Green Marketing Initiatives by Indian Corporate- Prospects and Confronts in Facing Global Competition


By

T. Sarunya
Final MBA
M.I.E.T. Engineering College
Trichy-7, Tamilnadu
 


ABSTRACT

Currently, there is escalating awareness among the consumers all over the world concerning protection of environment. The growing awareness among the consumers regarding the environmental protection had inculcated the interest among people to bestow a clean earth to their progeny. Various studies by environmentalists indicate that people are more concerned about the environment and are changing their behavior pattern so as to be less hostile towards it. Now we can see that most of the consumers, both individual and industrial, are becoming more concerned about environment-friendly products. Most of them believe that environment-friendly products are safe to use. Now is the era of recyclable, non-toxic and environment-friendly goods. As a result, green marketing has emerged, which aims at marketing sustainable and socially-responsible products and services in the society. This has become the new mantra for marketers to satisfy the needs of consumers and earn better profits. In this article the authors limelight the essence of green marketing and its relevance in improving the competence levels of the companies in the global competition.

INTRODUCTION

Green marketing refers to the process of selling products and/or services based n thr environmental benefits. Such a product or service m b produced and/or packaged in an environment friendly way. One of the major assumptions of green marketing that the potential consumers significantly decide a product or service on the basis of its 'greenness'. Also the consumers are willing to pay more fr green products thn th wuld fr a less-green comparable alternative product.

According to the American Marketing Association, green marketing the marketing f products tht r presumed t b environmentally safe. Thus green marketing incorporates broad range f activities including product modification, changes t th production process, packaging changes, well modifying advertising.

According to Mr. J. Polonsky, green marketing can be defined as, "All activities designed to generate and facilitate any exchange intended to satisfy human needs or wants such that satisfying of these needs and wants occur with minimal detrimental input on the national environment."

WHY GREEN MARKETING?

Companies that develop new and improved products and services with environment inputs in mind give themselves access to new markets, increase their profit sustainability, and enjoy a competitive advantage over the companies which are not concerned for the environment. There are basically five reasons for which a marketer should go for the adoption of green marketing. They are:

a) Opportunities or competitive advantage

b) Corporate social responsibilities (CSR)

c) Government pressure

d) Competitive pressure

e) Cost or profit issues

Most of the companies are venturing into green marketing due to the following reasons:
a. Opportunity or Competitive Advantage:

In India, around 25% of the consumers prefer environmental-friendly products, and around 28% may be considered healthy conscious. There fore, green marketers have diverse and fairly sizeable segments to cater to. The Surf Excel detergent which saves water (advertised with the message"do bucket paani roz bachana") and the energy-saving LG consumers durables are examples of green marketing. We also have green buildings which are efficient in their use of energy, water and construction materials, and which reduce the impact on human health and the environment through better design, construction, operation, maintenance and waste disposal. In India, the green building movement, spearheaded by the Confederation of Indian industry (CII) - Godrej Green business Center, has gained tremendous impetus over the last few years. From 20,000 sq ft in 2003, India's green building footprint is now over 25 million sq ft.

b. Corporate Social Responsibilities (CSR)

Many companies have started realizing that they must behave in an environment-friendly fashion. They believe both in achieving environmental objectives as well as profit related objectives. The HSBC became the world's first bank to go carbon-neutral last year. Other examples include Coca-Cola, which has invested in various recycling activities. Walt Disney World in Florida, US, has an extensive waste management program and infrastructure in place.

c. Governmental Pressure

Various regulations rare framed by the government to protect consumers and the society at large. The Indian government too has developed a framework of legislations to reduce the production of harmful goods and by products. These reduce the industry's production and consumers' consumption of harmful goods, including those detrimental to the environment; for example, the ban of plastic bags in Mumbai, prohibition of smoking in public areas, etc.

d. Competitive Pressure

Many companies take up green marketing to maintain their competitive edge. The green marketing initiatives by niche companies such as Body Shop and Green & Black have prompted many mainline competitors to follow suit.

e. Cost Reduction/ Cost of Profit Issues

Reduction of harmful waste may lead to substantial cost savings. Sometimes, many firms develop symbiotic relationship whereby the waste generated by one company is used by another as a cost-effective raw material. For example, the fly ash generated by thermal power plants, which would otherwise contributed to a gigantic quantum of solid waste, is used to manufacture fly ash bricks for construction purposes.

BENEFITS OF GREEN MARKETING

Today's consumers are becoming more and more conscious about the environment and are also becoming socially responsible. Therefore, more companies are responsible to consumers' aspirations for environmentally less damaging or neutral products. Many companies want to have an early-mover advantage as they have to eventually move towards becoming green. Some of the advantages of green marketing are as given below:

  • It ensures sustained long-term growth along with profitability.
  • It saves money in the long run, thought initially the cost is more.
  • It helps companies market their products and services keeping the environment aspects in mind. It helps in accessing the new markets and enjoying competitive advantage.
  • Most of the employees also feel proud and responsible to be working for an environmentally responsible company.

PROBLEMS OF GREEN MARKETING

Many organizations want to turn green, as an increasing number of consumers' ant to associate themselves with environmental-friendly products. Alongside, one also witnesses confusion among the consumers regarding the products. In particular, one often finds distrust regarding the credibility of green products. Therefore, to ensure consumer confidence, marketers of green products need to be much more transparent, and refrain from breaching any law or standards relating to products or business practices.

Many marketers tried and failed with green sales pitches over the last decade. Some of their wrong approaches include:

a. Overexposure and lack of credibility:

So many companies made environmental claims that the public became skeptical of their validity. Government investigations into some green claims (e.g. the degradability of trash bags) and media reports of the spotty environmental track records behind others only increased consumer's doubts. This backlash resulted in many consumers thinking environmental claims were just marketing gimmicks.

b. Consumer behavior:

Research studies have shown that consumers as a whole may not be wiling to pay a premium for environmental benefit, although certain market segments will be. Most consumers appear unwilling to give up the benefits of other alternatives to choose green products. For example, some consumers dislike the performance, appearance, or texture of recycled paper and household products. And some consumers are unwilling to give up the convenience of disposable product such as diapers.

c. Poor Implementation:

In jumping on the green marketing bandwagon many firms did a poor job implementing their marketing program. Products were poorly designed in terms of environmental worthiness, overpriced, and inappropriately promoted. Some ads failed to make the connection between what the company was doing for the environment and how it affected individual consumers.
 

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Source: E-mail March 14, 2011

 

           

 

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