Download Environmental Marketing

Environmental Marketing
(Mid Term)
Chapter- (1) The Principles of Environmental Marketing
Definition of Environmental Marketing: Environmental marketing is the holistic
management process responsible for identifying, anticipation and satisfying the
requirements of customers and society in a profitable and sustainable way.
Why Environmental Marketing is not Societal Marketing: Environmental marketing goes
beyond societal marketing in four key ways such as:
1. It is an open-ended rather than a long term perspective.
2. It focuses more strongly on the natural environment.
3. It treats the environment as something which has an intrinsic value over and above its
usefulness to society.
4. It focuses on global concerns rather than those of particular societies.
The Fundamentals of Environmental Marketing: Environmental marketing based on three
principles: social responsibility, the pursuit of sustainability and a holistic approach.
1. Social Responsibility: The evolution from societal marketing to environmental
marketing involves the adoption of two deceptively simple sounding concepts such as
holism and sustainability. For marketing managers, the challenge is to find ways to
implement these concepts to mentally and socially viable as well as economically and
technically viable. The common five elements among the many distinctions of corporate
social responsibility are as follows:
• Businesses have responsibilities that go beyond the production of goods and services at
a profit.
• These further responsibilities involve helping to solve important social problems,
especially those that businesses helped to create.
• Businesses are responsible to a broader constituency than their shareholders.
• Businesses serve a winder range of human values than can be captured by a sole focus
on economic values.
• Businesses have impacts that go beyond simple marketer-place transactions.
2. Holism: The idea that a business should be managed as a total system, and not simply
as a collection of functions or business units.
Holism in management is not a new idea but it is an idea still waiting to happen. Holism
for environmental marketing involves taking a more external, open-systems marketing
orientation. It involves seeing a company not just as an holistic entity in techno-economic
terms, but as part of a socio-environmental ecological system. The principles of ecology
can be summarized as follows:
• Everything is connected to everything else.
• Everything goes somewhere.
• Nature knows best.
• There is no such thing as a free launch.
Environmental marketing is a holistic management process it extends well beyond the
normally recognized boundaries of marketing theory and practice. Environmental
marketing essentially amalgamates six relatively well established approaches to
management which is shown in figure:
a) Societal Marketing: Environmental marketing has evolved from the societal marketing.
So marketers should follow societal marketing for implementing environmental
marketing concept.
b) Relationship marketing: Relationship marketing emerged partly as a response to the
shortcomings of marketing concepts developed from consumer markets when applied
industrial marketing.
c) Strategic management: The external focus of environmental marketing to consider
socio-environmental issues is closer to that of strategic management than conventional
marketing. It also shares with strategic management a longer-term perspective and an
internal agenda that encompasses all of a company’s operations.
d) Human Resource Management: Environmental marketing looks to move marketing
and business away from the mechanistic techno-economic paradigm to become more
human and more humane. It shares a concern for the people within the internal
environment with the field of human resource management.
e) Total Quality Management (TQM): Environmental marketing shares with TQM a
mandate to consider all aspects of the organization and a need to instill an entirely new
philosophy into the whole business. In many cases companies are adapting the concept of
eco-performance for inclusion within the concept of quality and speaking in terms of
Total Quality Environment Management (TQEM).
f) Business Re-engineering: Re-engineering means different things to different people but
it commonly involves a fundamental reappraisal of where and how the company creates
value for in stakeholders. Re-engineering involves taking a radical redesign approach to
the organization and its current way of doing things.
3. Sustainability: The concept that the activities of businesses to satisfy customers,
shareholders and other stakeholders today should not be at the expense of the ability to
satisfy them in the future.
The concept of sustainability is breathtakingly simple in theory and yet the process of
translating it into action has proved controversial. Sustainability involves development
that meets the needs of the present without compromising the ability of future generations
to meet their own needs. This means only consuming resources at a rate which allows
them to be replaced and only producing pollution at a rate that the environment can
assimilate.
Three key elements of sustainability are as follows:
• Futurity- a long term perspective which gives equal consideration to the needs of future
generations and to our own. In marketing terms it translates into a concern to ensure that
both the needs of future consumers and those of todays are satisfied.
• Welfare- a measure of the benefits that individuals accrue from society. This includes
conventional economic components such as income but also quality of life issues such as
environmental quality.
• Equity- an attempt to balance the distribution of economic costs and benefits between
different countries, regions, socio-economic classes, ethnic groups or sexes.
The Key Elements of Environmental Marketing: The key characteristics of environmental
marketing can therefore be summarized as:
1. A balanced a approach to the social, technological, economical and physical aspects of
businesses and societies that allows companies to STEP for ward.
2. An emphasis on long term sustainable qualitative development rather than short term
unsustainable quantitative growth.
3. An holistic approach aimed at reversing the reductionalist and fragmented approach of
previous business theory and practice.
4. A consideration of consumers as real human beings rather than as hypothetical
‘rational economy’ entities.
5. An emphasis on meeting the genuine needs of consumers rather than on stimulation
superficial desires.
6. A recognition that consumers and society have multiple and sometimes conflicting
wants and needs.
7. A view of the company and all its activities as part of the product that is consumed,
8. A recognition that the large-scale, long-distance nature of the current economy is not
sustainable and that in the future small and local will be beautiful.
9. The pursuit of added socio-environmental virtue as well as added techno economic
value.
The Implications of Environmental Marketing: The challenge of greening the philosophy
and practice of marketing will require a re-evaluation of some of its most fundamental
element. The implications of environmental marketing are as follows:
1. A New Approach to Consumers: Environmental marketers need to reconsider their
approach to consumers. And marketers need to view consumers as customers as citizens
of society and also as physical human beings.
2. A New Concept of Customer Satisfaction: In the past customer satisfaction has been
judged in terms of the performance of the product at the moment of consumption. But
now environmentally concerned customer may reject a product because they are made
aware of the social or environmental harm.
3. An Extended Time Horizon: Environmental marketing requires a longer time
perspective than grey marketing. The marketer’s time horizon must now go beyond the
economic lifetime of the product to consider the environmental impact of its disposal and
the long term effects of product use.
4. A Widened Horizon: Geographically the green challenge forces companies to think
internationally and globally to understand the socio-environmental impact of their
products, production, processes and sourcing policies. Economically it also forces them
to think across industry boundaries.
5. An Open Mind: The green challenge may also require marketers to abandon many of
their preconceptions about their customers, their products and the nature of their market.
6. An Expanded Product Concept: If green consumer satisfaction depends upon the
production process and on all the activities of the producer we are approaching the
situation where the company itself is becoming the product consumed.
7. An Opportunity Focus: Environmental marketing should be a positive approach and it
is as much about new opportunities as about new threats and restrictions.
8. A Need for Demarketing: One unavoidable conclusion of environmental marketing
logic is that where a product is being consumed and produced in an unsustainable way, it
may have to be demarketing to reduce consumption.
Chapter- (2) Green Consumerism
Consumption: Consuming means the use of resources and the creation of waste.
Marketers and economics view consumption relatively rationally in terms of the
satisfaction of wants and needs through the features and technical performance of
products. The process of consumption plays a number of roles in society such asIt occurs in an attempt to fulfill our needs and wants.
It drives the economy.
It can provide entertainment.
It helps to define ourselves.
It can make a statement about who individuals are and how they perceive themselves.
It can be a reward.
It is used as a proxy measurement of success particularly within industrialized
economics.
It can provide compensation for experiences and forms of satisfaction.
It gives us power.
It can become a disease.
Green Consumption: The term “green consumption” covers a full range of activities in
both production and consumption fields, including green products, the recycling of
materials, the efficient use of energy, the protection of the environment, and the
preservation of species.
A green consumer is someone who is very concerned about the environment and
therefore only purchases products that are environment friendly or eco-friendly.
Products with little or no packaging products made from natural ingredients and products
that are made without causing pollution are all examples of eco-friendly products.
In the green consumer guide, Elkington and Halies define green consumption as the
process of avoiding products which are likely to:
Endanger the health of consumers or others.
Significantly damage the environment in production use or disposal.
Consume disproportionately large amounts of resources during production, use or
disposal
Cause unnecessary waste through overpackaging, excess product features or an unduly
short lifespan.
Use materials derived from endangered species or environments.
Involve cruelty to, or needless exploitation of animals.
Adversely affect other countries, particularly developing countries.
Greening the Buying Process: Green consumer behavior can also include purchase and
consumption avoidance. We can define green consumer behavior as the purchasing and
non-purchasing decisions made by consumers, based at partly on environmental or social
criteria. The process of buying green products is show in figure:
1. The Recognition of a need or want: Needs come from within ourselves and are fairly
broad in scope. Needs are translated into wants which relate to specific means of
satisfying a given need usually through consumption of a product. While needs are
relatively enduring, wants can be extremely transitory. A demand for green products may
reflect a long-standing interest in environmentalism and this concern becomes translated
into a generic desire to purchase green products from green companies. It can also be
channeled into a desire not to make a purchase or actively boycotting a product or
company.
2. The Search for Relevant Information: A key element of green consumption is a desire
for more information about the relationship between products and the environment.
Green consumer guides have been one of the most important sources of credible
information for green consumers to date. Consumer guides are as follows:
The Organic Consumer Guide
The Green Parents’ Guide
The Cruelty Free Shopper
The Ethical Consumer Guide
The Global Consumer
Student shopping for a Better World.
3. The Evaluation of Alternatives: Evaluating alternatives is often reduced to selecting
between different products and competing brands in search of a purchase that will yield
satisfactory. For green consumption there are several levels of alternative purchase
behavior such as
Non-purchase
Borrowing, hiring and leasing
Buying second-hand product
Alternative products.
Alternative brands
Lifespan-based purchasing
Keep faith with existing brands
4. The Purchase Decision: Having evaluated alternative purchases and alternatives to
purchase, green consumers will proceed to take action to satisfy their needs. Consumers
will consider the following during purchase decision making:
Where to buy
How much to buy
When to buy
5. Post-purchase Behavior: Green consumers may behave differently to conventional
consumers after a particular purchase has been made.
• Product use change: The green consumer may continue to use the same products but in
a different way.
• Reuse of Products: A green consumer may reuse part or all of a product in the context
of other needs and wants.
• Product disposal: Green consumers will tend to dispose of products safely and where
possible usefully.
• Recycling of waste packaging: Post-purchase recycling concerns can have an effect on
the purchase decision.
• Care and maintenance: Green consumers may give increased attention to the care and
maintenance of consumer durables in an attempt to increase their lifespan.
Influences on Purchase and Consumption Decisions:
1. Economic Rationality: Rational economic approaches to consumption are based on
concepts of the marginal utility of products and purchasers’ attempts to maximize
personal benefits at minimum cost. following factors are influenced in decision making:
• Low price
• Low price for any complementary products.
• High prices among competitors and substitutes.
• Increasing real and disposable incomes
• High promotional expenditure.
2. Price Sensitivity: A key behavioral question is the extent to which customers are
willing to pay a price premium for improved eco-performance in products, Companies
often quote the problems of passing additional costs on to the customer as an argument
against greening.
3. Cultural Factors: Consumers in different countries will be influenced by different
cultural norms and values relating to the environmental and society. This may lead to
very different patterns of green consumer behavior.
4. Social Factors: Social and psychological approaches to consumption explain
purchasing behavior in terms of the need for social standing, acceptance and prestige.
5. Lifestage: Lifestage is an important influence on consumption. Parents are more likely
to be concerned about the environmental than adults without children.
6. Lifestyle: Consumers very in terms of whether or not they are willing to alter their
lifestyle as well as their purchase behavior to make ca contribution.
7. Convenience: Although cost is often discussed as the main barrier t green
consumption, convenience may be a more important influence.
8. Psychological Factors: An important psychological dimension in green consumption is
our desire for control.
9. Perceptions
10. Motivation
Consumerism: The consumer movement is an important potential influence on the
marketing of almost any product. The original declaration of consumer rights by
President Kennedy covered four basic principles:
1. The right to safety
2. The right to be informed
3. The right to choose
4. The right to be heard
The International Organization of Consumers’ Unions has since supplemented these
principles with four more:
1. The right of satisfaction of basic needs
2. The right of redress
3. The right to consumer education
4. The right to healthy environment.
A Complex and Changing Interrelationship: The evolution of the new green agenda has
increasingly revealed that the relationship between business, society and the environment
is not a pair of ‘one way streets’ but a set of complex interdependencies. Up until the
industrial revolution, life was closely related to the environmental and largely regulated
by its season and processes. Individual’s needs were mostly met within the context of
their family and local community often through non-commercial exchanges based on
reciprocity or redistribution of wealth. The Technological that emerged from the
industrial revolution allowed nature to be harnessed and then altered and to some extent
controlled. The management of the soil fertility, fuel, food, and water supplies, waste
disposal, housing, flood prevention and law and order moved away from a local,
community basis to become managed by centralized social or business institution. The
management perception of the relationship between business society and the environment
is presented in below:
The Conventional Approach to the Business-Society-Environmental Interrelation
Chapter- (3) The Green Challenge for Marketing
Green Marketing: Green marketing refers to the process of selling products or services
based on their environmental benefits. Such a product or service may be environmentally
friendly in itself or produced or packaged in an environmentally friendly way.
Thus green marketing incorporates a broad range of activities, including product
modification, changes to the production process, packaging changes, as well as
modifying advertising.
Challenging the Marketing Philosophy: There are three very distinct dimensions to the
green challenge to marketing: a philosophical challenge, a practical challenge and a
credibility challenge. The Philosophical basis of marketing is the marketing concept
which replaced the product and the production oriented selling concepts. The key
elements of marketing concept as it emerged as follow:
1. A Customer Orientation: Instead of viewing customers as a means to create profit if
they could be persuaded to buy, the marketing concept positioned customer needs as the
driving force of the business.
2. An Integrated Marketing Effort: For Marketing orientated companies marketing is a
guiding principle and integrating force within the company. Marketers like to view
marketing as ‘the glue that makes a company stick together’.
3. Profits through Customer Satisfaction: The selling concept pursues profit through sales
volume expansion and cost reduction. The marketing concept views customer satisfaction
as an objective in itself which if achieved generates profits in turn.
The Key criticisms contained in such challenges can mostly be classified under four
headings:
1. The marketing concept is unrealistic: The growing consumerism movement has been
used as evidence that the marketing concept exists in rhetoric rather than reality. If the
marketing concept was widely held and effectively put into practice, consumers should
not need to take legal action seek legislative change or mount campaigns against products
or companies in order to achieve satisfaction.
2. The marketing concept is too passive: Organizing a business around the needs of
customers has been criticized as too passive and reactive. The core purpose of marketing
is persuading and influencing and serving some degree of power over both competitors
and consumers.
3. The marketing concept is simply impossible: In relation to consumers the marketing
concept assumes that they are well informed, rational, consistent and not interested in
doing harm to them. But in green markets the problem of consumers being poorly
informed is particularly acute.
4. Marketing in practice is poorly directed: Demand is only created where the desire to
purchase a product is backed up by an ability to pay. Those that cannot afford to buy do
not count in the demand figures and therefore cease to exist on the grey marketing
agenda.
Chapter- (4) The Greening of the Organization
The Corporate Response: Corporate response means the responsibility for improving its
eco-performance, reducing office paper and reducing energy bills. Companies’ responses
will vary in terms of the depth of greening and the degree to which they involve the
trapping rather than the substance of improved eco-performance. Company will also vary
in the degree to which the greening process relates to the hardware (products and
production systems) or the organizational software of the business.
The Organizational Dimensions of Greening: The organizational dimensions of greening
can be considered by using the Mackinsey Seven S Framework. Each ‘S’ factor is an
important influence on the greening process. Theses seven factors are as follows:
1. Strategy: Strategy consists of several things and it is reflected in five concepts of
strategy adapted from Mintberg’s. Five Ps’ of strategy are:
• As a plan of written of remembered intentions.
• As a pattern of consistent actions which emerge.
• As a perspective on the world for greening.
• As a pronouncement of an intention to secure resources.
• As a position that the firm occupies in relation to its environment.
2. Superordinate Goals: Superordinate goals are the fundamental ideas around which a
business is built. A key goal towards which the majority of corporate and marketing
strategies strive, is the goal of growth. Growth is associated with many benefits for the
company and its managers. Growth brings economics of scale, protection from predators,
increased prestige and lobbying power.
3. Style: Closely related to organizational culture is the issue of style both of which are
typically difficult to change. Style is set by a number of things not least by what senior
managers say. There are a variety of means by which a greener management style can be
created. For implementing green agenda, the managers need to :
• work on being approachable,
• avoid the trappings of power,
• provide occasions on which long term or alternative ideas can be discussed,
• encourage people to speak up,
• encourage full and informed debate on major policy decisions.
4. Structure: For ensuing green roles, the environmental affairs managers should include:
• promoting environmental ideas throughout the company,
• advising on the development of eco-friendly products,
• planning and supervising the introduction of technical eco-measures,
• collaborating with development and investment projects,
• fixing regular minute meetings.
• arranging appraisal procedures with the committee chairperson,
• assessing the costs of environmental protection,
• dealing with questions of product liability,
• planning and carrying out environmental duties.
• acting as an agent for change
5. Staff: Staff are vital stakeholder for the environmental marketers and an important
component in the success of any greening strategy. They can be vital source of pressure,
ideas and enthusiasm for environmental improvement.
6. Skills: The green company will be a high skill company. Creating such high levels of
skills requires a degree of investment but this can pay handsome dividends.
7. Systems: In an organizational sense systems are the procedures through which the
daily work of the organization is accomplished. In order to attain the voluntary
certification under BS7750 (Environmental Management System) the organization must
implement the following procedures:
• commit itself to the establishment of an environmental management system,
• conduct an initial review and assessment of the organization’s environmental position
concerning its environmental policy,
• formulate an environmental policy in the form of a corporate environmental program,
• complete an inventory of the organization’s activities in relation to the policy,
• develop an environmental management plan,
• apply the management plan in both the company’s operations and recording,
• maintain a cycle of audits of the company’s performance.
Total Quality Environmental Management (TQEM): The mechanism of Total
Quality Management is a popular strategy for greening particularly with the emergence of
Total Quality Environmental Management (TQEM) in America. TQM is an existing
management doctrine which emphasizes the elimination of waste by taking a holistic and
customer-oriented focus. The five parallels between TQM and environmental
management are as follows:
1. TQM’s emphasis on the importance of customer and its broadening of the terms
beyond the purchasers of a product provide a useful framework for considering and
responding to the demands of environmental stakeholders.
2. TQM’s commitment to continuous improvement is very helpful to organizations
wishing to move beyond mere compliance with environmental regulation.
3. TQM’s focus on eliminating the root causes of problems.
4. TQM’s belief that quality is everyone’s responsibility within a company.
5. TQM’s concern with calculating the cost of quality.
The Evolution of the Green Organization: The greening process of organization as a
progression through several stages of environmental commitment and management
response. This progression is marked by changes to areas such as the mindset of
managers, resource commitment and support and involvement by top management and
has five distinct phases such as:
1. Beginner: Low financial commitment, no involvement of top management, no
environmental programmes, management sees no need for environmental programmes.
2. Fire Fighter: Ad hoc project funding, minor top management involvement, no formal
environmental programmes but attempts made to resolve issues as they arise.
3. Concerned Citizen: Small consistent budget, top management theoretically involved,
management believes environmental policy worthwhile policies show corporate
responsibility.
4. Pragmatist: Sufficient funding, top management theoretically involved, management
believes environmental management is important, policies attempt to minimize firm’s
environmental impact.
5. Proactivist: Open-ended funding, active involvement of top management in
environmental policy setting, policies attempt to include active management of
environmental issues.
Marketing within the Green Organization: The evolution of the organization role of
marketing is charted by Kotler who suggests that it represents something of a struggle
against domination of marketing. Progress is made by emphasizing that it is not
marketing but the customer becomes dominant with the increasing marketing orientation.
Eventually customer becomes central to the perspective of the business with marketing as
the integrative function. The evolution of marketing within organization is show in
figure: