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Low-carbon Marketing Strategy Based on the SWOT JIANG Fazhu, SHI Kun, WU Dan College of Economic and Management, Heilongjiang Bayi Agricultural University, China, 163319 [email protected] Abstract: A new marketing concept——Low-carbon Marketing Concept was proposed in this paper, where it first measured the feasibility of companies carrying out low-carbon marketing after the financial crisis by means of SWOT analysis and then gave some suggestions on how to implement low-carbon marketing strategy and how to operate in the era of low-carbon economy with creatively using of 4P mix strategies. Suggestions included devising strategic plans for low-carbon marketing, all-round R & D low-carbon products, making win-win low-carbon prices, building simple and smooth low-carbon distribution channels, and low-carbon promotions. Keywords: low-carbon economy, low-carbon marketing, SWOT, marketing strategies 1 Preface A series of new concepts——"low-carbon economy", "low-carbon technology", "low-carbon development", "low-carbon lifestyle", "low-carbon society", "low-carbon city", "low-carbon world" are becoming more and more concerned throughout the world[1]. Furthermore, the Climate Change Conference held in Copenhagen on December 7, 2009 took this concern into the peak. At the Congress, Premier Wen Jiabao, on behalf of the Chinese government, solemnly made a public commitment that greenhouse gas emissions per unit GDP in 2020 would be lower by 40%-45% than that in 2005.In order to practice this solemn commitment, China will vigorously develop low-carbon economy, promote low-carbon concept, and advocate low-carbon life. Low-carbon economy focuses on the whole economic activates and takes full account of greenhouse gas emitted from every aspect of production and consumption. It mainly deals with making more efficient choices between production and consumption of energy so as to minimize greenhouse gas emissions [2]. The coming of low-carbon economy will bring enterprises enormous business opportunities as well as challenges, and at the same time, there will be a broad space for low-carbon marketing. 2 Low-carbon marketing concept 2.1 Content of low-carbon marketing Low-carbon marketing is an operation and management process, which initiatively finds and actively guilds consumer demands and coordinates the interests between enterprises and consumers centered on sustainable development of human, society, and environment. Low-carbon marketing concept guides enterprises’ production and operation against the background that low-carbon economy is becoming a very important form of the new economic ideologies [3] and the focus of the new round of international economic growth and competition. Traditional marketing concept thinks that companies operating under market economy should always pay attention to consumer demands, business conditions and status of their competitors, so it concludes that meeting consumer demands, improving business conditions and creating more advantages than their competitors would achieve the expected results of marketing activities. However, low-carbon marketing concept innovates the theoretical framework of traditional marketing concept and breaks its marketing center. That is, low-carbon marketing concept focuses not on the primary issue that how to coordinate those three relationships to achieve their own interests in terms of traditional marketing, but on the relationship between low-carbon economy. Business decisions must be first based on the new economic development model with low energy consumption, low pollution, and low-emissions. 444 In the era of low-carbon economy, enterprises actively carry out low-carbon marketing for two reasons. On the one hand, it is a performance of enterprises obliging social responsibility. It is helpful to establish a good corporate image among target markets. On the other hand, it is winning chips for enterprises to enhance their strengths, to seek long-term, sustainable development in this new and competitive era of economic development. 2.2 Differences between low-carbon marketing and traditional green marketing Low-carbon marketing and traditional green marketing are both originated from the concept of sustainable development and based on the traditional marketing theory. However, low-carbon marketing and green marketing are two different stages of marketing concept. 2.2.1 Theoretical background Green marketing concept can be dated back to 1970s, when a series of contradictions and conflicts between resource shortage and irrational using brought it forward. Low-carbon marketing concept is budded from British Energy White Paper "Our energy future: creating a low-carbon economy" in 2003. From then on, low-carbon marketing is concerned in our society. It is rooted in the devastation on human environment caused by imbalance development of economy and society. 2.2.2 Marketing concept Green marketing concept is an environment-friendly marketing concept. It advocates reasonable allocation of internal marketing resources under the premise that consumer interests, business interests and social environment interests are coordinated [4]. Low-carbon marketing concept requires deeper rather than complying with environment-friendly. It promotes that all business organizations operate to coordinate the interests between consumers and business on the basis of sustainable development and protecting social environment interests. 2.2.3 Basic point of marketing Green marketing concept is anchored in the target customers with green consumption themselves to carry out marketing activities, so green consumption is the prerequisite of green marketing. And green marketing concept is a passive marketing concept. Low-carbon marketing concept is based on initiatively promoting low-carbon consumption concept among target consumers to make them know, understand, and accept it and to popularize low-carbon lifestyle. Thus, low-carbon marketing concept is a proactive marketing concept. 2.2.4 Performance Assessment Corporate performance, ecological performance, and social performance are three basic performance assessment indicators of marketing. Green marketing concept thinks that corporate performance is the core of green marketing performance, and its most important indicator variable is GDP, while, environmental performance is only a condition of enterprise performance[5].Low-carbon marketing concept views environmental performance as the core of low-carbon marketing performance and its most important indicator variable is the emission of carbon per unit GDP. Also, in the low-carbon marketing performance appraisal system, environmental performance is far greater than corporate performance and on this basis, adds the assessment of human existence performance. 2.2.5Target of marketing Although, both low-carbon marketing and green marketing are originated from sustainable development, they have respective marketing objectives. Green marketing is aimed to increase the net growth of economy, while low- carbon marketing is to reduce greenhouse gas emissions per economic growth. 3. SWOT analysis of low-carbon marketing SWOT analysis is also known as trend analysis. On the whole, SWOT can be divided into two parts: one part is SW to analyze strengths and weaknesses of internal conditions; the other is OT to analyze opportunities and threats of external environment. According to SWOT, and comprehensively using systematic analysis to match various factors together helps to draw a series of corresponding 445 conclusions with a certain degree of decision-making. 3.1 Internal conditions of low-carbon marketing 3.1.1Strengths (1) Market demand is growing. With the holding of Copenhagen Conference on Climate Change, how to reduce carbon emissions becomes a topic of common interest. Low-carbon life comes into the homes of ordinary people and is becoming a lifestyle coming up without times. A British survey in 2008 showed that more than two-thirds of people would give priority to buy products supplied by those companies who are active in energy-saving. In recent years Hollywood stars strongly seeking after hybrid vehicles also demonstrates that low-carbon consumption is gradually becoming a new consumer-oriented. (2)Low-carbon marketing leads business to success. President of Beijing Siji Micoe Solar Energy Technology Co., LTD, Li Jun leading thousands of its elite parters and cooperators released to the world “Work together and lead low-carbon economy” on the deck of the aircraft Minsk on January 29, 2010. He called on all businesses and citizens throughout the world “Love blue planet, and build low-carbon homes”. This clever marketing action reflected the rapidly growing Chinese solar water heater business’s unique view of the world. For decades, Siji Micoe has found an effective way to low-carbon marketing. From acquainting it in Beijing University to hand in hand with aerospace, then to allying with Honeywell——one of the top 500 in the world, Siji Micoe indisputably becomes the leader of its industry as a result of low-carbon marketing. (3)Low-carbon marketing can create a good corporate image. At the beginning of 2010, the case of Toyota global recalling its cars intensified and it reshuffled the global auto industry. On the occasion of new 2010 cars entering markets, Land Rover announced that it officially launched the plan of reducing carbon dioxide emissions and compensating for it in China. Shortly, General Motors also launched a public service activity “Low-carbon for the New Year” so as to call on the public to choose a low-carbon way to celebrate the Spring Festival. Chinese Changan Auto within minutes published a message in its website of CHANA BENNI Mini body painting contest, whose subject was “Paint carbon, Paint fashion”. Almost all car brands in the world have played the banner of low-carbon one after another trying to create good corporate image and to occupy greater market share in the reshuffling. 3.1.2Weaknesses (1)Low R & D ability. Take wind power technology for example, while it is the fastest growing new energy industry and has already had the capacity to manufacture a whole fan machine below 1.5MW, the technology of some of its core components such as bearings, converters, control systems, gear boxes, etc. is still difficult to capture. (2)Low energy efficiency. In 2009, China has consumed 6.31t standard coal. Crude oil consumption increased by 7.1%, electricity consumption by 6.2%, copper consumption by 39.7%, and ethylene consumption by 8.0%[6]. China's energy efficiency is improving year by year, but the level is still relatively low. Especially the recent years in 21st century, investments in high energy consumption industries such as steel, cement, electrolytic aluminum, nonferrous metal have been overheated, so that per unit GDP energy consumption has showed an upward trend and improving energy efficiency is imperative.[7] (3) Do not let low-carbon be a gimmick. Low-carbon is highly appreciated over the world; however, carrying out low-carbon marketing should not be only an empty slogan. Whether it is marketing products or marketing culture, one that can really enhance and achieve brand value is far from one or two activities, but having a faith in low-carbon faith and persistently following it. 3.2 External conditions of low-carbon marketing 3.2.1Oppotunities (1)Vast space. Zhou Dadi, a Chinese energy expert said in an interview on Dec. 8, 2009 that developing low-carbon economy is in concert with China's pursuit of sustainable development, and meets the requirements of China's current economic restructuring. Developing low-carbon economy will be as an 446 important content written into the 12th National Economic and Social Development Five-Year (2011-2015) plan. (2)Good financing environment. The capital invested in "green industry" has almost doubled, accounting for 19% of the total investment in recent years. In 2007, investments in clean energy projects (excluding large hydropower) increased by 91% compared with 2006, reaching $ 10.8 billion. It is estimated that by 2020 it will come up to $ 268 billion [8]. (3) Infinite potential market. China is yet the world's largest emitter of greenhouse gases, accounting for 2% of global emissions. It means that the market space that can be created in the era of low-carbon economy is also the largest. For Chinese enterprises, there will be clear comparative advantages with the huge market, coupled with government’s firm belief in reducing. 3.2.2 Threats (1) International barriers. In the new era of low-carbon economy, environmental responsibility measured by carbon footprint will become another basic commitment that enterprises must provide. The largest retailer Wal-Mart required its 100,000 suppliers to build mechanism of carbon footprint tests within 5 years in April, 2009. In mid-January, 2010, EU held a meeting to discuss the feasibility of imposing carbon tariff on those trading partners who didn’t reduce their greenhouse emissions. Once EU imposes carbon tariff, Chinese goods exported to Europe will be forced to afford 26% additional tariff costs. These moves of the western world raise barriers for Chinese enterprises entering low-carbon field and increase the difficulty of carrying out low-carbon marketing. (2) Questionable market. Many consumers doubt that whether low-carbon products are really low-carbon and green, and various low-carbon and environmental certificates and certification are also questioned. Since many consumers have no personal experience and they do not want to spend money in having a try because of the high price of low-carbon and environmental products, some products are unsalable. 4 Suggestions on implementing low-carbon marketing The main idea of making marketing strategies is to make use of strengths, and overcome weaknesses; to take advantage of opportunities and resolve threats; to sum up the past, be based on the present, and look to the future. This paper innovatively used the marketing mix strategies, with all factors considered, so as to make an optional marketing strategy for enterprises’ future development. 4.1 Devising strategic plans for low-carbon marketing Low-carbon economy will bring huge business opportunities to Chinese enterprises; as a result, all enterprises should be forward-looking and deep-seeking trying to make a long-term strategic plan to meet the rapid development of their industry. First of all, enterprises should change their marketing concept and establish a comprehensive view of low-carbon marketing. In the era of low-carbon marketing, enterprises should center on low carbon emissions, improving the environment and sustainable development and choose low-carbon marketing concept as a guiding principle in their everyday operation activities. Not only the marketing department, but all sectors in enterprises should work under the principle of low-carbon concept. Secondly, enterprises should build low-carbon-based forms of organization and establish a comprehensive low-carbon management mechanism. Low-carbon marketing goes through the whole process of production and operation, involving all departments evens every individual in the enterprise. This encourages companies to break the traditional organizational structure, and actively build low-carbon-based forms of organization to make low-carbon management systematic, standardized, comprehensive and measurable. Furthermore, nurture a low-carbon corporate culture, and wildly popularize it among employees in enterprises. Corporate culture is spiritual pillar; intangible wealth and power source for continuously forge ahead. Nurturing low-carbon corporate culture is conducive to enhancing the cohesion and centripetal force, to the implementation of low-carbon strategic plan, and to 447 raising core competitiveness’s of enterprises. Finally, make a low-carbon corporate image and raise the overall enterprise value. In the era of low-carbon economy, making low-carbon corporate image is an inevitable choice for enterprises’ development, and it is beneficial to enhancing the overall enterprise value, improving corporate appeal and expanding its influence. 4.2 All-round R & D low-carbon products Product strategy is the premier among marketing mix strategies. To R & D a product or service includes three interrelated meanings. R & D low-carbon products and low-carbon design is the first. In product design, in order to meet demands for low-carbon consumption in target markets, companies should comprehensively consider various factors, such as material selection, manufacturing process, function and product characteristics, among which the most important is the demand for low-carbon function of products. The second is low-carbon products’ brand management. Brand is the foundation of enterprises shaping their image, enhancing popularity and reputation. In the era of low-carbon economy, companies should examine whether their ideas are in accordance with the value of low-carbon consumption, whether it will lead to resonance of low-carbon consumers, and then they should apply low-carbon terms that can be understood by consumers to convey brand appeal and establish a brand image. The last is low-carbon products’ packaging management. Packaging management includes the design of product packaging, the selection of packaging material, the production of packaging and the processing of post-packaging. Successful implementation of low-carbon packaging is a booster for low-carbon marketing. Enterprises should abandon the traditional packaging idea——packaging to promote, and highlight low-carbon concept throughout the whole chain of packaging management under the guidance of low-carbon concept. 4.3 Making win-win low-carbon prices Pricing is the most flexible factor in marketing mix strategies. Pricing low-carbon products should take all internal and external factors into account. Enterprises should adopt flexible pricing strategies according to production costs, target market, life cycle and policy factors. First, keep in mind that environment should be compensated. Companies should embrace the expenditure of reducing carbon emission into costs, as a major part of the price of low-carbon products. Second, low-carbon products are still novelty for consumers. Due to high R & D expenses, part of the high-end and international market-oriented products may take skim pricing. In domestic market, pricing on low-carbon products must be oriented on popular consumers taking penetrating pricing. Third, pricing strategy of mixing products. There is a big price gap between the prices that can be accepted by consumers as levels of economic development and region differs. Companies may seek a series of different prices, and strive to maximize profits in the premise of keeping market share. Pricing strategies for business include product line pricing, options pricing, ancillary product pricing, product pricing and product bundle pricing [9]. Fourth, price adjusting strategy. Low-carbon products are also subject to changes in the demands of target markets, evolution of product life cycle, changes of policy and other factors. Enterprises may consider taking discount pricing, segment pricing, geographical pricing, and policy pricing in different stages. 4.4 Building simple and smooth low-carbon distribution channels Products and service transmits from manufacturers to consumers through distribution channels. Low-carbon distribution channels are the key to marketing. Only construction of smooth low-carbon distribution channels can ensure successful implementation of low-carbon marketing. So enterprises should spare no effort to establish them. There are four distribution channels for us to choose. The first one is direct distribution channels. Products are directly sold to consumers without intermediary. Companies can choose this way to minimize the emissions of carbon and resource depletion at the places where low-carbon markets are more mature. The second one is intermediary distribution channels. There is a layer of intermediaries in distribution channels. Companies in places where low-carbon 448 markets are yet not mature can choose this indirect marketing channel. The third one is changes in channel structure. The development of IT and the mature of direct and online marketing have had a tremendous impact on the organization of marketing channels. A major tendency is the weakening of intermediaries, which accelerates the flat and simplification of channel organizations. The last one is logistics management. In the era of low-carbon economy, companies must decide the best model for storage, handling and transportation of products and service so that consumers can get low-carbon products at the right time by right means. The efficiency of logistics management plays a very important role in building simple and smooth distribution channels. 4.5 Low-carbon promotion Low-carbon promotion tries to spark consumers’ desire to buy low-carbon products and eventually reach a deal by using a variety of low-carbon ways, communicating with consumers, popularizing low-carbon concept and promoting low-carbon lifestyle. Low-carbon promotion is the substantive phase that can lead consumers into low-carbon life. First of all, low-carbon ad. Advertising is the most important way to transmit information. Enterprises should choose different advertising strategies according to the characteristics of low-carbon products and different life cycle, including leading advertising, told advertising, persuading advertising and reminding advertising. Secondly, promotions mix of low-carbon. Promoting low-carbon is the extension of enterprises transferring their low-carbon concept. Demonstration, explanation and field marketing of low-carbon products help to promote the low-carbon features and functions of their products, impart low-carbon knowledge, increase the loyalty of low-carbon consumption, balance market share, and enchance corporate reputation. What’s more, low-carbon public relations. Low-carbon public relations are an effective way to establish a broad social base for successfully carrying out low-carbon marketing. They can promote their efforts in reducing carbon emissions and the low-carbon features of products by press and other mass media to enhance the awareness and loyalty of low-carbon products. Corporate public relations should strengthen the intensity of using of the Internet when the Internet is very popular in our everyday life. Enterprises can also participate in some public relations activities such as charitable and public service activities to establish a low-carbon enterprise image and improve corporate reputation. 5 Conclusion The value of low-carbon marketing strategy lies in creating value for the enterprise through strong enforcement. In view of the diversity of the environment and the complexity of their operating conditions, the organization should give full consideration to the level of integration between their own low-carbon marketing strategy and enterprise's own diversity, complexity in the course of developing and implementing low-carbon marketing strategy. According to the different stages of enterprise development, the enterprise should target to develop, carry out low-carbon marketing strategy, in order to face the challenge of the times, seize opportunities and seek a broader living space and sustainable development prospects in the low carbon economy. References [1]. 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