Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Green Marketing Strategy Fosters Construction Companies Developing in Sustain LUO Fuzhou1, REN Rui2 School of Management, Xi’an University of Architecture & Technology, P.R.Chian, 710055 Abstract: The sustainable development is the inevitable trend which the construction enterprise develops. The green marketing and sustainable development of construction enterprise are integrated together. In this paper, the function of green marketing in sustainable development is researched, and positive externality of green marketing is analyzed. In the end, the marketing strategy is put forward for sustainable development of construction enterprise. Keywords: Sustainable development; Construction enterprise; Green marketing; Externality. 1 Introduction With the global environmental degradation growing, the environmental problem has become the main issue which restricts enterprise's development and threatens its sustainable development. The traditional concept of development can not clearly meet modern requirements for the development of enterprise, and so a new concept of development, named sustainable development is put forward. Sustainable development was first proposed in the memorandums of "Our Common Future", "the Rio de Janeiro Manifesto" and "the 21stcentury Agendas". From that on, the sustainable development prevailed to the whole world. Sustainable development emphasizes: not only to meet the needs of the contemporary people, but have no harm to the needs of descendant person [1]. Its basic content is that a person is requested properly to deal with the resources and environment issues in the economic activities in order to achieve the sustainable development of society in the process of economic development. Achieving social sustainable development is in fact to achieve the sustainable development of enterprise which is the main body of social economy activities. Many studies have done from different view of the sustainable development. According to the achievements, "green" development concept has been put forward and introduced into enterprise's marketing activities by the most of the scholars. Further viewpoint has proposed that the green marketing promotes enterprise sustainable development. But all these studies confined to the enterprise which products generally production, and overlooked the sustainable development of construction enterprise. Construction marketing is different from others and has its own characteristics. Which include special trading objective which is always unique, unified activities of production and transaction, the special prices, the long duration of transaction which is often divided into several stages, etc [2]. These features have determined the distinctive characteristics of the production and management for the marketing management of construction enterprise and others. With the growing of global sustainable development, it becomes more urgent to study on construction firm’s sustainable development. Based on the large number of researches, green marketing of construction enterprise is researched in this paper in order to achieve the green marketing of construction enterprise and to promote the sustainable development of construction enterprise. 2 The role green marketing plays in sustainable development of construction enterprise So far as sustainable development has been put forward in western, many countries have adopted sustainable development model of economic development and formulate economic policies for the long-term economic development. In response to the national policy and construction firms’ long-term development, then marketing activities have to be linked to the development of the natural, social environment in order to promote a reasonable cycle of environmental development and green marketing. 1056 2.1 To gain a competitive advantage through branding More and more people are aware of healthy living environment on whether there was damage, and are calling for green living environment. Then, for construction enterprise, those who can construct products to meet the requirements of environmental protection, will be successful in the fierce competition will be able to establish a new green brand, and gain powerful competitive advantage. 2.2 Setting a good corporate image A good corporate image are an intangible asset which will help enterprises gain customers and market. In the implementation of green marketing process, as the use of green building materials and new technologies to reduce environmental pollution, the costs will increase. But in the long run, the environmentally concerned enterprise will be able to obtain the goodwill of the people and be conducive to the public image of business and the key to open the green market at domestic and abroad and even bring huge social and economic benefits for enterprise. 3 Analysis on the implementation status and reasons 3.1 The implementation status In recent years, the basic policy frame was proposed by our government for the green marketing and the sustainable developmental strategy to protect environment. With green marketing gradually become an international mainstream, more and more construction enterprises start to implement. Environmentally building materials are used and construction equipment and technologies are improved to reduce dust and noise pollution; green energy is used to reduce the consumption of traditional energy by many firms. However, there are still many problems in the implementation: green marketing concept hasn’t been yet established in many enterprises, the concept of environmental costs is not acceptable to the majority of enterprises; green consumption has not formed in consumers; adequate number of policies and measures has not made to support the development of green marketing by government. The radical reason to these problems is the positive externality of green marketing. MSB MC P P* P1 MR MER Q O Q1 Q* Figure 1: Externality of green production and the market equilibrium 3.2 Analysis on the reasons Because there is externality of green marketing, economic activities of construction enterprise have brought the whole community resources and the environment harmonious and sustainable development and the healthy development of the whole human society. However, construction enterprise has not been able to receive compensation [3]. According to "rational person" hypothesis, "Hitchhike" will be widespread, resulting in lower effective allocation of resources, market failure and making it difficult to start green marketing for construction enterprise. Analysis on externality will be in two ways: externality 1057 of green production and green consumption. 3.2.1 Externality of green production Construction is the key to the entire project and green marketing. In the entire construction process, advanced equipment, materials are needed in order to reduce to energy consumption, the noise, the dust and other deleterious substances to the human survival environment. These measures made by construction enterprise have brought some environmental and social benefits; moreover, construction enterprise's private cost obviously increased because of the use of advanced equipment. However, additional expenditures of Construction enterprise do not receive any compensation which makes externality of Green production becomes more serious. As shown in Figure 1, assuming the green production is carried on by construction enterprise, its marginal is MR, marginal cost is MC, and at the same time marginal social benefit is MSB brought by green production. Because of Externality, marginal social benefit (MSB) is greater than the marginal revenue (MR) of enterprise; the difference is MEB (marginal external benefit). To achieve private revenue maximum, equilibrium output of green production made by enterprise is Q1 (an intersection point of MR and MC); its price is P1. From the view of sustainable development, equilibrium output of green production made by enterprise is Q* (an intersection point of MC and MSB); its price is P*. We can see from figure 1, P1< P*, Q1< Q*. In other words, in spontaneous market mechanism, regardless of the output or price, green production level of construction enterprise is lower than the most superior level which the society requests. Pareto optimum has not been achieved so it has seriously restricted the sustainable development of construction enterprise. P MSB MC P MEB MR Q O Q1 Q* Figure 2: Externality of green consumption and the market equilibrium 3.2.2 Externality of green consumption Green consumption is that buyers purchase green products, which increases the benefits of the entire social and environment. Meanwhile, the price of green products is higher than ordinary products; the cost of buyers is bound to increase. However, this part of increased expenditure was not compensated by the society and others. "Hitchhike" will be widespread also, leading to the quantity of green product made by the entire social not able to achieve the social effective level, and there is a typical externality. In figure 2 assuming the green consumption is conducting, its marginal is MR, marginal cost is MC, and at the same time marginal social benefit is MSB brought by green consumption. Because of externality, marginal social benefit (MSB) is greater than the marginal revenue (MR); the difference is MEB (marginal external benefit). To achieve private revenue maximum, equilibrium consumption quantity of green production made by enterprise is Q1 (an intersection point of MR and MC); from the view of sustainable development, equilibrium consumption quantity of the whole community is Q* (an intersection point of MC and MSB). Obviously, we can see that Q1 is less that Q*(Q1< Q*). In other words, in spontaneous market mechanism, the resources of whole community are not an effective allocation, which hinder the sustainable development. 1058 4 Marketing strategy of green marketing 4.1 Economic principles of elimination of externality The above shows if construction enterprise wants to start green marketing and achieve sustainable development, it must first eliminate externality. Figure 3 shows us how to eliminate externality of the green marketing. Because of externality, in spontaneous mechanism, equilibrium output of enterprise is far below the optimal equilibrium output of community. To achieve sustainable development of construction enterprise, the equilibrium output Q1 of enterprise should be equal to the output Q* of the social. That is, to achieve sustainable development, we must make Q1 = Q*. From the figure, so long as the marginal cost MC reduces to MC1, it can be realized of externality internalization so that the resource distribution of the whole society will reach Pareto optimal state. 4.2 Marketing strategies While the construction enterprise implements green marketing and makes the marketing strategy, it should be considered both eliminating influence of externality and the particular characteristics of the construction products. Construction marketing is the whole process marketing of production, of which the marketing activities include environmental analysis, market demand forecasts, tendering and signing contracts, and construction, delivery and services. Therefore, the green marketing of construction enterprise should run through the whole process of marketing. Therefore, the authors propose in this paper some specific measures. P MSB MC P MC1 MER MR Q O Q1 Q* Figure 3: Principle of eliminate externality of green marketing 4.2.1 Green Public Relations strategy For construction enterprise, the green concept can be communicated more widely and enjoys popular support; some PR activities can be implemented also, such as green sponsored activities, charitable activities for publicizing the green image. When the green consumption and environmental awareness formed, the function of environmental protection of the products will become the evaluation indexes of private utility. When they consume some green product, their appraisal on this product’s utility will improve. Assume that the environmental protection function of this product happens to be MEB for the utility value-added that consumers bring, and then Demand curve of consumer can correspondingly rise to MSB (its MEB and MC) too. The externality will just disappear at this moment, and realizing the internalization of the externality will be favorable to the sustainable development of enterprise. 4.2.2 Green pricing strategy The green ideas could be introduced through bidding stage and making the green prices. The ultimate price is determined by the Bid Price because of the uniqueness of the construction products. Introducing 1059 the green idea from the early stage of bidding will be helpful to make the green price of the construction products. According to the principles of "compensation for the use of the environment" and "polluter pays", bidding will be included in environmental cost form a green costs charged to the green products prices. The cost of the construction enterprise will be reduced to MC1 from MC. At this moment, the equilibrium output of the green products made by construction enterprise is Q* (an intersection point of MC1 and MR), which happen to equal to the social optimum equilibrium output. The outside income of green marketing turns into the inside that enterprise is benefited. Thereby eliminating the externality and the resource distribution of the whole society will reach Pareto optimal state. Lower costs and the reasonable green price can promote the sustainable development of the construction enterprise effectively. 4.2.3 Green product strategy Green idea will be incorporated in the whole construction course and produce green products, which emphasize that resources and energy must be utilizing effectively and the ecological environment be protected. Construction is the most critical part of the whole production. During construction, the new technologies are used so that the utilization rate of resources will be raised, and demand for natural resources, energy consumption is significantly reduced, waste emissions to the environment pollution is reduced, too, especially the dust and noise pollution. The new green materials will be used so that pollution of construction products will be reduced. Thereby the environmental pollution is reduced and the damage to human health, the pollution of the entire production process would be reduced too. The cost will be charged to the green products prices. 4.2.4 Green certification strategy It is of great significance to gain green certification for the construction enterprise that operates with green marketing. By green certification, the image of construction products will be improved and the market is opened up further and shared for construction enterprise. Because of differentiation of construction product, competitive edge will be gained in the market and corporate image will be enhanced and the trust and favor of consumers will be winning. 5 Conclusions In a word, construction enterprise that implements green marketing strategy plays an important economic functions and social significance. Green marketing for constriction enterprise will adapt to the demands of global sustainable development strategy, promote the rational allocation of resources and improve the efficiency and use of resource allocation so that enterprises may become a green enterprise, and is beneficial to the share and expand of the market. Promoting cultural development and the development of the emerging green civilization would optimize activities and build new image of enterprise. All of these are beneficial for a society to achieve the goal of sustainable development, also for the sustainable development of enterprises and opened up a broad road. But as a new marketing concept, its spread and popularize still needs a process. It is not enough to rely only on the construction enterprise; as long as green marketing is understood by consumers, they can accept and trust it. Therefore, consumers, construction enterprises and the governments should participate together to promoting and facilitating the green marketing for construction enterprises. References [1] Mao Hongzhang, Tang Xiong Green marketing: Guarantee of modern enterprise's sustainable development [J] Enterprise Reform and Development 2005(10) [2] Gao Yonghong, Xia Yanwang The Thinking Of Marketing Culture about Construction Enterprise[J] Building 2001(6) [3] Huang Xi Externality analysis and countermeasures of green marketing [J] Journal of commercial university of Harbin 2006(1) [4] Huang Yajun, Yu Yihong Microeconomics [M] Higher Education Press 1060