green marketing and its implementation in · pdf filegreen marketing and its implementation in...

Asia Pacific Journal of Marketing & Management Review__________________________________________ ISSN 2319-2836 Vol.2 (7), July (2013) Online available at indianresearchjournals.com

75

GREEN MARKETING AND ITS IMPLEMENTATION IN INDIAN

BUSINESS ORGANIZATIONS

MANJUNATH .G.*; GUNDUPAGI MANJUNATH**

*ASSISTANT PROFESSOR,

ADARSH GROUP OF INSTITUTIONS (AGI),

ADARSH INSTITUTE OF MANAGEMENT & INFORMATION TECHNOLOGY (AIMIT),

5TH MAIN, CHAMRAJPET, BANGALORE – 18. KARNATAKA, INDIA.

**ASSISTANT PROFESSOR,

SRN ADARSH COLLEGE, DEPARTMENT OF COMM. MGMT.,

5TH MAIN CHAMRAJPET, BENGALURU-18. KARNATAKA, INDIA.

_____________________________________________________________________________________

ABSTRACT

Purpose: Green marketing refers to holistic marketing concept wherein the production,

marketing, consumption and disposal of products and services happen in a manner that is less

detrimental to the environment. Over the years, a majority of consumers have realized that their

behavior had a direct impact on environment. The objective of this paper is to study the

implementation of Green Marketing initiatives in the Indian organizations and also highlights on

the top five green marketing initiatives in the information technology (IT) sector in Bangalore.

The paper also aims to understand the concepts of Green Products; green marketing mix and

points out the challenges before green marketing initiators.

Methodology/Approach: The present paper studies the theoretical concepts of the green

marketing, green marketing management and green products. The paper also studies the theory

contributed by researchers in the area of environment marketing which includes green products,

green customers, green marketing mix and ecological processes.

Time frame: The research study was conducted during the period of August 2012 to April 2013.

Value: The research paper concludes that business firms need to change their mind set from

traditional marketing strategies to green marketing strategies in order to survive in the green

competitive world and to have a positive impact on the environment through green marketing

elements.

KEYWORD: Environment, Green Marketing, Green Marketing Management, Green Products

and Green Marketing Mix. _____________________________________________________________________________________

“Earth provides enough to satisfy every man's needs, but not every man's greed.”

― Mahatma Gandhi


76

Introduction:

According to American Marketing Association (AMA), Green marketing is the marketing of

products that are presumed to be environmentally safe. Thus, Green marketing incorporates a

broad range of activities, including product modification, changes to the packaging as well as

modifying advertizing. Hence, green marketing refers to holistic marketing concept wherein the

production, marketing, consumption and disposal of products and services happen in a manner

that is less detrimental to the environment. Over the years, a majority of consumers have realized

that their behavior had a direct impact on environment. There is a growing amount of evidence

indicating that consumers are shifting traditional products to green products to have a positive

impact on the natural environment.

Green Marketing as the development and marketing of products designed to minimize negative

effects on the physical environment. Green Marketing as the study of all efforts to consume,

produce, distribute, promote, package, and reclaim products in a manner that is sensitive or

responsive to ecological concerns. The inclusion of all efforts to consume recognizes that many

entities are involved in green marketing. Green marketing is not limited to government or

nongovernment organizations, nor is it solely an activity undertaken by consumers.

Manufacturers, wholesalers, retailers, and services firms each has opportunities to contribute in

the field of green marketing. This definition also identifies the need to consider the production,

distribution, and reclamation of products as integrated components of the marketing effort.

Efficiency at one stage of this process (e.g., distribution) may offer advantages in the channel,

but the goal of green efforts is to limit the total ecological influence associated with

consumption. Green Marketing must consider the promotional efforts employed to gain

consumer support of ecologically friendly products.

Green Marketing Management as the process of planning and executing the marketing mix to

facilitate consumption, production, distribution, promotion, packaging, and product reclamation

in a manner that is sensitive or responsive to ecological concerns. The management of green

marketing activity continues to evolve as companies incorporate new thinking about climate

change throughout their organizations. Initial green marketing efforts focused on the recycling of

products such as aluminum cans and photocopier toner cartridges. Over time, firms have begun

to consider ways to modify inputs to production that limit the influence of the products on the

environment. The study of green marketing reflects an interest in becoming more aware of

ecological and sustainability issues and consistently working to achieve higher levels of

sustainability. Increasingly, firms are recognizing that outputs from the production process

should be viewed under scrutiny of climate change as well. Savvy management recognizes that

everything coming out of a production facility is a product, by-product, or waste. Green products

are recognized nationally or internationally through certification and eco-labeling. For example,

the United States Environmental Protection Agency provides Energy Star labels for electronics

and appliances that are environmentally friendly. In the United States, personal computers

account for 2% of annual electricity consumption. The EPA s new Energy Star labels require


77

computers possessing the label to be 65% more efficient than conventional products. Adoption of

these new personal computers will enable industry to save $1.2 billion over the life of the

products. Firms also are viewing by-products of production in novel ways. Shell Oil is pumping

carbon dioxide, a refinery by-product, into 500 Dutch greenhouses. This action reduces

emissions by 325,000 tons per year and saves greenhouses from having to burn millions of cubic

meters of gas needed to produce carbon dioxide. Each of these aforementioned activities

represents a form of green marketing employed at various points in the supply chain.

Increasingly, however, organizations recognize the interdependencies operating throughout an

economy. Efforts to control costs and enhance productivity at one stage cannot occur at the

expense of other stages. The United Nations is an organization that has led the way in this

recognition of the multiple interdependencies among nature, economy, and society. In December

1983, the United Nations commissioned research on development and the environment.

The 1987 report of the United Nations Commissioned Research defined sustainability as

development that meets the needs of the present without compromising the ability of future

generations to meet their own needs. Importantly, this edict recognizes that there are at any time

limits on the ability of the biosphere to absorb human activity. The sustainable organization must

generate acceptable levels of economic performance, or it will not survive. It must also nurture

social performance in its interaction with customers, suppliers, consumers, and other interest

groups. Survival is also contingent on the firm s ability to achieve acceptable levels of

environmental performance throughout the supply cycle from raw material procurement to post

consumption disposal. In the retail sector, Wal-mart has publicly committed to reducing

packaging in its global supply chain by 5% by 2013.As part of its effort to gain logistical

sustainability; the firm developed a packaging scorecard to monitor supplier performance.

Green Products:

Simon (1995) defined "Green Products" as products made with reduced amounts of

material, highly recyclable material, non-toxic material, do not involve animal testing, do

not adversely affect protected species, require less energy during production or use, or

have minimal or no packaging.

Nimse (2007) defined green products as those that use recyclable materials, minimal

wastage, and reduce the use of water, save energy, have minimal packaging, and emit less

toxic substances. Compared with other products, green products bring less harm to

humankind and offer more long-term practical development opportunities from a social

and economic perspective. Green products are environmentally friendly products.


78

Gains/Benefits of Green Marketing:

Green marketing has positive influences on multiple participants in the economy. The

environment, developing economies, consumers, corporate strategy, the product, production

processes, and supply chain benefit from green marketing.

Environmental Benefits: The obvious benefactor of green marketing is the environment.

Conditions and trends in climate change, air, water, and soil conservation. Green marketing can

have an influence on climate change in several substantial ways. Fossil fuel consumption is a

major source of greenhouse gases associated with climate change. Two leading sources of

climate change are the burning of coal for electricity and the burning of gasoline for automobile

transportation. Green marketing initiatives focused on product development strategies reduce the

need to rely on these forms of energy.

For example, new appliances are designed with fuel efficiencies that clearly reduce energy

consumption. It is important to recognize that the consumer must incorporate concern for the

environment with multiple other considerations. For example, potential consumers of the new

Chevrolet Volt must reconcile the zero-fossil fuel consumption with the price differential for this

car versus less expensive cars that produce more carbon dioxide. Green marketing initiatives

contribute to the environment by incorporating green marketing strategies into superior value

propositions for consumers.

Developing Economies: The term developing economies refers to nations that have a relatively

low gross domestic product (GDP) per capita. The low income, underdeveloped assets, and

economic vulnerability common to these economies results in high dependence on the

agricultural sector. Inhabitants in these markets, however, face increased exposure to drought,

intense storms, floods, and environmental trauma that limits the ability to enhance quality of life.

Research performed by the United Nations indicates that inhabitants of these countries are much

more likely to be affected by natural disasters than inhabitants in high-income countries. Climate

change limits agricultural productivity, increases water stress, raises sea levels, negatively

transforms ecosystems, and thwarts human health. These factors do not operate in isolation;

interactively, they contribute to hunger and poverty in developing markets. Green marketing and

production position to reduce climate modify and consequently limit hunger and poverty.

Consumer Benefits: Consumers benefit in several important ways through green marketing.

These benefits often influence consumer decision making, and consumers will vary in the extent

to which they value these benefits. Initially, consumers benefit from the knowledge that they are

doing their part to reduce climate change. These consumers are likely to favor corporate efforts

to reduce pollution over efforts to raise corporate profitability. Consumers also value the

opportunity to be associated with environmentally friendly products and organizations.

Strategic Benefits: Managers of corporate strategy realize multiple benefits from a green

approach to marketing. Companies that incorporate ecological consciousness into their mission


79

statements and strategy enhance their images among consumers, employees, investors, insurers,

and the general public. Some consumers have strong attraction toward green products, and

approaching the market with an ecological focus enhances image of the brand among these

consumers.

Product benefits: Product benefits refer to components introduced into production outputs or

services designed to benefit the consumer, whereas process benefits refer to tools, devices, and

knowledge in throughput technology designed to facilitate manufacturing and logistics. For

example, a hybrid engine is a product innovation, whereas a just-in-time inventory system is a

process innovation.

Production Process Benefits: Production processes focus on organizational efforts to produce

the highest-quality products at the lowest possible cost. Process benefits accrue for handling of

products, by-products, and waste. The materials costs associated with sustainable manufacturing

techniques can be reduced in a number of ways.

Supply-chain Benefits: Green marketing influences relationships among the firms that make up

the channel from raw material mining to consumption. Green strategies that seek to eliminate

waste in the supply chain result in firms analyzing truck loading and route planning in the

delivery process. Routing that seeks to eliminate fuel costs can maximize truck capacity

utilization and improve customer service.

Review of Literature:

According to the authors like Ottaman, (1993) and Ken Peattie, (1993) concept of green

marketing is in and the concept of conventional marketing is out. Azhagaiah and Ilangovan

(2006) according to their study, researchers found out that the environmental issues have a

significant impact on the modern society and observed the impact of green marketing and the

environment protection. Thakur (2009) “Customer awareness with reference to green marketing

of automobiles” an empirical research carried at Indore, Madhya Pradesh and concluded that

green marketing of automobiles is attracting both from urban and rural people. This clearly

indicates that people are shifting to the eco-friendly products to have a positive impact on the

natural environment rather than traditional products. Welling & Chavan (2010) “Analyzing the

feasibility of Green Marketing in Small & Medium Enterprises”, an empirical study and the data

was collected from 114 respondents in (Suburban Mumbai) , the main purpose of their study was

to find out whether the Small & Medium Enterprises believed in implementing green culture

practices in the manufacturing and marketing of green products. Further their study concluded

that both the State and Central governments should take necessary steps and encourage the

SME‟s to manufacture green products. Brady (2010) Due to the diminishing availability of

natural resources, such as water, oil, this green interest is also creating a concern for

conservation. Sustainability concerns- climate change, toxic substances, ethical sourcing and

extreme utilization are at an all time high with consumers and media. With the viability of the


80

planet a growing concern many consumers are willing to do their part. Ramakrishna (2012)

“Green Marketing in India: Some Eco-Issues”, the researcher analysed the Eco-issues in Green

Marketing through the 4p‟s of green marketing mix and concluded that awareness to be created

among the people about green marketing benefits and eco-friendly products and also concluded

that the firms need to give more attention towards the green culture in order to survive in the

tough market.

Participants who need to understand the Green Marketing:

Green marketing is progressively more an important issue for most entities concerned in

marketing whether they are buyers, sellers, or regulators of an industry.

Consumers.

Governments.

Companies with recognized environmental reputations.

Companies highly dependent on scarce human capital.

Companies with low market power.

Companies operating in highly regulated industries.

Companies dependent on natural resources.

Reasons Why companies to adopt Green Marketing:

Opportunities or competitive advantage.

Corporate social responsibilities (CSR).

Government pressure.

Competitive pressure.

Cost or profit issues.

Challenges in Green Marketing:

Majority of the people are not aware of Green products and their uses.

Green products require a recyclable and renewable materials or elements which are

expensive.

People are often perceived that green products are expensive compared to traditional

products.

Green Marketing depends on technology and requires a huge investment in Research and

Development.

Green Marketing Mix: The combination of 4 Green P‟s or Green factors(Eco-friendly) is

known as Green Marketing Mix namely; Green Product, Green Promotion, Green Place and


81

Green Price. Under GMM “Green factors” should be considered as they closely associated to the

success or failure of the marketing of eco-friendly products:

Green Product: While manufacturing green products the firms should incorporate

environmentally friendly resources or materials in the product. The characteristics of the

resources or materials used in the product and its packaging should influence

environmental elements.

Green Promotion: The firms should focus more on “Green Advertising” in order to

communicate to its green customers (who uses eco-friendly products) and as well as

traditional customers (who are not green users) about the concept of environmental

protection. Apart from this, the firms should also launch promotional tools such as

schemes, coupons, offers and premium etc; in order to attract consumers to buy eco-

friendly products.

Green Place: Green products and services which are to be delivered from the point of

producers to the point of ultimate green consumers. In this context, the firm should

choose a proper channel considering product characteristics, consumer characteristics and

market characteristics.

Green Price: It is often perceived by the consumers that the prices of green products are

relatively higher compared to the traditional products. If production and operating costs

are lowered, it would give green products more competent force on the market.

Table: 1: Showing Companies had taken initiatives on Green Marketing:

4 Green P’s of

Marketing

Green

Price

Green

Product

Green Place

Green

Promotion


82

SL.No: Company Green Marketing Initiatives

1. Philips India Energy saving Lights.

Medical Equipments.

House hold appliances.

2. Mahindra Reva Electric Vehicle-“e2o”.

Earth friendly small tractor designed to the

farmers.

3. Go GreenBOV Battery Operated Vehicles(BOV)

4. Philips Compact Fluorescent Light (CFL) bulbs.

5. Hewlett-Packard

Company Energy-efficient products and services and

institute energy-efficient operating practices in its

facilities worldwide.

6. Wipro Technologies Sustainable IT products and solutions, which help

customers, achieve high productivity in energy,

space and asset management through the

lifecycle.

Recycled plastic.

Launched Green ware ranges of desktops are not

only 100% recyclable, but also toxin-free.

7. CISCO Systems Cisco recently partnered with San Francisco‟s

Department of Energy to announce World‟s first

Urban Eco Map Pilot. This tool provides

information on carbon emissions which are

caused by transportation, energy waste etc.

organized by ZIP codes.

Cisco is planning to minimize the ecological

impact by establishing responsible operation

programs aimed to reduce energy consumption

across the company, limit the greenhouse gas

emissions implicated in global warming, closely

manage the air quality, water consumption, food

procurement and waste and lastly, monitor and

ensure proper disposal of hazardous materials.

7. Infosys Technologies

Ltd. Focused on green buildings, water harvesting and

conservation, better transport management by

encouraging car pool for its employees and

increasing bio-diversity in its campuses.

Focused on „green engineering‟. The unit works

on new products as well as on refurbishing

existing products to make them more energy

efficient.


83

8. Accenture Focused on “green” buildings and data centers at

all global offices.

9. HCL HCL commits to manufacture products that are

environment friendly in all respects and are free

from hazardous chemicals.

10. McDonald Restaurant McDonald „restaurant‟s napkins, bags are made

of recycled paper.

11. Panasonic(With

ECONAVI Intelligent

eco sensors)

Eco-friendly refrigerators, air conditioners,

washing machines.

Plasma TV, LCD.

Quick iron, batteries and bulbs.

Table No:2: Showing Countries ranked according to their response level on Green

Marketing:

Rank Countries

1 India

2 UK

3 US

4 Thailand

5 Australia

6 Canada

7 China

(Source: Retrieved from www.google.com)

Table No: 3: Showing top 5 Information Technology (IT) Companies in Bangalore.

SL.NO Company Name

1 Wipro Technologies

2 CISCO Systems

3 Infosys

4 Accenture

5 HCL Technologies Source: www.mybangalore.com/.../top-5-green-it-companies-in-bangalore-.html

Conclusion: In the present day, a majority of consumers have realized that their

behavior had a direct impact on environment as there is mounting amount of evidence


84

indicating that consumers are shifting traditional products to green products to have a

positive impact on the natural environment. The research paper concludes that business

firms need to change their mind set from traditional marketing strategies to green

marketing strategies with a huge investment in technology, R and D and through Green

marketing elements such as eco-design of a product, eco-labeling, eco-packaging, green

logo in order to survive in the green competitive world and to have a positive impact on

the environment.

References:

Adrienne Fox (2007), “Corporate Social Responsibility Pays Off”, HR Magazine, August 2007.

Ans Kolk(2000), “Green Reporting”, Harvard Business Review, pp15-16.

Andrea Coombes(2007), “Deals Speed Up Hybrid Savings”, Wall Street Journal, May 2, 2007.

Allen D. Lee and R. Conger(1996), “Market Transformation: Does It Work? The Super Energy

Efficient Refrigerator Program”, Proceedings of the 1996 ACEEE Summer Study.

Azhagaiah R.Ilangovan A. (2006), “Green Marketing and Environment Protection”, Indian

Journal of Marketing, Vol.XXXVI.

Clare D Souza, Mehdi Taghian, and Rajiv Khosla(2007), “Examination of Environmental Beliefs

and Its Impact on the Influence of Price, Quality and Demographic Characteristics with Respect

to Green Purchase Intention”, Journal of Targeting, Measurement and Analysis for Marketing

15, No. 2, pp69-78.

Chad Holliday(2001), “Sustainable Growth, the DuPont Way”, Harvard Business Review,No. 8,

pp129-132.

Carol Matlack(2007), “Cleaning up with Next-Gen Jets”, Business Week, June 25,

2007,available at http://www.businessweek.com/globalbiz/

Colleen Taylor(2006), EPA Revises Energy Star, Electronic News 52, No. 44.

Chrissy Kadleck, Calif(2007), “Vineyard Cuts Environmental Impact”, Waste News, August 6,

2007.

Robert A. Frosch(1996), “Toward the End of Waste: Reflections on a New Ecology of Industry”,

Daedalus 125, No. 3, pp 199- 212.

http://www.businessweek.com/globalbiz/


85

Edwin R. Stafford and Cathy L. Hartman (1996), “Green Alliances: Strategic Relations between

Businesses and Environmental Groups”, Business Horizons 2 , pp50-59.

Gert Cornelissen et all(2008), “Positive Cueing: Promoting Sustainable Consumer Behavior by

Cueing Common Environmental Behaviors as Environmental”, International Journal of Research

in Marketing 25, No. 1, pp46 55.

Gro Brundtland(1987), “Our Common Future: The World Commission on Environment and

Development” Oxford University Press, New York.

H.Ramakrishna (2012),”Green Marketing in India: Some Eco-Issues”, Journal Of Marketing,

Vol-42,No-11, pp.11-14.

James Salzman and David Hunter (2007), “Negligence in the Air: The Duty of Care in Climate

Change Litigation”, Working paper no. 95, Duke University Law School.

Jeffrey R. Kosnett(2007), “GREEN is the Next Big Thing”, Kiplinger‟s Personal Finance,

October, pp32-34.

Jacquelyn Ottman, Edwin R. Stafford, and Cathy L. Hartman(2006), “Avoiding Green

Marketing Myopia”, Environment 48, No. 5, pp22-36.

Kevin Watkins(2008), Human Development Report 2007/2008, United Nations Development

Programme, Geneva, Switzerland.

Mark Vigneri , Ron Adams, and Ron Scrudato (2007), “Remediation for Those Hard-to-Reach

Places”, Pollution Engineering 39, No.6 , pp 36-40.

Mary Ann Falkman (2007), “Sustainability: The Wal-mart Way”, Packaging Digest 44, No. 20.

Saheli Datta and Todd Woody, Technologies for a Green Future, Business (2007)

Stuart L. Hart and Mark B. Milstein(1999), “Global Sustainability and the Creative Destruction

of Industries”, Sloan Management Review 41, No. 1, pp23-33.

Stafford(2006), Ned, Gas for the Greenhouse, Nature.

Sandra A. Waddock, Charles Bodwell, and Samuel B. Graves(2002), “The New Business

Imperative”, Academy of Management Executive 16, No. 2, pp132-148.

Timothy Ashby(2001), “Silicon Island Cuba s Digital Revolution”, Harvard International

Review 23, No. 3, pp14-18.

Tony Kent and Dominic Stone(2007), “The Body Shop and the Role of Design in Retail

Branding”, International Journal of Retail and Distribution Management 35, No. 7, pp531-543.


86

The Editors of Consumer, Reports Consumer Reports Buying Guide 2008.

Thakur Girish and Joshi Nitin M. (2009), “An Investigation Of Customers Awareness With

Reference To Green Marketing Of Automobiles”, Indian Journal Of Marketing, Vol:XXXIX.

Welling & Chavan Anupam .S. (2010), “Analyzing the Feasibility of Green Marketing in

SME‟s”, Asia-Pacific Journal of Research in Business Management, Vol-1, Issue-2.

green marketing and its implementation in · pdf filegreen marketing and its implementation in...

Documents