The Concept Of Green Marketing
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 4508 words||✅ Published: 16th May 2017|
Green marketing the term and the concept in recent times has been widely used in the marketing discipline to describe the promotion of green activities in companies. Green marketing is: “the holistic management process responsible for identifying, anticipating and satisfying the needs of customers and society, in a profitable and sustainable way” (Peattie & Charter, 2003, p.727). Green marketing is strongly linked to sustainability as it helps to achieve sustainability through generating and delivering sustainable solutions whilst continuously satisfying customer’s and stakeholder’s needs (Charter et al., 2002).
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A lot of different and various definitions of the marketing are available but they all tend to put the customer into focus: “Marketing is the delivery of customer satisfaction as a profit” (Kotler et al quoted by Nervi 2008, p19); “Marketing is the whole business seen from its final result, which is from the customer’s point of view” (Charter et al quoted by Nervi 2008, p19).
However, the concept of marketing has changed over the years and there is in general little reference to environmental, social and ethical perspectives in the traditional definitions (Kotler et al, 2001; Polonsky, 1994; Charter et al, 2002). The traditional definition focuses on concepts of mass consumption, mass sales, mass marketing and standardised products (Kotler et al, 2001) whereas the modern marketing adopts to some extent the concept of globalization (Kotler et al, 2001) and also focusing on concepts such as consumers satisfaction, selected marketing segments, customised products or services. There are no signs of green considerations in all those definitions. It is just in the description of green marketing that we can find some green perspectives.
The concept of green marketing seems to take its foundations into the concept of traditional marketing itself (Polonsky, 1994; Charter et al, 2002).
Polonsky (1994) observes that unfortunately a majority of people believes that green marketing refers solely to the promotion or advertising of products with environmental characteristics. The failure of some green marketing strategies happens frequently because companies used the environment as an additional promotional dimension without any attempts to analyse, or modify the underlying product itself and its environmental impact (King, 1985). Polonsky (1994) also claims that the green marketing incorporates a broad range of activities, including product modification, changes to the production, packaging changes, as well as modifying advertising. Yet defining green marketing is not an easy task.
Polonsky (1994) keeps three key components from this definition. He maintained that the green marketing is a subset of the overall marketing activity examining positives and negatives activities but also examining a narrow range of environmental activities. Polonsky’s definition (1994) is a useful starting point but today no definition or terminology has been universally accepted yet.
Polonsky defines the green marketing as: “all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs with the minimal detrimental impact on the natural environment” (Polonsky 1994, p2).
Despite the fact that many authors praise the merit of the green marketing it seems that marketing and environment are not necessarily good friends, as they often have diverging goals. According to Glorieux-Boutonnat (2004), marketing is focused on seducing consumers and generating profitable sales rapidly and generally takes the environment into consideration only as far as it helps achieving that goal. The environmental management tries to reduce the impact of production on natural resources, reducing the amount of material or energy or using more ecological materials. On the other hand, the marketers are focused on convincing and seducing the consumer by all the means such as more sophisticated packaging with more space for communication, or shifting to materials that is more appealing to the consumers, regardless of its impact on the environment (Glorieux-Boutonnat, 2004).
However, various authors notice that some brands have made successful use of green marketing and that it can bring a lot of advantages to companies.
2.2 History of Green Marketing
The idea of Green Marketing is a global concept that surfaced in the late 1980s when firms as well as consumers began to show concern about “Corporate Social Responsibility” (CSR). Marketing as a newly introduced concept was quickly the topic of a great deal of market research and a lot of different aspects of green marketing were discussed academically (Peattie & Crane, 2005).
In the early 1990s, green marketing “had arrived in earnest” (Peattie, 1992). This era was differentiated with a heightened environmental awareness, a growing consumer interest in green products and a pronounced willingness to pay for green features (Peattie. & Crane, 2005). Surveys showed a really extensive green market potential. The future promised to be bright.
Despite all these hopeful forecasts, the mid 1990s were a period of criticism for green oriented companies and green marketers. Market growth for green and environmental-friendly products had not progressed as anticipated. Firstly, because consumers had become disappointed by “green washing” practices from many firms that claimed to be “green”. This conducted to consumer uncertainty and doubt about green claims and practices of many firms.
Secondly, there was a considerable gap between environmental concern and actual purchasing. Marketers realized that consumer apprehension for the environment and a simultaneous desire for green products did not translate into purchasing behaviour (Kaman, 2008).
The late 1990s and the change to the new millennium brought a resurgence to green marketing. Due to the implementation of more advanced technology, stricter state enforcement on deceptive claims, government regulations and incentives as well as closer scrutiny from various environmental organisations and the media, many green products have greatly improved and regained consumer confidence (Kaman, 2008).
Nowadays, green marketing is no more a possibility, but a necessity. Consumers, firms, organisations and governments are strongly conscious of this fact. Marketers have to take environmental issues into consideration if they want to sustain on the market.
2.3 Why should Green Marketing be adopted?
According to Miller (2008), green businesses continue to develop, and new companies are joining the trend. Of course sometimes the change is a deliberate choice of the company, but sometimes not so much. Polonsky (1994) noticed five explanations to the reasons for firms to use green marketing.
The first is from Keller (1987) and Shearer (1990) who noticed that organizations perceive green marketing as an opportunity that can be used to achieve its objectives. Since society becomes greener, the demand for greener goods and services will rise. In order to answer to these new needs, marketing will have to become greener, leading companies and other organizations towards sustainable management (Peattie, 1992).
People generally want to do the right thing, so the challenge and opportunity for the green marketer is to make it easy for people to do so (Queensland Government, 2006). If there is a product with equal quality, price, performance and availability the consumer will choose the product with environmental benefit, this fact gives goods with environmental characteristics a competitive advantage (Polonsky, 1994).
2.3.2 Social Responsibility
The organizations believe that they have a moral obligation to be more socially responsible (Keller, 1987). Companies are more and more aware that their corporate responsibility as active members of the society is becoming an important factor in global competition and therefore they must behave in an environmentally responsible way (Polonsky, 1994). The society feels really concerned about these issues and now stock exchanges rates companies not only on the immediate financial results as they used to, but also in terms of corporate responsibility in the social and environmental fields (Glorieux-Boutonnat, 2004). In this way environment manager positions have been created in order to meet requirements of the new sustainability agencies. A lot of companies choose to become green because of their image.
2.3.3 Governmental pressure
The third reason is that governmental bodies are compelling firms to turn out to be more conscientious (NAAG, 1990). Some firms opt to green their systems, policies and products due to economic and non-economic pressures from their customers, business partners, managers, civilians and other stakeholders (Prakash, 2002). The role of the government is to protect consumers and society and this protection has significant green marketing implications (Polonsky, 1994). By introducing governmental regulations the government protects consumers in several ways: reducing or modifying consumption of harmful goods, ensure that the rules are respected, etc (Polonsky, 1994).
2.3.4 Competitive pressure
Competitors’ environmental activities push firms to modify their environmental marketing activities (NAAG, 1990). The firms have the desire to sustain their competitive position and tend to imitate competitors promoting their environmental behaviours (Polonsky, 1994).
2.3.5 Cost or profit issues
The last reason pushing a company to become green is the cost related with waste disposal or reductions in material usage obliging companies to modify their behaviour (Azzone & Manzini, 1994). Sometimes to modify the process of production can involve money but it will save money in the long term. Moreover, the implementation of sustainable marketing practices is good for cost cutting but also for the customer relationship management and the return on investment (Miller, 2008). Peattie and Crane (2005) also claimed that firms can be enthusiastic about green marketing when it involves short-term cost savings (packaging reduction, cost savings). Polonsky (1994) added that when trying to minimize waste, firms are often forced to re-examine their production processes and it often leads to more effective processes often reducing waste but also raw materials.
2.4 Introduction to Consumer Behaviour
Satisfaction of consumer need is the ultimate goal for success in business. Hence, an effective marketing strategy must focus in serving customers better than competitors. In the retail environment, we are watched and studied (Underhill, 1999) and our purchases are recorded and analyzed. The study of consumers help firms and organizations improve their marketing strategies by knowing why consumers make the purchases and the factors that influence consumer purchases. As a result, knowledge about consumers and addressing their needs is considered to contribute to a car dealer’s competitive advantage (Chojnacki, 2000). In the car industry, the key to successful relationship marketing rests at the dealer level. As far as the consumer is concerned, the dealer is the face of the company.
Consumer Behaviour consists of 3 distinct activities: shopping, buying and consuming (Tauber, 1972). Consumer Behaviour can be defined as the acts of individuals directly involved in obtaining and using economic and services, including the decision process that precede and determine these acts (Engel et al, 1968, P5).
2.4.2 Overview of Buyer Behaviour
Buyer Behaviour refers to the acts of individuals directly involved in the exchange of money for economic goods and services and the decision process that determines these acts (Engel et Al, 1968, P5). Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer. Rationale Buyer Behaviour is based on the decision process, which involves the set of rules that the buyer employs to match his motives and his means of satisfying those motives (Howard and Sheth, 1969). No two people are similar as physiological factors, cultural forces, economic considerations, interpersonal relationships, personality, self concept and learning are variables that shape goals and influence (Runyon, 1980).
2.4.3 Nature of purchase
The purchase of a car is complex decision making for an individual. This implies that the consumer will be highly involved in the purchase decision if the product in question relates to an issue with which they are so greatly concerned (Higie and Feik, 1989). Blackwell, Miniard and Engel (2001) have also maintained that the degree of involvement tends to be high when consumers perceive the decision of having direct influencers on themselves.
Brand and model perception often mirror the sales situation. Independent surveys such as those conducted by J.D Power and Associates (conducted in UK and Germany) rank Toyota as number one in the overall owners’ satisfaction. More specifically, Toyota has emerged as a leader in QDR (quality, durability and reliability).
Some car buyers switch from one brand to another at trade-in time whereas others display consistency of choice from purchase to purchase (Sambandam and hard, 1995). On that decision, whether to remain loyal to the previously purchased make or switch brands hangs the fortune automobile manufacturers and retailers. Loyalty has been recognized as essential to customer retention and therefore business survival (Reichheld and Schefter, 2000). Quality products, positive showroom experiences and good after sales service are all essential to the loyalty formula and consequently manufacturers have been putting considerable marketing effort in this direction. The Toyota endorser band has earned the connotation of reliability while the Volvo brand is positioned on the safety job.
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2.4.5 Consumer Decision Making Process
For many consumers, choosing an automobile is often a complicated and high-involvement process. Although cars are regularly used products, they are also rarely bought products. Additionally, an automobile is expensive, there is a large selection and the consequences of not choosing well typically lasts a long period of time and may cost a lot to rectify.
Consumers enter into the process of actively evaluating automobiles for purchase when they experience a strong desire or need for a car (Dholakia 2001; Frey & Jegen 2001; Villacorta, Koestner & Lekes 2003). Coupled with the ability and desire to buy, the consumer is said to be “in the market” for a new car. This means that the consumer is saving money or has access to funds for purchase, and they have strong intentions to complete the purchase in the near future.
To help them arrive at a final choice, many consumers will weigh and evaluate different factors, including; cost, performance, aesthetics, the ‘lifestyle/image’ associated with some makes/models, social influence and the car’s environmental credentials like fuel economy/emissions (Griskevicius et al. 2010). They finally establish “purchase parameters” based on the degree of importance of the vehicles’ elements or groups of elements.
In the evaluation process, the consumer seeks vehicles that best address the decision-parameters that they have established through a trade-off between different factors and dimensions.
If this trade-off process is driven by underlying intrinsic or extrinsic reasons, then it is likely that these reasons will manifest themselves in the factors or dimensions used for evaluation. These dimensions are sometimes called consumer consideration-sets. In this sense, a person who is buying a car to “show-off” may consider very use very different consideration-sets to those used by a consumer who is intrinsically motivated and buys a hybrid vehicle because they wish to save the environment. This kind of decision making mechanism affords researchers the opportunity to study the factors that enter into consideration for the purchase of cars. It may even be possible to compare the choice sets used for the purchase of different models or types of cars (e.g. conventional vehicles vs. petrol-electric hybrid cars).
At this point, it is useful to introduce the possible dimensions and constructs that consumers may use for choosing between different automobiles. Product performance/function includes evaluations of how the product is likely to perform (Lavidge & Steiner 1961). Utility is a common measure product performance. The consumer can evaluate performance first hand by test-driving the car or may obtain it second-hand through the media or through word-of-mouth. Product grade is closely related to performance and is the product’s perceived quality and attributes (Lavidge & Steiner 1961; O’Brien 1971). Buyers may believe that hybrids produce lower emissions, making it a better quality automobile. Typically, product quality is negatively associated with product price.
The cost of a car includes its purchase price and running costs. In Australia, a Prius costs $16,000 more than a Corolla, which is a comparable car (Toyota Australia 2010). Running costs for hybrids are also generally higher. The cost of a car has been found to be positively associated with its perceived image (Heffner, Kurani & Turrentine 2005, 2007). For example, expensive cars are perceived to be prestigious and luxurious. Indirectly, this prestige is transferred to its driver. Similarly, Prius drivers may derive benefits from the “green” image associated with hybrid vehicles.
Social influence can affect an individual’s choices (Ajzen 1991). People use specific products in order to gain admittance, fit in with, and to attain social standing within desired reference groups (Tybur & Van den Bergh 2010). This factor has been found to be significantly stronger for some groups of consumers (Steg 2005). Typically these consumers are described as conformists who will follow the directions and wishes of their referent groups. All of these dimensions help the consumer choose which car to buy.
2.5 Common reasons why consumers buy hybrid cars
Consumers are buying increasing numbers of environmentally friendly cars. Increasingly, many of these environmentally conscious consumers choose to purchase petrol-electric hybrid vehicles. In this category of “greener-cars”, Toyota’s Prius model is reported to be the market leader. In 2009/10, it was the best-selling car in Japan, an important leading market for automobile trends (Mick 2010). Sales of the Prius keep growing despite well-publicised quality and safety problems (Mitchell & Linebaugh 2010).
In fact, the demand for petrol-electric hybrids is so strong that Toyota has introduced a second and larger Camry branded hybrid vehicle into Australia. Other car manufacturers are following with their own models, indicating that there is likely to be sustained demand for this type of light-duty passenger vehicle.
Toyota markets the Prius as an environmentally better alternative to conventional vehicles because it uses less fuel and has lower emissions. This marketing position appears to appeal to consumers who do not wish to further degrade the environment. It has been suggested that these consumers choose to help by driving a car that is more environmentally friendly (Tybur & Van den Bergh,2010). However it has also been recognized that encouraging the adoption of environmentally friendly products is a key challenge for the behavioural scientists (Kaplan 2000). While some debate continues on the veracity of these propositions, this thinking has influenced the way people live by increasing their efforts to reduce energy use and to have fewer by-products as a result of consumption. It has been suggested that this type of thinking has led some consumers to prefer products like the Prius (Jansson, Marrell & Nordlund 2009).
The literature into reasons for buying environmentally friendly products appears to be split along the streams of intrinsic versus extrinsic motives.
Intrinsic motivations appear to be the reason why conservation and environmentally minded consumers adopt eco-friendlier products (Bamberg 2003). For example, intrinsically driven consumers buy hybrid cars to reduce the effects of their driving on the environment. However, there is another stream of literature using other research methods that have found that pro-environmental products are often not purchased because of pro-environmental motives (Barr 2004). In fact, in a wide-ranging study that employed disguised surveys on a range of products, Bamberg (2003) reported only a low to moderate association between consumers’ concern about the environment and adoption of consumption behaviour that was considered to be environmentally friendly.
It is also possible that extrinsic rewards (e.g. popularity, image, status) may be a more prominent reason for some consumers to adopt environmentally friendly products (eJansson, Marrell & Nordlund 2009). This is not to say that these consumers do not posses intrinsic motivations, but that extrinsic reasons appear to play a more powerful role in their decision making process. Griskevicius, Tybur & Van den Bergh (2010) conducted a series of experiments and found that many of the consumers’ in their sample chose environmental friendly products because of social or professional status concerns. In addition, participants were more likely to adopt environmentally friendly products with ‘conspicuous’ consumption characteristics (i.e. they could be seen using the product) over those that were predominantly consumed in private. They also found that consumers were more likely to choose environmentally friendly products that were comparatively more expensive, and tended to ignore those that were priced at the same level or below similar less eco-friendly products. The authors indicated that their results clearly suggested that some consumers tended to adopt an environmental friendly product only if this consumption decision was advantageous to their image as being pro-social issue and unselfish.
2.6 Factors contributing to the success of green marketing following green consumers
According to Peattie (1992) it must be ensured that the internal as well as the external green variables meet the following four success criteria in order to succeed in green marketing and to convince consumers:
2.8.1 Satisfaction of stakeholder needs. The aim is to succeed in implementing green issues while satisfying customer needs and wants. But it does not limit to consumers; other stakeholders, for example environmental organisations or governments or even employees, also want to be satisfied. Marketers have to take all potential stakeholders into consideration by ensuring satisfaction.
2.8.2 Safety of products and processes. Products, services, production or other processes in the marketing value chain have a meet strong safety and environmental standards for consumers, workers, society and the whole environment.
2.8.3 Social acceptability of the company. Products, services, processes and the whole company itself have to give a clear message about its practices in terms of green marketing. Not to mention the increasing skepticism and scrutiny shown by consumer behaviours concerning green marketing. Marketers have to convince consumers of the greenness of their products and services.
2.8.4 Sustainability of its activities. Products, services as well as all activities of the company have to stay sustainable in consumer eyes. A long term vision in the marketing process has to be integrated in order to stay sustainable but also competitive in the market.
All four success factors include a consumer perspective, which means that the role of the consumer as an essential stakeholder of green marketing should never e forgotten.
2.9 Some problems with going green
No matter why a firm uses green marketing there are a number of potential problems that they must overcome. One of the main problems is that firms using green marketing must ensure that their activities are not misleading to consumers or industry, and do not breach any of the regulations or laws dealing with environmental marketing.
Another problem firms face is that those who modify their products due to increased consumer concern must contend with the fact that consumers’ perceptions are sometimes not correct.
When firms attempt to become socially responsible, they may face the risk that the environmentally responsible action of today will be found to be harmful in the future. Some firms use DME (dimethyl ether) as an aerosol propellant, which also harms the ozone layer [Debets 1989]. Given the limited scientific knowledge at any point in time, it may be impossible for a firm to be certain they have made the correct environmental decision.
While governmental regulation is designed to give consumers the opportunity to make better decisions or to motivate them to be more environmentally responsible, there is difficulty in establishing policies that will address all environmental issues. For example, guidelines developed to control environmental marketing address only a very narrow set of issues, i.e., the truthfulness of environmental marketing claims [Schlossberg 1993]. If governments want to modify consumer behavior they need to establish a different set of regulations. Thus governmental attempts to protect the environment may result in a proliferation of regulations and guidelines, with no one central controlling body.
The push to reduce costs or increase profits may not force firms to address the important issue of environmental degradation. End-of-pipe solutions may not actually reduce the waste but rather shift it around. While this may be beneficial, it does not necessarily address the larger environmental problem, though it may minimize its short term affects. Ultimately most waste produced will enter the waste stream, therefore to be environmentally responsible organizations should attempt to minimize their waste, rather than find “appropriate” uses for it.
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