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Market Intelligence 1995 Mintel Report- Personal Stationary. Van S 1996 Ecological Design. First edition.Island Press. INTERNET REFERENCES

    Harold Silva Guerra Green Marketing

    GREEN MARKETING

    Harold Silva Guerra

    UNIVERSIDAD DEL NORTE

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    Harold Silva Guerra Green Marketing

    TABLE OF CONTENTS 1 INTRODUCTION

    2 GREEN MARKETING

    2.1 DEFINITION

    3 STRATEGIC MARKETING OF GREENER PRODUCTS 3.1 THE GREEN CONSUMER

    3.2 IDENTIFY THE OPPORTUNITIES 3.3 EDUCATE AND EMPOWER CONSUMER 3.4 HIGHLIGHT THE DIRECT BENEFITS OF GREENER PRODUCTS

3.5 THE FUTURE

    4 GOVERNMENT AND COMPETITIVE PRESSURE

5 SOCIAL RESPONSIBILITY

6 CONCLUSION

7 REFERENCES

8 APPENIDX

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Harold Silva Guerra Green Marketing

    1 INTRODUCTION

    The way people think about the environment, economic development and the links between the two is changing significantly. The end of the 1980s saw fundamental revaluation of our interest over resource availability and use, the environmental consequences of resource exploitation and the relationship between the environment, poverty and economic changes. This re-established opinion has given rise to a new approach to environment and development issues, an approach that seeks to reconcile human needs and the capacity of the environment to cope with the consequences of economic systems. This approach is called Sustainable Development.

    The World Commission on Environment and Development (WCED) (better known as the Brundtland Commission) define sustainable development in Our Common Future in 1987

    as:

    Development that meets the needs of the present without compromising the ability of

    future generations to meet their needs.

    Sustainable development holds humankind responsible for existing circumstances and challenges humankind to accept responsibility for instituting the changes necessary to attain sustainability. This challenge was reinforced at the United Conference on Environment and Development challenge was reinforced at the United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro in 1992. The conference‟s principal product (endorsed by the more than 100 heads of state and close to 10,000 delegates) was an agenda for change, called Agenda 21, a description of perceived needs and proposed actions to bring humankind into harmony with the finite resources of the earth by the middle of the 21 century.

    According to Mannion & Bowlby (1993) the vision of sustainable development set out in the Brundtland Report is a call for policies that recognise the need for economic growth, and seek to maximise growth, but which do so in a way which does not risk the position of vulnerable people or deplete the future viability of the resource base. It calls for a different attitude to economic development, in which the quality of growth is seen to be as crucial as the quantity of growth.

    The Brundtland Report (cited in Mannion & Bowlby) identifies two key concepts in sustainable development policies:

    a. The basic needs of all people must be met in a way which provides for their needs

    with security and dignity-in the world today, where the needs of so many are not met,

    this inevitably means giving the needs of the poor priority.

    b. There are no absolute limits to development-development potential is a function of

    the present state of technology and social organisation, combined with their impact on

    environmental resources.

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Harold Silva Guerra Green Marketing

    The Brundtland Report highly evolved the following list of objectives for sustainable development policies:

    a. Conserving and enhancing the resource base

    b. Merging environment and economies in decision-making processes

    c. Reviving economic growth

    d. Changing the quality of growth

    e. Ensuring a sustainable level of population

    f. Re-orienting technology and managing risk

    g. Meeting essential needs for jobs, food, energy, water and sanitation.

    In this essay we will focus on Green Marketing because companies and governments must act in a responsible manner to support environment for instance, reduce use of toxic materials, contamination water, lack of sanitation, ecosystem destruction due to development, deforestation, population growth, insufficient reuse and recycling, dung and wood burning and so on. Moreover, consumers who demand goods and thus create environmental problems.

    On the other hand, Green Marketing requires that consumers want a cleaner environment and are prepared to pay for it, probably through higher priced products, changed lifestyles, or even governmental intervention.

This report will attempt to define „green‟ marketing, briefly explain aspects of why

    companies move to green marketing, governmental and competitive pressure, social responsibility and, finally a conclusion will be provided.

2 GREEN MARKETING

    2.1DEFINITION

    Many people around the world believe that green marketing is just promotion or advertising of products with environmental characteristics for instance, environmentally friendly, ozone friendly, recyclable and so on. Frequently, consumers in the world associate that terms with green marketing but these terms are green marketing claims, in general green marketing is a big concept, one that can be applied to services, industrial and consumer goods, etc. Furthermore, green marketing include many aspects such as packaging changes, product modification, advertising modification, as well as production process.

According to Polonsky M (1994) he pointed out that Green or Environmental Marketing

    consists of 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 minimal detrimental impact on the natural environment.

Moreover, Peattie & Charter (1994) claims that 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.

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Harold Silva Guerra Green Marketing

    3 STRATEGIC MARKETING OF GREENER PRODUCTS

    In the last decades innovative environmental managers and product designers have made considerable progress toward reducing the environmental impacts of products. Handled by regulations, new technologies and consumer pressure, whilst designers have focused on particular eco-aspects of products such as increasing the amounts of recycled or recyclable materials, reducing material intensity of products an so on.

    There are five aspects for companies who wish move to green marketing: (Polonsky, 1994)

    a. Competitors‟ environmental activities pressure firms to change their environmental

    marketing activities.

    b. Governmental bodies are forcing firms to become more responsible.

    c. Organisations perceive environmental marketing to be an opportunity that can be used

    to achieve its objectives.

    d. Cost factors associated with waste disposal or reductions in material usage forces

    firms to modify their behaviour.

    e. Organisations believe they have a moral obligation to be more socially responsible.

    On the other hand, Rader (1997) argues that it is obvious that we cannot have an effective green market unless and until we have a truly competitive market in general (see appendix 1)

3.1 THE GREEN CONSUMER

    Many indicators show that consumer concern about the environment has steadily increased over the past two decades for example, The Green Gauge Report 1996 showed that 75% of Americans think they should take more positive action towards the environment.

    According to Ottman and Terry (1997) the consumer‟s increased environmental concern, and indeed his or her environmental sophistication, does not necessarily translate into increased green purchasing. Marketing greener products will have to entail more than attaching a green label or featuring images of wildlife in media advertisements.

3.2 IDENTIFY THE OPPORTUNITIES

    The demands for greener products around the world exist. Much of the demand will continue to be handled by regulations as producer responsibility, recycling, etc. Opportunities to increase there are as follows (based on Ottman and Terry 1997): a. Differentiating products and services in environmentally oriented ways that command

    brand loyalty capturing new market share among governments and corporations with

    green procurement and purchasing programs.

    b. Capitalising on service potentials.

    c. Creating alliances to reduce the cost and risk of entering into a new eco-innovation

    enterprise.

    d. Reinforcing a company‟s environmental position through cause-related marketing.

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Harold Silva Guerra Green Marketing

    e. Capturing revenue streams through innovative strategies which extent the life of the

    resources of which a product was comprised.

    The different opportunities appear due to industrial and individual consumers are becoming more focused and aware in terms of natural environments. In a 1992 study of 16 countries, more than 50% of consumers in each country, other than Singapore, indicated they were concerned about the environment. A 1994 study in Australia found that 84.6% of the sample believed all individuals had a responsibility to care for the environment. A further 80% of this sample indicated that they had modified their behaviour, due to environmental reasons (Polonsky, 1994). Many companies all over the world see the different changes about the environment in order to identify an opportunity to be exploited and define strategies to achieve standards of quality within the products.

    Companies around the world that have marketing goods with environmental issues will have a competitive advantage over companies that do not have marketing with environmental characteristics.

    There are many examples of companies all over the world that apply environmental policies in order to become more responsible for the environment:

    a. Winbond (Taiwanese company) is dedicating research and development of innovate

    high-tech products and to the advancement of information society toward higher

    efficiency in resource utilisation. Also, Winbond follows ISO 14001 clauses to

    establish and review the essential environmental objectives and targets on all function

    areas of activities, products, and services through management mechanisms. b. Johnson & Johnson‟s goal are based on identifying all sources of waste within every

    plant, developing a five-year capital appreciation plan for waste reduction activities,

    estimating waste reduction savings, benchmarking best-in-class practices among

    Johnson & Johnson companies and other corporations, and formulating measurable

    goals.

    c. McDonald‟s replaced its clamshell packaging with waxed paper because of increased

    concern relating to polystyrene production and ozone depletion.

    d. Xerox introduced a high quality recycled photocopier paper in an attempt to satisfy

    the demands of firms for less environmentally harmful products.

    e. The controlling vision of Ben & Jerry has linked prosperity of stakeholders through

    continued evaluation and improvement of its performance with respects four missions:

    product mission, economic mission, social mission, and environmental mission.

3.3 EDUCATE AND EMPOWER CONSUMER

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    According to Ottman and Terry (1997) consumers are concerned about the environment but as they have become more sophisticated, they require clear information about how choosing one product over another will benefit the environment. Consumer education results in their empowerment. Empowered consumers choose environmentally preferable products when all else is equal.

3.4 HIGHLIGHT THE DIRECT BENEFITS OF GREENER PRODUCTS

    Ottman & Terry (1997) claim that it is vital to stress the direct and tangible benefits provided by greener design, such as energy efficiency or recycled content, rather than stressing the environmental attributes them. Reducing the environmental impact of a product improves the product's overall performance and quality in ways that are important, not just the most dedicated and loyal green consumer, but to all consumers, for example superconcentrated laundry detergents not only save energy and packaging, they save end space, money and effort.

3.5 THE FUTURE

    Companies must to provide their customers many information about their product‟s environmental impact so that they will be able to decide if a product satisfy their needs.

    Ottman & Terry (1997) pointed out that environmental marketing presents important opportunities for industry. Taking advantage of them requires creativity, foresight and environmental commitment. In other words, redefine the roles of business and products and working co-operatively with governments, consumers groups and so on. Products can increase the quality of life, but their environmentally destructive impacts must be amended if we are to move towards sustainability.

4 GOVERNMENTAL AND COMPETITIVE PRESSURE

    Some governments around the world want to protect their society and consumers, this protection in terms of green marketing has important results. According to Polonsky (1994) governmental regulations relating to environmental marketing are designed to protect consumers in several ways that are as follows:

    a. Modify consumer and industry‟s use and/or consumption of harmful goods

    b. Reduce production of harmful goods or by-products

    c. Ensure that all types of consumers have the ability to evaluate the environmental

    composition of goods.

    Many governments create laws in order to control wastes produced by companies and care for the environment. Polonsky (1994) claims that many by-products of production are controlled through the issuing of various environmental licenses, thus modifying organisational behaviour. In some cases governments try to induce final consumers to become more responsible.

    The ROC (Republic of China) government and private environmental groups in Taiwan have been acting to stop international traffic in outlawed wildlife products. Beginning

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Harold Silva Guerra Green Marketing

    with the promulgation of the wildlife conservation law in 1989 and continuing through 1993 with the formation of an interministerial wildlife conservation investigation and supervisory task force to crack down on wildlife product smuggling. Taiwan has repeatedly demonstrated its commitment to domestic conservation and support for global wildlife protection efforts.

    In Bogota the government has laid down a law which allow certain cars with certain registration number out of the city on specific days (Pico y Placa). If for example, one car has odd number, it is allowed out Monday, Wednesday and Friday and even number Tuesday, Thursday and Saturday. This law has reduced the air pollution in the city, and is an example of how government laws may influence the environment.

    Furthermore, Polonsky pointed out that government attempts to protect consumers from false or misleading claims should theoretically provide consumers with the ability to make more informed decisions. In Australia where regulations have effected many companies, one unintended casualty was advertisements for the Federal Government‟s environmental labelling program “Environmental Choice”.

    Polonsky (1994) pointed out that another major force in the environmental marketing area has been firms' desire to maintain their competitive position. In many cases firms observe competitors promoting their environmental behaviours and attempt to emulate this behaviour. In some instances this competitive pressure has caused an entire industry to modify and thus reduce its detrimental environmental behaviour. For example, Xerox's "Revive 100% Recycled paper" was introduced a few years ago in an attempt to address the introduction of recycled photocopier paper by other manufacturers.

5 SOCIAL RESPONSIBILITY

    Polonsky (1994) believes that many companies around the world are opening to realise that they are member of the broader community and therefore must behave in an environmentally responsible manner. This transfer into companies that believe they must achieve social responsible objectives as well as profit related objectives. This results in environmental issues being integrated into company‟s corporate culture. Companies in this condition can take two contexts:

    a. They can use the fact that they are environmentally responsible as a marketing tool. b. They can become responsible without promoting this fact.

    Polonsky (1994) claims that there are examples of companies adopting both strategies. Organisations like the Body Shop promote the fact that they are environmentally responsible. While this behaviour is a competitive advantage, the firm was established specifically to offer consumers environmentally responsible alternatives to conventional cosmetic products. This philosophy is directly tied to the overall corporate culture, rather than simply being a competitive tool. An example of a company that does not promote its

    environmental initiatives is Coca-Cola. They have invested large sums of money in various recycling activities, as well as having modified their packaging to minimise its environmental impact. While being concerned about the environment, Coca-Cola has not used this concern as a marketing tool.

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Harold Silva Guerra Green Marketing

    Do managers of public corporations have the option of managing them in the public interest? We can consider the following case:

    The Stride Rite Corporation, a shoe company, was known for a number of years for its policy of locating plants and distribution facilities in some of America‟s most depressed inner cities and rural communities to revitalise them and provide secure, well-paying jobs for minorities. Arnold Hiatt, Stride Rite‟s CEO, had a strong personal commitment to this policy. In 1984 competitive pressures caused the company to experience a 68 percent drop in income, its first drop in thirteen years. Over Hiatt‟s strong objection. The board

    decided that the company could remain competitive only by contracting out production abroad to low wage countries their competitor were doing. The board reasoned, probably correctly, that if they did not move production abroad, the company would be subject to a hostile take-over by a buyer who saw an opportunity to reap significant profits by taking that step. Hiatt resigned and production was moved to China.

    On the other hand, the concept of corporate social responsibility (CSR) is still in its rudimentary stages in Taiwan, it is making steady, albeit slow progress. Taiwanese laws, such as Corporate Law, Labour Law, Environment Law, regulate some responsibilities that corporations in Taiwan should take. Because the concept of CSR has not reached effective levels of popularity, many people still do not really practice it. Some managers in Taiwan think economic responsibility is equivalent corporate social responsibility. Therefore, most companies in Taiwan take only legal responsibilities, because laws mandate them. However, ethical and philanthropic responsibilities, which are practised out of an entrepreneur‟ free will, is seldom witnessed. To understand how much responsibility corporations in Taiwan are taking and how popular the concept is, some surveys have done. The response rate was rather poor. The reasons being that most companies in Taiwan have little or no concept of repaying society. Either they are financially restricted to give something back to society, or they do not fully understand the concept of social responsibility. Some managers think that running their own business well is taking social responsibility and there is nothing more that they can do for the society. However, the scope of corporate social responsibility is goes beyond that. Some companies even take advantage of the preferential treatments of laws that encourage doing public welfare, in order to escape from paying taxes.

    In the Japanese scenario the concept of corporate social responsibility is an evolving and extremely dynamic issue. Much of this dynamism is the result of western ethical influences. Japan tends to slowly assimilate foreign views and practices into its culture and the same is true for ethics. For example, Japanese corporations are increasing becoming more aware of their responsibilities toward women, the world, and the environment. Japanese women have traditionally borne the brunt of strong discrimination in the workplace. Women generally do not receive equal pay or equal jobs. Recently, however, more women are gaining access to management and government positions. Corporations are becoming more aware of equal opportunity standards in the west and are thus changing their practices as a result. The business environment must still change significantly to accommodate working women but the trend is positive and noticeable.

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    In The Netherlands, the government systematically enters into negotiations between employers and unions in order to secure collective bargaining agreements that are consistent with the national economic plan for example, organize the working place in such a way, and methods so there is no negative influence on the safety and health of the employee, the use of dangerous materials and machinery should be avoided, the layout of the working environment and the use of equipment should be ergonomically adjusted for the employee, the employee should be given the opportunity to be able to contact other employee (i.e. socialise), the employees should be kept informed of the goals and results of his/her labour.

6 CONCLUSION

As a result of this report we can conclude the following:

    Green marketing covers more than a firm‟s marketing claims. Many companies must support the responsibility for environmental degradation. In the last decade, consumers who demand goods and thus create environmental problems.

    Furthermore, green marketing requires that consumers want a cleaner environment and are willing to pay for it, probably through higher priced goods, changed lifestyles or governmental intervention. Until this occurs it will be difficult for companies alone to lead the green marketing revolution.

    Government regulations are 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. Also, if governments want to modify consumer behaviour they need to establish a different set of regulations. While governments attempt to protect the environment, this may result in a proliferation of regulations and guidelines, with no one single central control body.

    A stakeholder approach is crucial for the development of right green philosophies, strategies and policies. Internally and externally organisations face on increasing depth of interest in their eco-performance and an ever-increasing range of interested parties. A green company needs to take a holistic view of its stakeholders and their relationship with the company and each other with each being viewed as a customer.

    According to The Mintel survey (1995) environmental issues have made a significant impact on the stationery market as green consumers demonstrated a preference for recycled paper for example, consumers have become increasingly aware that the pulp used for most stationery plantations, and concern has been reduced.

    Sustainability is the use of our resources, natural and technological, to meet our needs both today and in the future. In fact, people around the world are beginning to recognise that a healthy, functioning community relies on a healthy environment.

    Pollution affects everything from the health of children to the availability of raw materials. We must realise the importance of not only meeting environmental regulations but also taking extra steps to reduce waste, prevent pollution and conserve resources.

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