Why do Firms Go Green? 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 a minimal detrimental impact on the natural environment. What does Go Green or Environmental Marketing mean in the Firms? According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. What does Employees Stock Option mean? with Motivating Employees.
Why businesses should consider investing their time and money in green marketing or go green?
Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Other similar terms used are Environmental Marketing and Ecological Marketing.
Environmental issues have gained importance in business as well as in public life throughout the world. It is not like that a few leaders of different countries or few big renowned business houses are concerned about the day to day deterioration of oxygen level in our atmosphere but every common citizen of our country and the world is concerned about this common threat of global warming.
So in this scenario of global concern, corporate houses have taken green-marketing as a part of their strategy to promote products by employing environmental claims either about their attributes or about the systems, policies, and processes of the firms that manufacture or sell them. Clearly, green marketing is part and parcel of overall corporate strategy; along with manipulating the traditional marketing mix (product, price, promotion, and place), it requires an understanding of public policy process.
So we can say green marketing covers a broad range of activities. Firms use green marketing in an attempt to address cost or profit related issues. In implementing green marketing, consumers, corporate and the government play a very important role. But there are few constraints in implementing it like lack of consumer awareness, financial constraints, limited scientific knowledge, lack of stringent rules and competitive pressures.
Green marketing involves developing and promoting products and Services that satisfy your customer wants and needs for quality, performance, affordable pricing and convenience without having a detrimental impact on the environment.
Why are there good business go green today?
Firms may choose to green their systems, policies, and products due to economic and non-economic pressures from their consumers, business partners, regulators, citizen groups and other stakeholders(non-market environment).
Here are some other reasons may include:
They have taken social responsibilities as a good strategic move to build up an image in the heart of consumers. Even the socially responsible firms are getting leverage, whenever they intend to enter into foreign countries.
There are example of firms like ITC, HUL who are heavily promoting them as an environmentally concerned firms, whereas there is example of firms who are working in this direction in a silence manner like Coca-Cola, who have invested crores of money in various recycling activities, as well as having modified their packaging to minimize its environmental impact.
While being concerned about the environment coke has not used their concern as a marketing tool. Another big organization who is also working in this field without claiming any credit is Walt Disney World (WDW).
So we can see that firms in this situation have taken two perspectives:
- They are using green marketing as a marketing tool.
- They are working in this field without promoting the fact.
Competitive pressure:
Competition is an integral part of the business, and you cannot overlook any competitive action taken by your competitor. So to be in the market you have to have a vigil over your competitors move for marketing its products.
Some firms have taken green-marketing as a strategy to build up its image rather than inculcate it as a part of the policy and work silence. In some instances, this competitive pressure has caused an entire industry to modify and thus reduce its detrimental environmental behavior.
Governmental pressure:
In all most all civilized countries Govt. has the law to protect the consumers and the environment from the harmful goods or by-products and ensure through a law that all types of consumers have the ability to evaluate the environmental composition of goods.
Govt. established several regulations to control the hazardous waste produced by firms and many by-products of production is controlled through the issuing of various environmental licenses, thus shaping the behavior of organization towards more socially responsible one.
Some scholar claims that Green policies/products are profitable:
Green policies can reduce costs; green firms can shape future regulations and reap the first-mover advantage.
Change in customers attitude:
With increasing concern about the environment, consumers attitude towards firms having green policies or green products is becoming a motivating factor.
Cost or profit issue:
Firms may also use green marketing in an attempt to address cost or profit related issues. Disposing of environmentally harmful byproducts, such as polychlorinated biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases difficult. Therefore firms that can reduce harmful wastes may incur substantial cost savings. When attempting to minimize waste, firms are often forced to re-examine their production processes.
In these cases, they often develop more efficient production processes that not only reduce waste but reduce the need for some raw materials. This serves as a double cost saving since both waste and raw material are reduced. In other cases firms attempt to find end–of–pipe solutions, instead of minimizing waste.
In these situations, firms try to find markets or use for their waste materials, where one firm’s waste becomes another firm’s input of production. One Australian example of this is a firm who produces acidic waste water as a by-product of production and sells it to a firm involved in neutralizing base materials.
#The benefits of Green Marketing (Go Green):
Environmental responsibility has been added to the corporate agenda in the 21st century. Businesses are held accountable by both the government and society to operate in environmentally friendly ways. Green marketing is used by companies to communicate a brand’s emphasis on business practices or products that are beneficial for the environment. Here are explain by Bizfluent; What Are the Benefits of Green Marketing?
Product Opportunities:
Growing consumer awareness and interest in preserving and utilizing natural resources has contributed to an influx in sales and marketing of environmentally friendly and reusable products. “Organic” has become a keyword in marketing.
Sales of organic products reached $26.6 billion in 2009, according to Barbara Haumann in her April 2010 report for the Organic Trade Association. $24.8 billion was generated from organic food sales and an additional $1.8 billion was realized through non-food organic products.
Enhanced Environmental Awareness:
The Encyclopedia of Business (2nd Edition) pointed out that a benefit that resonates with industry and consumers alike is the expansion of environmental awareness. As companies market their green-friendly efforts and products, they simultaneously encourage the green initiative. This perpetuates the efforts by other companies to operate with more green responsibility and causes consumers to remain vigilant in holding companies accountable for their actions.
Premium Prices:
Keeping up with environmental expectations can be expensive for a company. Preserving rain forests, recycling, reducing waste and other green-friendly actions take time, resources and concerted effort.
A benefit of green marketing expansion is that consumers may become more comfortable and accepting of paying higher premium prices to acquire earth-friendly products or to support companies that engage in green activities. The Encyclopedia of Business acknowledges that it is a crucial task of marketers to get customers to take on these premium prices.
Supplier Expansion:
In Go Green, A challenge faced by early adopters of the environmental movement was the limited supply of earth-friendly food and non-food products. Companies that initially sold organic foods faced high prices due to a limited number of organic farmers and suppliers.
However, Haumann notes in her report “farmer’s markets, co-ops, and CSA (community-supported agriculture) operations gained a lot of interest as consumers increasingly look for locally and regionally produced organic foods.” Grocery retailers also benefit from stronger local supplies of organic food products.
