Definition of green marketing

According to the American Marketing Associatiation,green marketing is the marketing of products that are presumed to be environmentally safe.Green marketing incorporates a broad range of activities,including product modification,changes to the production process,packaging changes,as well as modifying. What is green marketing? Green marketing refers to the process of selling products and/or services based on their environmental benefits. Such a product or service may be environmentally friendly in itself or produced and/or packaged in an environmentally friendly way. The obvious assumption of green marketing is that potential consumers will view a product or service's "greenness" as a benefit and base their buying decision accordingly. The not-so-obvious assumption of green marketing is that consumers will be willing to pay more for green products than they would for a less-green comparable alternative product - an assumption that, in my opinion, has not been proven conclusively. While green marketing is growing greatly as increasing numbers of consumers are willing to back their environmental consciousnesses with their dollars, it can be dangerous. The public tends to be skeptical of green claims to begin with and companies can seriously damage their brands and their sales if a green claim is discovered to be false or contradicted by a company's other products or practices. Presenting a product or service as green when it's not is called greenwashing.

History of green marketing

According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe.[1] Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect and contradict each other; an example of this will be the existence of varying social, environmental and

retail definitions attached to this term.[1] Other similar terms used are Environmental Marketing and Ecological Marketing. Green, environmental and eco-marketing are part of the new marketing approaches which do not just refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those approaches and provide a substantially different perspective. In more detail green, environmental and eco-marketing belong to the group of approaches which seek to address the lack of fit between marketing as it is currently practiced and the ecological and social realities of the wider marketing environment. The legal implications of marketing claims call for caution. Misleading or overstated claims can lead to regulatory or civil challenges. In the USA, the Federal Trade Commission provides some guidance on environmental marketing claims.This Commission is expected to do an overall review of this guidance, and the legal standards it contains, in 2011.

Ecological Marketing
Ecological marketing was based on the idea that environmental protection and resource conservation can be better advanced through less regulation by the public sector and more enterprise in the private sector. This idea, in turn, is based on the premise that the ecologically concerned consumer is a legitimate but largely unused market segment one that is identifiable, accessible and measurable]In the 1970s the importances of a small number of environmental issues like oil use or pollution for a narrow range of industries (for example cars and chemicals) was framed as something that was relevant to engineers, lawyers and marketers within companies. Originally proposed at the American Marketing Association first conference on ecological marketing in 1975, the idea was compatible with the antiregulatory mood of these days in the U.S. It found supporter at the 1979 conference, who felt that government and business should strike a better balance in the division of responsibility for the management of negative social externalities.Green/

environmental marketing
Unfortunately, a majority of people believe that ecological (green) marketing refers solely to the promotion or advertising of products with environmental

characteristics. Terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often associate with green marketing. While these terms are green marketing claims, in general green marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and even services. Thus, green marketing incorporates a broad range of activities, including product modification, changes of the production process, packaging changes, as well as modifying advertising. Green marketing came into prominence in the late 1980s and early 1990s, it was first discussed much earlier. The American Marketing
Association (short: AMA) held the first workshop on Ecological Marketing in 1975 the proceedings of this workshop resulted in one of the first books on green marketing entitled Ecological Marketing. According to Dainora Grundey and Rodica Milena Zaharia 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 harmful impact on the natural environment

The 20 New Rules of Green Marketing

As the greener consumer products have gone mainstream, the rules to green marketing have changed as well. In order to keep marketers up to date, author Jacquelyn Ottman (The New Rules of Green Marketing) has created 20 new rules to follow: 1) Green is mainstream. Not too long ago, just a small group of deep green consumers existed. Today, 83% of consumers - representing every generation, from Baby Boomers to Millenials and Gen Ys - are some shade of green. Moreover, there are now finely defined segments of green consumers. 2) Green is cool. Once a faddish preoccupation of the fringe green is not only mainstream -its chic. In fact, green consumers are early adopters and leaders who influence purchasing behavior. Celebrities and other cool types generally are espousing green causes. People show off (and self-actualize) by tooling around in a Toyota Prius (or soon, we predict, in a Nissan LEAF electric), and carry cloth shopping bags to look the part.

3) Greener products work equally or better and are often worth a premium price. Thanks to advances in technology, weve come a long way since the days when greener products gathered dust on health food store shelves because they didnt work as well and were not a good value. Organics, hybrid cars, and safer cleaning products now command a premium price. 4) Green inspires innovative products and services that can result in a better consumer value, enhanced brands, and a stronger company. Savvy managers no longer consider the environment to be a burden that represents added cost and overhead but an investment that can pay back handsomely. 5) Values guide consumer purchasing. Historically, consumers bought solely on price, performance, and convenience. But today, how products are sourced, manufactured, packaged, disposed of and even such social aspects as how factor and farm workers are treated all matter. 6) A life approach is necessary. Single attributes such as recyclable, organic, or energy-efficient matter greatly, but dont mean a product is green overall. Recycled products still create waste, organic strawberries can travel thousands of miles, and CFLs contain mercury. So a more thorough, life cycle or carbon-based approach to greening is necessary. 7) Manufacturer and retailer reputation count now more than ever. In addition to looking for trusted brand names on supermarket shelves, consumers are now flipping over packages, saying, Who makes this brand? Did they produce this product with high environmental and social standards? 8) Save me! Scrap the images of plantet! Bag the daisies! Nix the babies! Even the greenest consumers no longer buy products just to save the planet. Todays consumers buy greener brands to help protect their health, save money, or simply because they work better. Thats why safer products such as organics, natural personal care and pet care, and energy-efficient products are leading the way in sales. 9) Businesses are their philosophies. It used to be that companies were what they made. International Business Machines. General Foods. General Motors. Now, businesses and brands are what they stand for. Method. Starbucks. Timberland. 10) Sustainability represents an important consumer need, and is now an integral aspect of product quality. Green is no longer simply a market position. Products need to be green. Brands need to be socially responsible. Period.

11) The greenest products represent new concepts with business models with significantly less impact. If we simply keep greening up the same old brown products weve been using forever, were never going to get to sustainability. With time running out, weve got to leap to service replacements for products, and adopt entirely new ways of doing business. 12) Consumers dont necessarily need to own products; services can meet their needs, perhaps even better. Consumers historically met their needs by owning products, but concepts like Zipcar and eBooks are starting to prove that utility and service are what really matters. 13) The brands consumers buy and trust today educate and engage them in meaningful conversation through a variety of media, especially via website and online social networks.Talking at consumers through traditional media and paid advertising cant build loyalty among empowered consumers in a connected world. 14) Green consumers are strongly influenced by the recommendations of friends and family, and trusted third parties. With rampant cynicism about traditional forms of advertising and backlash in place against perceived green washing, savvy marketers leverage purchase influencers and third parties like NGOs and especially eco-labelers. 15) Green consumers trust brands that tell all. BP, ExxonMobil, and SIGG learned this lesson the hard way. Its no longer enough to have a well-known name. Todays brands become trusted by practicing radical transparency, disclosing the good - and the bad. 16) Green consumers dont expect perfection. Just like theres no more whitest whites theres no greenest of the green. Consumers expect that youll set high goals (i.e. perform beyond mere compliance), keep improving, and report on progress. 17) Environmentalists are no longer the enemy. Recognizing the power of the marketplace to effect change, many environmental advocates willingly partner with industry, offering useful guidance and expertise. 18) Nearly everyone is a corporate stakeholder. No longer confined to just customers, employees, and investors, publics of all stripes are now corporate stakeholders: environmentalists, educators, children included - even the unborn. 19) Authenticity. Its not enough to slap on a recycling logo or make a biodegradability claim. Brands viewed as the most genuine integrate relevant sustainability benefits into

their products. Thats why HSBC and Stonyfield Farm aim to reduce the carbon impacts of their operations. 20) Keep it simple. Plato was an environmentalist: Simplicity is elegance." Todays consumers are cutting out the needles purchases, and getting rid of the gadgets and gizmos that dont add value to their lives. Thats why they are migrating to brands that help express these values - Method, Starbucks, Timberland. Its just that simple.

Greenhouse gas reduction market

The emerging greenhouse gas reduction market can potentially catalyze projects with important local environmental, economic, and quality-of-life benefits. The Kyoto Protocols Clean Development Mechanism (CDM), for example, enables trading between industrial and developing nations, providing a framework that can result in capital flows to environmentally beneficial development activities. Although the United States is not participating in the Kyoto Protocol, several US programs enable similar transactions on a voluntary and regulatory basis.[1] While international trade in greenhouse gas[20] reductions holds substantial promise as a source of new funding for sustainable development, this market can be largely inaccessible to many smaller-scale projects, remote communities, and least developed localities. To facilitate participation and broaden the benefits, several barriers must be overcome, including: a lack of market awareness among stakeholders and prospective participants; specialized, somewhat complicated participation rules; and the need for simplified participation mechanisms for small projects, without which transaction costs can overwhelm the financial benefits of participation. If the barriers are adequately addressed, greenhouse gas trading can play an important role supporting activities that benefit peoples lives and the environment.

The Green Marketing Mix

A model of a green marketing-mix should, of course, contain all 4Ps:

Product: A producer should offer ecological products which not only must not contaminate the environment but should protect it and even liquidate existing environmental damages.

Price: Prices for such products may be a little higher than conventional alternatives. But target groups like for example LOHAS are willing to pay extra for green products.

Place: A distribution logistics is of crucial importance; main focus is on ecological packaging. Marketing local and seasonal products e.g. vegetables from regional farms is more easy to be market green than products imported.

Promotion: A communication with the market should put stress on environmental aspects, for example that the company possesses a CP certificate or is ISO 14000 certified. This may be publicized to improve a firms image. Furthermore, the fact that a company spends expenditures on environmental protection should be advertised. Third, sponsoring the natural environment is also very important. And last but not least, ecological products will probably require special sales promotions.

In their book of Sustainability Marketing Belz and Peattie go one step further in terms of not just marketing but operating green. They transformed the 4 Ps into the 4 Cs. The four Cs customer solutions, customer cost, communication and convenience are taking the point of view of the customer (not the producer). Customer solutions:These solutions go beyond selling physical products and present solutions to customers problems. They imply knowing customers and their needs well and offering products and services that satisfy customer needs and that take into account social as well as environmental aspects.

Customer Cost:Customer Cost does not only include the financial price a buyer has to pay for a product or a service, it also considers the psychological, social and environmental costs of obtaining, using and disposing of a product.

Communication: Green communication goes beyond promotion, which is a form of persuasion and a one-way communication from seller to buyer. Communication is a process of interactive dialogue within which it is essential to build trust and credibility.

Convenience: Means that customers want to use products and services that meet their needs and that are easy and convenient to access and use.

The level of greening-strategic, quasi-strategic, or tactical dictates exactly what activities should be under-taken by a company. Strategic greening in one area may or may not be leveraged effectively in others. A firm could make substantial changes in production processes but opt not to leverage them by positioning itself as an environmental leader. So although strategic greening is not necessarily strategically integrated into all marketing activities, it is nevertheless strategic in the product area.

Green marketing activities

Popularity and effectiveness

Ongoing debate
The popularity of such marketing approach and its effectiveness is hotly debated. Supporters claim that environmental appeals are actually growing in numberthe Energy Star label, for example, now appears on 11,000 different companies'[21] models in 38 product categories, from washing machines and light bulbs to skyscrapers and homes. However, despite the growth in the number of green products, green marketing is on the decline as the primary sales pitch for products. (NEEDS CITATION) On the other hand, Ropers Green Gauge shows that a high percentage of consumers (42%)feel that environmental products dont work as well as conventional ones. This is an unfortunate legacy from the 1970s when shower heads sputtered and natural detergents left clothes dingy. Given the choice, all but the greenest of customers will reach for synthetic detergents over the premium-priced, proverbial "Happy Planet" any day, including Earth Day. New reports, however show a growing trend towards green products.

Confusion
One challenge green marketers -- old and new -- are likely to face as green products and messages become more common is confusion in the marketplace. "Consumers do not really understand a lot about these issues, and there's a lot of confusion out there," says Jacquelyn Ottman(founder of J. Ottman Consulting and author of "Green Marketing: Opportunity for Innovation.").Marketers sometimes take advantage of this confusion, and purposely make false or exaggerated "green" claims. Critics refer to this practice as "green washing"

Greenwashing
The term greenwashing refers to all industries that adopt outwardly green acts with an underlying purpose to increase profits. The primary objective of greenwashing is to provide consumers with the feeling that the organization is taking the necessary steps to responsibly manage its ecological footprint. In reality, the company may be doing very little that is environmentally beneficial[24] The term greenwashing was first used by environmentalist Jay Westerveld when objecting to hoteliers practice of placing notices in hotel rooms which asked their quests to reuse towels to save the environment. Westerveld noted that there was little else to suggest that the hoteliers were interested in reducing their environmental impacts, and that their interest in washing fewer towels seemed to be motivated by a concern to save costs rather than the environment. Since

then greenwashing has become a central feature of debates about marketing communications and sustainability, with awards for greenwashing established and numerous campaigns, law and advices developed in an attempt to reduce or curb it.

Target market
In 1989, 67 percent of Americans stated that they were willing to pay 5-10 percent more for ecologically compatible products.By 1991, environmentally conscious individuals were willing to pay between 15-20 percent more for green products.By 1993, MyburghLouw and OShaughnessy conducted a mail survey of female consumers in the UK to investigate their perceptions of environmental claims on the packaging of clothes detergents. They found that 79 percent of their sample agreed to pay up to 40 percent more for a product which was identical in every respect to their own brand and which had been proven to be green. An important challenge facing marketers is to identify which consumers are willing to pay more for environmentally friendly products. It is apparent that an enhanced knowledge of the profile of this segment of consumers would be extremely useful. Efforts to identify environmentally friendly consumers can be traced back to the early 1970s, as well as Anderson and Cunningham, were pioneers in studying the profile of socially responsible consumers. Overall, their combined results portray a highly socially conscious person as female, pre-middle aged, with a high level of education (finished high school) and above average socioeconomic status.

LOHAS
LOHAS stands for Lifestyles of Health and Sustainability, and describes an integrated, rapidly growing market for goods and services that appeal to consumers whose sense of environmental and social responsibility influences their purchase decisions. The Natural Marketing Institutes (short: NMI) estimates the US LOHAS consumer market of products and services to be USD 209 billion sold across all consumer segments.

The five LOHAS segments as defined by NMI include: LOHAS: Active environmental stewards dedicated to personal and planetary health. These are the heaviest purchasers of green and socially responsible products and the early adapters who influence others heavily.

Naturalites: Motivated primarily by personal health considerations. They tend to purchase more LOHAS consumable products vs. durable items.

Drifters: While their intentions may be good, DRIFTERS follow trends when it is easy and affordable. They are currently quite engaged in green purchasing behaviours.

Conventionals: Pragmatists who embrace LOHAS behaviour when they believe they can make a difference, but are primarily focused on being very careful with their resources and doing the right thing because it will save them money.

Unconcerned: Either unaware or unconcerned about the environment and societal issues mainly because they do not have the time or the means these consumers are largely focused on getting by.