Green Marketing

INDEX Sr.No. Subject Page No.

1 Introduction 1-2

2 Objectives of the studies 3-15

3 Research Methodology 16-18

4 Key Concepts 18-24

5 Importance of Green Marketing 25-27

6 Challenges and Opportunities 28-33

7 Relation Between social Responsibility and Green Marketing

33

8 Social responsibility towards environment and towards consumers

34-35

9 Some cases of Green Marketing and Green Product 35-36

10 Conclusion 37-38

11 Finding 39-40

PROJECT REPORTON

CORPORATE SOCIAL RESPONSIBILITIES OF GREEN MARKETING

SUBMITTED TOTHE UNIVERSITY OF MUMBAI

SUBMITTED BYMr. MAZHAR JAMIL DALVI

1st SEMESTERF.Y.M.M.S.(2010-2011)

V.S.I.M,KHED, 415709,

DIST.-RATNAGIRI

DECLARATION

I MAZHAR JAMIL DALVI, student of first year MASTER OF

MANAGEMENT STUDIES (1st semester) at V.S.I.M College, Khed affiliated to

University of Mumbai, hereby declare that I have completed the project on

“CORPORATE SOCIAL RESPONSIBILITIES OFGREEN MARKETING”

In the academic year 2010-2011 as per the requirement of

University of Mumbai, as a part of my academic curriculum.

The information submitted is formulated with the aid of primary and

secondary data.

MAZHAR JAMIL DALVI

INTRODUCTION

In today's business world environmental issues plays an important role in

marketing.

Many people believe that green marketing refers solely to the promotion or

advertising of products with environmental characteristics. Generally terms like

Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally

Friendly are some of the things consumers most often associate with green

marketing. In general green marketing is a much broader concept, one that can be

applied to consumer goods, industrial goods and even services. For example,

around the world there are resorts that are beginning to promote themselves as

"ecotourism" facilities, i.e., facilities that specialize in experiencing nature or

operating in a fashion that minimizes their environmental impact .Thus green

marketing incorporates a broad range of activities, including product

modification, changes to the production process, packaging changes, as well as

modifying advertising.

Consumers expectation of environmental friendly products :

According to the text book customer-oriented marketing “means that the company

should view and organize its marketing activities from the consumer’s point of

view. It should work hard to sense, serve, and satisfy the needs of a defined group

of customers” (Kotler 492).

OBJECTIVES OF THE STUDY

To Study Concept Of Green Or Environmental Marketing

To study the concept of Green Product

To study concept of Green Consumer

To study concept Corporate Social Responsibility

To study relationship between social responsibility and green marketing

To study challenges and opportunities in green marketing

RESEARCH METHODOLOGY

In this project, I have elaborated the concept of Green Marketing, Green

Product ,Green Consumer and CSR on the basis of available secondary data. I

have collected this data from books, journals, newspapers and internet. I have

used this data to reach to some conclusions which can be implicit by the

companies while practicising for green marketing.

KEY CONCEPTS

GREEN MARKETING :

In general green marketing is a much broader concept, one that can be

applied to consumer goods, industrial goods and even services. For example,

around the world there are resorts that are beginning to promote themselves as

"ecotourism" facilities, i.e., facilities that specialize in experiencing nature or

operating in a fashion that minimizes their environmental impact .Thus green

marketing incorporates a broad range of activities, including product

modification, changes to the production process, packaging changes, as well as

modifying advertising.

Promotional activities aimed at taking advantage of the changing consumer

attitudes toward a brand. These changes are increasingly being influenced by a

firm's policies and practices that affect the quality of the environment, and reflect

the level of its concern for the community.

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 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.

Marketing specialists are in agreement: green marketing campaigns exist and their

clients should have one.  The debate begins when the question turns to actually

knowing what green marketing is and the best way to employ it. Although the

rampant confusion is understandable due to the current amorphous nature of green

marketing, the original concept was quite simple. Green marketing emerged as

“marketing of products that are assumed to be environmentally safe,” a simple

enough definition by anyone’s standards. Unfortunately, the very simplicity of the

initial definition provided excessive leeway for companies seeking to take

advantage of green marketing, and the marketers creating their campaigns.

GREEN PRODUCTS :

Go Green seems to be the things to do now. i heard so much about the "green"

product these days, I wonder if "green" eventually will be like the nutrition labels,

or the "no trans-fat", "no cholesterol" and become just another gimmick for the

merchant to sell products?

is there truely a "green" product? does industry really have ways to produce goods

that has no impact or very low impact on the environment?

What qualifies a Green product?

Green has already become a way to sell products, i did a project for a business

class and every company's website i checked said that they were trying to "go

green" , while it sounds ridiculous for some companies to say there are products

such as some food items that are grown without using chemicals that harm the soil

and the air or cars that emit less chemicals into the air, but mostly people just like

to say their product is "green" and raise the price and people buy it.

Environmental marketing firm TerraChoice found that many retail products

overstate their environmental attributes, a practice which risks causing skepticism

among consumers. The company sent people to big-box retail stores to find

products labeled as green. In the process, it found that almost all of them

committed at least one of what it calls "sins of greenwashing." Most common was

the "Sin of the Hidden Trade-Off," where manufacturers claim a product has a

green feature, such as recycled paper content, but don't pay attention to potentially

more important issues, such as global warming or water use.

Who is mindful of environment related issues and obligations, and is supportive

of environmental causes to the extent of switching allegiance from one product or

supplier to another even if it entails higher cost.

GREEN CONSUMER

Without getting technical, a green consumer is someone who is very concerned

about the environment and, therefore, only purchases products that are

environmentally-friendly or eco-friendly. Products with little or no packaging,

products made from natural ingredients and products that are made without

causing pollution are all examples of eco-friendly products. The green consumer

would be the type to drive a hybrid vehicle, buy products made with hemp or

those made from recycled materials

The modern world has led consumers to become increasingly concerned about the

environment. Such concerns have begun to be displayed in their purchasing

patterns, with consumers increasingly preferring to buy so-called

‘environmentally friendly products’. Marketing managers have in turn recognised

the strategic importance of marketing in finding responses to the ‘environmental

needs’ of consumers due to the influence this may have on their consumption

habits. The growing number of organizations entering the green product market

also indicates the need for suitable segmentation and positioning strategies. This

paper focuses on the identification of distinct market segments. Through the use

of variables related to the environment, as well as demographic variables, the

segments that are occupied by consumers with different sensitivities to

environmental matters are identified, and the possible implications of these results

for the marketing strategies of companies are also discussed.

CORPORATE SOCIAL RESPONSIBILITY :

Corporate social responsibility (CSR) can be defined as the "economic, legal,

ethical, and discretionary expectations that society has of organizations at a given

point in time" (Carroll and Buchholtz 2003, p. 36). The concept of corporate

social responsibility means that organizations have moral, ethical, and

philanthropic responsibilities in addition to their responsibilities to earn a fair

return for investors and comply with the law. A traditional view of the corporation

suggests that its primary, if not sole, responsibility is to its owners, or

stockholders. However, CSR requires organizations to adopt a broader view of its

responsibilities that includes not only stockholders, but many other constituencies

as well, including employees, suppliers, customers, the local community, local,

state, and federal governments, environmental groups, and other special interest

groups. Collectively, the various groups affected by the actions of an organization

are called "stakeholders." The stakeholder concept is discussed more fully in a

later section.

Corporate social responsibility is related to, but not identical with, business ethics.

While CSR encompasses the economic, legal, ethical, and discretionary

responsibilities of organizations, business ethics usually focuses on the moral

judgments and behavior of individuals and groups within organizations. Thus, the

study of business ethics may be regarded as a component of the larger study of

corporate social responsibility.

Carroll and Buchholtz's four-part definition of CSR makes explicit the multi-

faceted nature of social responsibility. The economic responsibilities cited in the

definition refer to society's expectation that organizations will produce good and

services that are needed and desired by customers and sell those goods and

services at a reasonable price. Organizations are expected to be efficient,

profitable, and to keep shareholder interests in mind. The legal responsibilities

relate to the expectation that organizations will comply with the laws set down by

society to govern competition in the marketplace. Organizations have thousands

of legal responsibilities governing almost every aspect of their operations,

including consumer and product laws, environmental laws, and employment laws.

The ethical responsibilities concern societal expectations that go beyond the law,

such as the expectation that organizations will conduct their affairs in a fair and

just way. This means that organizations are expected to do more than just comply

with the law, but also make proactive efforts to anticipate and meet the norms of

society even if those norms are not formally enacted in law. Finally, the

discretionary responsibilities of corporations refer to society's expectation that

organizations be good citizens. This may involve such things as philanthropic

support of programs benefiting a community or the nation. It may also involve

donating employee expertise and time to worthy causes.

A traditional view of the corporation suggests that its primary, if not sole,

responsibility is to its owners, or stockholders. However, CSR requires

organizations to adopt a broader view of its responsibilities that includes not only

stockholders, but many other constituencies as well, including employees,

suppliers, customers, the local community, local, state, and federal governments,

environmental groups, and other special interest groups. Collectively, the various

groups affected by the actions of an organization are called "stakeholders." The

stakeholder concept is discussed more fully in a later section.

Corporate social responsibility ("CSR" for short, and also called corporate

conscience, citizenship, social performance, or sustainable responsible

business[1]) is a form of corporate self-regulation integrated into a business

model. CSR policy functions as a built-in, self-regulating mechanism whereby

business monitors and ensures its active compliance with the spirit of the law,

ethical standards, and international norms. The goal of CSR is to embrace

responsibility for the company's actions and encourage a positive impact through

its activities on the environment, consumers, employees, communities,

stakeholders and all other members of the public sphere. Furthermore, CSR-

focused businesses would proactively promote the public interest by encouraging

community growth and development, and voluntarily eliminating practices that

harm the public sphere, regardless of legality. CSR is the deliberate inclusion of

public interest into corporate decision-making, and the honouring of a triple

bottom line: people, planet, profit.

The term "corporate social responsibility" came in to common use in the early

1970s, after many multinational corporations formed. The term stakeholder,

meaning those on whom an organization's activities have an impact, was used to

describe corporate owners beyond shareholders as a result of an influential book

by R. Edward Freeman, Strategic management: a stakeholder approach in 1984.

[2] Proponents argue that corporations make more long term profits by operating

with a perspective, while critics argue that CSR distracts from the economic role

of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-

empt the role of governments as a watchdog over powerful multinational

corporations.

CSR is titled to aid an organization's mission as well as a guide to what the

company stands for and will uphold to its consumers. Development business

ethics is one of the forms of applied ethics that examines ethical principles and

moral or ethical problems that can arise in a business environment. ISO 26000 is

the recognized international standard for CSR (currently a Draft International

Standard). Public sector organizations (the United Nations for example) adhere to

the triple bottom line (TBL). It is widely accepted that CSR adheres to similar

principles but with no formal act of legislation. The UN has developed the

Principles for Responsible Investment as guidelines for investing entities.

RELATIONSHIP BETWEEN SOCIAL RESPONCIBITITY & GREEN

MARKETING :

“Green or Environmental Marketing consists of all activities designed to generate

and facilitated any exchange 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.”

Kotler and Levy, in their book, Corporate Social Responsibility define corporate

social responsibility as "a commitment to improve community well-being

through discretionary business practices and contributions of corporate

resources".  Some of the benefits of being socially responsible include (a)

enhanced company and brand image (b) easier to attract and retain employees (c)

increased market share (d) lower operating costs and (e) easier to attract investors.

A socially – responsible firm will care about customers, employees, suppliers, the

local community, society, and the environment. CSR can be described as an

approach by which a company (a) recognizes that its activities have a wide impact

on the society and that development in society in turn supports the company to

pursue its business successfully and (b) actively manages the economic, social,

environmental and human rights. This approach is derived from the principles of

sustainable development and good corporate governance. Marketing managers

within different firms will see some social issues as more relevant than others.

The relevance of a given social issue is determined by the company's products,

promotional efforts, and pricing and distribution policies but also by its

philosophy of social responsibility.

Focus entirely in profits (and profitable firms typically serve society well)

Explicitly incorporate social responsibility into its day-today marketing

decisions to minimize negative effects on society and enhance positive

effects

Go even further and engage in social projects that are unrelated to the

corporate mission and even detrimental to profits ( which could net out to

be socially undesirable)

Management must decide which of these three levels of social

responsibility to adopt and which social issues are relevant to its business.

Ethical Conflict faced by the Marketers

 Marketers must be aware of ethical standards and acceptable behavior. This

awareness means that marketers must recognize the viewpoints of three key

players: the company, the industry, and society. Since these three groups almost

always have different needs and wants, ethical conflicts are likely to arise. Ethical

conflicts in marketing arise in two contexts : First, when there is a difference

between the needs of the three aforementioned groups ( the company, the

industry, and society) a conflict may arise. Second and ethical conflict may arise

when one's personal values conflict with the organization. In either case, a

conflict of interest is a possible outcome.

Ethical dilemmas facing marketing professionals today fall into one of three

categories: tobacco and alcohol promoting, consumer privacy, and green

marketing. Standards for ethical marketing guide business in efforts to do the

right thing. Such standards have four functions: to help identify acceptable

practices, foster internal control, avoid confusion, and facilitate a basis for

discussion.

Marketing in order to protect the environment and to improve the quality of life

and are concerned with issues that include conservation of natural resources,

reducing environmental pollution, protecting endangered species, and control of

land use. The three Rs of environmentalism are Reduce, Reuse, and Recycle.

Many companies are finding that consumers are willing to pay more for a green

product. Toyota has become quite successful with their hybrid cars.

Green marketing refers to the development and distribution of ecologically-safe

products.  It refers to products and packages that have one or more of the

following characteristics: (1) are less toxic, (2) are more durable, (3) contain

reusable materials, or (4) are made of recyclable material. In short, these are

products considered "environmentally responsible".

Social responsibility towards environment and towards consumers

These new governmental bodies established that national public policy now

officially recognized the environment, employees, and consumers to be

significant and legitimate stakeholders of business. From that time on, corporate

executives have had to wrestle with how they balance their commitments to the

corporation's owners with their obligations to an ever-broadening group of

Some cases of Green Marketing

When Miura, a world-leader in industrial steam boilers, began looking for a new

marketing message to build their North American market share, they were starting

from the low single digits.  Plus, they faced strong completion from the

entrenched market leaders in an industry where old relationships die hard. They

needed to move to the next level with a message that caught the attention of both

distributors and end-users, recognizing that each had different buying variables.

Green marketing was that next level, and based on Miura’s marketing at the time,

which stressed highest in-service efficiencies and innovative money-saving

technology, they could certainly make the claim of being “greener” than the

competition.

Green Products

We use the terms "green" and "sustainable" to refer to products, services, and

practices whose manufacturing, purchase and use allows for economic

development while still conserving, for future generations:

(1) The earth's biological diversity and supporting ecological processes (such as

nutrient, fire, and flood cycles), and

(2) The components of our economy and quality of life that require natural

resources and depend on " nature's services ", such as:

fertile soils and healthy populations of pollinators for agriculture;

the diversity of tree species needed to provide lumber and paper, and the diversity

of plants needed to provide critical medicines

Importance of Green Marketing

A new trend for businesses is green marketing. Green marketing is simply when a

business finds ways to integrate products into the company that are

environmentally friendly. The products that are marketed by a company are

considered to be environmentally safe and will help reduce the use of excess

energy and other costs. There are several meanings to green marketing because it

identified different aspects of production process. While some companies

consider green marketing to be changed to the production process, others define

green marketing as modifications to advertising.

Currently, over 70% of consumers link marketers' social responsibility to their

environment behavior. Due to the inclining interest people have in the

environment, environmental concerns are rapidly expanding into all aspects of

marketing. The product development phase is the area that is under "green"

construction. Several companies have reviewed their existing products and have

found ways to cut costs on the production on these products or have found a way

to design them to provide some type of benefit to society.

Light bulbs are a great example of green marketing. The standard light bulb uses

two times the amount of energy and the new environmentally friendly, energy-

saving light bulbs. Light bulb manufacturers found ways to redesign their product

after a manner that would appeal to the public and would reduce overall energy

costs. Studies have found that consumers are generally interested in the

environment and want to find ways to help the environment. Harnessing this

consumer "power" behind green marketing is not quite as easy because the green

consumer movements have been small and have not been able to reach the critical

mass.

Green as distinct from "natural," has come a considerable distance since it first

achieved recognition in Western Europe in the late 1960s, and in the United States

in the 1980s. In what was then West Germany, the expression assume political

significance and even became the name of a recognized, and at least briefly

powerful, political party. Four years ago, during the negotiations to finalize the

European Community, "Green" activists exerted enough influence on ecological

concerns to bring changes to the EC's Cosmetic Directives. Green forces under

whatever label are credited with what amounts to a forthcoming ban on animal

testing that last year became part of the EC's Fourth Cosmetic Directive. That ban

may be regarded with favor by at least one element of the cosmetic industry

(those who market "natural" cosmetics, whose fate seems somehow inexorably

linked with lack of animal testing), but it hasn't drawn raves from suppliers who

feel compelled to test their ingredients for teratogenicity, mutagenicity, and

carcinogenicity -- none of which can be detected by using alternative in vitro

cosmetic test methods.

Why Green Marketing?

As resources are limited and human wants are unlimited,it is important for the

marketers to utilize the resources efficiently without waste as well as to achieve

the organization’s objective.so green Marketing is inevitable.

There is growing interest among the consumers all over the world regarding

protection of environment. Worldwide evidence indicates people are concerned

about the environment and are changing their behavior.As a result of this,green

marketing has emerged which speaks for growing market for sustainable and

socially responsible products and services.

Benefits of Green Marketing

Companies that develop new and improved products service with environment

inputs in mind give themselves access to new markets, increase their profit

sustainability, and enjoy a competitive advantage over the companies which are

not concerned for the environment.

Adoption of Green Marketing

There are basically five reasons for marketer should go for the adoption of green

marketing They are:

Opportunities or competitive advantages.

Corporate social responsibilities (CSR)

GREEN MARKETING OPPORTUNITIES :

Today’s consumers are increasingly socially conscious, with a growing

concern to know if companies honestly treat employees fairly while doing

their part to protect and save the environment. Brand values like social

responsibility, benefit to the community, and “being green” are at the top

of more shopping lists than ever. Not unsurprisingly, enthusiasts of

technology are leading the way.

The recently published Forrester study titled Making The Case For

Environmentally And Socially Responsible Consumer Products, a survey

of over 5,400 U.S. adults were asked about their purchasing habits

between April and May of 2008. Amazingly, 65% of those polled

consumers confirmed they were “concerned about the environment or

global warming.” This trend is up nearly 23% from a November 2007

study, which found that 53% percent of consumers were concerned about

sustainability. In short order, business has been quick to leverage this

social trending with products and marketing offers – some more

successfully than others.

Today’s “green marketing” offers a unique set of challenges; the least of

which is a prevalent lack of standards for identifying what it actually

means to be a “green” product or company. In combination with the

increase in consumer awareness, marketers are seeing a growing demand

for eco-labeling, “green” advertising and the overall importance of

reporting on sustainability and renewable energy oriented products and

projects. This obviously has created a glut of misguided opportunities to

nearly everything to be positioned as being “green”, from a minor

packaging change to actual services and products that truly reduce energy

and waste.

As so many new and old companies jump on the “do good” bandwagon,

factions of green marketing have arisen — cause marketing, cause-related

marketing, cause branding, conscious marketing, social good marketing

and many other new ways of positioning brands within this growing

market sector.

What binds this growing set of terms is simple: establishing your

marketing efforts in a way that’s truly responsible. Often this can be

misunderstood to mean aligning tactics with a cause, but it is certainly not

limited to that description. It may also mean the responsible use of funds,

reducing unnecessary print marketing materials, or not deploying a

controversial ad that might benefit the company financially. Taking this

effort a bit further might be easiest to simply call it “Ethical Marketing”.

This trending presents a unique challenge to green marketers like

ourselves as products and messages become much more common, often

resulting in great 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.) Advantageous

marketers can take advantage of this confusion by intentionally making

false or exaggerated claims to being “green” – what we now know as

“green washing”.

GREEN MARKETING CHALLENGES

es;

Conclusion of Green Marketing

In general, green marketing still has a long road to travel in both research and

practice. The social desirability of effective persuasion techniques fostering

widespread environmentally responsible behavior is unquestionable. Green

purchasing is central to this societal transformation. Probably on of the most

critical issues in green marketing is the reduced individual benefit perceived

by most consumers. Thus, the challenge for green marketers has so far been to

increase the perception of individual benefits by adding emotional value to

green brands, and will be even more so in the future. Future green marketing

research should extend its analysis to the motivational basis of environmental

behavior.

In the face of these difficulties, it is perhaps unsurprising that much of what

has happened under the banner of “green marketing” has had relatively little to do

with either marketing or the environment. Green marketing should therefore not

be written off as a prophecy unfulfilled, but recognised as one whose time has not

yet come. Perhaps the answer to making more substantive progress towards

sustainability does not lie with marketers at all, since the market’s current flaws

make it incapable of delivering sustainability alone. The market needs to operate

within a society in which sustainability is more than adopted as a public policy

goal, but is actively pursued through policy implementation in terms of taxation,

education, industrial policy, and public spending and investments. Whilst the

early predictions for growth in the green market may now look a little overstated,

the predictions for growing environmental problems have not. The longer we take

to address the issue, and to make progress towards more sustainable marketing,

the greater the disruption and effort will be. The sooner substantive progress is

made, the more likely the story will be to have a happy ending.

Finding of information of Green Marketing

Going green with eco friendly products is important to most people who care

about the condition of the planet. But despite their best efforts, green marketing

can be confusing, overwhelming, and even downright misleading to shoppers who

want to be environmentally friendly. How can consumers learn to

Greenwash is a term coined by environmentalists to describe the way many so-

called "green businesses" deliberately confuse consumers with vague, misleading,

or untrue statements about their environmental practices.

According to organizations like Greenpeace and TerraChoice, there are many

forms of greenwashing at large in the advertising world. Some companies may

focus on their eco friendly accomplishments without acknowledging that their

supposed achievements barely meet the legal standard; others advertise the virtues

of one line of green products, while avoiding any mention of the gas-guzzling,

polluting designs that make up most of their sales.

Greenwash is misdirection at best and outright lies at worst, and it can be found in

every supermarket today, according to research conducted by the Canadian

environmental certification firm TerraChoice. Over 99% of products examined by

TerraChoice in 2007 were guilty of at least one form of greenwash, from

misdirection to vagueness to outright lies.

As a result, consumers don't know who to trust. They can either take the green

marketing claims at face value, or dismiss them all as lies. It can be very

challenging for even the most environmentally conscious person to know which

brands to avoid and which green products to buy.

Learning to see through the greenwash takes a little bit of care and attention in

examining labels. Essentially, there are two things to look for in assessing a green

product's claims:

Green Certification: The first indication of a green business' legitimacy is

whether or no there is third-party certification on product labels. This kind of

approval is the only way to be sure that someone is checking up on the claims

made by green marketing. In North America, the two major certification bodies

are Ecologo and Green Seal.