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SUSTAINABILITY MARKETING PRIMER A note from the editor I derive immense pleasure to launch first edition of the magazine ‚Sustainability Marketing Primer‛ and to introduce the theme line of sustainability marketing to the world. The noble idea of launching a magazine on this theme is to spread words of environmental concern to the consumers and the organizations across the world for their lifestyle, products, services, processes and practices. Though the increase in environmental concern can be observed among the organizations for their businesses and among the consumers for their consumption practices, it is required to put forward the explanations to them for behaving in environmentally friendly manner and to create an urge for continuous improvement with the time in their behavior towards the environment. This magazine intends to serve this purpose to a very great extent. The innovative ideas and esteemed suggestions are always welcomed from all the corners of the globe. Warm regards, Prashant Kumar Mumbai, INDIA. https://www.facebook.com/pages/Green-Marketing-Primer/305193156159366 Issue 1, January 2012
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SUSTAINABILITY MARKETING PRIMER

Mar 22, 2016

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Prashant Kumar

The noble idea of launching a magazine on this theme is to spread words of environmental concern to the consumers and the organizations across the world for their lifestyle, products, services, processes and practices. Though the increase in environmental concern can be observed among the organizations for their businesses and among the consumers for their consumption practices, it is required to put forward the explanations to them for behaving in environmentally friendly manner and to create an urge for continuous improvement with the time in their behavior towards the environment.
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Page 1: SUSTAINABILITY MARKETING PRIMER

SUSTAINABILITY MARKETING PRIMER

A note from the editor – I derive immense pleasure to launch first edition of the magazine ‚Sustainability Marketing Primer‛ and to introduce the theme line of sustainability marketing to the world. The noble idea of launching a magazine on this theme is to spread words of environmental concern to the consumers and the organizations across the world for their lifestyle, products, services, processes and practices. Though the increase in environmental concern can be observed among the organizations for their businesses and among the consumers for their consumption practices, it is required to put forward the explanations to them for behaving in environmentally friendly manner and to create an urge for continuous improvement with the time in their behavior towards the environment. This magazine intends to serve this purpose to a very great extent. The innovative ideas and esteemed suggestions are always welcomed from all the corners of the globe. Warm regards, Prashant Kumar Mumbai, INDIA.

https://www.facebook.com/pages/Green-Marketing-Primer/305193156159366 Issue 1, January 2012

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– Content –

A note from the editor

Defining ‘GREEN MARKETING’ . . . . . . . (3)

‘GREEN MARKETING’ in Actions . . . . . . . (4)

‘GREEN MARKETING’ in Knowledge . . . . . . . (7)

Emerging ‘GREEN’ consumers . . . . . . . (10)

Reach us . . . . . . . (14)

About the editor – Prashant Kumar is working in the area of ‘Sustainability in Business and Green Marketing’ for last 3 years. His association with Indian Institute of Management Bangalore (IIMB) INDIA, Indian Institute of Technology Bombay (IITB) Mumbai INDIA and National Institute of Industrial Engineering (NIIE) Mumbai INDIA has nurtured him to an effective business research professional. His research work is well recognized at international and national levels. He is a part of doctoral research in this area. His work includes study of company practices and strategies in green marketing as well as green consumer research and theory development on green consumer behavior.

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‘Sustainability marketing’ is also named as ‘Green Marketing’ and ‘Environmental Marketing’. Out of these three names, the term ‘Green Marketing’ is found most common in practice among the researchers and the practitioners. Defining ‘GREEN MARKETING’ –

‚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.‛ - Stanton and Futrell (1987) ‚The holistic management process responsible for identifying, anticipating and satisfying the needs of consumers and society, in a profitable and sustainable way.‛ - Peattie and Charter (1994) ‚The process of planning, implementing and controlling the development, pricing, promotion and distribution of products in a manner that satisfies the following three criteria: (1) customer needs are met, (2) organizational goals are attained, and (3) the process is compatible with the ecosystem.‛ - Fuller (1999)

‚Creating, producing and delivering sustainable solutions with higher net sustainable value whilst continuously satisfying customers and other stakeholders.‛ - Charter et al. (2006) ‚Green marketing is a marketing activity, which seeks to make the existence of the company acceptable or even useful for the environment and the society.‛ - Liesionis (2007) ‚Marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.‛ - Kotler and Armstrong (2009) ‚…….referring to the planning, development and promotion of products or services that satisfy the needs of consumers for quality, output, accessible prices and service, without however a negative effect on the environment, with regard to the use of raw material, the consumption of energy etc.‛ - Papadopoulos et al. (2010)

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‘GREEN MARKETING’ in Actions –

This section covers the sustainable business practices as well as green marketing activities and practices in businesses across the globe. These business practices can be grouped in three categories: 1. Product design and engineering, 2. Manufacturing processes, and 3. Supply chain and logistics. These three categories are explained as follows: Category 1 – Product design and engineering This includes the efforts made at product and packaging design levels so that the resource consumption of a product can be reduced at manufacturing, transportation

and consumption levels. Further, removal of environmentally harmful ingredients, use of recycled and recyclable materials and reuse of usable components are also taken into consideration at product and packaging design levels. Reduction in resources consumption means the reduction in material consumption during product manufacturing and packaging, and reduction in energy consumption during usage of the product. Also, it is related to increased energy efficiency and human comfort

during product consumption stage at consumers’ end. Such changes are incorporated through the technological

development that leads to saving the environment as well as improvement in the quality of life. Removal of environmentally harmful ingredients at product and packaging design stage is considered important at its disposal stage. The companies prefer to reduce the amount of harmful ingredient in the product and packaging, and at times, substitute it with another ingredient which is scientifically proved to be environmentally safe. The use of recyclable and recycled materials is also important from the life-cycle perspective and is aimed at disposal stage of a product and packaging. The recyclable ingredients of a disposed product and packaging are retrieved for recycling purpose. And, the disposal of recycled ingredients is considered to be an environmentally friendly activity. The concept of reusability is also aimed at reduction in resource consumption. The concept of modular design is incorporated at design stage to facilitate easy disassembly and saving the cost by conserving materials.

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Category 2 – Manufacturing processes This includes environmental measures taken by the companies at manufacturing level such as banning the use of hazardous materials in manufacturing of products, reducing the amount of waste generated and reduction in pollution produced during production as well as the use of recyclable and reusable materials in assembly of products. Such initiatives lead to reduction in carbon footprints, improvement in energy efficiency and reduction in resource consumption at plant level. To achieve such goals, companies are adopting environmentally-friendly manufacturing policy and techno-managerial changes which result in increase in productivity, safe manufacturing processes, quality assurance, recyclability and meeting with environmental standards. Category 3 – Supply chain and logistics This includes environment-based sourcing guidelines for purchase department and for suppliers so that the environmental goals set at product design and manufacturing stages can be met. Companies are working with the suppliers for value creation initiatives to achieve goals in their plants as well as business activities at suppliers’ end so as to be in compliance with all local and international environmental laws applicable to the workplaces, the products produced, the method of manufacturing and the transportation. Such initiatives include sourcing of environmentally safe/ friendly materials, material procurement in environmentally friendly manner, use of recycled materials, energy conservation and resource conservation. Companies issue sourcing guidelines to their suppliers by dividing the sourcing materials in two categories: prohibited substance group and controlled substance group. Demanding suppliers to be RoHS-complaint (Removal of Harmful Substances-complaint) and asking them to sign contracts for following certain codes of conduct and policy are seen as a major initiative to consider ‘Suppliers’ as main stakeholder in environmental initiatives taken by the companies. Environmental initiatives in reverse logistics part of supply chain include recovery of used products at consumers’ end to use them for reuse and recycling purposes. Recollection and recovery of used products are done at several levels such as voluntary level, ‘at-home pick up’, drop box, collection centers and recycling bins. Some of the companies are paying the consumers for dropping the used products or giving discount vouchers for the next purchase. Some companies are refurbishing used products to sell them in other markets at low prices. For recycling, companies are tying up with government authorized recyclers, recycling agency network, ISO-14000 certified recycling partners, or they are setting up their own recycling plants to recycle chemical and solid wastes. Apart from supply chain, the environmental changes are being made in logistics as well which include collaboration with logistics service provider for fuel-

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efficient transportation as well as capacity optimization, transport efficiency, transportation network optimization, and planning, research and usage of alternative transport methods. It also includes the change in packaging materials and the sales packages. Such activities lead to reduction in CO2 emissions in domestic as well as international transportations, reduction in resource consumption in shipping processes, energy efficiency and reduction in operational carbon footprints of its logistics operations. Strategic partnership, collaboration and tie-ups with carriers, suppliers, freight companies and transport goods manufacturers have led to offer power-saving solutions and energy efficient transportation that improve the overall environmental performance of the transport industry. Such initiatives also include selection of efficient mode of transportation and freight consolidation/ deconsolidation.

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‘GREEN MARKETING’ in Knowledge –

This section covers the research being carried on in the area of sustainability management and green marketing. With an extent of concern much more than 30 years ago, the environmental problems at present appear to concern all the citizens, as well as the enterprises and the institutions all over the world. Hence the firms observe their stakeholders worrying about the environment and changing their behavior gradually. So, environmental concern has become an important area to address for the firms so as to obtain a moral license to operate and exist in the society and they are needed to focus on strategic actions that should lead to improve a firm’s environmental performance. Hence, they are now shifting locus of their activities towards the environment and the stakeholders. By adding the word ‚green‛ in many of their activities, their environmentally friendly activities are now being recognized as competitive advantage for them and as an opportunity from ‘ecological consuming approach’. Over a period of time, the firms’ environmental actions, product offerings to cater to eco-conscious consumers, communicating firms’ actions to stakeholders and consumer behavior are shifting the marketing orientation towards green marketing. Hence, it has led to the origin of the term ‘Green marketing’ or ‘Environmental marketing’ or ‘Sustainable marketing’. So far a little has been done to generate knowledge in the domain. Authors in the domain have made attempts to study certain aspects related to Green Marketing. The studies in the domain can be divided in two categories: (i) Firm-level studies, and (ii) Consumer research. This article here talks about ‘Product’ and ‘Price’ so as to elaborate two of the 4Ps of marketing and the knowledge developed in the same so far. Product Though the term ‘Green’ of green marketing has to refer to the processes as well as the products, the literature in green marketing has largely emphasized on products because development of more sustainable products will lead to sustainable ‚marketing mix‛. The product includes every aspect of it i.e. design, production, packaging, usage and disposal which provides an opportunity to companies to benefit from positive consumer attitudes towards the environment. Green product can be defined as a product that was manufactured using toxic-free ingredients and environmentally-friendly procedures, and is certified as such by a recognized organization. Green design means reduction of environmental harm at product design stage and associated production processes stage that helps companies to reduce the environmental impact of their products and processes; resulting in simultaneous costs cutting and increase in product marketability.

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One of the initiatives in green design concept is ‘Removal of Harmful Substances (RoHS) compliance’; which means substituting hazardous substances for a substantial number of environmentally friendly components and avoiding purchasing harmful materials from their suppliers or establishing environmental requirements for purchasing items. Another initiative is, suppliers’ evaluation on the basis of ISO 14001 certification, environmental audits and screening, and are supported by educating and training them on environmental issues as well as working in collaboration with them for environmental improvements. In terms of the attributes, green products (and packaging) are those who produce least pollution, consume less amount of energy, fewer amount of material is required to manufacture them, are easy to recycle, designed for disassembly, designed for remanufacturing, easy to decompose, designed to reuse, minimum waste produced and reduced weight and volume. Also, processes also make a product green by reducing waste (thus, improving efficiency), reprocessing the waste for internal use, incorporate recyclability and reusability, use recyclable or recycled materials. So, this has led to emergence of the concepts such as ‚3 Rs – reduce, reuse, and recycling‛, ‚4R strategy (for packaging) – Reduce, Recycle, Reuse and Redesign‛ and ‚Reduce, Reuse, Recycle, and Comply‛. The concept of 3 Rs (Reduce, recycle and Reuse) has been found prevalent in reverse logistics for critical evaluation of resource usage and resource efficient processes. Product recovery, recycling and waste management have emerged as a common concern for companies; with the purpose of customer service, developing green image, to cope up with legislative pressure and profit rather than environmental safety. Price Over a period of time, researchers have noticed that the positive attitude of consumers towards environment has resulted in their environmentally responsible behavior; and hence, the advertisements of ‚green‛ products have started grabbing their attention and they have started reading information on packaging of a product and on eco-labels. These have resulted in developing their understanding over impact of green products in their lifestyle and a segment of consumers have showed their intentions and willingness to pay more for green products. Though researchers have been unable to tap the gap between intentions to purchase green products and the actual purchase behavior of eco-friendly consumers but price is always been found a considerable factor for environmentally friendly purchase behavior among consumers. Price appears to be a major factor to influence environmentally friendly consumer attitude to convert in actual

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purchase of green products. Researchers have studied consumers’ willingness to pay and purchase intentions for green products like hybrid cars, washing machines, CFL bulbs and recycled products and found that purchase behavior largely depends on price sensitivity of consumers as well as product attributes of green products (quality and security, trust in certification, brand name). Pricing of green products emerges as one of the important variables for consumers to decide on green product purchase. Research on general marketing practices has also shown that price competition rules the market conditions in many sectors, and cost-effectiveness is one of the criteria that customers rank as particularly important while selecting a product or service. But research in green marketing has studied ‘Price’ as a part of consumer research and as one of the several product attributes. Researchers need to develop concepts on ‘Price’ and its role in consumers’ actual purchase behavior which should be based on value offered by green products.

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Emerging ‘GREEN’ consumers –

Destructive environmental changes and serious threat to human survival has led to increase in environmental consciousness of citizens around the world. So, environment is something that is now connected with the emotions of the citizens in their consumption pattern as well. Along with very high level of environmental consciousness among citizens in developed nations Like UK and USA, now the breeze is in developing nations like India. This interview introduces a charming techie guy, Shekhar Pandey, from Mumbai INDIA who has been dealing with marketing of products as well as services in IT industry since last 3 years. He says, he is environmentally motivated by the way his employers function. Let’s find out how the company practices transformed him into a ‘green’ consumer. Q. How do you connect environment with your life and lifestyle? The functionality of the employers I have been working with, has affected my thoughts and behavior towards the environment. Since the very beginning of my career, I have been dealing with my clients for sales of the IT products and services. And, I have found them intensely discussing and struggling on the point of power consumption of the IT products they buy from us and the money they pay for electricity bills. On the other side, I have also seen the efforts my bosses make in designing the complete product package that becomes most effective and economical in terms of power consumption. This has sensitized my understanding towards the concept of power saving. Whenever there is a power failure at where I stay in Borivli, Mumbai, it reminds me of the discussions with my clients and then I realize the very importance of electricity in our lives and lifestyles. I feel, our dependency on electricity is very high. Since electricity is generated from natural resources, I think my understanding towards saving the electricity connects my lifestyle with the environment. Q. What does make your lifestyle eco-friendly? When I connect my lifestyle with the environment, I think whatever product(s) I use since the time I wake up in the morning to late night, till I go to bed and even during my sleep hours, should be eco-friendly. Because every product has some impact on the environment, eco-friendly products will have, I think, least environmental impact. Q. Would you like to share any experience with eco-friendly/ green products!!!! One major change that I have done in my lifestyle is switching to CFL lights. I have installed CFLs in my flat. Also, I have recommended it to many of my friends. And, some of my close friends have also switched to CFL lights after I

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strongly recommended them. But, you see, there are few questions in my mind. There are two types of CFL lights available in the market. One is CFL bulbs and another is CFL tubes. I find CFL tubes have more illumination than CFL bulbs. So, there remains confusion in my mind which one I should adopt. Clarification by the interviewer – I would like to mention here that the application of CFL tubes is different than CFL bulbs. You should place tubes in a room or in corridors where you require more illumination while CFL bulbs can be place in washrooms and gallery where you require less illumination and CFL bulbs are smaller in size too. Q. So, this was what your experience has been with eco-friendly/ green products that you use in your daily life. Now, please tell us something about the practices you follow or the services you use and how you make it eco-friendly. I generally use public transport while commuting. So, that is something I am proud of my behavior towards the environment. I generally take an auto rickshaw or a taxi for commutation across Mumbai. But generally it is not shared transport. In Mumbai, shared transport is available at very few places. I think, there should be sufficient number of auto rickshaws and taxis to cater to this need. Arguing on the concept of shared transport; people in Mumbai generally say that no one has time to cooperate for it. But you see, the number of commuters in Mumbai is so high that it won’t take much time to get three passengers for shared transport in peak hours and I think, it will take hardly 2-3 minutes. And, number of those the people who cannot wait for even 2-3 minutes is very less. Q. As you have made a shift to CFLs, do you want to see some shift in the ‘Practices’ as well? Though for a long time, Mumbai has shifted its auto rickshaws and taxis from petrol to CNG, I still wish to see another change. CNG is less polluting than petrol but is not eco-friendly as I think. I wish to see a shift from CNG to Electric or Hybrid vehicles. Q. So, what are your thoughts or experience with such products and

technologies? Another point that reminds me when I think about CFLs and

electric/ hybrid vehicles is ‘Performance’. The reason why electric/ hybrid vehicles are not yet commercialized is lack in performance. Though environment factor is important, human comfort is also equally important because whatever we use in our daily life is to get comfort and high quality of life.

Q. So, do you mean that environment factor should consider ‘Product’ and ‘Practice’ with ‘Performance’? Absolutely yes because I don’t think that in their lifestyles, most of the people would favor environment at the cost of comfort and quality of life.

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Q. How is a product ‘green’ for you? For me, a green product is power efficient, fuel efficient and recyclable. And, most important is, money saving should be there. Energy saving in a green product is fine with me because I can notice the saving when I use it. I opted for CFLs because I can see the savings in my electricity bills. So, for me, money is important to be highlighted when you say that a product is ‘green’. Another point is price. According to me, CFL tubes are greener than CFL bulbs because bulbs are costlier than tubes. And, also there is performance difference between the two. So, how can I say that whole range of CFL products is green? Next, I think a product is green if it is recyclable. But, I don’t understand the concept of recyclability i.e. how a waste is recycled. When I give a thought to how wastes are being disposed and recycled, I don’t understand how it is done. But I do understand the motive behind it i.e. to save the raw materials and this is something good as well as in the favor of environment. Q. Disposal of waste products is an environmental activity that many companies are taking up these days to project their green image. How do you comment on this? Disposal of a waste product is very important because many waste products are harmful to the environment as well as human and animals when we throw them without properly disposing them. Q. There are some companies like Nokia, Samsung, Motorola, Videocon, Philips, Wipro, Dell, LG, HP etc who are facilitating consumers to drop their waste electronic products in company’s defined customer interaction outlets. This is called ‘Take-back program’. They are using some of the parts of waste products to manufacture new pieces of the products. This is because when a product is a waste for a particular consumer, it’s not the whole product which is a waste actually. Some parts of the product have longer life than the life of whole product. And, the components which cannot be used further, companies are taking up initiatives for disposal and recycling of those components. So, this way the environment is not harmed and resource saving can be done for our future generations to get the benefits of the limited resources available. So, what do you say on this? Though I am not aware of any such ‘take-back program’, I appreciate this concept. Actually, this is informative to me but I don’t think I am getting any benefit out of this act. But, yea when it comes to saving resources for the future generations, I am impressed on this. Though I can’t get anything out of ‘take-back program’ at present, I will surely derive happiness by making such efforts. I have N-72 model of mobile phone which is no more in use. Now I would do something to it. Q. Some products are disposed completely and some are done partially. What are your thoughts on this? If it is feasible for the companies to dispose the whole waste product, it is best and then, no harm is being done to the environment. But

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even if a part of a waste product is being done, it’s still better. That means, at least something is being done to save the environment. But I really feel bad when companies don’t dispose waste products just because one part or a few parts of it can’t be disposed; and companies are not disposing the waste product at all. That’s bad. Q. There is a concept called ‘Consume less’. What do you think about it and how do you see the relevance of this concept in your daily life? According to me, it means, avoiding buying or storing of products in advance and in bulk, then consuming lesser and throwing rest as waste. For example, I buy clothes in more number and then don’t wear all of them. That’s something which is unnecessary and these days, I have been struggling to avoid this practice. What I generally do is, when I go to the market, I pick up whatever I feel like buying; without thinking whether is it useful for me or not, or rather, I need it or not. Currently I am in process of giving unused or old clothes of mine to those who can use it such as my maid etc. In the light of this concept, dual-sim phones are advisable which is based on ‘Consume less’ concept, I think. It is very much popular in low-end category because of some technical limitations. I don’t know much about its technical limitations, I have just heard of it. Still, I think dual-sim phone is something that is related to the concept of ‘Consume less’.

Thank you Shekhar for your time and sharing your thoughts. Wish you happy and healthy time.

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Reach us at:- Prashant Kumar Mumbai, INDIA

+91-923-0761-777 [email protected]

https://www.facebook.com/pages/Green-Marketing-Primer/305193156159366

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