Project report on

“Green marketing”

Presented to

Prof. joyeeta chattergee

By

Group1/Section-A Padma Devi (19)

Saurabh Pandey (21)

Gaurang Sahlot (79)

Isha Vashist (83)

Nihareika Sinha (91)

Siraj Siddiqui (151)

INTRODUCTION

According to the American Marketing Association, green marketing is the marketing of

products that are presumed to be environmentally safe. 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. Other similar terms used are

Environmental Marketing and Ecological Marketing. 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.

So, in simple terms 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.

2

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 has not been proven conclusively, specially the mild effect

which it had had on consumers has washed away by the present recession (2008-09) only.

Green marketers though argue that it is a way to use the environmental benefits of a

product or service to promote sales. Many consumers will choose products that do not

damage the environment over less environmentally friendly products, even if they cost

more. With green marketing, advertisers focus on environmental benefits to sell products

such as biodegradable diapers, energy-efficient light bulbs, and environmentally safe

detergents.

People buy billions of dollars worth of goods and services every year—many which harm

the environment in how they are harvested, made, or used. Environmentalists support

green marketing to encourage people to use environmentally preferable alternatives, and

to offer incentives to manufacturers that develop more environmentally beneficial

products.

THE BIRTH OF GREEN MARKETING

The concept of green marketing has been around at least since the first Earth Day in

1970. But the idea did not catch on until the 1980s, when rising public interest in the

environment led to a demand for more green products and services. Manufacturers

responded to public interest by labeling hundreds of new products "environmentally

friendly"—making claims that products were biodegradable, compostable, energy

efficient, or the like.

3

The term Green Marketing came into prominence in the late 1980s and early 1990s. The

American Marketing Association (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".

The first wave of Green Marketing occurred in the 1980s. Corporate Social

Responsibility (CSR) Reports started with the ice cream seller Ben & Jerry's where the

financial report was supplemented by a greater view on the company's environmental

impact. 

In 1987 a document prepared by the World Commission on Environment and

Development defined sustainable development as meeting "the needs of the present

without compromising the ability of future generations to meet their own need", this

became known as the Brundtland Report and was another step towards widespread

thinking on sustainability in everyday activity. 

Two tangible milestones for wave of green marketing came in the form of published

books, both of which were called Green Marketing. They were by Ken Peattie (1992) in

the United Kingdom and by Jacquelyn Ottman (1993) in the United States of America. 

In the years after 2000 a second wave of Green marketing emerged. By now CSR and the

Triple Bottom Line (TBL) were widespread. Such publications as a 2005 United Nations

Report, then in 2006 a book by Al Gore and the UK Stern Report brought scientific-

environmental arguments to a wide public in an easy to understand way. 

GREEN WASHING

In spite of its growing popularity, the green marketing movement faced serious setbacks

in the late 1980s because many industries made false claims about their products and

4

services. For instance, the environmental organization Corp Watch , which issues

annually a list of the top ten "green washing" companies, included BP Amoco for

advertising its "Plug in the Sun" program, in which the company installed solar panels in

two hundred gas stations, while continuing to aggressively lobby to drill for oil in the

Arctic National Wildlife Refuge. Green marketing can be a very powerful marketing

strategy though when it's done right. In a similar kind of case Chad’s green marketing

campaign bombed because he made the mistake of packaging his environmentally

friendly product in Styrofoam, emitting CFC’s.

Without environmental labeling standards, consumers could not tell which products and

services were truly beneficial. Consumers ended up paying extra for misrepresented

products. The media came up with the term "green washing" to describe cases where

organizations misrepresented themselves as environmentally responsible.

So, While green marketing was growing greatly as increasing numbers of consumers

were 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. Thus, in other words

presenting a product or service as green when it's not is called green washing.

THE LEGAL FACTORS

In 1992, the Federal Trade Commission (FTC) stepped in to prevent further deception.

The FTC created guidelines for the use of environmental marketing claims such as

"recyclable," "biodegradable," "compost-able," and the like. The FTC and the U.S.

Environmental Protection Agency defined "environmentally preferable products" as

products and services that have a lesser or reduced effect on human health and the

environment when compared to other products and services that serve the same purpose.

The label "environmentally preferable" considers how raw materials are acquired,

produced, manufactured, packaged, distributed, reused, operated, maintained, or how the

product or service is disposed.

5

Today, special labels help the public identify legitimate environmentally preferable

products and services. Several environmental groups evaluate and certify products and

services that meet FTC standards—or their own tougher standards. One popular product

that has received certification is shade-grown coffee, an alternative to coffee beans that

are grown on deforested land in the tropics.

THE NEXT BOOST

During the late 1990s, green marketing received a large boost when President Bill

Clinton issued executive orders directing federal offices to purchase recycled and

environmentally preferable products. Some industries adopted similar policies.

Examples of environmentally-beneficial products and services:

Paper containing post-consumer wastepaper

Cereals sold without excess packaging

Shade-grown coffee beans

Cleaning supplies that do not harm humans or environment

Wood harvested from sustainable forests

Energy-efficient light-bulbs

Energy-efficient cars

Energy from renewable sources of energy such as windmills and solar power

6

THE GREEN DILEMMA

The past decade has shown that harnessing consumer power to effect positive

environmental change is far easier said than done. The so-called "green consumer"

movements in the U.S. and other countries have struggled to reach critical mass and to

remain in the forefront of shoppers' minds. While public opinion polls taken since the late

1980s have shown consistently that a significant percentage of consumers in the U.S. and

elsewhere profess a strong willingness to favor environmentally conscious products and

companies, consumers' efforts to do so in real life have remained sketchy at best. One of

green marketing's challenges is the lack of standards or public consensus about what

constitutes "green," according to Joel Makower, a writer on green marketing.In essence,

there is no definition of "how good is good enough" when it comes to a product or

company making green marketing claims. This lack of consensus -- by consumers,

marketers, activists, regulators, and influential people -- has slowed the growth of green

products, says Makeover, because companies are often reluctant to promote their green

attributes, and consumers are often skeptical about claims.

Despite these challenges, green marketing has continued to gain adherents, particularly in

light of growing global concern about climate change. This concern has led more

companies to advertise their commitment to reduce their climate impacts, and the effect

this is having on their products and services

ADOPTION OF GREEN MARKETING 

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

marketing. They are - 

* Opportunities or competitive advantage 

* Corporate social responsibilities (CSR) 

* Government pressure 

7

* Competitive pressure 

* Cost or profit issues 

GREEN MARKETIN MIX

Every company has its own favorite marketing mix. Some have 4 P's and some have 7 P's

of marketing mix. The 4 P's of green marketing are that of a conventional marketing but

the challenge before marketers is to use 4 P's in an innovative manner. 

Product 

The ecological objectives in planning products are to reduce resource consumption and

pollution and to increase conservation of scarce resources (Keller man, 1978). 

Price 

Price is a critical and important factor of green marketing mix. Most consumers will only

be prepared to pay additional value if there is a perception of extra product value. This

value may be improved performance, function, design, visual appeal, or taste. Green

marketing should take all these facts into consideration while charging a premium price. 

Promotion 

There are three types of green advertising: - 

8

* Advertisements that address a relationship between a product/service and the

biophysical environment 

* Those that promote a green lifestyle by highlighting a product or service 

* Advertisements that present a corporate image of environmental responsibility 

Place 

The choice of where and when to make a product available will have significant impact

on the customers. Very few customers will go out of their way to buy green products. 

CHALLENGES AHEAD

* Green products require renewable and recyclable material, which is costly 

* Requires a technology, which requires huge investment in R & D 

* Water treatment technology, which is too costly 

* Majority of the people are not aware of green products and their uses 

* Majority of the consumers are not willing to pay a premium for green products 

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 number–the Energy

Star label, for example, now appears on 11,000 different companies' models in 38

product categories, from washing machines and light bulbs to skyscrapers and homes.

The difference is, however, that green—rightfully so—is on the wane as the primary

sales pitch for products. On the other hand, Roper’s Green Gauge shows that a high

percentage of consumers (42%) feel that environmental products don’t work as well as

conventional ones. This is an unfortunate legacy from the 1970s when shower heads

9

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.

CONSUMER’S CONFUSION

One challenge green marketers -- old and new -- are likely to face as green products and a

message 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".

STATISTICS

According to market researcher Mintel, about 12% of the U.S. population can be

identified as True Greens, consumers who seek out and regularly buy so-called green

products. Another 68% can be classified as Light Greens, consumers who buy green

sometimes. "What chief marketing officers are always looking for is touch points with

consumers, and this is just a big, big, big touch point that's not being served," says Mintel

Research Director David Lockwood. "All the corporate executives that we talk to are

extremely convinced that being able to make some sort of strong case about the

environment is going to work down to their bottom line."

COMPANY’S GREEN INITIATIVES

ITC 

10

* ITC has been 'Carbon Positive' three years in a row (sequestering/storing twice the

amount of CO2 than the Company emits). 

* 'Water Positive' six years in a row (creating three times more Rainwater Harvesting

potential than ITC's net consumption). 

* Close to 100% solid waste recycling. 

* All Environment, Health and Safety Management Systems in ITC conform to the best

international standards. 

* ITC's businesses generate livelihoods for over 5 million people. 

* ITC's globally recognised e-Choupal initiative is the world's largest rural digital

infrastructure benefiting over 4 million farming families. 

* ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an

estimated 35 million person days of employment among the disadvantaged. 

* ITC's Watershed Development Initiative brings precious water to nearly 35,000

hectares of drylands and moisture-stressed areas. 

* ITC's Sustainable Community Development initiatives include women empowerment,

supplementary education, integrated animal husbandry programmes. 

MARUTI: GREENING THE SUPPLY CHAIN 

The company has remained ahead of regulatory requirements in pursuit of environment

protection and energy conservation at its manufacturing facilities, and in development of

11

products that use fewer natural resources and are environment friendly. 

The company credited the 'Just-in-Time' philosophy adopted and internalized by the

employees as the prime reason that helped to excel in this direction. 

The company has been promoting 3R since its inception. As a result the company has not

only been able to recycle 100% of treated waste water but also reduced fresh water

consumption. The company has implemented rain water harvesting to recharge the

aquifers. Also, recyclable packing for bought out components is being actively

promoted. 

The company has been facilitating implementation of Environment Management System

(EMS) at its suppliers' end. Regular training programs are conducted for all the suppliers

on EMS. Surveys are conducted to assess the vendors who need more guidance. The

systems and the environmental performance of suppliers are audited. 

The green co-efficient of this system is much better than the conventional system 

HCL's ENVIRONMENT MANAGEMENT AND ECOSAFE POLICY

In building a system to identify, develop and sustain the maintenance of an environment

management system at corporate level we have formulated a program that we proudly

refer as HCL's ecosafe. 

The aim is to encapsulate knowledge, awareness, and key developments on all

environmental issues faced by today's world and to incorporate these in HCL's operations

assuring our commitment in delivering quality products, solutions and services 

The key objective under HCL ecoSafe is targeted at integrating environmental

management procedures into its business processes thereby protecting the environment,

12

health, and safety of all its stakeholders. HCL commits to manufacture products that are

environment friendly in all respects and are free from hazardous chemicals. 

HCL ecoSafe focuses on product lifecycle management to ensure that our products right

from when they are manufactured, bought by customers, recovered at their end-of-life

and recycled after useful life are done in an environmentally responsible manner Key

initiatives undertaken through HCL ecoSafe program are: 

MORE EXAMPLES

* McDonald's restaurant's napkins, bags are made of recycled paper. 

* Coca-Cola pumped syrup directly from tank instead of plastic which saved 68 million

pound/year. 

* Badarpur Thermal Power station of NTPC in Delhi is devising ways to utilize coal-ash

that has been a major source of air and water pollution. 

* Barauni refinery of IOC is taken steps for restricting air and water pollutants. 

THE NEW TRENDS REVEALED BY DELOITTE 

Shoppers are thinking green, but not always buying that way, according to a new study

released by the Grocery Manufacturers Association (GMA) and Deloitte. The study

found that while 54 percent of shoppers indicate that environmental sustainability in a

factor in their purchasing decisions, they actually bought green products on just 22

percent of their shopping trips. The survey is the basis of the GMA-Deloitte report titled

Finding the Green in Today's Shoppers: Sustainability Trends and New Shopper Insights

and was based on interviews with over 6,400 shoppers. 

13

Now eco packaging is poised to become the next low-hanging fruit of the clean tech

world. Investors and entrepreneurs this week at Europe's most important annual clean

tech conference reported unprecedented interest in reducing the use of raw materials

while finding superior protection for food and other products. 

Consumers are increasingly putting plastic shopping bags and non-green wrapping items

on their naughty list, according to Deloitte's 2008 Annual Holiday Survey. Nearly half of

the 13,000 consumers polled said they'd be willing to pay more for green gifts. This was

up from 17 percent last year. 

Consumers perceive themselves as being environmentally responsible. Successful green

marketing requires matching a company's brand attributes with its customers' identity as

"green." An article suggested examining green marketing from the perspective of the 4

P's of marketing -- product, price, placement and promotion -- plus a 5th P, "prove it." 

Americans are quick to identify polluting companies as "socially irresponsible" and

make their purchasing decisions accordingly, says a new survey. The poll also found that

American consumers between the ages of 18-29 are more likely to spend more on

organic, environmentally preferable or fair trade products than other age groups. 

The survey, by the research firm Global Market Insite, quizzed more than 15,000 online

consumers in the U.S. and 16 other countries about their socially conscious business

practices. 

Americans placed the highest value on corporate community involvement; when asked

what factor was the most important in determining if a business is socially responsible,

"contributing to the community" (e.g. sponsorship, grants, employee volunteer programs)

came in highest with 47%. On the other hand, all of the other countries surveyed (India,

Canada, Australia, Germany, China, and Japan) selected environmentally preferable

14

practices (recycling, using biodegradable products) as the top factor. 

"In the high-tech era where employees are expected to work 24/7, it's significant that

Americans rate giving back to the community as their top priority in recognizing socially

responsible companies," said Marjorie Thompson, co-author of Brand Spirit: How Cause

Related Marketing Builds Brands. "It shows that people want to feel connected to each

other and that they are willing to reward businesses who tap into this sense of mutual

support and belonging. Companies will need to start thinking of their community

programs as core to their businesses and brands, and central to how they market

themselves." 

Not surprising, the U.S., along with other countries such as India and China, which have

experienced environmental disasters caused by corporations (e.g. Love Canal, Bhobal,

Exxon Valdez) or have had to deal with major polluting issues (e.g. coal plants,

manufacturing), believe that damaging the environment is associated with acting socially

irresponsible. Other countries, including France (60%), Denmark (52%) and Italy (45%)

selected the use of child labor as the main factor in making them think a corporation is

socially irresponsible. 

Juxtaposing Americans' negative opinions on damaging the environment, the GMIPoll

found that only 42% of all Americans are willing to spend more for products branded as

organic, environmentally friendly, or fair trade, except for the Y Generation. While only

14% of 18-29 year olds label themselves as socially responsible consumers, half of this

age group (50%) responded that they will spend more on these types of products

(organic, environmentally friendly or fair trade) compared to their older and wealthier

counterparts, with only 37% of 45-64 years olds saying they would spend more on green

products. 

Thompson advertisements: "Based on the findings, Generation Y is obviously more

environmentally conscious and socially savvy, which is expected given that many are

15

aware of the issues surrounding globalization and trade and how this can negatively

affect the environment, labor pool and the local communities." 

Surprisingly, a large majority of online consumers in the less developed countries of

China and India, 91% and 71% respectively, will pay more for socially responsible

products, while almost half (47%) of the U.K. respondents indicated they would spend

more for these types of goods. 

GREEN HOUSE AS REDUCTION MARKET

The emerging greenhouse gas reduction market can potentially catalyze projects with

important local environmental, economic, and quality-of-life benefits. The Kyoto

Protocol’s 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.

While international trade in greenhouse gas 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 people’s lives and the environment.

16

One of the most popular trend in the business is emission trade or Emissions trading (or

emission trading) which is an administrative approach used to control pollution by

providing economic incentives for achieving reductions in the emissions of pollutants. It

is also called cap-and-trade .A central authority (usually a governmental body) sets a

limit or cap on the amount of a pollutant that can be emitted. Companies or other groups

are issued emission permits and are required to hold an equivalent number of allowances

(or credits) which represent the right to emit a specific amount. The total amount of

allowances and credits cannot exceed the cap, limiting total emissions to that level.

Companies that need to increase their emission allowance must buy credits from those

who pollute less. The transfer of allowances is referred to as a trade. In effect, the buyer

is paying a charge for polluting, while the seller is being rewarded for having reduced

emissions by more than was needed. Thus, in theory, those who can reduce emissions

most cheaply will do so, achieving the pollution reduction at the lowest cost to society.

There are active trading programs in several air pollutants. For greenhouse gases the

largest is the European Union Emission Trading Scheme. In the United States there is a

national market to reduce acid rain and several regional markets in nitrogen oxides.

Markets for other pollutants tend to be smaller and more localized.

GREEN MARKETING CASES

Philips Light's CFL

Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL)

bulb was Earth Light, at $15 each versus 75 cents for incandescent bulbs.The product had

difficulty climbing out of its deep green niche.The company re-launched the product as

"Marathon," underscoring its new "super long life" positioning and promise of saving $26

in energy costs over its five-year lifetime Finally, with the U.S. EPA's Energy Star label

17

to add credibility as well as new sensitivity to rising utility costs and electricity shortages,

sales climbed 12 percent in an otherwise flat market.

Car sharing services

Car-sharing services address the longer-term solutions to consumer needs for better fuel

savings and fewer traffic tie-ups and parking nightmares, to complement the

environmental benefit of more open space and reduction of greenhouse gases. They may

be thought of as a "time-sharing" system for cars. Consumers who drive less than 7,500

miles a year and do not need a car for work can save thousands of dollars annually by

joining one of the many services springing up, including ZipCar (East Coast), Flex Car

(Washington State), and Hour Car (Twin Cities).

Electronics sector

The consumer electronics sector provides room for using green marketing to attract new

customers. One example of this is HP's promise to cut its global energy use 20 percent by

the year 2010. To accomplish this reduction below 2005 levels, The Hewlett-Packard

Company announced plans to deliver energy-efficient products and services and institute

energy-efficient operating practices in its facilities worldwide.

Introduction of CNG in Delhi

New Delhi, capital of India, was being polluted at a very fast pace until Supreme Court of

India forced a change to alternative fuels. In 2002, a directive was issued to completely

adopt CNG in all public transport systems to curb pollution.

CONCLUSION

Green marketing is still in its infancy and a lot of research is to be done on green

marketing to fully explore its potential .Think of a refrigerator for example. While we

may have had to be convinced in the 1950s to buy a refrigerator, we would have wanted

the great white box to have attractive looks till the 1970s, but in today's uncertain world,

we might ask ourselves about the impact of the chlorofluorocarbons (CFCs) that our

18

refrigerator is emitting and demand a more environmentally friendly refrigerator. 

So, if today's successful marketing is about appealing to personal values and delivering

consumer empowerment, then surely the time is right to inject sustainable development

into the marketing mix to help address some of the gritty issues presently faced by our

planet .Green marketing methods may produce highly effective results if used cautiously

and with integrity.

19