‘Embedding Sustainability in the
Marketing Management Process – Insight and Strategies’, IIMT Business Review
Vol. 4, No.1, July2011-May 2012, ISSN: 0975-0916.
Embedding Sustainability in the Marketing Management Process – Insights and Strategies
Abstract
Objective of this article is to provide an insight into how
sustainability can be embedded into the Marketing Management Processes.
Segmenting and targeting, differentiating and positioning, development of
marketing mix and packaging can each contribute to the cause of sustainability
and address the concerns of the ‘Green Customer’.
For green marketing to be effective, you have to be genuine. To
be genuine, you have to ensure that none of your business practices contradict
your claim. It means the following.
1.
You are actually doing what you claim to be doing in your green
marketing campaign.
2.
That the rest of your business policies are consistent with
whatever you are doing, that's environmentally friendly.
Both these conditions have to be met for your business to
establish the kind of environmental credentials that will allow a green
marketing campaign to succeed. The solution is to embed sustainability into
each stages of the marketing management process.
Key words
Green, Sustainability, Embed, Marketing Management
Process
Introduction
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.
Green washing:
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 is contradicted by
company's other products or practices. Presenting a product or service
as green when it's not is called green washing. What if customers who happen to
walk behind your store see an overflowing trash bin filled with paper,
cardboard and plastic bottles? Obviously, he or she will decide that you don't
care as much about recycling as you say you do in your green marketing.
Marketing’s Role
Marketers are both the
super-villains and super-heroes of sustainability. As super-villains they spend
their time encouraging people to buy more and promoting unsustainable
consumption. They encourage using too much packaging and limiting the useful
life of a product so that people are forced to replace them earlier than
necessary. But as super heroes the real power lies in their hands. First they can
work to identify, anticipate and satisfy customer requirements profitably by
identifying opportunities for more sustainable products. Second, they can
market their products in a responsible way that does not promote over
consumption or misinformation through green washing. Third, they communicate
information about the product and how best to use and dispose of it.
Marketers have a crucial job in providing consistent messages
about sustainability and the company not only to external customers, but more
importantly to employees and internal teams. Green marketing can be a very
powerful marketing strategy when it's done right.
Segmenting the
green consumer
Numerous studies have been conduced to understand
the green consumer. The result is an ever growing variety of groupings.
·
The product
evangelists are the ones that do not just believe in your product, but believe
in it so much that he will tell others about it.
·
Those who will buy
sustainable products no matter what.
·
Those who will
buy green but expect high standards of quality.
·
Those who are
not sure what to think but do want to buy green if it is easy and straight
forward.
·
The conflicted
consumer which believe that the companies they currently buy from are unethical
and are building resentment towards the brands
·
Those who are completely
confused as to what to buy and therefore end up not buying green.
·
Those who stay
away from green products and are uninterested in this area altogether.
·
The young people
whose awareness levels are increasing. They are not just getting involved but
influencing their parents’ decision in this area.
·
Women in general
may not be taking sustainability labels seriously but are inclined towards
organic and herbal products.
·
Sustainability
consumers are being put into a group described as LOHAS (Lifestyles of Health
and Sustainability) by certain marketers..
Positioning the
‘Green Product’
Marketers can follow
several positioning strategies.
Personal Benefit strategy :
Consumers are looking
for products that aren’t just making an impact far away,
but that directly
impact them as well. They are more likely to respond to product
attributes that will personally benefit them
such as safe, non toxic, cost effective rather than just
biodegradable.
Multiple benefit strategy:
Decisions are based on
a range of factors often combined together. The
marketers position
themselves on more than one differentiating factor.
Consumer participation strategy:
Many of the significant
contributions the consumers can make towards the
environment is by
product use, maintenance and disposal.
Eco-ugly strategy:
‘Eco-ugly’ is
the product that is overpriced, low
performance and unsavory versions for the niche who will buy sustainable
products no matter what.
Eco-chic strategy:
Eco-chic or eco-friendly
stuff is an improvement that actually looks as nice and cool as the less
sustainable originals.
Eco – iconic strategy:
Eco – iconic may
be defined as ‘eco-friendly goods and services sporting bold, iconic markets
and design, helping their eco conscious owners show off their eco-credentials
to their peers. It is about attracting recognition from their peers in the same
way as traditional status symbols do.
Eco-embedded strategy:
Another trend
that is slowly catching up is eco-embedding making products and processes more
sustainable without consumers. Even noticing it , not leaving much room for
consumers and companies to opt for less sustainable alternatives.
Problems in
Differentiating and positioning
1. Problem
of marketing myopia : The potential market can be overlooked by looking at the
demand for existing products but not the potential demand for products that do
not exit in this area.
2. Problem
of confused positioning : Consumers are not always formation with or may not truly
understand the meaning of the terms used in the surveys such as green, sustain
ability etc. They do not necessarily know what exactly is a green product is or
how to recognize a green company.
3. Problem
of perceived performance: Many consumers will see green product as being
inferior consumers are looking for green products that work as effecting, on
better than non-green options.
4. Problem
of cost: Consumers don’t was to pay much extra a sacrifice quality of green products.
5. Problem of Convenience: Consumers will
tolerate only minimal inconvenience in using green products and don’t want to
go out of this way to by then. Product need to be easy to use and available at
mainstream distributions.
6. Problem of over stating green behaviors :
Marketers must focus on what people actually do and not what they say they do.
Therefore when considering why people would purchase sustainable products, it
is more important to understand the compromises and trade-offs consumers are
being asked to make. Getting to this stage will then allow companies to focus
on providing the products that people actually want and need.
Products
A sustainable product is one that provides
environmental, social and economic benefits over its full life-cycle. Today
most work is being done on separate parts of the life cycle , but in the future
we will increasingly see products that really do aim to be sustainable as a
whole. Companies have two fundamental
choices when it comes to creating sustainable products. First, they can take an
existing product and make it greener. This involves many of the concepts
introduced in eco-design including using more sustainable materials, production
processes, disposal etc. second they can identify customers needs and wants and
develop entirely new products that are able to better address these in a more
sustainable way.
Consumers are
looking for a variety of different kinds of sustainable products options (or
combination of) including.
·
Products that present a solution: This could be a product that is a better alternative
to what is currently available. The focus is on identifying a need and
providing a product that satisfies that need.
·
Products that are safer : Several sustainability products , for example those
that use less chemicals and have more natural ingredients such as organic, aim
at providing healthier, safer options for consumers.
·
Products that save money : Many green products on the market right now,
especially new technologies (both very simple or complex) allow consumers to
not only reduce their energy or water use for example, but also save them money
(i.e. solar panels which enable a consumer to both generate their own power and
sell excess power into the grid. )
·
Products that make them feel good: Certain products may or may not have any intrinsic
sustainability characteristics but the companies producing them or the products
themselves support causes that the consumers perceives to be important .
Supporting those products makes the consumer feel as if they have done their
part in making the world a better place.
·
Products that make them look good: some consumers are looking for products that look
like they are green in order to communicate to others their green credentials
(i.e. Hybrid cars or green luxury goods.
·
Products
that make it easy to switch: Consumers are looking for products that make
their life simpler, not more complicated and they are looking for products that
make it easy to switch. Consumers are also looking for products, brands or
retailers that are doing the work for them, such as products that all uphold
certain standards so that they do not have to think about every single
purchasing decision.
·
Products that are of high quality: Consumers are looking for products that offer high
quality.
·
Products that aren’t doing harm: “Consumers are increasingly interested in
supporting products that are not doing harm to society and the environment, in
particular as the levels of awareness increase about the impacts of many of
these products and processes.
Generally it is the use of the product itself rather
than the purchase that generates satisfaction . With this in mind marketers
should rethink not only the way that products are designed, but how the entire
product experience is designed.
Price
Pricing products
is a tricky business whether they are green or not. Getting the price right is
crucial. If the price it too high and you may miss the mainstream market and
price it too low and consumers may see it as a lesser quality product. While
the pricing of the product from the company’s side often rests on their actual
costs, what a consumer is willing to pay for a more sustainable product is more
related to the perceived value it brings to both the customer and to the
environment and society as a whole. Determining how much a consumer is willing
to pay for a sustainability product comes down to these points.
·
The Perceived value (financial) this has to do with the total value that the
customer is getting from the product or service itself, and how much value they
are getting form this products as opposed to another one. This includes.
1.
Operating Costs;
CFC light bulbs for example may be a little bit
more expensive than traditional light bulbs to buy , but they will cost
the consumer less over time because they last longer and use less energy, which
results in reduce reduced energy bills.
2.
Indirect Costs:
Is the product worth enough to the consumer that they are willing to go out of
their way to buy it? Is it higher quality, or does it result in increased
consumer satisfaction? Is the product easy to find, easy to use?
·
The Perceived values (ethical) : This comes not have to do with the product itself ,
but rather with the claims that the products makes. How much does the consumer
value the environmental and social guarantees the product is making? This also
depends how much knowledge the consumer has about different issues, and
therefore whether they are able to understand the positive changes that the
company has made to society or to the environment. It also has to do with how
far they believe the impacts being claimed to be true. This includes.
1.
Direct Impact:
Supporting a product that was made using sustainable materials, sustainable
process, fair trade, recyclable materials etc.
2.
Indirect Impact:
For example some companies will link parts of their profit to social and
environmental causes relevant to or of interest to their business. This is
either through the price you pay, or as a percentage of profits. Customers then
feel that they are doing something good by buying the product, especially if
they care for the cause.
Place
(Retailers and
Sustainability)
The place in the marketing mix includes several
elements such as where the product is made, how the products are transported
and where the product is being sold. In this context, retailer includes any
organization that sells and delivers a product to the consumer, and it can
include super markets, specially stores, fast food restaurants and department
stores. .
Retailers have often been perceived as not only playing
a passive role in sustainability, but in some cases being part of the problem.
·
Store Management :
They must make sure their own operations are sustainable, and that they are
controlling and managing their own environmental and social impacts through implementing
systems in energy and water conservation, waste management and recycling.
·
Where products Come from: The sourcing of consumer products includes working
with supplier to favor development of products that are more sustainable.
·
Eliminating unsustainable products: some retailers are eliminating products they
consider to be unsustainable from the store and, where possible, offering more
sustainable alternatives.
·
Educating the customer: Retailers are providing more sustainable options for
their customers to choose form. They can also educate their staff about these
options and promote them appropriately.
·
Where the product is placed: Within the retail location, make more sustainable
products easier to find and easier to buy. Green products are sometimes confined
to the health food aisle of store. This can limit the number and kinds of
customers these products could potentially attract.
·
How the product is sold: Retailers can also explore new ways to get the
products to consumers in the first place e.g. providing carry bags or provision
to refill their bottles.
·
Reverse logistics: Retailers can also provide as spot for consumer to
bring back products for reuse and recycling. Provide facilities to collect used
batteries collect used plastic bags, tape roles, paint brushes, chip bags and
candy wrappers in a section of retail stores.
Packaging
Packaging is
first part of the consumers tangible experience with your product. If a product
or a company promotes itself as green and then uses excessive or unsustainable
packaging, it is not sending a consistent message to the customer. Packaging
should not only be seen as something that protects the products, it should also
be seen as an opportunity to connect with the customer and transmit information
about the product, what it is made of, how to best use it and how to dispose of
it when a consumer is finished using it. There are two components to
sustainable packaging.
A. The Packaging
itself and
B. Messages on the package
A.
The packaging itself: Companies can look at making the packaging itself
more sustainable. This includes looking at:
1.
Materials: Materials
used must be beneficial, safe and
healthy for individuals and communities. It is sourced manufactured,
transported and recycled using renewable energy. It is manufactured using clean
production technologies and best practices.
2.
Reducing the amount packaging but insuring proper
and simple packaging : Getting rid
of all packaging is not the answer either . Under packaging can be as much of
an issue as over packaging in terms of wasted energy and resources from ruined
goods. Packaging needs to be considered in the context of the design and
manufacture of the product.
3.
Packaging across the life cycle of the product : Producers must think about how much is being used
and what kinds of materials are being used and what kinds of materials are
being used as part of the packaging whether it is primary, secondary or
tertiary packaging.
B.
The message on the package: It can be taken as an opportunity to communicate
their commitment as well as to engage the customer. Following information can
be provided.
1.
Sustainability information
2.
Materials used or not used
3.
How to use and dispose
4.
How to return, repair or reuse
5.
How to recycle
Promoting
Promoting is not just a matter of letting people
know what ever you are doing to protect the environment, but also a matter of
letting them know why it matters. It is not only about the value proposition
being offered but also about how customers can participate in the value
delivery by taking part in a positive environmental action. Customer’s green
decisions can be enforced.
1.
Be good:
Do not market to groups by creating unnecessary pressure or concerns, for
example scaring people about a supposed illness.
2.
Be honest:
Be transparent about what ever you are doing. Make sure what ever you say or
claim is backed up and easy for the reader to understand.
3.
Be creative:
It seems that all ads for green business use trees and flowers. Look out for
different ways.
4.
Be positive:
Don’t spread gloom and doom, instead surprise the customer with a positive
message.
5.
Be consistent:
Your engagement, initiatives, image,
product lines, operations and marketing messages must be aligned and
integrated.
6.
Be Focused:
Concentrate on what is important to your audience.
7.
Empower your customers: Get your customers involved. Give them something
they can do.
Conclusion
Changing
public policies like the adherence to the Kyoto Protocol and the devastating
results of global warming such as Hurricane Katrina have shifted the attention
of consumers, businesses and governments towards mounting environmental
consciousness and concern. As a consequence the state of the environment and
how to create a sustainable way of life have become prevalent topics in the
media.
Not
only do consumers grow increasingly environmentally alert, they also turn this
consciousness into actual behavior by adopting a more eco-friendly and healthy
lifestyle. Thus, the green
consumer market is constantly growing and offers huge potential and
opportunities to businesses around the globe. Show potential
customers that you follow green business practices and you could reap more
green on your bottom line. Green - marketing
isn't just a catchphrase; it's a marketing strategy that can help you get more
customers and make more money. But only if you do it right.
You
have to walk the talk and actually implement green policies and act in
environmentally friendly ways for green marketing to work, but if you do,
you've got a powerful selling point with those who are environmentally
conscious and want to act to make the world a greener place - a market that's
growing exponentially right now
References
www.business-ethics.org/research.html
www.fastcompany.com/magazine/110/next-reading-lict.html
www.greenbiz.com/news/2008/10/20/argentina
www.greatplacestowork.com/great/results.php
www.sustainability.com/downloads_public/insight
http://greenliving.about.com/od/greenathome/Green_at_Home.htm
http://alternativefuels.about.com/lr/hybrid_vehicle_reviews/252427/1/
Books Referred:
Philip Kotler, Marketing
Management , Patparganj -
Magazines
Business world magazine,
January 2009
