A series of Q&A questions. (case study) The knowledge of Business and Sustainable Development is required
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Module8MGMT2004GreenandSustainabilityMarketing.pptx1
MGMT 2004: Business and Sustainable Development
Lecturer: Dr. Hossein Mohammadi
School of Management
Curtin University
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ELECTRONIC WARNING NOTICE FOR COPYRIGHT STATUTORY LICENCES
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Green and Sustainability Marketing
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At the end of this lecture you will be able to:
Describe the difference between conventional and green marketing
Understand the strengths and weaknesses of green marketing
Identify the potential of sustainability marketing as a way forward
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A story of my neighbour!
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Do you know anyone like my neighbour? [But you and I are definitely not like that right? ]
To what extent “marketing” is responsible for this lifestyle? [It’s not our fault]
Can “green marketing” come to the rescue? [If so, what are the potential and pitfalls?]
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How well does the marketing practice align with the aspiration of sustainability?
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Marketing is about developing products and services that meet consumer needs at the right price and communicating their benefits effectively in the market place
Marketing
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Conventional Marketing Equation
Marketing techniques have evolved over time i.e. intensified advertising in social media. However, profiting from consumer satisfaction remains the primary motive behind marketing theory and practice
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E.g. Theories of Marketing
Perceived-value
Either offer similar products and services at higher price/rate than the competition so that consumers will believe what’s being advertised is superior
Or offer cheaper prices than the competition so that consumers will believe its more value for the money
Positioning
In order to maximize sales (and profits), products or services offered must be positioned in such a way that consumers should believe that they need to buy what's being advertised
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E.g. Practices of Marketing
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E.g. Types of Marketing
Social marketing: the main focus is on the application of well-known marketing tools and techniques to foster social change
Sustainability marketing: the main focus is on building and maintaining viable relationships with customers, the society, and the environment
Green marketing: the main focus is on promoting products and services with minimum detrimental impact on the natural environment
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The paradox of marketing:
Marketing is the driving force behind unsustainable economic growth and individual lifestyles
Contributes to over-consumption
Complicit in the promotion of unsustainable/unethical values and behaviours (suppliers & buyers)
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How Responsible is Marketing?
The ‘more is better maxim’ of marketing seems to violate sustainability principles and arguably undermines efforts to mainstream ethical and ecologically sensitive consumer behaviour
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Marketing has the potential to be used as a tool to do less harm or do better:
Altering consumption patterns for society’s long-term best interests
Educate and raise awareness about the impact of our consumption
Change values, life-styles and consumer choice
Help challenge the status quo or existing norms
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Marketing with a Conscience
There is an increasing recognition and desire within the business sector to change the way marketing is done in line with the triple bottom line
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Wellbeing of the Planet and People should be a part of the marketing mix
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The Growth of Green Market
How to identify Green Products and Services?
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Eco Labels
The potential of eco labels was globally recognized in 1992 Rio Earth Summit
An informative means for consumers to make choices to reduce their negative impacts + influencing the green market in terms of better products and services
Type I, II, and III labels
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For businesses: provides a way to measure performance and also communicate and market the environmental credentials of product & services
For consumers: guides their purchasing decisions by providing behind the scene info on products & services
For governments: encourages the behavioral change of producers and consumers towards long-term sustainability without regulatory measures (C&C or MBE)
Purpose of Eco Labels:
It empowers people to discriminate between products that are harmful to the environment and those more compatible with environmental objectives…so ecolabels are the tools of green marketing
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Promotes products or services by employing environmental claims either about their attributes or about the systems, policies and processes of the firms that manufacture or sell them (Prakash 2002: 285)
Channels consumer demand towards environmentally less problematic areas of consumption (Hockerts 2003)
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Green Marketing
Green 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 [Polonsky 1994, p. 2]
Profiting from not only satisfying customers but also caring for the socio-environment
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Green Marketing Target Group
| Types of Consumers [Sources: Ginsberg & Bloom (2004) & Brooks et al. (2009)] | ||
| Share | Type | Explanation |
| 11% | True Blue Greens | Likely to buy green products and services |
| 5% | Greenback Greens | Will buy green but won’t make lifestyle changes |
| 33% | Sprouts | Care but don’t put in extra effort |
| 18% | Grousers | Environmental issues are somebody else’s problem |
| 31% | Basic Browns | Unaware or don’t care |
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| Types of Consumers [Source: Ogilvy and Mather (1992)] | ||
| Share | Type | Explanation |
| 16% | Activist | Likely to buy green products and services |
| 34% | Realist | Are worried about the state of the environment |
| 28% | Complacent | Environmental issues are somebody else’s problem |
| 22% | Alienated | Unaware or don’t care |
Green Marketing Target Group
Only a Small Percentage of Consumers Respond to Greenness
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Numbness
People are too busy and simply do not have (make) time or don’t want to know
Reluctance to change lifestyles
Green issues are too big to handle
What can I do about melting ice caps??
Apathy
Green labels have a bad name because of perceptions of poor performance and ideological slant
Dislike of ‘green’ labels
Scepticism about industry's green claims
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Understanding the Consumers
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Akrasia
Inconsistency in their demand – mostly opportunistic - consumption choices often do not reflect personal values.
Self-righteousness – self-deception
I recycle and therefore I am green
Financially struggling
We may like to buy organic but simply cannot afford to do so because of large price premiums
Reluctance to pay more – fear of price gauging
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Understanding the Consumers
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Adequate pricing
Consumers must be willing and able to afford premiums
Adequate greenness
Price, image & performance may be more important
Product performance
Product must be/do more than being green
Credibility of claims
Consumers need to believe your claim
Instilling an sense of wanting to make a difference
Demonstrate that using your product will make a difference
Encourage behavioural change
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Ingredients of Effective (Green) Marketing
Source: Prakash (2002), Ottman (2008)
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https:// youtu.be / PVPyHrPZbVM
E.g. Green Marketing
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Green marketing can help communicate the need to:
Improve environmental quality
Look for alternative product choices
Promote ‘better’ practices in industry
Raise awareness
Educate consumers
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Potential of Green Marketing
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Social, Economic, and Environmental:
Not really about reducing the levels of consumption in the society
Primarily about sales or profits at the end of the day
Superficial and unethical environmental improvements or misleading claims
… which is called ?
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Pitfalls of Green Marketing
Rebound effect
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Greenwashing
http://www.greenwashingindex.com/
It’s greenwashing when a company or organization spends more time and money claiming to be “green” through advertising and marketing than actually implementing business practices that minimize environmental impact. It’s whitewashing, but with a green brush (http://greenwashingindex.com/about-greenwashing/)
Greenwashing Index
Public rating system for greenwashed advertising
CHOICE Australia
Reporting system which registers consumer complaints
NGO registers
E.g. Greenpeace, Sierra Club
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Sin of the hidden trade-off
e.g. made from 100% paper
Sin of no proof
e.g. This product is ‘green’
Sin of vagueness
e.g. environmentally friendly
Sin of irrelevance
e.g. CFC free hairspray
Sin of lesser of two evils
e.g. fair trade tobacco
Sin of worshipping false labels
e.g. free to roam chooks
Sin of fibbing
E.g. Outright lying and deceit
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7 Sins of Greenwashing
Source: Terrachoice (2009)
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How prevalent is greenwashing?
In 2007, over 95% of environmental product claims committed at least one of the seven sins of greenwashing; by 2010, this percentage had fallen by half and the number of genuinely green products on offer rose significantly
Source: Terrachoice (2009, 2010)
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Weekly Topic
Compare and contrast green marketing vs sustainability marketing using advertisements (TV or print media) of your choice.
Does it:
Improve environmental quality or promote ‘ethical/better’ practices in industry?
Sound like green-washing (which type?)?
Cause rebound effect?
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Embryo stage (pre-1974)
Ecological marketing (1975-1989)
Green marketing (1990-2000)
Sustainable marketing (post-2000).
Sustainability paradigm shift requires:
Promotion of ‘less being more’
Reductions in aggregate levels of consumption
Acceptance of having to take a step back
Social transformation based on values (not the value of the stuff you keep in the storage)
Transition from consumers to customers
¾ of the world population have not even started to consume the way we do though India, China and Brazil have slowly begun to do so…
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Is Marketing for Sustainability a way forward?
Source: Peattie & Crane (2005)
Can we really market what will be perceived as:
deprivation
anti-development
moralistic
a step back?
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Key Elements of Sustainability Marketing
Treating socio-ecological problems as a starting point of the marketing process, not as a set of externalities or constraints (i.e. businesses don’t operate in isolation)
Understanding costumer behaviours holistically (i.e. numb or akrasia)
Reconfiguring the marketing mix (i.e. 4P)
Appreciating and utilizing the transformational potential of marketing activities and relationships (i.e. optimistic view of the future)
Green Marketing
Conventional Marketing
Retention & Engagement
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Back to the Marketing Equation
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Australians spend $750 million annually on dud Christmas presents (SMH 29.12.2011)
We are spending more and more each year on professional de-cluttering services (Nelson et al. 2007)
Americans spend about $35 billion a year on weight-loss products ( http://www.cbsnews.com)
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Critical reflection (of us):
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Growing demand for green and ethical consumer products will continue to fuel green market and green marketing
Marketing will continue to reward unethical behaviour (due to price advantages) in the absence of complete information and safeguards
Green marketing, although is a right step forward, it does have limitations on social, economic, and environmental fronts
Critical thinking/reflection is desperately needed to transform marketing for sustainability that promotes changing our behaviour and reducing the levels of our consumption
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Concluding remarks
A story of my neighbour!
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