GREEN MARKETING CONCEPT

Research Proposal: Adopting Green Marketing and Avoiding Green Marketing Myopia


Statement of the Problem

With the continuing rise in environmental awareness and concern, companies recognize that it pays to be green. As well as acting in an environmentally responsible way, it is important for companies to communicate their green credentials (BNET Editorial, 2007). Consumer awareness of environmental issues has grown considerably in the past few years and presents a good opportunity for companies to differentiate themselves through green marketing. However, it also presents risks if handled incorrectly. Instead of building brand loyalty, spurious green claims can alienate the very market organizations are trying to appeal to. The bottom line is; don’t just say green – be green (Peter Lisney and Midlands Business Development Ltd, 2008).

Although no consumer product has a zero impact on the environment, in business, the terms “green product” and “environmental product” are used commonly to describe those that strive to protect or enhance the natural environment by conserving energy and/or resources and reducing or eliminating use of toxic agents, pollution, and waste (J. Ottman, 1997). Paul Hawken, Amory Lovins, and L. Hunter Lovins write in their book Natural Capitalism: Creating the Next Industrial Revolution that greener, more sustainable products need to dramatically increase the productivity of natural resources, follow biological/cyclical production models, encourage dematerialization, and reinvest in and contribute to the planet’s “natural” capital (P. Hawken, A. Lovins, and L. H. Lovins, 1999). Escalating energy prices, concerns over foreign oil dependency, and calls for energy conservation are creating business opportunities for energy-efficient products, clean energy, and other environmentally sensitive innovations and products—collectively known as “cleantech” (Business Week, 2005).

In 1994, Philips launched the “EarthLight,” a super energy-efficient compact fluorescent light (CFL) bulb designed to be an environmentally preferable substitute for the traditional energy-intensive incandescent bulb. The CFL’s clumsy shape, however, was incompatible with most conventional lamps, and sales languished. After studying consumer response, Philips reintroduced the product in 2000 under the name “Marathon,” to emphasize the bulb’s five year life. New designs offered the look and versatility of conventional incandescent light bulbs and the promise of more than $20 in energy savings over the product’s life span compared to incandescent bulbs. The new bulbs were also certified by the U.S. Environmental Protection Agency’s (EPA) Energy Star Label. Repositioning CFL bulbs’ features into advantages that resonated with consumer values—convenience, ease-of-use, and credible cost savings—ultimately sparked an annual sales growth of 12 percent in a mature product market (G. Fowler, 2002).

Philips’ experience provides a valuable lesson on how to avoid the common pitfall of “green marketing myopia.” Philips called its original entry “Earthlight” to communicate the CFL bulbs’ environmental advantage. While noble, the benefit appealed to only the deepest green niche of consumers. The vast majority of consumers, however, will ask, “If I use ‘green’ products, what’s in it for me?” In practice, green appeals are not likely to attract mainstream consumers unless they also offer a desirable benefit, such as cost-savings or improved product performance ( K. Alston and J. P. Roberts, 2006). To avoid green marketing myopia, marketers must fulfill consumer needs and interests beyond what is good for the environment (A. Ottman et al., 2006).

Aims and Objectives

This research aims to define green marketing and green marketing myopia from different point of view and determine how organizations adopt green marketing and avoid green marketing myopia. It presents a model namely eco-effective product design (Adapted from Frei 1998) to understand how green product manufacturing organizations develop their products.

Broad Research Question

To determine how organizations adopt green marketing and avoid green marketing myopia.


Literature Review

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. While green marketing is growing greatly as increasing numbers of consumers are 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. Presenting a product or service as green when it's not is called green washing. Green marketing can be a very powerful marketing strategy though when it's done right (www.about.com).

There is a degree of confusion over the term “green marketing.” Some believe that it refers solely to the promotion or advertising of products with environmental characteristics such as “recyclable,” “organic,” or “environmentally friendly.” While these terms are widely used by “green” companies, green marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and some services. Green marketing incorporates a variety of activities, including modifications to products, changes to the production and distribution processes, packaging changes, and modifications to marketing communications (BNET Editorial, 2007).

Green marketing has been around for longer than one might suspect – in fact, a workshop on ‘ecological marketing’ was held by the American Marketing Association in 1975. Since then, the definition has been refined and segmented into 3 main buckets:

Retailing Definition: The marketing of products that are presumed to be environmentally safe

Social Marketing Definition: The development and marketing of products designed to minimize negative effects on the physical environment or to improve its quality.

Environmental Definition: The efforts by organizations to produce, promote, package, and reclaim products in a manner that is sensitive or responsive to ecological concerns.

All three of these definitions speak to the fact that green marketing involves informing consumers about initiatives organizations have undertaken that will benefit the environment, with the overall goal of improving sales or reducing costs (Torque Customer Strategy 2008).

Reducing the company’s impact on the environment is the right thing to do and can even save the money. Effectively communicating organization’s environmental policies tells the customers, workforce and shareholders organization care. It builds loyalty, enhances the brand and should grow sales. Going green as a company not only crosses all boundaries within a business, it also extends to customers and suppliers. That’s why getting the message across both externally and internally is critical if organizations are to take full advantage of the efforts (www.midlandsbusinessdevelopment.co.uk).

Green marketing must satisfy two objectives: improved environmental quality and customer satisfaction. Misjudging either or overemphasizing the former at the expense of the latter can be termed “green marketing myopia.” In 1960, Harvard business professor Theodore Levitt introduced the concept of “marketing myopia” in a now-famous and influential article in the Harvard Business Review (T. Levitt, 1960). In it, he characterized the common pitfall of companies’ tunnel vision, which focused on “managing products” (that is, product features, functions, and efficient production) instead of “meeting customers’ needs” (that is, adapting to consumer expectations and anticipation of future desires). Levitt warned that a corporate preoccupation on products rather than consumer needs was doomed to failure because consumers select products and new innovations that offer benefits they desire. Research indicates that many green products have failed because of green marketing myopia—marketers’ myopic focus on their products’ “greenness” over the broader expectations of consumers or other market players such as regulators or activists. Aside from offering environmental benefits that do not meet consumer preferences, green marketing myopia can also occur when green products fail to provide credible, substantive environmental benefits (J. Lawrence, 1991).
Roper ASW’s 2002 “Green Gauge Report” finds that the top reasons consumers do not buy green products included beliefs that they require sacrifices—inconvenience, higher costs, lower performance—without significant environmental benefits (Roper ASW “Green Gauge Report 2002). Ironically, despite what consumers think, a plethora of green products available in the marketplace are in fact desirable because they deliver convenience, lower operating costs, and/or better performance. Often these are not marketed along with their green benefits, so consumers do not immediately recognize them as green and form misperceptions about their benefits. When consumers are convinced of the desirable “non-green” benefits of environmental products, they are more inclined to adopt those. The analysis of past research and marketing strategies finds that successful green products have avoided green marketing myopia by following three important principles: “The Three Cs” of consumer value positioning, calibration of consumer knowledge, and credibility of product claims (A. Ottman et al., 2006).

Methodology

The nature of this research is explorative, therefore, qualitative method is required. I found secondary data, case based study and interpretative approach would be an appropriate strategy as there exists some previous research in the similar area. To understand how green product manufacturing organizations develop their products a model namely eco-effective product design (Adapted from Frei 1998) is used.


Figure 1: Model of eco-effective product design. (Adapted from Frei 1998)


Data will be collected from ten business organizations selected using random sampling technique as previous researchers used more or less same amount of randomly selected samples for similar type of study. Primary data will be collected by personal interview. Unstructured questionnaire will be used to collect data. Data will be analyzed using interpretative technique.



Research Implication

Green marketing is gaining significant attention from both CEOs and consumers. Given that a carefully crafted green marketing strategy can earn credibility with customers and provide a platform for revenue growth, it’s an area worthy of additional consideration (Torque Customer Strategy 2008). Bangladeshi business organizations can save energy, reduce cost and increase revenue by adopting green marketing strategy. The result of research will assist decision makers, managers, businessmen, academicians, practitioners and other concerned to do better understanding of green marketing, green marketing myopia and how green product manufacturing organizations develop their products. This information will help the business organizations adopting green marketing by avoiding green marketing myopia. Green marketing myopia has led to ineffective products and consumer reluctance (A. Ottman et al., 2006).

Timeline

Period Activities
15 days Preliminary Preparation
15 days Fieldwork and Data Collection
10 days Data Analysis
10 days Draft Report Preparation
10 days Final Report Preparation


References

Peter Lisney and Midlands Business Development Ltd 2008. Green Marketing Strategy Checklist v1, p.01.

K. Alston and J. P. Roberts, “Partners in New Product Development: SC Johnson and the Alliance for Environmental Innovation,” Corporate Environmental Strategy 6, no. 2: pp.111–28.

A. Ottman et al "Avoiding Green Marketing Myopia: Ways to Improve Consumer Appeal for Environmentally Preferable Products",http://www.greenmarketing.com/articles/Stafford-MyopiaJune06.pdf (Retrieved on 07 September 2009).

J. Ottman, Green Marketing: Opportunity for Innovation (Lincolnwood [Chicago]: NTC Business Books, 1997).

P. Hawken, A. Lovins, and L. H. Lovins, Natural Capitalism: Creating the Next Industrial Revolution (Boston: Little, Brown, and Company, 1999).

Business Week, “Alternate Power: A Change in the Wind,” 4 July 2005, pp.36–37.

G. Fowler, “‘Green Sales Pitch Isn’t Moving Many Products,” Wall Street Journal, 6 March 2002.

Frei, M. (1998). Die öko-effektive Produktentwicklung – Der Beitrag des Umweltmanagements zur
Entwicklung umweltgerechter Produkte. Dissertation Nr. 12593 der ETH Zürich, Zürich.

T. Levitt, “Marketing Myopia,” Harvard Business Review 28, July–August (1960): pp.24–47.

J. Lawrence, “The Green Revolution: Case Study,” Advertising Age, 29 January 1991, p.12.

Roper ASW “Green Gauge Report 2002: Americans Perspective on Environmental Issues” November 2002, http://www.windustry.com/conferences/november2002/nov2002_proceedings/ plenary/greenguage2002.pdf (Retrieved on 07 September 2009).

Torque Customer Strategy 2008, www.torquecustomerstrategy.com (Retrieved on 07 September 2009).

http://sbinfocanada.about.com/lr/green_marketing/289619/1/ (Retrieved on 07 September 2009).

www.bnet.com (Retrieved on 07 September 2009).