Chapter:
01- Environment Marketing
Concept of Environment:
The
Environment is viewed as a composite asset that provides a variety of services.
It is a very special type of asset since it provides us with the life support
systems that sustain our very existence.
Environment
provides the economy with raw materials, which are transformed into consumer
products by the production process, and energy, which fuels this
transformation. These raw materials and energy return to the environment as
waste product.
The
environment also provides services directly to consumers. The air we breathe,
the nourishment we receive from food and drink, and the protection we derive
from shelter and clothing are all benefit we receive either directly or
indirectly from environment. Not only that, the environment also provides us
with a variety of amenities for which no substitute exist.
Therefore
we should undertake measures to prevent undue depreciation of the value of this
asset (the environment) so that it continues to provide aesthetic and life
sustaining service.
Concept of
Marketing:
The
aim of marketing is to know and understand the customer so well that the
product or service fits him and sells itself.
Example: SONY designed it’s Walkman,
Nintendo designed a superior video game and Toyota introduced its Lexus automobile. They
were swamped with orders from the consumers because they designed the right or
appropriate products and services based on careful marketing homework.
Marketing
may be defined from both social and management points of view. Two (02) simple
definitions of Marketing are given below:
According
to American Marketing Association:
‘Marketing is the process of planning and executing the conception, pricing,
promotion and distribution of ideas, goods, and services to create exchanges
that satisfy individual and organizational goals’.
According
to Philip Kotler ‘Marketing is a
social and management process by which individuals and groups obtain what they need and want through creating,
offering and exchanging products of value with others’.
For
a clear understanding of the marketing, it is necessary to define and
understand several of its core concepts noted below:
#
Target market and segmentation.
#
Market Place, Market space and Meta Market.
#
Marketers and Prospects.
#
Needs, Wants and Demand.
#
Product, Offering and Brand.
#
Value and Satisfaction.
#
Exchange and Transactions.
#
Relationships and Networks.
#
Marketing Channels.
#
Supply Chain and Competition.
#
Marketing Environment.
#
Marketing Program.
#
Marketing Concepts (four P based & others).
Concept of
Environment Marketing:
The
natural and physical environment, traditionally discussed as an external
influence on the process and content of managerial decision making, is now
viewed as central to marketing and management strategy. Marketers, just like
politicians have been monitoring the growing consumer concern about the
environment with much interest. There is now a general consensus within
business and consumer communities that the environmental marketing appears to
be real and growing. Moreover, consumer surveys over the past decade reveal a
growing segment of consumers who either reward or intend to reward firms that
address environmental concerns in their business and marketing practices and
punish firms that appear to ignore the environmental imperatives.
Definitions
of Environmental Marketing are given below:
Peattie
(1995) defines environmental marketing as ‘the holistic management process
responsible for identifying, anticipating and satisfying the requirements of
customer and society, in a profitable and sustainable way’--- according to
this, environmental marketing is a tool for a company to carry out
economically, socially and ecologically responsible operations.
Juslin
(1994) defines environmental marketing as ‘The core of environmental marketing
is the marketing strategy, the strategic decisions in which the environmental
issues are emphasized in product decisions and environmental strengths are used
as a comparative advantage. Environmental marketing is based upon the
assumption of environmentally conscious and demanding customers and markets.’
Philip
Kotler (2003) defines environmental marketing as ‘Environmental marketing is
one which connects the company to the environmentally and socially conscious
and demanding markets. It also integrates the functions of the company to serve
those markets in an environmentally and socially responsible way.’
From
the above brief discussions, environmental marketing may be viewed as a
marketing system that meets one or more of the following criteria:
A)
Explicitly
or implicitly addresses the relationship between product or service and the bio
physical environment.
B)
Promotes
an environment oriented lifestyle with or without highlighting a product or service.
C)
Presents
a corporate image of environmental responsibility.
Thus
environmental marketing may be regarded as a social force within the
environment designed to aid and protect the consumer in conformity with the
expectation of environmentalists by exerting legal, moral and economic pressure
on business.
Integration of
Environmental Issues into Marketing:
Integration
of Environmental issues into marketing is of great priorities to the marketer
point of view. Before discussing the integration of environmental issues into marketing,
we need to comprehend some philosophic questions noted below related to
business ethics and the concept of responsibility in business:
a)
To
what degree should companies have social and environmental responsibility in
the society?
b)
How
can ethically accepted performance and the concept of responsibility in
business be defined and operationalised?
c)
What
would be the social, environmental and economic consequences and side effects
of such environmental approach in marketing management?
d)
Could
environmental marketing be a potential source of competitive advantage?
The
answers to all of the above questions lie in the integration of environmental
issues into marketing. According to Peattie ‘Without a greener philosophy and
vision of marketing, the greening of marketing will be an uphill battle’.
Regarding the integration of environmental issues into marketing, Ottman (1998)
suggests five things:
a)
To
define green in an appropriate manner.
b)
To
enlist consumer support for lifestyle changes necessary for greener behavior
and product.
c)
To
gain credibility and assert that the interests of industry do not conflict with
greenness.
d)
To
communicate the environmental marketing terms under uniform guidelines.
In
context of the above discussion we can conclude that environmental marketing is
a term for marketing with a concern for ecological issues. In every steps of
marketing planning, marketer should take care of the impact of his activities
upon the components of environment such as Water, Air, Nature, Human being etc.
Integrated Model of
Environmental Marketing:
Environmental
Marketing is a process for formulating and implementing entrepreneurial and
environmentally beneficial marketing activities with the goal of creating
revenue by providing exchanges that satisfy a firm’s economic and social
performance objectives. Depending on the level of integration of environmental
considerations, environmental marketing can be either strategic (formulated and
implemented at the highest level of strategy), quasi-strategic (at the business
strategy level) or tactical (functional).
Juslin
(1992, 1994, and 1995) has provided an approach to environmental marketing
which is based on his integrated model of marketing planning. The idea in the
model is that environmental issues should be genuinely integrated in all the
hierarchical levels of marketing planning i.e. marketing strategies, structures
and functions. Environmental marketing broadens the customer oriented marketing
philosophy with clear targets and functions both on the societal and company level.
The model is presented in the following figure:
Objectives of the business unit
 |
|
|
Action plans
Quantitative Objective and means per
planning period
The basic
characteristics of environmental marketing may be summarized as follows:
1)
A
balanced approach to social, technological, economic and physical aspects of
business and societies that allows companies to step forward.
2)
It
emphasizes long term sustainable qualitative development rather than short-term
unsustainable quantitative growth.
3)
A
holistic approach aimed at reversing the approach of previous business theory
and practice.
4)
It
considers consumers as real human beings rather than as hypothetical ‘rational economic’
entities.
5)
It
emphasizes on meeting the genuine needs of consumers, rather than on
stimulating superficial desires.
6)
It
recognizes that consumers and society have multiple and sometimes conflicting
wants and needs.
7)
A
view of the company and all its activities as part of the ‘product’ that is
consumed.
8)
It
recognizes that the large scale, long distance nature of the current economy is
not sustainable, and that in the future small and local will be beautiful.
9)
It
embraces the concept of eco-performance which incorporates the non-market
outputs of the company.
10)
The
pursuit of added socio-environmental virtue as well as added techno-economic
value.
The
above three elements of Juslin’s (1992) environmental marketing planning are
discussed at some length in the following:
Environmental
Marketing Strategies:
The
core of environmental marketing is the marketing strategy-the strategic
decisions in which the environmental issues are emphasized in product and
customer decisions and environmental strengths are used as competitive advantage.
In
environmental product decisions, environmental friendliness is regarded as a
product characteristic that is examined during the whole life of the product.
Environmental friendliness may also convert a commodity or ordinary product
into a special or custom product which is reflected into the price.
In
environmental customer and market area decisions a company aims at satisfying
the needs of environmentally conscious customers and therefore, actively tries
to focus on such market segments. If a company has no other choice than trying
to avoid environmentally sensitive customers and market areas and focus on some
other segments instead.
Environmental
friendliness as a competitive advantage is often dependent on natural
circumstances of a company but also requires goal oriented work to develop
environmental marketing in a company.
Environmental
Marketing Structures:
Marketing
structures (e.g. EMS environmental management
system) are arranged in order to realize marketing strategies and to facilitate
the marketing functions. Marketing structures are the procedures through which
the daily work of the organization is accomplished and they form the framework
for the manning and implementation of environmental marketing. To consider and
document environmental issues in all decision making will mean use of an
environmental management system that may require changes in organization philosophy,
in planning and information systems, in personal recruitment and training, and
in designing the distribution channels.
Environmental
Marketing Functions:
Environmental
Marketing functions are those mechanisms or tools (e.g. personal selling and advertising)
that allow a company to carry out it’s strategies through its chosen marketing
structures.
Environmental
arguments in advertising are perhaps the most visible part of environmental marketing.
However, green advertising without credible environment emphasis in strategies
and appropriate connections between strategies and marketing operations leads
to green washing. Environmental marketing will also set new challenges for the
personal communication and contacts of sales people. A systematic collection of
relevant market information regarding environmental concerns in the market will
provide background information to support pro-active strategic and structural decisions.
Product planning and pricing should also reflect strategic decisions.
Corporate Social
Responsibility (CSR) – in Environmental Marketing & Business Success:
The
relationship between humans and their environment has increasingly become the
focus of global attention in recent decades. Both the level of resource used
and it’s subsequent disposal have changed the environment on a scale that has
given rise to considerable concerns over associated problems, mainly in the
developed countries of the world. One specific field that has gained prominent
attention has been the fate of forests and the increased depletion of these
forest resources raised huge concerns among the various stakeholders of the society.
The kind of development in the society means all companies including forest
Industry Company have to consider the views of various stakeholders groups in
their decision making. Therefore, environmental and social concerns in the
society set new challenges for companies. According to Peattie (1995), company
responsibilities may be divided into three such as: I) Economic responsibility
II) Social Responsibility III) Ecological Responsibility
Corporate Social
Responsibility (CSR)
refers to business decision making linked to
a)
Ethical
values.
b)
Compliance
with legal requirements.
c)
Respect
for people, communities and the environment.
Corporate Social
Responsibility (CSR)
is a term describing a company’s obligation to be accountable to all of its
stakeholders in all its operations and activities.
CSR is about how to
manage the following
six responsibilities to achieve business success:
I)
Customers.
II)
Employees.
III)
Business
Partners.
IV)
The
Environment.
V)
Communities.
VI)
Investors.
Sustainable business
strategies based on
CSR can be developed in three stages:
a)
Pollution
prevention which focuses on continuous improvement efforts to reduce waste and
utilize energy.
b)
Product
stewardship which focuses not only on minimizing pollution from manufacturing
but also on all environmental impacts associated with the full life cycle of a
product.
c)
Development
and commercialization of clean technologies within a framework of
sustainability vision which contribute to the solution of both environmental
and social problems.
Corporate
Environmentalism & the Greening of Strategic Marketing:
Corporate
Environmentalism:
Recent
developments show that a green agenda following holistic principles have now
been integrated into mainstream marketing literature. Experts analyzed the
greening of strategic marketing with implications for marketing theory and
practice and based on analysis following definition of corporate
environmentalism has been arisen:
Corporate
environmentalism consists of:
A)
Economic
environment
B)
Socio-Cultural
environment
C)
Legal
environment
D)
Technological
environment
E)
Political
environment
F)
External
environment.
Corporate
Environmentalism is influenced
by the following factors:
External: a) Legislation
b) Public Concerns
Internal: a) Top management commitment
b) Competitive Advantage
Greening of Strategic
Marketing:
Following
four strategies are very much important for the greening of Strategic
Marketing:
A)
Enterprise Strategy
B)
Corporate
Strategy
C)
Business
Strategy
D)
Functional
Strategy
From
a firm’s point of view, enterprise strategy is the most important level of
strategy that drives the rest other strategies.
Enterprise strategy deals with the relationship
of the firm and its environment and consequently, conceptualization of the
organizational environment becomes crucial to the theory and practice of
strategic management and marketing strategy.
Based
on the empirical study on the forest industries of Finland,
Sweden, Germany, UK
and western North America, it is found that
almost every company at least partially integrated environmental issues into
their marketing strategies and practices. The impact of environmental issues on
marketing planning has been strongest among German and Finish companies and
within the pulp and paper industry. This indicates that environmental marketing
is becoming the norm at some level but this development has been driven mostly
by the outside pressures and it has been a genuine pro-active strategic
decision for a part of the companies. Given the attention to environmental issues,
forest certification is considered to be an important marketing tool and the
environmental emphasis in marketing planning is guiding companies to look for
the ways to utilize certification in their marketing.
It
is opined that companies must become more proactive in defining new types of
relationships with both regulators and environmentalists in order to gain
competitive advantage and raise resource productivity. Companies practicing
genuine environmental marketing planning through appropriate strategies,
structures and functions are best positioned to reap potential competitive
advantage through environmental friendliness. Other aspects such as price and
quality are also important as a competitive advantage but in the long run, the
genuine and transparent corporate social responsibility will be a necessity, at
least among larger corporations.
Strategic aspects of
Green orientation
are noted below:
a)
Strategies
affecting the environmental responsibility as a means for the firm to achieve
institutional legitimacy in the society.
b)
Strategies
affecting the choice of business, product market decisions, minimum
environmental impact, business and technology, environmental protection
business.
c)
Strategies
affecting the competitive strategy, conservatism, cost advantage and
differentiated offering.
d)
Greening
of Marketing mix leading to the consequences like better customer satisfaction,
positive company image, strategic cooperative alliances, green product
launches, increased R&D investment and enhanced competitive advantage.
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