Green Marketing is the process of selling environmentally safe products and services on the basis of their benefits to the environment. It is mainly practised by companies that are working towards sustainable development and corporate social responsibility. Green marketing has been gaining popularity as companies are implementing sustainable marketing practices which make them appear more attractive to the consumers. Another factor contributing to the growth of green marketing is that in recent times, the consumers have been willing to pay extra on products and services that have a positive impact on the environment. According to the 2014 Nielsen Global Survey on Corporate Social Responsibility, it was determined that 55% of consumers were willing to pay more for products that contribute towards the betterment of the environment.
Green marketing of products include:
Products that are manufactured in an eco-friendly manner
Products that can be recycled
Products that do not contain any harmful or toxic material
Products that are made from environment friendly material
Products that can be repaired and reused.
BENEFITS OF GREEN MARKETING:
PRODUCT OPPORTUNITIES: The increase in consumer awareness in the recent times towards preserving the environment and natural resources has led to a significant increase in eco-friendly and recyclable products which has opened up new opportunities for companies. For e.g. According to the 2010 report of the Organic Trade Association, the sale of organic products has reached to $26.6 billion in 2009.
ENHANCED ENVIRONMENTAL AWARENESS: Environmental awareness benefits both, the companies and the consumers. As companies go green with their products and practices, they operate with greater social responsibility which improves the reputation of the company in the public eye.
PREMIUM PRICES: Environment friendly products may be expensive for the company Preserving the environment, recycling and reducing waste requires a considerable amount of resources. The benefit of green marketing is that the consumer will be willing to pay a higher price for the eco-friendly products.
SUPPLIER EXPANSION: The early challenge faced by the environmental products was the limited number of suppliers available but in the last few years, there has been a significant increase in the suppliers green products. For e.g. Organic foods were initially sold at a higher price due to a limited number of organic farmers and food suppliers but with increasing environmental awareness, the number of suppliers of organic foods has increased, and thus they can be bought at affordable prices.
LIMITATIONS OF GREEN MARKETING:
Despite the fact that going green leads to improved public relations and provides the opportunity to tap into the growing green market, some companies may still restrain from going green due to the following reasons:
CONVERSION EXPENSE: The initial cost of going green may be extremely high. For e.g. If a company decides to switch to solar power, the initial cost of installing solar panels will have huge upfront costs for the business.
COSTLIER PRODUCTS: The switch to green materials may have a higher cost as the raw materials required are also more expensive which will lead to a higher price for the consumer.
EXAMPLES OF GREEN MARKETING
STARBUCKS: Starbucks has an extremely successful “bean-to-cup” approach, which stresses top efficiency at each part of its global supply chain. The programme appears to be a great success, with the company's decision to use coffee cup sleeves made of recycled paper saving roughly 78,000 trees per year since 2006. Starbucks has also coordinated with numerous environmental organisations, from Conservation International to the Earthwatch Institute, in their efforts to do right by the community that they operate in. Another step taken by Starbucks to preserve the environment is inviting customers to bring their own reusable coffee mugs on Earth Day and get free coffee which will majorly reduce the harmful environmental impact that its production may have.
BANK OF AMERICA: Since 2007, Bank of America has approved more than $87 billion in financing for low-carbon and sustainable business activities. As part of their commitment to environmental sustainability they have promised to provide $125 billion in capital, along with significant intellectual capital, to develop solutions to climate change and other environmental challenges. Aa per their website, the company reduced paper use by 32% from 2000-2005, even with a 24% growth in their customer base. They also runs an internal recycling program that recycles 30,000 tons of paper each year, saving roughly 200,000 trees for each year that the programme has operated. They have also offered employees a $3,000 cash back reward for buying hybrid vehicles.
TESLA: Tesla is an automobile and energy company which specialises in electric car manufacturing and solar panels. Tesla has focussed on making electric cars affordable and attractive to the everyday user. It is one of the most successful initiatives to tackle environmental pollution and global warming. Tesla's green marketing campaign has been a huge success as their sales have continuously increased and their stock has skyrocketed. Tesla Energy has revolutionised the renewable energy market by making large-scale battery power more accessible to the common man. By storing renewable energy Tesla is helping to greatly reduce the usage of fossil fuels which cause a great amount of pollution. As the leader in the rapidly growing energy sector, Tesla's cost effective battery systems have turned clean power and energy into a viable sector.
TOYOTA: Toyota Prius, the world's first mass-market hybrid vehicle is Toyota's most successful green marketing campaign. The popular car is now sold in over 40 countries. The Environmental Protection Agency has crowned the Prius and its 48MPG as the most fuel-efficient car available for purchase in the U.S. The authorities in the United Kingdom have also recognised Toyota's efforts, namely the UK Department of Transport, who has ranked the Toyota Prius as the third most fuel efficient car in the country.
McDONALD's: McDonald's is one of the world's largest food stores and has taken the initiative to go green in view of the outcome of fast food on people's health while reducing their overall energy consumption. Particularly, the company uses energy efficient appliances and have thus cut their energy wastage by 25% in their business activities. McDonald's have also set up green parking lots only for hybrid vehicles. The parking lots have the capability of recharging the vehicles and cleaning ground water. Furthermore, McDonald's has started using eco-friendly means to obtain their animal and dairy products as to not harm the environment.
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