What is the risk of ‘green washing’ in sustainable marketing?
– What are the main strengths of sustainable marketing?
– What market strategies can be deployed for sustainability?
– What are the risks associated with sustainable marketing?
– What information might sustainable marketing want to communicate?
– Definition of sustainability marketing
– Strength of sustainability marketing
– Greenwashing, why greenwashing, benefits of greenwashing and risks of greenwashing.
– Conclusion
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Charter and Polonsky (1999) state “that green marketing is the marketing or promotion of a product based on its environmental performance or an improvement thereof”
APPLYING SUSTAINABLE MARKETING STRATEGIES- THE KEY TO OBTAINING COMPETITIVE ADVANTAGES ON THE INDUSTRIAL PRODUCTS MARKET.
The success of implementing strategies is measured by sales volume, market share, profits, listed stock prices.
The application of principle of sustainable marketing by organization is due to
– Legislative regulations on environmental protection that compels companies to be aware to their actions on environment
– The advantage of reducing cost and increasing profit. Moving towards sustainability saves company from risks and costs. Turning the organization residues or waste to source of income.
– Innovation- the process of creating new products and services adapting to the change in demands
– More efficient workforce – Ability of the company to keep and attract talented employees and it
– Positioning through differentiation- Providing high quality products that meet both the
– requirements of the consumers and those of the environment will result in consumer loyalty.
United Nations pushes for global adoption of its SDG and encourages organizations to integrate sustainable practices into their business for the benefits of the organization and world. The fundamentals of any marketing strategies is to provide competitive advantages in a market.
Managers are too much concentrate in obtaining short term profit and ignore the long run profit.
A company that want to achieve long term profit develop interest in the direction of sustainable development.
Consumers are willing to pay more for goods and services from companies that shows commitment to creating positive social and environmental impact. (plagiarism)
Opportunities for green marketing: young consumers (Kaman Lee) Emerald
Main idea is to identify factors that affect adolescent consumers green purchasing behaviour.
Factors
– Social influence
– Environmental concerns
– Self-image in environmental protection
– Perceived environmental responsible.
Environmental marketing messages should be more emotional than rational
The green marketing should convey a message that each of us is responsible to save our earth.
SUSTAINABLE MARKETING RISKS
– Market risks: Lack of understanding of the benefits of sustainability among consumer. Focusing on sustainability benefits while overlooking other benefits that may be more important to the target market.
– Operating risks: When a company is more concern about the growing awareness of sustainability, such is creating operating risk that must be address during marketing plan development and execution. As customer maybe consider sustainability as a rallying point, some companies refer to sustainability as a rallying crying for employees. (Loss in profitability and Loss of focus).
Most of the companies believed that incorporating sustainability to company corporate mission statement and adding green to their product will give them competitive advantage over competitors.
**** Risk can set in when company embark on sustainable marketing by using more financial and human resources than competitors without gaining a commensurate benefit. The company may experience loss of sales, market shares, and profitability since it operates at cost disadvantage.
**** Marketing an activity that is not part of the core economic strategy may lead a company to damage its profitability by loss of focus and misallocation of critical resources.
– Corporate risks: mostly occur when companies pursues sustainability marketing activities and goals. Marketing activities on its own have implications for corporate images, however sustainability marketing can cause a higher level of positive or negative impact on corporate image. This is because sustainability is a more altruistic and noble cause compared to other business objectives.
*** The following corporate image risks are associated with sustainability marketing.
** Negative greenwashing image
** Magnified negative impact of an inconsistent action
Greenwashing is a false impression that company strategy, operation and product are designed to be beneficial to the environment. This is done by companies to market their green credential so as to improve their brand image to generate more patronage.
Any company that make use of false marketing “greenwashing” is taking a significant risk because if the stakeholders including consumer get to know the company true activities and footprint, it could impact negatively on public relation, sales and eventually on profitability.
Also, perceived insincere companies by the public suffer serious consequences.
It is more advisable for any company that is using sustainable marketing to be sincere in their motivation and effective in its execution
Marketing sustainability is faced with risk because consumer appeal for sustainability is still not properly defined.
The purchasing power of many consumers has not confirmed that they understand the impact and benefits of sustainability.
When sustainability strength is considered as benefit against value that can be derived from low price or low cost provider differentiation strategy, the sustainability seems to have low impact.
Sustainability marketer must consider the market, operating, and image risk related to sustainability marketing
Greenwashing practices have the ability to inflict long-term damage to a brand and company franchise.
SUSTAINABLE MARKETING STRATEGY
STRATEGIES
Segmentations is carried out as a result of consumer behaviour inconsistent and need for behavioural change to act more sustainably. Segmentation strategy help marketers to identify potential target groups that can be offered products in a much suitable way.
Positioning: Positioning in case of sustainability is about how the target market perceives and what position it takes in consumer minds,
SUSTAINABLE MARKETING STRATEGY
– Screening sustainability issues and actors
– Segmenting sustainability markets: Geographic, demographic, behavioural, Psychographic
– Introducing sustainability innovations
– Positioning sustainable products
– Partnering with sustainability stakeholder
SUSTAINABLE MARKETING
Any organization that want to be sustainable, there marketing communication must be done in a sustainable fashion which should impact and contribute to building a sustainable society.
Making a sustainability part of the business can be initiated by the company, response to consumer pressure, and reaction to competitors. The company marketing objectives and strategies need to be adapted to the sustainability agenda.
Sustainable marketing communication must be able to satisfy the following:
– It contribute to triple bottom line value for the organization i.e. it helps to build the financial, human, and human capital
– It takes a whole system perspectives and considers all the organization’s legitimate stakeholders interest.
– It facilitate transparency, accountability, and integrity in the organization.
In performing sustainable marketing, communication must be accorded same standard as given to other aspects of marketing strategy and tactics.
– External communication helps maintain connections or relationships with customers and other external stakeholders.
– Internal marketing helps to maintain employee morale and to teach and motivate employees to be effective ambassadors for the organizations.
Barriers to sustainable marketing communication
Not all marketing communication are effective, there are mistakes that creates barriers to success of SMC namely
– Losing sight of the basics- Being sustainable and promoting sustainability are among many goals for SMC. One of the mistakes usually made is too more concentration on sustainability goals to the point pf overlooking traditional marketing. Sustainability alone is not sufficient reason for customer purchase, especially if the product fails to deliver on its primary function.
WHAT IS GREENWASHING
Greenwashing is known is green marketing or green sheen – It is a marketing employed to make companies appear more sustainable than they are in practice.
Greenwashing may be purposeful or it may be accidental.
Companies uses press releases about green project or sustainability task forces to rebranding products or services and advertising materials.
A typical example is the Volkswagen “clean diesel” engine and it affected the company stock values by 30%.
Avoid getting caught in the legally and reputational detrimental trap of greenwashing.
As demand for sustainable practices increases, many companies will inevitable opt for the easy way out by using green marketing to appear environmentally responsible.
GREENWASH
– Greenwashing practices are incompatible with economic theories according to which market equilibrium depends on the circulation of information.
– Conveying misleading information of a company brand tends to disrupt the flow of information that individuals use to make rational choices and thus tends to undermine market equilibrium.
– The risk of being attacked for greenwashing can be high, especially in the sectors that have the greatest environmental and social impact and for powerful companies that have ubiquitous public presence.
The problem of greenwash seems like a mild issue to worry about, but it is actually an extremely serious matter.
– It is insidious
– Eroding customer trust
– Contaminating the credibility of all sustainability related marketing and hence inhibiting progress toward a sustainable economy.
– It is very hard for customer to know the difference when some marketers are muddying the water for all and it makes the customer to throw up their hands in confusion.
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