Explore the Strategy of Green Marketing
When shoppers enter the grocery store to stock up on the week's meals, there are typically several thoughts that cross their minds. For one, what does the product cost? Secondly, are there any specials available that could change their shopping lists?
More recently, shoppers are asking additional questions on their weekly shopping excursions: is the product environmentally friendly? Is the product organic? Is it worth the extra cost?
In this article...
While different agencies and organizations offer various definitions of green marketing (sometimes called environmental marketing, or eco-marketing), they generally agree that it is the marketing of products and companies that promote the environment in some substantial way. Some definitions look for environmentally “safe” or “sustainable” production, while others seek to reduce a company’s “carbon footprint.”
In either case, green marketing involves more than simply presenting an environmentally friendly product. It also speaks to, and actively promotes, a company’s processes and business practices as having low environmental impacts.
Some business practices, such as reducing production waste or energy costs, are good for both the environment and business profitability (See also Ethical Marketing). Adopting such practices may or may not be perceived as “green,” depending upon consumer perceptions of other aspects of the business. However, these actions can still be positioned as the company “doing its part”—promoting positive reactions toward the company.
Since all product production involves the consumption of energy and the production of some amount of waste, any company could potentially participate in green improvements and marketing. In practice, however, different companies participate in green marketing based on their estimation of its dollar and non-dollar value, with some businesses devoting their mission statements to green practices. Some leaders in green marketing include:
One of the challenges faced by green leaders is increased scrutiny. In balancing trade-offs between environmental goals and business profitability—which is ultimately necessary if the business is going to continue to exist—even a green leader can be perceived as being “not green enough” in some of its decisions. Thus, a company like Starbucks is both celebrated for its business practices, and criticized by others for gaining fame when it could be doing more (in the critics’ estimation, at least).
A majority of polls indicate that consumers favor green products, and are willing to pay more for them. However, the fact is that higher-priced green products have always struggled for market share. In many industries they garner only 3 percent of total market share in the consumer market; in business-to-business markets, green marketing often commands greater results. This does not mean that the majority of purchasers do not care about green marketing, but it does mean that they also care about other competitive value propositions, including quality, convenience, and cost.
The National Marketing Institute estimates that about 80 percent of consumers are engaged by green marketing at some level, with about 17 percent of consumers highly engaged. This consumer group, referred to as LOHAS (Lifestyles of Health and Sustainability), are those most likely to pay a premium for green products. As a group, they are more affluent and better educated than the general population. A related market segment, designated Naturalites, constitute an additional 19 percent of the population. This group (also more affluent and educated than the general population) is interested in green products as they appeal to health considerations. They are highly likely to buy organic foods, but are less interested in green marketing for durable products.
Highly price-sensitive consumers are the least responsive to green marketing. For those with less disposable income, being thrifty with their money becomes a more immediate concern. Green marketing therefore faces a particular challenge in times of economic slowdown, as price becomes a bigger factor in consumers’ purchasing decisions.
Green marketing requires a holistic approach. A company cannot succeed simply by highlighting a green aspect of a particular product, but must demonstrate a commitment on multiple levels, such as in production processes or environmental engagement. Customers are particularly skeptical of many green claims; they know that businesses seek profit and aren’t above “greenwashing” their everyday business to make it appear environmentally friendly when it’s of no real concern to them. For example, a hotel asking customers to “save the environment” by reusing towels to conserve water will not likely be perceived as green; instead, they’ll be seen as trying to use green rhetoric to save on washing expenses.
Therefore one of the first challenges of effective green marketing is establishing credibility through a comprehensive plan. First, green marketing has to be business-wide. It does no good to advertise the green properties of a product if the company’s production and distribution entirely ignore environmental concerns. Second, it has to be honest; unsubstantiated claims should be avoided. Third, it should be transparent. Consumers need information about a business to evaluate its claims and reputation; therefore, the business should promote awareness of its products’ histories, including origin and manufacturing. Fourth, a product can be certified green by a third party (see Popular Green Certifications). Some companies do self-certification; however, for that to be credible, a third party needs to be able to review and approve their certification processes.
There are many options for green certification—some 400, at least—with some devoted to single qualities (made from recycled components, or being energy efficient) and others evaluating multiple attributes. The most intense certifications involve Life Cycle Assessments, which examine the methods and energy that goes into producing a product, the product itself, and the future consequences of the product (such as its length of use, and if it can be recycled). If materials for a particular product must be purchased from another company, some life-cycle assessments will extend their evaluation to that company’s processes as well.
In pursuing any type of green certification, companies should avoid “rubber stamp” certifications, or trying to pass off internal certification as a third-party endorsement. Such tactics may have an initial pay-off, but are bound to result in backlash. In addition, green messaging on products should be clear. A statement like “ingredients include biodegradable surfactants (anionic and nonionic) and enzymes” (found on a Tide bottle) can provoke more skepticism than confidence. “Green” can encompass many things—water/land conservation, recycling, non-toxic chemicals, reduced carbon footprint, sustainable agriculture—so it’s important to identify how exactly a particular product or brand is green. (See also Marketing Laundry Detergent)
Marketers must also remember that green virtues compete against other factors (such as quality and price), and generally cannot be sold on their own. Effective individual product marketing will focus on direct benefits (like health) first, adding the environmental benefits as icing on the cake. Meanwhile, marketers must make sure that these environmental benefits do not compromise the product’s value. For example, when SunChips offered a new bag that composted easily, but produced more noise (enough to interfere with television-watching), consumers rejected the product. To them, the value of eating chips from the bag without noise was more important than the value of composting the bag.
Finally, marketers must make sure that green products are being delivered to the right markets. For example, higher-priced green products are not likely to sell well in Walmart stores, where the average customer has only $65 dollars a week for groceries. However, they may sell extraordinarily well in an upscale San Francisco neighborhood, where residents have more disposable cash in addition to a local culture that promotes environmental consciousness.
Marketing Managers direct green campaigns and integrate them with overall business strategy.
What do they do?
Source: U.S. Bureau of Labor Statistics
Education and experience
Most marketing managers have at least a bachelor’s degree (often in marketing, advertising, or business management), as well as demonstrated experience in their industry. Experience in buying and/or distribution is a plus for applying green marketing to those aspects of the business. Education preparing them for this career includes classes in marketing, market research, statistics, and consumer behavior. Additionally, future marketing managers often pursue and complete an internship while in school.
Market Research Analysts gather data about the demand for green products and solutions.
What do they do?
Education and experience
Market research analysts need at least a bachelor’s degree in market research or related field, such as statistics or computer science; many jobs also require a master’s degree, particularly for leadership or advanced research positions. Specific research experience in green methodology is also important when applying to a green company or green campaign.
Public Relations Managers represent the company’s brand and (in this case, green) values.
What do they do?
Education and experience
Public relations managers need at least a bachelor’s degree (about a quarter also have a master’s degree), usually in public relations or communications, and often with a minor in advertising, business management, or marketing. Their work experience often begins with an internship, then moves on to supporting more experienced staff members, before getting work on their own account(s). Necessary skills include excellent writing ability, and an understanding of both public and organizational communications.
Effective green marketing requires not only the ability to communicate a green message, but also the ability to research, analyze, plan, and coordinate the diverse components of that message in a profit-driven business environment. A good marketing program can equip you with the skills and knowledge you need to accomplish these tasks.
Courses in research methodology and analytics will teach you how to organize data on which to base your campaigns. You’ll learn to use data collected directly from consumers as well as data collected from the market, in terms of sales, expenses, etc.—and learn how to account for apparent discrepancies. You’ll also learn how to develop predictive models in order to select the best campaign strategies.
Your marketing program will also emphasize and develop communication skills. You’ll learn how to use both verbal and graphic messages, and how to adapt your message to the audience, including consumers, other businesses, and executives in your company. Additional classes at a marketing school will teach about aspects of business organization and management, including purchasing and distributing—both important components in developing a holistic green campaign.
To learn more about what a marketing school can do for you, request information from schools with degrees in marketing, and see how you can promote both business and environmental goals in a greener market.