Scalability of green businesses


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Scalability of green businesses

  1. 1. Emerging trends in marketing Submitted by S.Arul Vignesh(10AB05)
  2. 2. Scalability of Green BusinessesStrategies for scalability:What will be the achievable growth rate for the green businesses on a Year overYear basis? Over all the green business as a market can grow at a great pace as there is a growing demand and people are moving towards healthy and sustainable products, but a single green business cannot be done at scales matching a conventional business, probably a green business might be able to grow 2 – 5 % if it is already a mature business and an introductory product may achieve growth rates of nearly 10 %What will be a realistic gross margin for a green business with a four yearbreakeven period? Gross margin for a green business venture with a four year break even period might be 10 % - 20 % , it depends on the product and the premium people are willing to pay for it.What will be the ideal size of the business (in terms of turnover) for local greenbusinesses? A local green business ideally will have turnover of a maximum of one lac and for an annum it may translate to 10 – 15 lacs.Constraints:What are the constraints in marketing natural products? The constraints in marketing natural products are multi faceted , natural products grown sustainably will be done in a smaller scale , so the budgets for the products may not be so great as a result they are many limitations in advertising the product , and developing a brand name may possible only through word of
  3. 3. mouth. There are many fake products which claim to be green and natural , so making customers and people believe in a true natural product become difficult .What are the advantages in marketing organic/fair-trade products? The main advantage of marketing fair trade products, first would sell the idea first to the general public, they would come to know what fair trade products are. There are people who are genuinely interested in paying premium for organic and fair trade products the only problem being they are not aware of those products , so marketing is necessary to at least make sure the people in need come to know about it.What are the best suited models for scalability for organic/fair trade products? Best models for scalability would be to get the product from a largenumber of people like the self groups in Tamilnadu there by involving a lot of timeand work and there by value to the product.Can replicability be a strategy for natural products? How can logistics andcentralized sourcing of end products help in the viability of the natural productsbased green businesses?  Logistics and centralized sourcing of end products will help in efficient network creation among farmers,intermediaries,distributors and retailers and ensure proper prices and sustainable growth to all in the supply chain.  It will lower the prices and equal profit sharing is possible. Replicability should be done with consistency in delivering the quality product
  4. 4. Balancing profits with processes:How can the green business demonstrate the benefits to the communities throughits backward linkages to the consumer?  Green business involves the farmers and producers as the main stakeholder of the business  It provides them a platform for sustainability and growth  Buying produce from local growers reduces the environmental impact and costs of transporting product.  Small local farms are a valuable component of a communitys character, helping maintain agricultural heritage, preserve land use diversity, and moderate development.How is the green product positioned in the market alongside other productswhich claim the same health/environmental/social benefits? A green product mainly is positioned as a sustainable product which is producedwithout doing any significant damages to the environment. A green product is alsopositioned as a product which everyone cannot buy as its made in a large scale socustomers know they are among a few who can get these good products.Can green businesses withstand competition in the marketplace? What are theimpacts of internal competition among green businesses?Green business can definitely withstand completion is market place; they are now seenas a game changer from the conventional products which does not offer the true valueit says. Internal completion among the green business makes the market for the overall business grow as they innovate new ideas , models of taking the product to themarket.
  5. 5. Sustainable business model: How is consumer behaviour affecting the growth of green businesses? Consumer are not buying products alone , they have started buying the associated benefits’ , the brand and are in constant search for something new and innovative. That too in India only now when the market is growing too good , there is a lot of awareness on health issues , on chemical used in conventional products the scale of damage they cause to our environment the customers are demanding more now. How do you identify the consumer segment at the local/regional/ national level? What parameters apply to this identification process? Customer segments can be identified with demographical factors such as age,sex, education level, income level,marital status, occupation,religion,psychographi c, behavioural and geographic patterns Green products can be targeted for the health and environment conscious people. A niche segment can be created. Based on the product and price Segmenting, Targeting and Positioning should be done According to Anderson Research, Green products are in demand for the people falling under the age of 30-35, educated and upper middle class people 3.Is packaging a solution for scalability? Provide an example for one natural product and one each for organic / fair-trade product? Yes, packaging is a solution for scalability. Packaging is not only to protect the product, source of information, differentiate from others but also to attract customers. Eg, Women Horlicks, Calcium Sandoz The recent trends in marketing have increased the concentration in Packaging to attract the customers and increase the sale. Organic and green products should use Packaging as a tool to push the sales. Usage of biodegradable materials makes the business owners to be committed to environment and also can attract customers
  6. 6.  Example for natural product is Last Forest Honey.  Example for fair trade product is Batdorf & Bronson CoffeeFuture of green businesses:How long will the green business take to grow into a conventional market drivenbusiness? Come up with a hypothesis based on consumer awareness, healthstatus, inflation, lifestyle change and policy environment.By 2020 there would be a large change in consumer perception towards greenproducts on many accounts like health , fairness , sustainability ofearth and peoplewho want to get what they pay for actually.Awareness for green products is increasing. Present scenario says that Green Productsare costlier than normal products, so it is consumed only by higher social class people.In future there is a possibility of lowering the price of green products to cater to allclass of people. But there are many factors to be taken into consideration.Inflation, awareness, demand, commitment to environment, changing lifestyle andbehaviour and health conscious influence the green product market.Green products will achieve a conventional market driven business status when theawareness, affordability, commitment to environment increase.