Green marketing

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Green marketing

  1. 1. Green MarketingGreen Marketing
  2. 2. What is it?What is it?  Using claims about a product'sUsing claims about a product's environmental "friendliness" in orderenvironmental "friendliness" in order to promote the productto promote the product
  3. 3. Examples of “green” advertisingExamples of “green” advertising claims?claims?  biodegradablebiodegradable  compostablecompostable  recyclable/recycledrecyclable/recycled  environmentally safeenvironmentally safe  ozone friendlyozone friendly
  4. 4. Why do companies use it?Why do companies use it?  Research shows that consumersResearch shows that consumers prefer--and are willing to spend moreprefer--and are willing to spend more money on--products they perceive asmoney on--products they perceive as environmentally safeenvironmentally safe  More than half of AmericanMore than half of American consumers have purchased a productconsumers have purchased a product because of a label that said it wasbecause of a label that said it was environmentally safe orenvironmentally safe or biodegradablebiodegradable
  5. 5. Are there problems of deceptionAre there problems of deception with “green” claims?with “green” claims?  KeyesKeyes FibreFibre Company'sCompany's claims for Chinetclaims for Chinet disposable tablewaredisposable tableware • biodegradablebiodegradable • compostable in municipal solid wastecompostable in municipal solid waste composting facilitiescomposting facilities • RecyclableRecyclable  In fact, according to the FTCIn fact, according to the FTC • Won’t degrade in landfillWon’t degrade in landfill • Few municipal composting facilitiesFew municipal composting facilities • No facilities accept it for recyclingNo facilities accept it for recycling
  6. 6. Why are consumers fooled by suchWhy are consumers fooled by such claims?claims?  consumers generally can't tellconsumers generally can't tell whether a product will do what thewhether a product will do what the advertiser claimsadvertiser claims • degrade in a landfilldegrade in a landfill • not deplete the ozone layernot deplete the ozone layer  even if the claims are true, it mayeven if the claims are true, it may not be evident for five, ten, fifty ornot be evident for five, ten, fifty or more yearsmore years
  7. 7.  As a result of concerns aboutAs a result of concerns about growing use of such claims, the FTCgrowing use of such claims, the FTC issued Guides for the Use ofissued Guides for the Use of Environmental Marketing ClaimsEnvironmental Marketing Claims
  8. 8. What do the Guides cover?What do the Guides cover? Any way in which a message can beAny way in which a message can be receivedreceived  labelinglabeling  advertisingadvertising  promotional materialspromotional materials
  9. 9. Any form a message can takeAny form a message can take  wordswords  symbolssymbols  emblemsemblems  logoslogos  depictionsdepictions  product brand namesproduct brand names
  10. 10. 260.6 General Principles260.6 General Principles (a) Any qualifications or disclosures(a) Any qualifications or disclosures should be sufficiently clear,should be sufficiently clear, prominent and understandable toprominent and understandable to prevent deceptionprevent deception (b) Claim should make clear whether it(b) Claim should make clear whether it applies to the product or the packageapplies to the product or the package (c) Claims should not overstate the(c) Claims should not overstate the environmental attribute or benefitenvironmental attribute or benefit
  11. 11. 260.7 Environmental Marketing260.7 Environmental Marketing ClaimsClaims (a) General claims (e.g., “eco-safe”)(a) General claims (e.g., “eco-safe”) must bemust be  not misleadingnot misleading  substantiated in advance of the claimsubstantiated in advance of the claim • burden of proof on advertiserburden of proof on advertiser
  12. 12. (b) Claims of degradability,(b) Claims of degradability, biodegradability, and photodegradabilitybiodegradability, and photodegradability  are deceptive unless there isare deceptive unless there is scientific evidence that the entirescientific evidence that the entire product or package willproduct or package will completelycompletely break down and return to nature (i.e.break down and return to nature (i.e. decompose) within a reasonablydecompose) within a reasonably short period of timeshort period of time
  13. 13. (c) Claims of compostability (of the(c) Claims of compostability (of the product or package)product or package)  are deceptive unless all the materialsare deceptive unless all the materials in the product or package will breakin the product or package will break down into usable compost in a safedown into usable compost in a safe and timely mannerand timely manner • in an appropriate composting facility; orin an appropriate composting facility; or • a home compost pilea home compost pile
  14. 14.  are deceptive ifare deceptive if • the item is not compostable in a homethe item is not compostable in a home compost pile; andcompost pile; and • there are no institutional or municipalthere are no institutional or municipal composting facilities in the communitycomposting facilities in the community where the item is soldwhere the item is sold
  15. 15. (d) Claims of recyclability(d) Claims of recyclability  are deceptive unless the product orare deceptive unless the product or package can be collected, separated orpackage can be collected, separated or otherwise recovered from the solid wasteotherwise recovered from the solid waste streamstream • for reuse; orfor reuse; or • in the manufacture or assembly of anotherin the manufacture or assembly of another package or productpackage or product • through an established recycling programthrough an established recycling program
  16. 16.  If only part of a package or item isIf only part of a package or item is recyclable, any claim of recyclabilityrecyclable, any claim of recyclability must be adequately qualified tomust be adequately qualified to avoid consumer deceptionavoid consumer deception  A claim of recyclability is notA claim of recyclability is not deceptive if only minor, incidentaldeceptive if only minor, incidental components are non-recyclablecomponents are non-recyclable
  17. 17.  Claims of recyclability have uniqueClaims of recyclability have unique potential for deception becausepotential for deception because  not all communities have recyclingnot all communities have recycling facilitiesfacilities  not all facilities recycle the samenot all facilities recycle the same products and packagesproducts and packages
  18. 18. As a general rule, use of the term "recyclable"As a general rule, use of the term "recyclable" and/or use of symbols that imply recyclability areand/or use of symbols that imply recyclability are deceptivedeceptive  unless collection sites for recycling the materialunless collection sites for recycling the material are available to aare available to a substantial majority ofsubstantial majority of consumers or communitiesconsumers or communities  even if collection sites are established in aeven if collection sites are established in a significant percentage of communities or availablesignificant percentage of communities or available to a significant percentage of the populationto a significant percentage of the population  unless the claim is qualified to indicate the limitedunless the claim is qualified to indicate the limited availability of recycling programsavailability of recycling programs
  19. 19. Symbols that imply recyclability includeSymbols that imply recyclability include  three chasing arrowsthree chasing arrows • FTC Guide says that, unless qualified, it meansFTC Guide says that, unless qualified, it means product or package is made ofproduct or package is made of recycledrecycled materials as well as being recyclablematerials as well as being recyclable  SPI symbolSPI symbol • code developed by the Society of the Plasticscode developed by the Society of the Plastics Industry to indicate the type of plastic fromIndustry to indicate the type of plastic from which product is madewhich product is made • numbers run from 1 to 7numbers run from 1 to 7
  20. 20. Qualifications that adequately notifyQualifications that adequately notify consumers of limited availability ofconsumers of limited availability of recycling programs includerecycling programs include  "This bottle may not be recyclable in your"This bottle may not be recyclable in your area"area"  "Recyclable in the few communities with"Recyclable in the few communities with facilities for foam polystyrene cups"facilities for foam polystyrene cups"  providing the approximate number orproviding the approximate number or percentage of communities or populationpercentage of communities or population to whom programs are availableto whom programs are available
  21. 21. (h) Claims relating to the preservation(h) Claims relating to the preservation of the ozone layerof the ozone layer  For example:For example: • ozone safeozone safe • ozone friendlyozone friendly • contains no CFCscontains no CFCs  are deceptive if the product containsare deceptive if the product contains any ozone-depleting substanceany ozone-depleting substance
  22. 22.  Problem: all ozone is not alike:Problem: all ozone is not alike:  ozone layer in upper atmosphere isozone layer in upper atmosphere is necessary to prevent sun's harmfulnecessary to prevent sun's harmful radiation from reaching earthradiation from reaching earth  ozone at ground level forms smogozone at ground level forms smog • can cause serious breathing problemscan cause serious breathing problems  "ozone safe" products should not"ozone safe" products should not harm the atmosphere at either levelharm the atmosphere at either level
  23. 23. Green PowerGreen Power  Green marketing heavily used inGreen marketing heavily used in electricity generation/marketingelectricity generation/marketing  What is green power?What is green power?  electric power that iselectric power that is • generated by renewable resourcesgenerated by renewable resources • less polluting than fossil fuels andless polluting than fossil fuels and nuclear powernuclear power
  24. 24. What types of power are “green”?What types of power are “green”?  WindWind  BioenergyBioenergy  Geothermal energyGeothermal energy  Solar powerSolar power  Hydroelectric powerHydroelectric power
  25. 25. Why is green power attractive toWhy is green power attractive to consumers?consumers?  Electricity generation is largest industrialElectricity generation is largest industrial polluter in US; currently produces:polluter in US; currently produces:  two-thirds of the annual U.S. emissions oftwo-thirds of the annual U.S. emissions of sulfur dioxide (main cause of acid rain)sulfur dioxide (main cause of acid rain)  30 percent of the nitrogen oxide emissions30 percent of the nitrogen oxide emissions (stress forest ecosystems; combine with(stress forest ecosystems; combine with organic compounds in sunlight to formorganic compounds in sunlight to form smog)smog)  40 percent of carbon dioxide emissions40 percent of carbon dioxide emissions  toxic-metal emissions (mercury and lead)toxic-metal emissions (mercury and lead)  nuclear waste.nuclear waste.
  26. 26. What are the “dirtiest” energyWhat are the “dirtiest” energy sources?sources?  CoalCoal  OilOil  Nuclear powerNuclear power  Natural GasNatural Gas
  27. 27. What are the green power options?What are the green power options? 1. Green Pricing1. Green Pricing  Consumers do not have to change theirConsumers do not have to change their electricity providerelectricity provider  Customers choose to pay a premium onCustomers choose to pay a premium on their electricity bill to cover the extra costtheir electricity bill to cover the extra cost of purchasing clean, sustainable energyof purchasing clean, sustainable energy  As of March 2003, more than 300As of March 2003, more than 300 electricity providers in 32 states haveelectricity providers in 32 states have implemented green pricing options orimplemented green pricing options or announced plans to do soannounced plans to do so  Green Mountain Power’sGreen Mountain Power’s CoolhomeCoolhome,, CoolbusinessCoolbusiness
  28. 28. 2. Green Marketing2. Green Marketing  Sale of green power in competitiveSale of green power in competitive markets; consumers have option tomarkets; consumers have option to choose among suppliers and servicechoose among suppliers and service offeringsofferings • like choosing long-distance telephone carrierslike choosing long-distance telephone carriers  As of October, 2003 green marketing wasAs of October, 2003 green marketing was available in nine statesavailable in nine states • all in the northeast except Texasall in the northeast except Texas • not in Vermontnot in Vermont
  29. 29. 3. Green Tags3. Green Tags  Tradable Renewable Certificates (TRCs)Tradable Renewable Certificates (TRCs) represent the environmental (non-power)represent the environmental (non-power) attributes or benefits of renewable electricityattributes or benefits of renewable electricity generationgeneration  consumer pays for the benefit of adding clean,consumer pays for the benefit of adding clean, renewable energy generation to the regional orrenewable energy generation to the regional or national electricity gridnational electricity grid  provides same environmental benefit asprovides same environmental benefit as purchasing green pricing or green marketingpurchasing green pricing or green marketing productproduct  provide “green” option for people in statesprovide “green” option for people in states where green pricing/marketing not availablewhere green pricing/marketing not available
  30. 30. Consumer Protection Issues inConsumer Protection Issues in Green PowerGreen Power  When power flows from theWhen power flows from the generator to your house, electronsgenerator to your house, electrons get mixed together on the wiresget mixed together on the wires • You can't specify which electrons youYou can't specify which electrons you getget • you can't know for sure if they are beingyou can't know for sure if they are being generated by "green" power sourcesgenerated by "green" power sources  A number of mechanisms have beenA number of mechanisms have been established to avoid consumerestablished to avoid consumer deceptiondeception
  31. 31. 1. Voluntary certification1. Voluntary certification  Green-eGreen-e  Establishes consumer protection and environmentalEstablishes consumer protection and environmental standards for electricity products, and verifies that thesestandards for electricity products, and verifies that these products meet the standards.products meet the standards.  Standards include:Standards include:  50% or more of the electricity supply comes from one or50% or more of the electricity supply comes from one or more of these eligible renewable resources: solar, wind,more of these eligible renewable resources: solar, wind, geothermal, biomass, and small or certified low-impactgeothermal, biomass, and small or certified low-impact hydro facilitieshydro facilities  if a portion of the electricity is non-renewable, the airif a portion of the electricity is non-renewable, the air emissions are equal to or lower than those produced byemissions are equal to or lower than those produced by conventional electricityconventional electricity  there are no specific purchases of nuclear power, andthere are no specific purchases of nuclear power, and  the product meets the Green-ethe product meets the Green-e new renewablenew renewable requirementrequirement
  32. 32. 2. State standards2. State standards  In 2002 Illinois established a "green powerIn 2002 Illinois established a "green power standard" for green power claims. The standardstandard" for green power claims. The standard establishes three tests:establishes three tests:  100% of the power must come from new clean100% of the power must come from new clean power sources (i.e., coming online after Januarypower sources (i.e., coming online after January 1, 2002)1, 2002)  at least 2/3 of the power must be produced byat least 2/3 of the power must be produced by wind or solar energy, with the remainder fromwind or solar energy, with the remainder from other renewable energy sources such as landfillother renewable energy sources such as landfill gas, small hydro, and biopowergas, small hydro, and biopower  the power purchase must create clear air qualitythe power purchase must create clear air quality benefits for the Illinois airshedbenefits for the Illinois airshed
  33. 33. 3. National Association of Attorneys3. National Association of Attorneys General (NAAG)--EnvironmentalGeneral (NAAG)--Environmental Marketing Guidelines for ElectricityMarketing Guidelines for Electricity  Provisions include:Provisions include:  term "green" and other similarly generalterm "green" and other similarly general statements of environmental benefit should bestatements of environmental benefit should be used with caution; every implied representationused with caution; every implied representation of environmental benefit must be substantiatedof environmental benefit must be substantiated  term "clean energy" means energy whoseterm "clean energy" means energy whose generation does not cause significant emissionsgeneration does not cause significant emissions  a "renewable" energy source is one which isa "renewable" energy source is one which is naturally replenishable and is replenished onnaturally replenishable and is replenished on some reasonable time framesome reasonable time frame
  34. 34. Green Power in VermontGreen Power in Vermont  Apparently the only green power optionApparently the only green power option available in Vermont is Green Mountainavailable in Vermont is Green Mountain Power'sPower's Cool HomeCool Home projectproject  Customers make a $6 monthly tax-Customers make a $6 monthly tax- deductible contribution to the non-profitdeductible contribution to the non-profit group Clean Air-Cool Planetgroup Clean Air-Cool Planet  through the Vermont-based groupthrough the Vermont-based group NativeEnergyNativeEnergy, new renewable energy, new renewable energy projects are developedprojects are developed • wind farmswind farms • farm methane systemsfarm methane systems

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