Environmental Issues in Business 2011Environmental Issues .docx

Environmental Issues in Business 201
1
Time (Stress) ManagementWeek 2Become familiar with topics
Week 3Preliminary literature review Week 4Topic selection &
literature review Week 5 (Tuition free week)Literature review
and early draft stage Week 6Advancing manuscript Week
7Advancing manuscript Week 8 (Tuition free week)Finalising
manuscript Week 9Proof-reading and checkingWeek 10Paper
submission due
Lecture 8
Green Marketing
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At the end of this lecture you will be able to:
explain the role of green marketing in the sustainability context;
describe differences between green marketing and conventional
marketing approaches;
describe the strengths and weaknesses of green marketing; and
identify key elements of effective green marketing.

The marketing paradox
How do marketing and sustainability fit together?
Schism in the marketing discipline
Genuinely green vs greenwashing
Greener vs sustainable marketing
The problem of marketing “greenness”
How green can be too green
Consumers as green marketing obstacles
Designing a green marketing strategy
The dos and don’ts
Examples
The good, bad and ugly
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Overview
Lecture 7
4
How well does marketing align with the goals of sustainable

development?
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The paradox of marketing:
Marketing is the driving force behind unsustainable, (un-
)economic growth and individual lifestyles
Contributes to over-consumption
Complicit in the promotion of unsustainable/unethical values
and behaviours
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How Responsible is Marketing?
The ‘more is better maxim’ of marketing seems to violate
sustainability principles and arguably undermines efforts to
mainstream more ethical and ecologically sensitive consumer
behaviour
Lecture 7
6
Sustainable production and consumption.
But can also be used as a tool for social change:
Altering consumption patterns for society’s long-term best

interests
Educate and raise awareness
Change values, life-styles and consumer choice
Help challenge the status quo
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Marketing: A Tool for Change?
Promotion of products or services by employing environmental
claims either about their attributes or about the systems,
policies and processes of the firms that manufacture or sell
them
(Prakash 2002: 285)
Channelling of consumer demand towards environmentally less
problematic areas of consumption
(Hockerts 2003)
8
Green Marketing

Product attributes
Value-addition processes
Management systems
Associated Causes
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Target Areas for Green Marketing
Source: Prakash (2002)
Green marketing can help:
Aid reduction of impacts
Provide alternative product choices
Promote ‘better’ practices in industry
Raise awareness
Educate consumers
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How Sustainable is Green Marketing?

Green marketing is being criticised for:
not reducing levels of consumption
being sales orientated
underpinning and being underpinned by profit motive
building façade of environmental improvement
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Limitations of Green Marketing
Sustainability transition may require:
Promotion of ‘less being more’
Reductions in aggregate levels of consumption
Acceptance of having to take a step back
Social transformation towards more sustainable values
¾ of the world population have not even started to consume the
way we do though India, China and Brazil have begun to do so.
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Sustainable Marketing?
(Social or critical marketing)
Source: Peattie & Crane (2005)

Can we promote what will be perceived as:
deprivation
anti-development
moralistic
fatalistic
pessimistic
a step backwards?
Social and critical marketers believe that we have no option but
to try (ultimate challenge)
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Is ‘Less’ Sexy and Does it Sell?
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“The American lifestyle is not negotiable”
What are the Chances for Sustainable Marketing?
Former US President George Bush (1992)

In the UK, in 2012, £ 2.4 billion were spent on unwanted
Christmas presents, while Australians spend $750 million
annually on dud Christmas presents (SMH 29.12.2011)
Americans spend about $35 billion a year on weight-loss
products (http://www.cbsnews.com)
We spent more money each year on professional de-cluttering
services (Nelson et al. 2007)
There is a global rise in freecycling (Nelson et al. 2007)
In other words, there is scope for consuming less
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At the same time:
Lecture 7
15
Being genuine
If companies don’t walk their talk, consumers won’t believe
them
Companies need to verify and substantiate their claims to
prevent scepticism and cynicism

Measuring & understanding the true extent of consumer demand
for green products
Green arguments alone (moral suasion) are insufficient to sway
consumer behaviour
Danger of over-emphasising greenness of products whilst
ignoring consumer demands (marketing myopia)
Sources: Levitt (1960), Ottman, Stafford and Hartman (2006)
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Key Issues in Green Marketing
Lecture 7
16
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Lack of Genuineness
In 2007, 99% of environmental product claims committed at
least one of the seven sins of greenwashing; by 2010, this
percentage had fallen substantially and the number of genuinely
green products on offer rose significantly
Source: Terrachoice (2009, 2010)

Sin of the hidden trade-off
e.g. made from 100% paper
Sin of no proof
e.g. This product is ‘green’
Sin of vagueness
e.g. environmentally friendly
Sin of irrelevance
e.g. CFC free hairspray
Sin of lesser of two evils
e.g. fair trade tobacco
Sin of worshipping false labels
e.g. inauthentic labelling
Sin of fibbing
E.g. Outright lying and deceit
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7 Sins of Greenwahsing
Source: Terrachoice (2009)
Greenwashing Index

Public rating system for greenwashed advertising
CHOICE Australia
Reporting system which registers consumer complaints
NGO registers
E.g. Greenpeace, Sierra Club
Government regulation
UK government devised industry code for authentic green
advertising
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Greenwash Safeguards
Numbness
People are too busy and simply do not have (make) time or
don’t want to know
Reluctance to change lifestyles
Green issues are too big to handle
What can I do about melting ice caps??
Apathy
Green labels have a bad name because of perceptions of poor
performance and ideological slant
Dislike of ‘green’ labels
Scepticism about industry's green claims
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Understanding the Consumer

Akrasia
Inconsistency in consumer demand. Consumption choices often
do not reflect personal values.
Self-righteousness – self-deception
I recycle and therefore I am green
Financial constraints
We may like to buy organic but simply cannot afford to do so
because of large price premiums
Reluctance to pay more – fear of price gauging
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Understanding the Consumer
KPMG (2000):
75% of respondents had bought products on the basis of social
or environmental issues during the previous year
NSW Chamber of Commerce (2001):
73% people would buy green ceteris paribus
49% would switch to greener brands
60% of all consumer purchases are made with some awareness

of environmental impacts
GreenPortfolio UK Survey (2006)
50% of the companies surveyed believe that customers are
prepared to pay more for environmentally friendly products
Bonini & Oppenheim (2008)
87% of consumers state that they are concerned about the
environmental and social impacts of the products they buy
Yet, only 33% of consumers say they are ready to buy green
products or have already done so
Brooks et al (2009)
69% of US consumers are likely to buy environmentally
friendly products if priced within their budget
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Do People Want to Buy Green?
Lecture 7
22
True blue greens (9%)
Strong values matched by action
Green target group
Greenback greens (6%)
Strong values but politically inactive

Sprouts (31%)
Believe in environmental causes in theory but not in practice
Grousers (19%)
Uneducated about environmental issues and cynical about their
ability to drive change
Basic browns (33%)
Caught up with day-to- day concerns and do not care about
environmental and social issues.
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Only a Small Percentage of Consumers Responds to Greenness
Source: Ginsberg & Bloom (2004) & Brooks et al. (2009)
Lecture 7
23
Based on these figures only 15% of consumer can be marketed
to using environmental claims
Adequate pricing
Customers must be willing and able to afford premiums
Adequate greenness
Price, image & performance may be more important
Product performance
Product must be/do more than being green

Credibility of claims
Customers need to believe your claim
Instilling a sense of wanting to make a difference
Demonstrate that using your product will make a difference
Encourage behavioural change
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Ingredients of Effective Marketing
Source: Prakash (2002), Ottman (2008)
Flop – Earth Light
Clumsy, funny-looking bulb
Did not easily fit most lamps
Name confused consumers
$15 each versus 75¢ for incandescents
Result: Earth Light could not climb out of a green niche.
Success - Marathon CFL
Super long life
Incandescent-looking shape appealed to the convenience-
oriented mainstream
Promise of saving $26 in energy costs over its lifetime lured
thrifty consumers
U.S. EPA's ENERGY STAR¨ label to add credibility
Result: Sales in 2001 were up 12% in a flat market.
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Philips: Marketing Flop & Success

Source: Ottman Consulting (2003)
Lecture 7
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Green opportunities are emerging
Growing demand for green and ethical consumer products will
continue to fuel green market growth and vice versa.
Green marketing can be both driver of, and response to, green
market growth
Green marketing helps businesses with company and product
differentiation and consumer education
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Conclusion
Green marketing can foster good social, environmental and
economic outcomes
However, markets still continue to reward unethical behaviour

(due to price advantages) in the absence of perfect information
and safeguards.
Doors remain open for unethical ‘green’ marketing, attracting or
silencing customers and critics respectively based on fraudulent
claims.
More safeguards are needed to protect ethical players and to
identify and punish wrong-doers.
Critical reflection needed whether sustainability can be
achieved without reducing levels of consumption.
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Conclusion
Associated Content (2008) Shell Oil Company Told to Stop
Misleading Advertising. Available online at:
http://www.associatedcontent.com/article/304531/shell_oil
_company_told_to_stop_misleading.html?cat=17
Bonini, S. and J. Oppenheim (2008). Cultivating the Green
Consumer. Stanford Social Innovation Review. (Fall), 56-61
Brooks, G., Marohn, D., Regelin, K., & Rincones, D. (2009).
Cradle-to-cradle: A new approach for marketing green products
to the mass consumer. Evanston: Kellogg Innovation Network.
Centre for Environment Education. (2007). Gram-Nidhi - Eco-
enterprises for sustainable livelihoods. 28th June, from
www.ceeindia.org/cee/rural.html#GRAMNIDHI
Ginsberg, J. M., and P. N. Bloom. 2004. Choosing the right
green marketing strategy. MIT Sloan Management Review 46
(1): 79-84.
GreenPortfolio. (2006). Green relations. The communication

viewpoint. London: GP.
KPMG and Resnik Communications (2000) Putting your money
where your mouth is. Socially Responsible Investment
Research.
Levitt, T. (1960) Marketing Myopia. Harvard Business Review
48(July-August), 3-13
Lindsey, N. (2000, 11th August). Cleaning up in Asia. The
Australian, p. 38.
Ottman, Stafford, and Hartman (2006). How to avoid green
marketing myopia: Ways to improve consumer appeal for
Environmentally Preferable Products . Environment Magazine
48(5): 23-36
Ottman Consulting (2003). Lessons from the green graveyard.
Available at: http://www.greenmarketing.com
Nelson, M. R., Rademacher, M. A., & Paek, H.-J. (2007).
Downshifting Consumer = Upshifting Citizen? An Examination
of a Local Freecycle Community. The ANNALS of the
American Academy of Political and Social Science, 611(1),
141-156.
Peattie, K., & Crane, A. (2005). Green marketing: Legends,
myth, farce or prophesy? Qualitative Market Research, 8(4),
357-371.
Prakash, A. (2002). Green marketing, public policy and
managerial strategies. Business Strategy and the Environment,
11(5), 285-297.
Terrachoice Green Marketing (2009 and 2010). Sins of
greenwashing. Available online: http://terrachoice.com/
Worldwatch Institute (2010). Vital signs 2010. Washington, DC:
WWI.
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References

Lecture 7
28
Green
Marketing
Green Marketing

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