As people became aware of the environmental effects of conspicuous consumption, people consciously shifted to environmentally friendly products. Peattie and Charter (2008) say that the moral criticisms of marketing made way for new disciplines to emerge. The first they say was the Apologist paradigm, which aimed at delivering the social values desired by customers. The Societal Marketing concept aimed at concentrated on the acceptability of social ideas rather than economic goods and services. The Reconstructionists paradigm came initially to address the rapidly developing consumerism movement. Kotler (1972 in Crane, 2000) developed the societal marketing concept to address this issue. The model classified products in a matrix according to the satisfaction delivered immediately and long-run consumer welfare, showing that the ideal stage to be was as desirable products with high immediate satisfaction and high long-run consumer welfare. It was later identified that what was good consumers was not objective (Crane, 2000) and involved unaddressed moral issues.
During the 1990s, observable purchasing decision patterns of consumers based on morality emerged (Crane, 2000) due to changing values and attitudes, pressure group activity, media interest and political interest (Peattie and Charter, 2008). Though the focus of academic research had shifted on this issue only recently, an early work in the 1970s by Andresen and Cunningham (1972 in Crane, 2000) on responsible consumption, ecologically concerned consumers and socially conscious consumption laid the foundation for today’s concept of ethical and green consumption [1] .
The emergence of green marketing concept created an opportunity for companies to differentiate and market their products as green. Green marketing concept initially started as ‘Ecological’ green marketing in the 1970s (Peattie and Charter, 2008), which tried to address the environmental problems. This then evolved to ‘Environmental’ green marketing, which aimed at creating innovative products to address environmental problems like pollution and product waste. This concept has now evolved as ‘Sustainable’ green marketing which looks to address long term viability of consumption.
The sustainable approach simply means enjoying a material standard of living which does not adversely affect the future generations. People therefore use the natural resources at a rate where they can be replenished either naturally or by human intervention and create pollution or waste at a rate at which the environment can consume them without harming itself (Peattie and Charter, 2008). Marketing theories were traditionally built on economic and technical systems perspectives, ignoring that companies are physical systems that exist in the physical environment, which is finite and vulnerable (Peattie and Charter, 2008).
Green marketing aims at balancing the techno-economic and socio-environmental approach which calls for re-evaluation of the fundamental principles of marketing. Peattie and Charter, (2008) identify the areas that green marketing helps to refocus traditional marketing. Marketing has been oriented to identify and satisfy consumers’ wants; while green marketing proposes to refocus on consumers’ welfare rather than wants. It stresses on the importance of sustainability and welfare instead of satisfying all the wants which may be at cost of future generations. Traditionally customer satisfaction was measured during consumption. The green consumer may reject the product though satisfactory, due to adverse effects of the product on environment in production or disposal, activities of suppliers, producers or investors. (Value chain can be added here? From hollensen notes taken)
Consumption decision involves consideration of the whole process of production and producer’s activities. As Drucker (1973 in Peattie and Charter, 2008) puts it, the company as a whole becomes the product the customer consumes. Company’s responsibilities extended to managing the product even after its lifespan, which brought major changes in the way products were designed and supply chain was managed. As per traditional marketing theory, success depends on companies addressing the 4Ps; Product, Price, Place and Promotion. The idea of success is redefined by the green marketing concept, which is derived from addressing issues as satisfaction of customer needs, safety of products, social acceptability and sustainability; known as the 4 S criteria (Peattie and Charter, 2008).
GM: legend, myth….Peattie and Crane, 2005
Many ground breaking green products disappeared from the market and the number of new green products being introduced into marked fell and companies have become cautious of launching communication showing them green due to fear of being criticised for ‘green washing’.
Vandermerwe and Oliff’s (1990 in Peattie and Crane, 2005) survey found that 92 per cent of European multinationals claimed to have changed their products in response to green concerns, and 85 per cent claimed to have changed their production systems. Green product introductions in the US more than doubled to 11.4 per cent of all new household products between 1989 and 1990, and continued to grow to 13.4 per cent in 1991 (Ottman, 1993 in Peattie and Crane, 2005). Similarly, the volume of green print ads grew by 430 per cent, and that of green TV ads by 367 per cent, between 1989 and 1990 (Ottman, 1993 in Peattie and Crane, 2005). Stories of companies such as the Body Shop, Ecover, Volvo, 3M, and even McDonalds became ever more cited in the green business literature to illustrate how and why green marketing initiatives could pay.
Mintel’s (1995 in Peattie and Crane, 2005) follow-up report on the environment recorded only a very slight increase in green consumers since 1990, and identified a significant gap between concern and actual purchasing. Specialist brands such as Ecover and Down to Earth failed to sustain the growth they enjoyed in the early 1990s, and the specialist green ranges of some major companies such as Lever Brothers and Sainsburys were discontinued. Although green product growth continued strongly in certain markets, such as food, tourism, and financial services, across the majority of markets there was no longer talk about the impressive growth in green product introductions.
Perhaps the most damning market research evidence in the case for the decline of green marketing is the alarming cynicism being displayed by consumers about green products, green claims, and the companies behind them (Kangun et al., 1991; National Consumer Council, 1996). The marketing philosophy and process is built around the customer and the relationship between the company and the customer. If this is characterised by cynicism and distrust, then companies are unlikely to be able to bring customers along with them through the changes needed to move towards sustainability. Green marketing will not work in the face of consumer distrust, but then that distrust may be partly a product of the types of “green marketings” that companies have relied upon so far.
For King (1985), failures in marketing in practice were often due to the existence of “false marketing”, the manifestations of which he categorised as “thrust marketing”, “marketing department marketing”, “accountant’s marketing” and “formula marketing”.
King presented “thrust marketing” as a highly sales-based approach. In green marketing too, firms have frequently only used the environment as an additional promotional dimension without any attempt to analyse, or modify, the underlying product itself and its environmental impacts.
Can add the augmented product concept here..showing green as a product augmentation in addititon to the conventional attributes. A sound green strategy alone will not help sell a product. A sound product augmented with the green attribute will be in a better position to be sold….
“Marketing department marketing” represented a lack of integration between marketing and other business functions. Equally, with green marketing, many firms have sought to address consumers’ needs, but their interest in the environment has been limited to the marketing department, or the production department, or some other individual function. This has prevented firms from developing a broad, holistic approach to green marketing.
Green concepts have to be internalised in every aspect of the organisation to deliver effective results.
Many of the firms that have most publicised their green stance have been those that have been in the frontline as targets for criticism, such as those in “dirty” industries such as oil, chemicals, pharmaceuticals, and automotives. In response, they frequently went on a PR offensive, using glossy brochures, lobbying, and countless press releases in order to persuade the sceptical public of their environmental credentials. Menon and Menon (1997) characterise the early response to environmental concern of many companies as typified by the establishment of specialist environmental functions, and in marketing terms, “public relations and publicity (begins) to play a bigger role in a firm’s marketing communications strategy to allay public concerns to mollify and, if possible, co-opt interest groups and regulatory agencies”.
This reactive approach, focused on reputation management and risk management, suggests a compartmentalisation of green marketing within the PR function, a place where there is little opportunity to affect product, production or policy decisions. Nor is there much scope for developing a customer focus when so much effort is expended on putting forward the position of the company or industry. We can also identify in the green spinners a significant degree of conservatism. Their failure to actually go out and engage, debate with, and listen to various stakeholder groups suggests a rigid adherence to common practices and established mindsets. By seeking to deny or discredit dissenting voices, they made the classic marketing error of looking inward when many of the answers they sought were to be found by looking outside of the organization. Public relations is but one aspect of marketing, and companies basing their approach on this one element have clearly not embraced the philosophy of green marketing to any significant extent. Green spinning was always going to fail because unless they are involved and consulted, contemporary consumers and pressure groups are unlikely to be fully convinced by the protestations of commercial enterprises.
King’s notion of “accountant’s marketing” was characterised by a fascination with short-term profitability and limited concern for long-term brand building. With the environment too, many companies have been enthusiastic about green marketing when it has involved short-term cost savings (e.g. packaging reductions or energy savings), but lukewarm when it has come to investing money in order to develop more sustainable products and processes.
When King wrote about “formula marketing”, he meant that rather than embracing innovation and imagination, much marketing activity had emphasised control, risk aversion, and the use of tried-and-tested recipes for success. Clearly, much green marketing activity also has focused on avoiding any significant change, and focusing instead on marginal, incremental improvements to existing products and processes (for example through an emphasis on packaging reduction rather than on changing core products or production processes).
The growth in market research identifying consumer concern about the environment during the 1990s meant that it was taken for granted in many quarters that “green would sell” and many firms responded by rapidly adjusting their promotional campaigns. The same products continued to be produced, but green themes were added to promotional campaigns in order to take advantage of any environmental concerns of consumers. However, there was little market research by firms to track customers’ actual needs and responses. Even when these were investigated, the response was often focused on identifying the environmental benefits of existing products, rather than seeking alternatives to those products. This was obviously a very opportunistic response to environmental concerns. Marketing managers could scrutinise their products and production processes searching for an indication that their product was high in something environmentally good, and if not, at least low in something environmentally bad. These attracted regulatory action and customers eventually lost faith in such claims.
It is therefore not surprising that green products have often underperformed significantly. Some firms identifying these trends have realised that their (and their suppliers’) claims lacked independent authentication, and have since attempted to develop certification programmes in order to regain customer confidence. However, problems remain. There are now a host of different logos allegedly certifying various environmental benefits, and consumers are understandably confused. Failure to turn a selling orientation into a marketing one has therefore meant that green is now often seen as a fruitless marketing strategy amongst many major businesses, regardless of the environmental qualities of their products.
When it started to become apparent that greening could create cost savings, many marketers became enthusiastic about the environment. Economies in terms of energy and material input efficiencies, packaging reductions, and logistics rationalisation provided strong incentives for firms to develop their environmental programmes. However, although this may have meant that products were now costing less to produce, these savings did not tend to filter through to customers in terms of cheaper, greener products. Indeed, on the contrary, green products have almost always been priced at a premium over conventional offerings. Pricing strategies seek to establish green products as premium products serving niche markets. Overall, the tendency of green products to be perceived as expensive has severely hampered their market penetration.
Having plucked the “low hanging fruits” of greening, many firms found themselves in a position where, if they were to move any further towards sustainability, they had to embrace more radical change and invest more management time and money to achieve it (Shelton, 1994). However, in green harvesting firms, we can usually recognise deep cultural fixations on cost reduction, short-term profitability, and shareholder value. There is, therefore, a profound reluctance in such companies to make strategic investments in green marketing initiatives. Greening starts to look less and less of an attractive option, the whole agenda loses momentum, and this particular guise of green marketing ultimately fails in the medium to long-term.
Here, a committed individual, section, or company seeks to bring innovative green products to market (Menon and Menon, 1997). emergence of new green brands in a wide range of markets such as cleaning products, paper goods, cosmetics, and food. There are two types of enviropreneur marketing. Boutique enviropreneur marketing has involved the marketing of innovative green products by small start-up firms that only produce ostensibly green products, such as Ark, Ecover, Tom’s of Maine and the Body Shop, Corporate enviropreneur marketing by contrast occurred within large organizations that produce many non-green products as well as green brands. Lever Brothers, Boots and Sainsburys supplemented their existing ranges with green brands.
Knowing that consumers want greener products is not the same as knowing exactly which products consumers are going to want, what kind of price-performance trade-offs they may be willing to accept, and what marketing approach they will find respond to. Many of the enviropreneur firms were actually working from a production orientation. All their efforts were focused on producing the most environmentally benign products, rather than the products that consumers actually wanted. Thus, they ended up producing products that were perceived as either under-performing, over-priced, or just too worthy and “unsexy”. [green tag alone can’t sell, the core product itself should be marketable with green aspects as augmented attributes]. These led to the failure of enviropreneur marketing, leading to stalled growth of boutique firms and a large proportion of the corporate brands had been deleted and/or absorbed into conventional ranges. The problems they had were also because they failed to successfully research, understand or educate their customers.
Firms whose environmental initiatives do not go beyond responding to regulation (both planned and expected). They see simple compliance with environmental legislation as an opportunity to promote their green credentials like promotion of the absence of banned CFCs as a customer benefit. It is green marketing in a very conservative guise – the firm seeks to travel the path of least change and will only go beyond compliance when there is a very real expectation of imminent legislation. Such firms have never had much hope of appealing to the environmental concerns of increasingly savvy customers, or of making any significant advances towards sustainability. The free market will thus never be able to turn our compliance marketers into genuine green marketers.
They attempt to highlight how little of this activity has had to do with either marketing or the environment. Baker’s (1999) analysis of King’s “failed marketings” suggested four essential features of “real” marketing, which, perhaps except for the first, assume even greater importance in a green marketing context.
It is not easy to find evidence of companies whose green marketing strategies began with comprehensive market research into customers’ wants, needs, attitudes, beliefs, and knowledge.
The pursuit of sustainability needs to go beyond long-term to become open-ended. many green marketing initiatives have clearly been rather shortsighted, such as the promotion of recyclable containers in areas that lack recycling facilities. their payback period is often longer than that of conventional alternatives. After decades in which the emphasis was on immediate benefits for the individual consumer, it is difficult to now balance this with an emphasis on delivering benefits to others in the future (including future generations of consumers).
Green marketing needs to be reflected throughout the company so that the actions or policies of any part of the company or its supply chain do not compromise the eco-performance of products. Shelton’s (1994) research into major green pioneers revealed them running into problems because environmental concerns did not mesh well with traditional corporate cultures, and senior management lost interest in environmental initiatives once the “low hanging fruit” had been picked.
However, customer wants and needs can often be effectively met in ways that create environmental improvements by innovations in market structures and supporting services. This can allow needs to be met through renting rather than owning products, improving product longevity through service and maintenance, or reducing environmental impact through better product disposal. Innovation is being seen very narrowly in terms of product and production system technology.
marketing scholars during the latter half of the 1990s began to move beyond the original green marketing agenda and its focus on the pursuit of environmentally-based competitive advantage. Ideas about what might constitute sustainable (or at least more sustainable) marketing began to emerge (Peattie, 1995; Van Dam and Apeldoorn, 1996).
Fairtrade Labelling Organizations International: Ethical Consumerism – A Guide for Trade Unions –
What is “ethical consumerism”?
Over the last ten or twenty years, more and more people around the world, primarily in industrialised countries, have become better informed and more aware of the origins of the goods they purchase on a day-to-day basis, the buying policies and practices of the shops they visit and the policies and principles of the services they buy. In a growing number of cases, this increased awareness and knowledge is affecting consumer practices and may be the difference between someone buying a particular product or service or not. There are a number of reasons for this development, which is commonly referred to as “ethical consumerism”, or also “ethical consumption”, “ethical purchasing”, “moral purchasing”, “ethical sourcing”, “ethical shopping” or “green consumerism”.
Fundamentally, ethical consumerism is consumers taking responsibility for their decisions in purchasing goods and services. Two key elements that have contributed to this development and that are interrelated are the significant and rapid progress in Information and Communications Technologies, particularly internet-based, and the role of the media in exposing bad practices in global supply chains of goods and services. Consumers are more informed then before, due to the substantial amount of information available on the internet and media attention on life stories of exploited workers, sometimes children, who make products which are eventually sold in the west at many times the small amount of money they are paid in wages. All of which contributes to a very confusing picture for the average consumer, who is bombarded with messages of what to do or not to do.
Trade unions, charities and other civil society organisations the world over run regular campaigns to inform consumers of how the products and services they buy are manufactured, farmed or otherwise provided and produced, pointing out that a very obvious way to tackle poverty and inequality around the world would be to ensure that everyone enjoys decent working conditions and benefits from a living wage, access to adequate public services, particularly education, health and social protection, and a fulfilled and meaningful life. In this way, the fundamental principles of ethical consumerism are directly linked to the need for companies to be socially responsible in all aspects of their business activities
In essence, therefore, “ethical consumerism” applies to the intentional purchase by a consumer of products and services that have been manufactured, processed or provided through ethical means, in other words, with minimal harm to or exploitation of humans, animals and/or the natural environment. Put simply, it is about buying products and services that are made and distributed under ethical conditions by companies that behave in an ethical and socially responsible manner.
Consumer activism is not a new concept and ethical consumerism is built on the foundations laid by social activists mainly in 20th century, but going back as far as the creation of cooperatives in the mid-19th century. Since the 1980s, an additional emerging form of consumer activism that has grown significantly in strength and influence has been so-called “green consumerism”, which is based on the impact of consumption on the environment [can use for intro into GM?].
The premise of this form of consumer awareness is to limit the impact of consumption on the environment to protect the wellbeing and interests of future consumers. While in the early stages of its existence, the green consumer movement remained on the margins of retailers’ radars, it gradually grew in importance and influence to the extent that today green “products” are growing in both number and scope, from vegetables and fruit, to green cars and electrical products. The movement generally promotes a message calling on consumers to be more careful and informed in their decision-making on consumption, although there is also a more radical element which recommends that people should make more effort to consume less in general to protect the environment and its capacity to provide for future generations.
Personal health and hygiene concerns have also played their part in promoting ethical consumption as citizens in industrialised countries pay greater heed to the increasing number of research reports into the effects of certain types of food and food-processing methods in terms of contemporary diseases and illnesses, such as cancer, obesity and diseases affecting the heart, the brain, the digestive and the respiratory systems, and so on. People generally pay more attention to their diet and therefore to the products they consume.
Consumer activism aims at ensuring value for money for those who consume, while protecting their interests and well-being as well as those of workers involved in local, national and global supply chains. Ethical consumerism further reinforces these principles and values by focusing on environmental protection and sustainable development. In its purest form, ethical consumerism is about purchasing goods and services that have been produced without harm to or exploitation of humans, animals or the environment.
In this respect, its philosophy appeals to the majority of consumers in the world as ideally most people would probably prefer to buy ethical products and services. The challenge is that the world is not “ideal” and consumers are obliged to make purchasing decisions based on a range of priorities and personal realities.
Four types of ethical buying, stating that ethical consumerism is just as much about supporting “good” companies and products as it is withdrawing support from the so-called “bad” ones:
• Positive buying: Favouring particular ethical products, such as energy-saving light bulbs.
• Negative purchasing: Avoiding products of which consumers may disapprove, such as eggs laid by battery hens or large cylinder cars which give out high carbon emissions.
• Company-based purchasing: Targeting a business as a whole and avoiding all the products made by one company, for example, through national and/or international boycotts.
• Fully-screened approach: Looking both at companies and at products and evaluating which product is the most ethical overall. This is the basis of the work of Ethical Consumer, which conducts research into a wide range of products and highlights what it terms “best buys”, which are essentially the most ethical, “fully screened” products that it can find. The results are then published in the Ethical Consumer Magazine.
One aspect of ethical consumption that should not be overlooked is recycling. Any form of consumption creates waste products. In most cases, this would be in the form of packaging of a wide variety of consumer products – even organic fruit and vegetable products are packaged to some extent.
http://www.ce.cmu.edu/GreenDesign/gd/Research/price.jpgsource: Matthews and Lave
Ethical investment, more commonly known as socially responsible investment, describes an investment strategy which seeks to maximize both financial return and social good. (mention about the delisting from ethical funds meant damage to their reputation… peattie?)
Repositioning CFL bulbs’ features into advantages that resonated with consumer values-convenience, ease-of-use, and credible cost savings-ultimately sparked an annual sales growth of 12 percent in a mature product market (Fowler, 2002).
While noble, the benefit appealed to only the deepest green niche of consumers. The vast majority of consumers, however, will ask, “If I use ‘green’ products, what’s in it for me?” In practice, green appeals are not likely to attract mainstream consumers unless they also offer a desirable benefit, such as cost-savings or improved product performance (Alston and Roberts, 2001).
Based on the evidence, successful green products are able to appeal to mainstream consumers or lucrative market niches and frequently command price premiums by offering “non-green” consumer value (such as convenience and performance).
Green marketing must satisfy two objectives: improved environmental quality and customer satisfaction. Misjudging either or overemphasizing the former at the expense of the latter can be termed “green marketing myopia.”
In 1960, Harvard
business professor Theodore Levitt
introduced the concept of “marketing
myopia” in a now-famous and influential
article in the Harvard Business Review.11 In it, he characterized the common pitfall
of companies’ tunnel vision, which
focused on “managing products” (that is,
product features, functions, and efficient
production) instead of “meeting customers’
needs” (that is, adapting to consumer
expectations and anticipation of future
desires).
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