Product & Service providers in every industry sector are trying to position themselves as some iteration of green.
California’s AB 32 Bill will require California (already the greenest state), to be ever greener. The current Global Warming Climate Protection concern has stimulated Cap & Trade Carbon Trading globally. Some Corporations are filing voluntary C.S.R’s (Corporate Sustainability Reports). The financial crisis has temporarily caused a drought on capital lending yet Venture Capitalists continue investing with thirst in Green / Clean tech.
It is a common misconception that green marketing refers specifically to the promotion and advertisement of products with environmental characteristics (such as Recyclable or Ozone Friendly). While this is true, green marketing is generally a much broader concept, one that encompasses consumer goods, industrial goods and even services (for example, the growing ecotourism market). Green marketing includes a range of activities such as product modification, packaging changes, production line changes, and advertising modifications. Over the past several years, green marketing has become increasingly more important to consumers and manufacturers. The reasons for this are unfortunately not only to do with an environmental ethic or feeling of environmental responsibility, but also to do with economics and market strategy. Economics is a field of study that is concerned with how people use their limited resources in order to try and satisfy unlimited wants. The question of course should be concerned with whether or not these wants are reasonable or even justifiable, though this paper will address how green marketing activities utilize these limited resources. There are several reasons that can account for firms increased use of green marketing. First, organizations view environmental marketing as an opportunity to achieve its objectives. Second, organizations might feel they have a moral obligation to be more socially responsible. Third, government pressure is making firms more responsible. Fourth, competitors’ environmental actions pressure other firms to do the same. Lastly, cost factors associated with waste disposal for example might force firms to modify their behavior (1). In a 1992 study of 16 countries, more than 50% of consumers in each country, other than Singapore, indicated they were concerned about the environment. As consumer demands change in the direction of environmental responsibility, firms will also change more. However, many firms see these changes as an opportunity to be exploited. There are examples of firms who have made some strides to be more environmentally responsible, in an attempt to better satisfy consumer needs. McDonald’s, for example, replaced its clam shell packaging with waxed paper because people became concerned about the polystyrene in the shell paper due to ozone depletion. Another example is how the tuna manufacturers changed their fishing techniques because of increased concern over drift nets and the death of dolphins. It is important to highlight the fact that just because firms make small strides toward environmental responsibility, does not mean they are environmentally or even socially responsible. In many cases firms have actually misled consumers in an attempt to gain market share. Also many firms claim green though they have not considered the accuracy of their behavior, their claims, or the effectiveness of their products. As Polonsky notes in his article ‘An Introduction to Green Marketing’, “This lack of consideration of the true ‘greenness’ of activities may result in firms making false or misleading green marketing claims” (1). Government regulations of environmental marketing are supposed to protect consumers. The most recent publicized environmental regulation backed by the government was the creation of a set of guidelines that were meant to “control” green marketing claims from companies. These regulations include the Australian Trade Practices Commission’s (FTC) “Environmental Claims in Marketing- A Guideline”, and the regulations set forth by the National Association of Attorneys- General. Such guidelines were established in order to ensure that consumers were given information about a product that would allow them to evaluate a firm’s environmental claims. Individual states have also passed legislation aimed at controlling environmental marketing activities. These pieces of legislation tend to be much more stringent than the FTC’s guidelines. There have been many cases where firms were prosecuted for false advertisement, the majority being held in State courts (1). Though regulations exist to help protect consumers, the laws remain weak, and firms are still able to advertise “highlights” and leave out the rest. Perhaps the biggest problem that arises in green marketing is that it is very difficult to establish policies that will address all environmental issues. The guidelines in place today, for example, only address the truthfulness of environmental marketing claims and nothing else. As Polonsky argues in ‘An Introduction to Green Marketing’, “If governments want to modify consumer behavior they need to establish a different set of regulations. Thus governmental attempts to protect the environment may result in a proliferation of regulations and guidelines, with no one central controlling body” (1). In the future, it is hoped that green marketing will bring stricter regulations and a sharper eye to watch over firms. It should, that is, do the job it was created to do. As Polonsky argues, “Ultimately, green marketing requires that consumers want a cleaner environment and are willing to ‘pay’ for it, possibly through higher priced goods, modified individual lifestyles, or even government intervention. Until this occurs it will be difficult for firms alone to lead the green marketing revolution” (1). The interest of many big firms lies in economics, and their behavior reflects this alliance. Simply put, while firms should be held responsible for the damage they wreak on the environment, ultimately it is the consumer who demands the good they are providing and is therefore an actor in that destruction. 1. Polonsky, Michael Jay. An Introduction to Green Marketing. Department of Management, University of Newcastle, Newcastle NSW 2308.