Clearing the Air About Green Marketing
Understanding How Green Marketing Works and When to Use It
June 4, 2010
By Emily McClendon
What is Green Marketing
Marketing specialists are in agreement, green marketing campaigns exist and their clients should have one. The debate begins when the question turns to actually knowing what green marketing is and the best way to employ it. Although the rampant confusion is understandable due to the current amorphous nature of green marketing, the original concept was quite simple. Green marketing emerged as “marketing of products that are assumed to be environmentally safe”; a simple enough definition by anyone’s standards. Unfortunately, the very simplicity of the initial definition provided excessive leeway for companies seeking to take advantage of green marketing, and the marketers creating their campaigns.
Although green marketing has experienced a recent resurgence as environmental issues are becoming incorporated into the public psyche, green marketing has been around for several decades. Green marketing began in the 1980’s, with the implementation of Corporate Social Responsibility (CSR) Reports which provided an overview of companies’ environmental, social, and financial impacts. When consumers were able to monitor a company’s operational practices, they were better able to understand which companies were wasteful and which were implementing sustainable measures. With the establishment of CSRs and the publication of several books highlighting green marketing, the movement gained traction as well as evolved to become more profitable.
Over the relatively short history of green marketing, a movement that began as a way to incentivize the production of environmentally friendly products has degenerated into a mishmash of ideas, ethics, and confusion about what green products really are.
Why it works
Green House Gas Reduction
Take one product, attempt to make it environmentally friendly, and then tell everybody about it. That is current green marketing in a nutshell. With few standards, and very little labeling of any significance, the right to call a product environmentally friendly is practically limitless. Authenticity of labeling has further lost creditability as the pseudo-accepted authority; EnergyStar, has recently undergone an embarrassment in which some of the more egregious products deemed efficient were exposed, for example the approval of a gas-powered alarm clock.
One of the few true determinants of a sustainable product is a demonstrably lower carbon footprint compared to competitors. Carbon Dioxide, despite controversy, is widely considered to be one of the most common and detrimental greenhouse gases (GHGs) contributing to global warming. To truly reduce a product’s carbon footprint, the entire production process must be considered from manufacture to packaging, to transport. For example, one of the masters of efficiency, IKEA, uses Optiledge for shipping. Optiledge utilizes recyclable plastic pallets rather than the traditional wood pallets. The reduction in weight requires less fuel for transportation, and the recyclable nature of the pallets allows them to be reused several times, therefore removing the need for continual manufacturing (a big carbon producer).
Although consumers often believe the claims companies make about products being environmentally friendly, the true test the amount of carbon each product creates.
Efficiency and Sustainability Go Hand in Hand
Companies have more than one reason to produce “environmentally friendly” products. Sustainability goes usually encourages efficiency. Creating a sustainable process for manufacture and distribution often results in lower overall costs in the long run. Once companies get over the sticker shock of the capital investments required to renovate and reduce environmental damage, they often realize that net revenues will increase. Profits remain a primary concern in a capitalist economy, as they should, and cost effectiveness is an additional, persuasive, reason to become environmentally friendly.
Greater Social Consciousness
Although there is spirited debate about the reasoning behind social accountability, the fact remains that corporations are stepping up to become socially accountable. Part of accountability involves the effect a company’s actions will have on the environment of their consumers. The movement towards social corporate responsibility encompasses accountability for the environmental impacts of their products, a movement that results in both a reduced impact and recognition for sustainable efforts. Although today’s consumers are balancing complex lifestyle choices, environmental awareness is a growing factor in product selection.
Just as the definition of environmentally friendly is surrounded in confusion, so is the effectiveness of “green marketing”. While more traditional marketing campaigns can point to metrics to illustrate the effectiveness of an individual campaign, determining if consumers are making choices primarily dependent upon environmental concerns is nearly impossible. Surveys indicate that 78% of consumers consciously attempt to buy products that are environmentally friendly, but the problem remains pinpointing how to utilize a sustainable preference.
With consumers making their own decisions about what “environmentally friendly” means, producers are scrambling to capture the market and convey the sustainability of their products. Although modern consumers are making an active effort to buy more responsibly, many still have little knowledge about what phrases like, "all-natural", "Non-toxic", and "100% post-consumer recycled" truly implicate. Further confusing the issue are the varying degrees of consumer interest in “green” products. According to Mintel, currently 12% of consumers are classified as those that attempt to buy a green product every time they make a purchase, while 68% of consumers will only occasionally pursue a green option. Marketers must include this discrepancy along with a consumer’s preference for price, quality, and luxury.
Many marketers take advantage of this confusion to exaggerate their claims or make their products appear to possess attributes that have no relevance on the determination of sustainability. There is a market for green products, a market that will yield considerable profit, but the crux of green marketing is understanding how to exploit demand in the green market.
Cases of Environmental Marketing
Some companies have been able to create products with an emphasis on green initiatives that appeal to consumers. Perhaps one of the best examples is the Compact Fluorescent Light bulb (CFLs). With a cost of 2-3 times that of their incandescent counterparts, CFL sales struggled when they were first introduced. Not until marketing campaigns underscored the sustainability of CFLs while promoting the energy savings (about $26/yr per bulb replaced) did sales outpace those of incandescent bulbs.
Another excellent example is Brita’s marketing campaign focused on the environmentally aware. By promising that the use of their product reduces plastic bottle waste and is less damaging to already depleted watersheds, Brita has increased sales of their water filters. In this case, green marketing was not supplemented by an appeal to sustainability but was used as a standalone policy.
Today’s Green Consumer
When you think of a green consumer you might envision someone who cruises in a Prius while listening to NPR on the radio, but today's green consumer may just as well be the soccer mom down the street. Green consumers aren’t conforming to the traditional idea of environmentalists. They are spread across age, geographic, racial, and income groups.
Additionally, different groups consider different aspects of green products priorities, and these draws range from altruistic environmental protection to a purely financial concern due to the efficiency of most green products. Grasping an understanding of the “green” market, and doing it quickly, can be one of the best investments a company can make. However, churning out products that are supposedly green will no longer be an effective strategy as green consumers grow in both knowledge and number.
Green marketing campaigns can be successful, but assuming that reaping the benefits won’t require any more thought that a hastily created green campaign could be an unsustainable mistake. Products must actually have a reduced carbon footprint to be environmentally friendly, and marketing firms need to tout the sustainable aspects their target market consider the most important.