Green marketing as a trend towards achieving sustainable development

Dahhan A.1, Arenkov I.A.1
1 Saint-Petersburg State University

Статья в журнале

Экономика, предпринимательство и право
Том 11, Номер 11 (Ноябрь 2021)

Цитировать:
Dahhan A., Arenkov I.A. Green marketing as a trend towards achieving sustainable development // Экономика, предпринимательство и право. – 2021. – Том 11. – № 11. – doi: 10.18334/epp.11.11.113768.

Аннотация:
: Recently, interest in environmental issues has increased, and the field of business and marketing was no exception. So, many companies have started to pay more attention to green marketing due to the demands of governments and societies related to sustainability and the desire of these companies to achieve competitive advantages and higher profitability in the long run. Therefore, this article aims to shed light on the most prominent aspects of green marketing, starting from its concept, through its evolution, and then its strategies and elements of its mix, and ending with its advantages and difficulties related to its implementation. Thus, this article attempts to provide a fairly clear and comprehensive idea of green marketing, which in turn can help researchers, marketers and companies alike to better understand this type of marketing.

Ключевые слова: green marketing, sustainable development, green product, green price, green place, green promotion

JEL-классификация: M31, Q01, Q56



Introduction:

In the last years, many issues have emerged in the global community regarding environmental issues and the concern has increased about it, such as environmental pollution, forest destruction, and global warming and the depletion of limited resources. In general, the causes of environmental damage can be categorized into two factors, namely due to natural and human-caused events. Damage caused by humans is actually greater than the damage caused by natural disasters. This is because the damage done can occur continuously and tends to increase. In Fact, the highest principal perpetrators of environmental destruction are companies. The damage contribution reaches 70 percent [22]. This detrimental effect of the world’s economic activity on the environment drew the attention of various business fields; in this regard, marketing was no exception. With the emergence of the environmentalist movement in the early 1970s, the marketing field gradually embraced the concept of “Green Marketing” [3].

Today, green marketing has moved from a trend to a way of doing business and the green color is gradually becoming the symbolic color of eco-consciousness, environmental protection and the sustainability [11], [2]. And it is believed to bring positive values to the society by its activities, and it is imperious need of economy because of our limited resources. In the general view of the literature, green marketing has a set of five features which called “5 I”: [18], [23]

Table1: Green marketing features (5 I) [Source: Compiled by authors].

Green marketing features
Explanation
Intuitive
Must address lack of tendency to change shopping habits.
Integrative
Green marketing brings benefits to many areas at the same time, such as economy, environment and society.
Innovative
Green marketing motivates companies to introduce new and innovative products.
Invitational
Through green marketing, consumers are invited to buy environmentally friendly products.
Informative
It should work on environmental education and awareness raising.
Briefly, green marketing includes all marketing activities designed and implemented to satisfy human needs in ways that do not have a bad effect on the environment. It is not simply sales and advertisements, but it also includes a broad range of marketing activities that may include product design and redesign, green manufacturing and integrated marketing communication, etc. [24]. By reviewing the concept of green marketing, its essence and mechanism of action will become clearer.

Green marketing definition:

Defining green marketing is not a simple task where several meanings intersect and contradict each other since it incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising [10]. So, at present there is no universal definition of green marketing. There is also some freedom in the use of this term. It can be replaced by terms like ecological marketing, sustainable marketing, eco marketing, enviropreneurial marketing and environmental marketing [18], [24]. Green marketing can be defined as a holistic and responsible strategic management process that identifies, anticipates, satisfies and fulfils stakeholder’s needs, for a reasonable reward, that does not adversely affect human or natural environmental well-being [39]. It is a marketing that ties closely with issues of industrial ecology and environmental sustainability, such as extended producer liability, life-cycle analysis, material use and resource flows [25]. In fact, several authors also have defined green marketing in previous studies, but all of these definitions revolve around the definition provided by the American Marketing Association within its workshop on ecological marketing in1975, the definition is segmented into three major clusters: [19], [10].

1. Retailing Definition: The marketing of products that are supposed to be environmentally safe.

2. Social Marketing Definition: The development and marketing of products designed to minimize negative effects on the physical environment.

3. Environmental Definition: The attempts and efforts by organizations to produce, promote, package, and retrieve products in a manner that is sensitive or receptive to ecological concerns.

Despite the many concepts of green marketing, we notice that all of them focus on one meaning, which is to carry out all marketing practices, but on the condition that no harm to the environment, in addition to preserving various natural resources at the same time.

The evolution of green marketing and its link to sustainable development:

Green marketing emerged between 1970s and 1980s. However, the term green marketing came into force in the late 1980s and early 1990s and began to be popularized [28] [11]. The following table summarizes the stages of green marketing evolution:

Table2: Evolution of green marketing [10]

Stages
Decade
Important milestones in Green Marketing history
1st stage
1980s
Introduction of ecological products; ecological was equivalent to green products; green consumption was very low.

2nd stage
Early 1990s
High concern about green issues; still low consumption of green products; companies involve themselves in using less raw material, wasting less; corporate efforts in recycling, energy efficiency, corporate responsibility.
3rd stage
Late 1990s
Changes in production processes, technology and resourcing; sustainability marketing; Total quality management involves environmental issues.
4th stage
2000s – Till the present
Green products and services making a comeback; eco-friendliness /going-green become more and more popular between companies and consumers; the term of ‘sustainable green marketing’ is introduced.
In fact, as is clear from the table, the fourth stage of the development of green marketing, although it began almost 20 years ago, it is still prevalent until the present time. Where there has been no significant change in the concept and philosophy of green marketing, but it can be said that only the means of its application have clearly changed, especially with technological developments and the increasing environmentally friendly innovations. So, until now, the fifth stage of green marketing evolution has not appeared or has not been named according to the previous literature, and only the previous four stages are usually adopted.

Anyway, the fourth stage of green marketing evaluation indicates also a close link between the term green marketing and sustainable development. These days, concept of green marketing can be considered as one of the key business strategies of the companies for gaining the competitive advantage, ensuring sustainable consumption of their products in the markets and enjoying sustainable development in future. Green marketing concept emerges from societal marketing. It is a part of Corporate Social Responsibility (CSR) [4, 31, 32]. In general, sustainable marketing is a term that typically represents green marketing, and sustainability as a concept can be controversial, open to multiple interpretations, and difficult to translate into meaningful actions due to political, economic and technological constraints faced by businesses and governments [24]. The literature indicates that sustainable business models include three dimensions: “social, environmental and economic” or “people, planet and profit”, commonly referred to as the “triple bottom line” approach (Figure 1) which was developed by Elkington, 1994. [30]

Figure 1: Triple bottom line [30]

According to this model, companies must consider three variables: economic, environmental and social in their business decisions. In the environmental field (the planet), the use of natural resources should not harm future generations, thus reducing the environmental impacts of the work of companies. From an economic (profit) perspective, it is necessary to maintain the profitability of the company. In the social and political sphere (people), the link is concentrated in social justice, it is important to know how socially responsible an organization has been during its operations [28], [7]. In other words, our economic or social activities should be framed for optimal utilization of natural resources and keeping the environment safe. The solution to these existing problems can be rectified if we go for sustainable development [4]. The Brundtland Report (1987) for the World Commission for Environment and Development “a sub-organization of the United Nations that aimed to unite countries in pursuit of sustainable development” defined sustainable development as, “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” [30]. Sustainable development is the form of development which aims at sustainable consumption and sustainable economic growth and tries to protect the environment [4].

Therefore, it is the responsibility of companies to drive development towards more sustainability and to become greener, so that the goal of companies is to create markets for more environmentally friendly products and services and to educate and influence customers to change [2]. This reflects the essence of green marketing, which is creating value for consumers and reaping profits in the least harmful way to society and the environment in addition to its ability to form a strong culture of environmental responsibility within the business world as well as at the social level. The biggest proof of such an achievement is the remarkably raising consumer interest and awareness about green products and sustainable consumption and production’s importance during the several past years [14]. last but not least, marketers should analyze the changing consumer attitudes while recognizing the role that companies can play in protecting the environment to ensure society’s well-being. By practicing the philosophy of green marketing, deferent companies can contribute to economic growth, social prosperity and environment protection [4]. In fact, adopting green marketing practices that lead to sustainability is no longer just an option, but rather has become a fait accompli, as companies that do not engage in sustainable development will find themselves outside the market sooner or later, especially with the increase in competition and the increased interest of consumers, governments and all other stakeholders in environmental issues.

Green marketing strategy

A green marketing strategy takes the outlines of a traditional marketing strategy. Marketing strategy can be defined as the selection process of market segmentation according to the appropriate marketing mix of the product, price promotion and distribution which can satisfy the consumer demand in the target market and help the organizations achieve their set goals and objectives at the same time. In fact, there are several classifications of green marketing strategies. According to Ginsberg & Bloom (2004), there are four main green marketing strategies that firms usually choose while turning green, two strategies are defensive in nature; and two are assertive: [12]

Table 3: Green marketing strategies [Source: Compiled by authors]

Green marketing strategy
Strategy characteristics
Lean green strategy
Here companies create a competitive cost advantage through the considerable reduction of their energy consumption throughout their overall value chain; Nevertheless, such entities often abstain from promoting their Green Marketing efforts mainly for the fear of not being able to hold the high responsibility that the Green Marketing tag confers.
Defensive green strategy
This strategy means that company apply green marketing only in order to survive in times of high competition. Although under this strategy, firms’ environmental activities are usually candid; however, their green advertising campaigns are quite transient.
Shaded green strategy
It happens when firms intend to invest heavily into making their products and processes environmentally friendly but prefer to position them in the market based on other attributes. Consequently, the “environmental benefits are promoted secondarily
Extreme green strategy
Firms in this strategy tend to apply the Green Marketing principles throughout their whole product’ life cycle, their marketing mix is green by nature, targeting mainly green customers within the market.
Indeed, marketers should consider two factors before adopting green marketing strategies. The first relates to the probable size of the green market in their sector; the second to those marketers’ ability to differentiate their green products from the ordinary or green products of competitors. After considering these factors, marketers should answer four other questions: How substantial is the green consumer segment for the company? Can the company increase its revenue by implementing a green strategy? Does the company have the required resources and the commitment of the top managers to be green? Can the company compete with current rivals on environmental issues? So, when marketers have clear answers on these questions, they can choose on of previous strategies [1]. Anyway, a green marketing strategy has to address some fundamental areas of importance in order to gain competitive advantage. That’s need the implementation of important strategical and tactical actions related to constitute what is called "marketing mix".

Green marketing mix:

In general, green marketing mix includes four important elements as in traditional marketing. It usually referred to as 4Ps, that helps companies reach their Green Marketing and sustainability goals which are: Green Product, Green Price, Green Place (Distribution) and Green Promotion. Each company has its own marketing mix, but according to green marketing principle every component in the marketing mix will have a green perspective from establishing to introducing a product to the market [23], [9]. Indeed, marketing mix can be extended. For example, some authors added 3 elements: packaging, positioning, and people [23]. Whereas in case of service sector, three different components such as people, physical evidence and process are combined to make up 7P’s [9]. Regarding the consumer's point of view, we should add the 4 S's to the traditional 4 P's: (1) satisfaction, (2) safety (product safety and production for consumers); (3) social acceptance of products, production and activities of the company and (4) sustainability of products [28]. However, in this article, the green marketing mix (4p’s) will be highlighted as follows:

Green Product:

Environmental development goals call for reduced energy use, heat and pollutant emissions to maximize the sustainability of finite resources. Therefore, green products emerged in response to these goals because they help preserve and conserve the natural environment, conserve energy and resources, reduce or avoid the use of toxic substances in production, and reduce emissions and waste [15]. In general, green products refer to products that are used naturally, are made from non-toxic or recycled materials, or have less packaging/environmentally friendly packaging. Green products are regularly considered to be healthier and safer than other regular products [19]. The green product is the center of the green marketing mix and the most important part of the entire green marketing strategy. In business, the term green product is generally used to describe those efforts to protect or enhance the natural environment by conserving energy and/or resources and by reducing or eliminating the use of harmful agents, pollution and waste [2]. It is worth noting that there are a lot of proposed definitions of green products. Both studies [5], [25] provided an extensive review of the concept and definition of green products. At the same time, other similar terms used in the literature for green products include environmental products, ecological products, eco-product, and sustainable products.

Indeed, there are six ways to make products more environmentally friendly: Repair: extend the life of a product by repairing its parts; Re-new: extend the life of the product for a longer time; Remake: The new product is based on the old products; Reuse: designing a product to be used multiple times; Recycling: products can be processed into raw materials that can be used in the same products or in other products; Reduce: The product uses fewer raw materials and/or produces less disposable waste, providing similar advantages to the previous version or competing products [28]. Every traditional product can have a green counterpart to some extent, here are some examples of green products: organic foods, green clothes, energy-saving lights, natural goods, green hotels, green trips, electronic cars, environmentally friendly electronic home appliances, etc.

Green Price:

Green price is a key component of the green marketing mix. In general, price is an important element, because it can create a good combination of profits and returns, while other marketing elements may create costs [23]. In the past, many environmental and social costs were considered externalities, and were not included in the final product price. Due to legislative pressure and stakeholder pressure, this situation is gradually starting to change and many environmental and social costs are no longer considered externalities and are now being charged to the price [28]. Therefore, products that focus on the environment may charge a higher price compared to regular products due to the cost related to the environmental policies implemented by companies and efforts to provide these green products [15]. In fact, some customers are actually willing to pay more only if they believe the product adds value [15]. This value may be improved in performance, function, design, appearance, or taste. Environmental benefits are usually an added advantage but are often the deciding factor between products of equal value and quality [29]. Last but not least, companies and producers can rethink their pricing strategy in order to demonstrate that sustainable products do not necessarily need to be more expensive than traditional products. A company that can add environmental aspects to its products at a low price will gain a competitive advantage over its competitors [28]. This is in line with the authors' point of view, as one of the most important factors in attracting a larger segment of consumers to try green products is the appropriate price of these products. Thus, the more the price of green products is close to or less than the price of traditional products, the greater the chances of buying them from a larger segment of consumers.

Green Place:

Place can represent the location where a product can be purchased and it can be physical or virtual stores. The product should ideally be distributed away from not ecological ducts, to be arranged in a proper and environmentally-safe place where there is lesser or no pollution [29]. In fact, there are two alternatives for companies to reduce their negative impact on the environment. One of them is to attribute greater importance to local production, instead of selling imported products. This would avoid costs associated with transporting the products and consequently a reduction in the emission of greenhouse gases. The other solution would be to identify more environmentally friendly ways of supplying products to the market to meet consumer demands. Companies can look for stores that sell only ecological products or that respect the principles of sustainability [28]. Marketers pursuing sustainability may want to rate the different potential distribution channels for their commitment to sustainable practices. For examples, companies can make greater use of online selling of their products to reduce the amount of consumer driving to outlets [17]. In fact, with the shift towards an online environment on the one hand and the increase in environmental awareness on the other hand, there is a greater possibility to apply the principles of green distribution more. But of course, companies must have the basic infrastructure necessary for this.

Green Promotion:

Green promotion is primarily used as a tool to spread knowledge, create awareness of the green properties of products and advance the safety of environmental claims through the use of recycled, reused and recycled materials [13]. The goal of green promotion is to make an effect on the buying behavior of consumers by encouraging them to buy products that do not harm the environment and directing their attention to the positive consequences of their purchasing behavior, on themselves and on the environment [29]. Due to the lack of information, most customers are not fully aware of the importance of the green product, and therefore the green promotional strategy must realize this fact. To redirect this void due to lack of information, the company may exercise several green promotional tools [9]. Such as advertisements, marketing facilities, posters, forums, sales promotion, public relations, social media marketing, on-site promotions, videos and presentations, etc. [15]. Unlike traditional marketing, green marketing promoters have a big problem of conveying a clear message with the environmental terms used in promoting the products because they use terms like biodegradable, recyclable and eco-friendly. Therefore, marketers of green products and services have been criticized over the use of their difficult terminology [27].

In general, there are four guidelines that can be used to promote green products and services accordingly: 1) Products' information must be accurate to avoid misleading consumers. 2) Environmental claims made by companies must be clear as to whether they are applicable to packaging, product, and both. 3) Unnecessary information about the environmental benefits of products should be avoided, as consumers may become confused. 4) If companies are comparing the environmental attributes of one product to another, they should be clear [28]. In general, marketers must adhere to the previous guidelines when promoting green products. The more credible claims in promoting green products, the more likely they are to be purchased by consumers

Advantages of green marketing:

Green marketing is a concept which has been widely adopted by firms worldwide because of various reasons such as: [26], [16]

· Competitive pressure: To thrive in the market, companies need to compete with competitors by promoting their environmental products. In fact, this competitive pressure has encouraged companies to change their harmful environmental behavior.

· Opportunities: With increasing consumer interest in green products, many companies see this change as an opportunity to exploit and compete with environmentally irresponsible companies. In fact, they use green marketing as an opportunity to achieve their goals.

· Social Responsibility: Companies are members of a larger community and believe that they should be socially responsible like everyone else. In fact, they should not only try to achieve their profit goals but also try to achieve environmental goals as well. So environmental issues are integrated into the corporate culture.

· Government pressure: Governments around the world want to “protect” the consumer and society. This protection has a significant impact on companies' implementation of green marketing. Indeed, governments are forcing companies to be more responsible.

Therefore, companies around the world may adopt environmentally friendly practices in an effort to improve their image and performance. These practices are mainly represented by green marketing, which offers a lot of benefits to companies. In general, green marketing offers a lot of benefits, and here are the most prominent ones: Green marketing can build brand value; brings benefits from subsidies and potential incentives; it encourages green innovations; it attracts new customers; Fulfilling corporate social responsibility; compliance with environmental legislation and regulations; it enhances customer awareness on environmental protection [11]; it improves the public image and builds reputation of companies among their target customers; it protects from legal penalties; it achieves long-term growth along with profitability; it increases corporate revenues by improving the efficiency of their resources; it enhances competitive advantage over non-green companies; it opens new markets for products [23] , [6]. The above advantages illustrate the importance of green marketing and justify the desire of different companies to implement it. Unfortunately, its implementation is not without some challenges and difficulties. This will be discussed in the next paragraph.

Green marketing challenges:

Despite the many benefits of green marketing, there are many challenges associated with green marketing implementation. The following are the most prominent of these challenges [23], [11]: It is a relatively new concept for the market; consumers do not have enough awareness of green products; price of eco-friendly or green products are high; competition in the market is high; finding green alternatives is difficult; green product requires renewable and recyclable material which is expensive; green product technology up gradation needs huge investment in R & D.

In addition to the above challenges, companies may misuse the essence of green marketing through adopting one of the following failed marketing strategies: [21], [8]

· Green spinning: That is manipulation of green image via publicity.

· Green selling: Promote products or services with misleading or unproven green claims. Only describing products as environmentally-friendly to increase their sales effectively.

· Green harvesting: Using tactics only to reduce operating or production expenses and these tactics focus on a short term and do not address the issue of long-run sustainability.

· Entrepreneur marketing: Developing innovative green products to market without really understanding what the consumers actually want.

· Compliance marketing: Complying with certain standards to evade government sanctions by using simple compliance with compulsory environmental legislation as an opportunity to promote the company’s green credentials without taking voluntary initiative in green policies.

If companies want to engage in green marketing, they must face the above challenges and avoid any failed strategy. This is mainly through a commitment to credibility and following the correct principles of applying green marketing. According to Ottman et al. (2006), there are three key principles to avoid green marketing myopia: [20]

· Consumer value positioning: marketers should design green products better than alternatives, in terms of efficiency and cost effectiveness, health and safety, performance, symbolism and status, and convenience.

· Customer knowledge development: marketers should educate consumers with marketing messages and slogans that connect environmental product attributes with desired consumer value (e.g. “energy-efficient saves money”).

· Credibility of Product Claims: marketers should employ environmental product and consumer benefit claims that are specific, meaningful, unpretentious and qualified. They should also have product endorsements or eco-certifications from expert third parties.

Therefore, by following the previous principles and adhering to the ethics of green marketing in general, benefits will be achieved for companies and society alike, where profits will be achieved and the economic wheel will spin without harming the environment and without depleting limited natural resources, which ultimately contributes to achieving sustainable development goals.

Conclusion:

By reviewing the various aspects of green marketing in this article, it becomes clear to us its great importance not only to companies, but also to the environment and stakeholders as a whole. Although this type of marketing has not yet been adopted by many companies till now, the facts say that its future is very promising, especially with the trend towards sustainability and increased environmental awareness among consumers. And it is also clear to us the great role that green marketing plays in advancing sustainable development forward. Therefore, companies must respond to the market requirements related to the environment and assume their social responsibility, and realize the importance of green marketing more and engage in it in one way or another if they want to achieve competitive advantages, or at least, if they want to avoid being out of the market in the near future.


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