Return to Home Page 1997 Can Environmentalism and Marketing Coexist in the 1990's? Paul Herbig INTRODUCTION: Marketing is a way of thinking about the problems of exchanges between buyers and sellers. Marketing strategists approach the issue of exchange from the perspective of actual or potential customers and then create satisfying products or services to fill a need. Marketing is defined by the American Marketing Association as the performance of all activities necessary for the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. Organizations can approach the performance of the marketing functions from different avenues. Some pursue a product concept or a marketing concept as their strategic orientation toward the marketplace. The marketing concept first appeared in the 1950's. Definitions vary, but virtually all concur that the concept includes a primary focus on customer needs, long run profit via customer satisfaction, and integration of all functions in the organization in a manner designed to meet customer needs. Firms operating under the marketing concept start with the goal of creating customer satisfaction. Then they move forward in performing all activities necessary to introduce products, services, or ideas to the marketplace. The task of marketing management is to develop and execute plans for creating customer satisfaction. Their decisions usually concern which product or services will be offered, which type of promotional program needed to create awareness, what “acceptable” price to charge, and the distribution channels that will be needed. The first task mentioned that of which product or service to offer is greatly affected by the growing environmental concerns. Major growth in public attention paid to the rapid deterioration of the natural environment, environmental pollution, and global warming will provide new product opportunity and affect existing products to a large degree. Consumers will require products that are environmentally friendly but that does not require too much compromise on performance and value. Management is likely to resist the additional business costs and taxes required for environmental protection. This paper deals with the research question-Can Environmentalism and Marketing coexist in the 1990's? Marketing management must be willing to accept the things that they cannot change and change the things that they can. Management must assess the external and internal environments surrounding them by probing questions such as: What opportunities exist for introducing product/services that involve less toxic processes and technologies? Which products/services are easily recycled? What is the liability exposure in relevant markets for polluters? What new laws and regulations are likely in such areas as acid rain emission standards and air a water pollution that will broaden markets for equipment designed to address such problems? What can the business unit do to win environmental creditability points with the public, regulators, and lawmakers? _IMPORTANCE OF TOPIC: A strong relationship between marketing and environmentalism has been forged due to the inception of environmentally concerned consumers. Firms are now moving into customer and market driven integrated approaches that characterize corporate environmental progress in the twenty-first century (Woodlard, 1995). Ecological Marketing is the study of positive and negative aspects of marketing activities on pollution, energy depletion, and non-energy resource depletion (Apaiwongse, 1992). As a marketing strategy, its overall orientation to solve ecological problems is different from those legal-regulatory approaches most commonly employed in private and public sectors (Apaiwongse, 1994). It is more flexible and viable than other policies based on regulation. Marketers would appreciate and cooperate with free market mechanisms rather than strict regulations set to solve ecological problems. The New York consulting and research firm FIND/SVP promotes four criteria as key success factors for any environmental minded business-product, packaging, practice, and promotion (Kane and Shi). A green product runs cleaner, works better, or saves money and energy through efficiency. Green packaging includes recycled content in packaging materials, source reduction, refill alternatives and aerosol replacements. Green practice is when companies voluntarily recycle and attempt to reduce waste on a daily basis. Green promotion requires companies to be honest to consumers and not to mislead by over promising. The Federal Trade Commission’s (FTC) guidelines available to environmental marketing claims carefully detect the company’s promotion. The regulations are applicable to labels, advertising and promotions. Regulations on direct and indirect words, they strictly enforce symbols, emblems, logos, depictions or product brand names. Moreover, the Federal Trade Commission closely scrutinizes claims made by companies about their products environmental attributes; and if they are found within the product and/or package. “A company that claims an environmental benefit it is unable to substantiate its treading on the ice and leaving itself open to substantial penalties in a lawsuit.” (Kane and Shi) Common environmental terms include the following: 1. biodegradable/photodegradeable in which the entire product/package will completely break down and return to nature; 2. Compostable- the product/package will be broken down into usable mulch or other soil-conditioning materials; 3. Recyclable the product must be one that is easily collected, separated, or recovered from trash. It should be used to make a new package or product; 4. Recycled content they make out the product of materials destined for a landfill; materials from waste produced in manufacturing process or in post consumer use; 5. Ozone Safe or Ozone Friendly-the Product must not contain ozone-depleting substances (No CFCs); 6. Source Reduction-a change in the way they make the product or a change in business behavior(Kane and Shi). CURRENT STATUS: “As environmental issues become greater public concern, corporations realize that green marketing is a good corporate strategy.” (Marketing News, 1992) In fact, 77% of Americans’ find a company’s environmental reputation important in their decisions of which brands to buy. More than 56% refused to buy a product because of environmental concerns (Teufel, 1991). The 1990's is an Earth Decade. Environmentalism is emerging as a worldwide force and is among the most important issues facing management today. Firms such as McDonald’s are becoming leading proponents of recycling, while others such as 3M are investing in a myriad of pollution controls for its manufacturing facilities. Population demographics suggest that he aging baby boomers will continue to make environmental stewardship a high priority. The garbage crisis, the disappearing ozone layer, the attendant threat of global warming, and damage to the ecological system, as a result of such incidents as that of the Exxon Valdez, can dramatically affect the attractiveness of markets. Firms with skills and expertise in pollution control and environmental clean up are growing rapidly as demand accelerates for less toxic processes and technologies and better pollution control. Eliminating toxic wastes and hazardous emissions can help save resources and avoid future liabilities. The Clean Air Act imposes higher air pollution and acid rain emission standards. They are redesigning products in large numbers to make them more environmentally benign. For example, Pampers and Luvs disposable diapers have been under attack because of adverse effects on the environment. Still, other firms are redesigning products to reduce excess packaging and are turning to packaging that uses less plastic. Environmental Facts (Kane and Shi) ï The amount of garbage in the United States has more than doubled in the last 30 years, increasing from 88 million tons per year in 1960 to 196 million tons per year in 1990. ï One third of the waste is generated by businesses such as offices, restaurants, and retail stores. ï Paper including cardboard and newspaper, was the single largest component of municipal waste streams, amounting to 73.3 million tons, or 37.5 percent of the nation’s waste. ï Office paper was the third largest category of paper waste generated. ï Each U.S. resident produced 4.3 pounds of garbage daily in 1990, 1.6 pounds more than three decades ago. ï Toxicity of waste has increased as a multitude of consumer products now contain toxic chemicals that may enter the environment when the products are recycled, deposited in landfills, or incinerated. FUTURE POTENTIAL: Voluntary policy or regulation alternatives are compatible with the concept of ecological marketing and are going to be a vital strategy in the future. The Environmental Protection Agency has a Bubble Concept that gives industries and government cost-effective means to accelerate pollution reduction. It sets overall limits on pollutants for an entire plant, allowing business to determine the most appropriate mix of controls on the emission sources within the plant. It allows substantial savings to industry without relaxing government requirements. (Butler, 1984) According to Mindleson and Polensky, (1995) strategic alliances with environmental groups can provide five benefits to marketers of consumer goods: 1. Increase consumer reliability in green products and their claims; 2. Give firms access to environmental information; 3. Give the marketer access to new markets; 4. Provide positive publicity and reduce public criticism; 5. Educate consumers about key environmental of the firm and products. All these benefits will help marketers to overcome the problems associated with green products and green marketing claims. Table 1 suggests how strategic alliances, if used correctly, may assist firms in overcoming the problems associated with green marketing activities (Mendelsen and Polonsky, 1995). PROBLEMS WITH ENVIRONMENT MARKETING Alliance Benefits: Credibility Cynicism Confusion Increased reliability HIGH HIGH LOW Access to information- MODERATE MODERATE MODERATE Access to markets- MODERATE MODERATE MODERATE Better publicity- MODERATE LOW LOW Public education- MODERATE MODERATE HIGH (Table 1: Mendleson and Polnsky, 1995) IMPLICATIONS: Marketing managers could face unclear and ambiguous facets while making decisions. The lack of information, inablitiy to predict results from decisions, and confusion concerning how to meet expectations of green policy regulators could also arise. Providing information could change this via cooperation of businesses, regulators, and policy makers regarding reducing policy uncertainty. They must continue to be patient with the Environmental Protection Agencies and policies. From the marketing concept or customers’ orientation perspective, the most significant implication for consumer office executives and marketers is the identification of environmentally responsible markets that may be substantial enough to warrant the development of specific environmentally oriented consumer affairs/marketing programs (Tucker, 1980). Demographics are key in determining which audience or market to target. If marketers of consumer goods are going to be able to use green marketing in an effective manner, they need to develop strategies to overcome the problems. One strategy that organizations have recently adopted to make their environmental marketing activities more effective is to form a strategic alliance with an environmental group (Mendleson and Polonsky, 1995). There are formal associations, informal alliances, product endorsements, corporate sponsorships and licensing of products. Organizations can use all these types of strategic alliances to overcome the problems associated with green marketing. Each producer must carefully evaluate how its proposed alliance will help in achieving the objective before entering into a formal agreement with a given environmental partner. CONCLUSION: The marketing concept’s focus on consumer needs and satisfaction in the past had led to many challenges facing the Earth. They range from deforestation to desertification, from ozone depletion to ground water contamination, from atmospheric warming to algal red tides, clogged landfills and waterways, carbon dioxide, chloroflurocarbons (CFCs), sulfur dioxide and other chemical hazards. Due to the production of many products, for example, the 1988 Environmental Protection Agency reported: “Waterways served as industrial pollution sinks; skies dispersed smoke from factories and powerplants; and the land powered to be a cheap and convenient place to dump industrial and urban wastes.” Environmental Marketing “ . . . it is nothing less than applying the process and techniques of marketing toward restoring the Earth.” (Siegel, 1992) It includes domestic, international, and global effects to demarket products with CFCs. It has the goal of restoring the Earth to the goals of satisfying the needs of the consumer and the firm. Incorporating environmental marketing is imperative for the control of the severe environmental pollution affecting the Earth. Moreover, managers must recognize environmental improvement as an economic and competitive opportunity, not as a cost or threat. Companies that go for the innovation will reap what they sow. The adoption of improving, resource-productivity and competitiveness is vital. Companies should favor innovation-based solutions. Tracing their own discharges, scrap, emissions and disposal activity will give them insight about beneficial product design, packaging, raw materials and process changes. Environmental progress demands that companies innovate to raise resource productivity. Resisting innovation that reduces pollution, as the United States car industry did in the 1970's, will lead not only to environmental damage but also to the loss of competitiveness in the global economy (Porter and Van de Linde, 1995). 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