Greener Marketing

A Global Perspective on Greening Marketing Practice

Martin Charter, Michael Jay Polonsky

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351283069
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Building on the strengths of the material published in the hugely successful first edition of Greener Marketing, this important new title examines on a global scale the progress of environmental marketing in the 1990s and considers how social issues are increasingly becoming critical factors in how corporations meet the ever-growing demands and expectations of customers.

Despite the fact that such issues are increasingly important in marketing activities around the world, it is difficult for practitioners to keep up to date with complex and rapidly changing information and ideas. The purpose of this book is to provide practitioners and academics with best-practice examples and actionable recommendations on how to implement and appraise green marketing activities. It will provide information and ideas for those involved in marketing on how to incorporate environmental and social considerations, as well as providing new perspectives on marketing for environmental managers.

To achieve a comprehensive viewpoint, the book is split into three sections. The first sets out the strategic issues and rationale for green marketing, the second addresses tactical issues in more detail, and the third provides detailed international case studies.

Topics addressed by the global set of contributors include the growing area of products versus services, environmental product development, green marketing alliances, environmental communications, green consumers, eco-tourism and environmental marketing in developing countries.

reener Marketing is not only a sequel to the successful first volume, but redefines global progress towards the successful marketing of greener products and services.

1
Strategic Developments

1
Corporate Environmentalism and the Greening of Strategic Marketing

Implications for Marketing Theory and Practice

Subhabrata Bobby Banerjee

ENVIRONMENTALISM is enjoying a resurgence in today’s society and the 1990s can be arguably called the decade of the environment. The previous surge in public interest in the environment began in the 1970s, a decade that saw the enactment of important legislation such as the Clean Air Act in 1970, the Resource Conservation and Recovery Act in 1976, and the Clean Water Act in 1977 (Cairncross 1992). Public and media attention waned in the 1980s; however, environmental problems worsened. The late 1980s and early 1990s saw a re-emergence of environmental concerns: environmental problems such as ozone depletion, global warming and rainforest destruction were high-priority items on the public agenda. The Rio Earth Summit of 1992 was a defining event in the business–environment relationship and corporate environmentalism became a mainstream rather than a fringe activity.

Public awareness of environmental issues is now almost universal. A national survey conducted by the Roper Organisation in 1992 found that 20% of North Americans constituted the ‘True-Blue Green’ segment (Roper 1992). This segment reflects the highest level of concern for the environment in terms of consumers’ attitudes and behaviour. Interestingly, this greenest segment almost doubled from 11% in 1990 (Roper 1990), despite rising public concerns about economic recession, unemployment and healthcare. In recent years, this segment has shrunk to 10% (Speer 1997), as has the overall proportion of consumers who say they ‘care about the environment’ (63% in 1996, down from 72% in 1990). While the environment may not be the top-priority issue it was in the early 1990s, people still care about it: the apparent apathy is due to consumer perceptions that products and services are ‘greener’ than they were in the past (Speer 1997). Several recent surveys indicate that the state of the environment continues to remain a high-priority issue in many countries all over the world (Bonner 1997; Shanoff 1996).

Environmental issues have been studied by researchers in such diverse disciplines as economics, sociology, education and psychology since the 1970s. Interest in the environment appears to be reviving in recent years among marketing scholars: many international marketing conferences in the last four years have included special session papers on environmental issues, and several marketing journals have brought out special issues on the topic. In 1991, the American Marketing Association developed an environmental policy statement that urged all marketers to integrate environmental concerns into the business decision-making process, improve the accuracy of environmental claims for products and services, reduce environmental impact of their products, and work with industry, government and the public to find meaningful solutions to environmental problems (Marketing News 1991). The role of the business corporation in environmental protection is considered to be a major strategic focus for the nineties and, according to Varadarajan, ‘enviropreneurial marketing appears to be taking roots in a growing number of organisations’ (1992: 342). Enviropreneurial marketing is defined as ‘the process for formulating and implementing entrepreneurial and environmentally beneficial marketing activities with the goal of creating revenue by providing exchanges that satisfy a firm’s economic and social performance objectives’ (Menon and Menon 1997: 54).

This growing trend appears to reflect changes in the external environment¹ of market systems: increased regulatory forces and public environmental concern have the potential to influence marketing actions at both micro and macro levels. Governmental monitoring and control of the ecological impact of business activity is a process that is designed to minimise the negative consequences of environmental damage. These macro-level actions attempt to address societal concerns about environmental issues and have strategic implications for business firms that are manifested at the micro level.

This chapter will discuss the phenomenon of corporate environmentalism, i.e. the process by which business firms integrate environmental concerns into their decision-making process. Using theoretical perspectives from strategic management and marketing, the chapter will examine the ways in which environmental concerns can be integrated into the strategic marketing decision process. Some plausible driving forces of corporate environmentalism will be identified and linked to strategic business actions. Possible consequences of an environmental strategy will also be discussed and the chapter will conclude by discussing implications for marketing.

Marketing and the External Environment

Traditionally, marketing theory has largely ignored the influence of the biophysical environment in the formulation of strategy. Conventional approaches to environmentalism have focused on ‘green marketing’, i.e. the implementation of marketing programmes directed at the environmentally conscious market segment (Henion 1976). This view has been criticised as being unnecessarily restrictive, and researchers have recommended that an environmental marketing programme should emerge from broader issues arising from the relationship of a firm and its stakeholders (Coddington 1993). As we will see in the next section, this chapter takes a much more comprehensive view of environmentalism, involving all levels of strategy.

Conceptualisation of the external environment of marketing has, until recently, ignored the biophysical environment. ‘Environmental scanning’ is used widely in the literature as an important part of the strategic planning process (Zeithaml and Zeithaml 1984), but the biophysical environment plays virtually no role in the development of strategy. The external environment as defined in environmental scanning has, until now, been restricted to the social, political, cultural, technological, economic or legislative environments. What is often overlooked in the analysis of external environments is that all its aspects operate within and are constrained by the biophysical environment. An increase in environmental legislation in recent years has resulted in heightened environmental awareness among the business community and many corporations have been compelled to integrate environmental issues into their strategic planning process in order to meet stricter environmental standards. However, this process is not an easy one and, as many researchers have pointed out, it is important to examine ecological constraints on strategy formulation and these considerations should be applied at the broadest corporate strategy level (Gladwin et al. 1995; Jennings and Zandbergen 1995; Shrivastava 1995a). However, theory development and empirical studies examining environmental influences on corporate strategy continue to be scarce.

Theoretical attempts to link the biophysical environment with business organisations have resulted in two research streams. One area focuses on the theoretical and paradigmatic implications of integrating the environment into strategy. Researchers have called for the re-evaluation of existing neoclassical economic paradigms and have discussed the emergence of new paradigms such as the ecocentric paradigm and the sustainable development paradigm (Gladwin et al. 1995; Purser et al. 1995). The basic premise of these arguments is that attention to the natural environment is lacking in the literature and, in cases where environmental issues have been addressed, ecological principles are either subsumed or disassociated with the economic paradigm. These views challenge traditional assumptions of the neoclassical economic paradigm. The main criticism of the current economic paradigm is that it presents a distorted picture of the economic situation by ignoring environmental damage (Passel 1990). Macroeconomic indicators such as GNP and GDP do not reflect the costs of environmental damage. For example, one of the world’s worst environmental disasters, the Exxon Valdez oil spill, actually showed up as a gain in the United States’ GNP because of the products and services involved in the clean-up (Reilly 1990). Traditionally, environmental costs have been treated as ‘externalities’ arising from economic activity, and these costs are typically not borne by the producer and are thus not included in the market transaction. Public policy actions frequently attempt to internalise these externalities by estimating the external cost of pollution and by applying pollution taxes (Petulla 1980). These normative actions take into account the needs of the external stakeholders of business firms.

Stakeholder theory, business ethics and corporate social responsibility are some promising avenues for internalising environmental costs from the perspective of a business firm (Gladwin et al. 1995). The traditional view that the social responsibility of a firm means maximising profits for stockholders is being challenged by the stakeholder perspective (Bowie 1991; Westley and Vredenburg 1996; Klonoski 1991). Apart from stockholders, organisational stakeholders include employees, customers, the local community, government agencies, public interest groups, trade associations and competitors. Stakeholder theory implies that, since all stakeholders are legitimate partners in a business, a business firm must consider the impact of its actions on all stakeholder groups. Including the planet as a stakeholder (arguably the ultimate stakeholder) in this framework implies that business firms need to be accountable for environmental damage. According to a recent survey, an increasing number of North American consumers believe that companies should take greater steps to deal with environmental issues: 35% in 1996, up from 29% in 1993 (Lawrence 1998).

One problem with the stakeholder approach is that these theories only focus on ‘what should be done’ by organisations to address environmental problems and how organisations should be socially responsible and take into account the needs of all their stakeholders. Stakeholder theory does not provide too much detail on how to translate moral decisions into business actions, and there are pragmatic difficulties in operationalising stakeholder theory in real-world business decisions (Sternberg 1997). Different groups can have differing interests, and balancing competing interests to satisfy the needs of all stakeholders can be a difficult task (Fineman and Clarke 1996). In fact, some firms that attempted to position their operating strategy as ethical, environmentally and socially responsible are coming under increasing scrutiny by the public, media and government. False advertising claims about environmental attributes of products and services and attempts to ‘greenwash’ the public are among the criticisms directed at these firms (Entine 1995; Rosen 1995). The rise in public environmental concern in the late 1980s and the emergence of a ‘green’ market segment led many firms to try to position their products (often with dubious claims) as ‘environmentally friendly’. Since 1990, the Federal Trade Commission (FTC) has listed 32 cases of ‘suspicious environmentally related product claims’ (Speer 1997) and threatened prosecution if the companies in question did not stop making the claims (the companies did stop making the claims).

The second research stream focuses on the strategic implications of environmental issues for the firm and describes the range of strategic options facing a firm in dealing with environmental issues. How does the environment impact on manufacturing strategy? How does it impact on marketing strategy or on new product development? This research examines environmental issues that can influence the behaviour of decision-makers within firms (Hanna 1995). It examines how managerial behaviour can be modified to address environmental issues and exemplifies the position of this chapter: namely, the conceptualisation of corporate environmentalism as the inclusion of environmental considerations in the strategic planning process of the firm (Maxwell et al. 1997).

Examples of this phenomenon abound in the business press. McDonald’s launched a major waste reduction effort in alliance with the Environmental Defense Fund aimed at reducing waste by 80% in five years (Allen 1991). Procter & Gamble has invested in projects ranging from new, less environmentally harmful technologies to packaging modifications and industrial composting: under pressure from environmental groups, the company pledged to spend $20 million annually to develop composting facilities for disposable diapers (Coddington 1993). Firms are also engaged in actively seeking and cultivating environmentally conscious consumers by launching products with a ‘green’ appeal. For instance, the number of new green product introductions in national markets rose from 60 in 1986 to 810 in 1991. Moreover, the share of green products of all new product introductions rose from 1.1% in 1986 to 13.4% in 1991 (Ottman 1998). However, this figure has dropped over the last few years mainly due to increased consumer scepticism about environmental claims and the FTC’s attempts to regulate their use (Kangun et al. 1991; Scammon and Mayer 1995). Green product introduction, especially in consumer markets, has slowed in recent years as the debate on what is really ‘green’ continues. However, many green products, once in niche markets, are now part of the general merchandise found in all sorts of store. Dollar sales for these products (diapers, feminine hygiene products, paper towels, dishwashing liquids) have shown sustained growth over the last few years (Speer 1997).

It can be argued that the effects of the behaviours described above are negligible in relation to the actual ecological impact of these firms’ business activities and hence these actions are not really ‘environmental’. The above examples do not imply that the firms in question are ‘environmentally concerned’ or ‘socially responsible’ companies. However, changes in the external environment have had an effect on these firms’ strategies and led to some degree of integration of environmental issues. Corporate environmentalism as conceptualised in this chapter refers to the degree of integration of environmental issues into company strategy and is not intended to distinguish ‘good’ from ‘bad’ companies.

Corporate Environmentalism and the Business Firm

Changes in the external environment of the firm can influence their internal strategies. Policy actions designed to promote corpor...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Preface
• Foreword
• Introduction
• Section 1: Strategic Developments
• Section 2: Greening the ‘Marketing Mix’
• Section 3: Case Studies
• Bibliography
• Biographies
• Index