University of Wollongong

Research Online
University of Wollongong in Dubai - Papers University of Wollongong in Dubai

2009

Green marketing: a challenge or an opportunity in

the global environment
Ravindra P. Saxena
University of Wollongong, [email protected]

Pradeep K. Khandelwal
Institute of Management Technology

Publication Details
Saxena, R. P. & Khandelwal, P. K. 2009, 'Green marketing: a challenge or an opportunity in the global environment', Global Studies
Journal, vol. 2, no. 3, pp. 59-73.

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Green Marketing: A Challenge or an Opportunity in the
Global Environment
Ravindra P. Saxena, University of Wollongong in Dubai, United Arab
Emirates
Pradeep K. Khandelwal, Institute of Management Technology
Ghaziabad, India

Abstract: The earlier perception of industry towards green marketing was that the pressure for making
business environment green and behaving in a more responsible manner especially comes from Gov-
ernment and its legislations. Now that old perception is changing throughout the globe as studies
performed on consumers reflect that in most countries consumers are becoming more aware and
willing to act on environmental concerns. There is a radical change in consumer preferences and life
styles. They prefer environment friendly products over the others and many times are ready to pay a
little extra price for such green products. Due to this shift from traditional marketing to green marketing,
companies these days are facing many new challenges. This can also be viewed as a source of new
opportunities to grow in today’s highly competitive global environment. A 2008 survey by the National
Geographic Society and GlobScan on consumer choice and the environment reported on current be-
havior in fourteen countries (including Canada, China, France, Germany, India, Mexico, Russia, the
UK and the US). The study found signs that consumer in all countries “feel empowered when it comes
to the environment and are taking some action in their daily lives to reduce consumption and waste.”
A global Synovate survey conducted in 2007 in association with Aegis, and repeated in 2008 in asso-
ciation with BBC World, also found that consumers in most countries are becoming more aware and
willing to act on environmental concerns. Most of such studies on green philosophy and green marketing
are done in developed countries but such studies however, remain conspicuously missing in the context
of developing economies like India. The present study discusses the concept of green marketing and
its interface with consumers in India. A field survey of consumers was conducted to understand their
perception towards green marketing and preference for green products. The data collected was analyzed
by using the T-test and One Way ANOVA. The results of the study are highly relevant in this challenging
era of liberalization and globalization and can be used by industries for exploring and exploiting new
opportunities. This study also provides future direction to researchers in the field of green marketing.

Keywords: Green Philosophy, Green Marketing, Green Companies, Green Brands, Green Consumers,
Sustainable Development, Competitive Advantage, Corporate Social Responsibility

Introduction

G
OING GREEN SEEMS to be the way to go these days. The book “Green Marketing
Manifesto” written by John grant states that “We are currently eating, sleeping and
breathing a new found religion of everything ‘green’. At the very heart of respons-
ibility is industry and commerce, everyone is now racing to create their ‘environ-
mental’ business strategy. In line with this awareness, there is much discussion about the
‘green marketing opportunity’ as a means of jumping on this bandwagon.”

The Global Studies Journal

Volume 2, Number 3, 2009, http://www.globalstudiesjournal.com/, ISSN 1835-4432
© Common Ground, Ravindra P. Saxena, Pradeep K. Khandelwal, All Rights Reserved, Permissions:
[email protected]
THE GLOBAL STUDIES JOURNAL

“The Growth of Green Marketing” an article contributed by Smart blog to the special
section of the Reno News & Review , states that “Today’s consumers are increasingly socially
conscious, with a growing concern to know if companies honestly treat employees fairly
while doing their part to protect and save the environment. Brand values like social respons-
ibility, benefit to the community, and “being green” are at the top of more shopping lists
than ever. Not unsurprisingly, enthusiasts of technology are leading the way.”
Today’s “green marketing” offers a unique set of challenges; the least of which is a pre-
valent lack of standards for identifying what it actually means to be a “green” product or
company. In combination with the increase in consumer awareness, marketers are seeing a
growing demand for eco-labeling, “green” advertising and the overall importance of reporting
on sustainability and renewable energy oriented products and projects. This obviously has
created a glut of misguided opportunities to nearly everything to be positioned as being
“green”, from a minor packaging change to actual services and products that truly reduce
energy and waste.
“Green marketing” isn’t merely a catchphrase; it’s a marketing strategy that can help you
get more customers and make more money. As in any marketing effort — the challenge is
doing it right the first time. With a struggling economy forcing businesses and consumers
to cut back on spending, marketers are more hard pressed than ever to find new, innovative
ways to pitch their product or service.

Enter the Latest Bandwagon - Green Marketing

“Sustainability will emerge from this financial crisis as global mega-trend offering business
opportunities similar to those that arose during the information age,” said Bill Roth (Entre-
preneur.com) in a recent MSNBC column. On top of the current financial crisis, entrepreneurs
and marketers are given the task to begin educating themselves and prepare for the latest
sustainable, green opportunity, says Roth. Green marketing is full of unique challenges in-
cluding a lack of standards determining what it means to be a green product or company and
cost of entry into the market.
Green marketing concept emerges from societal marketing (Kotler, 1999). Green marketing
is an attempt to characterize a product as being environmental friendly (eco friendly). It
holds the view that marketing which is a part of business not only has to satisfy customers
in particular, but also has to take into account the interests of society in general. That is, all
those who are affected by the activities of a business should be kept in mind when setting
the objectives and the policies of an organization. This has already helped to increase the
recent trend towards the “greening” of the companies.
As a philosophy, green marketing runs parallel to the societal marketing concept and es-
pouses the view that satisfying customers is not enough and marketers should take into account
ecological interests of the society as a whole, and hence become the part of Corporate Social
Responsibility (CSR). The Gulf News- Wipe Out waste (WOW) campaign in UAE highlights
regularly the corporate best practices. It says “Organizations, Companies who have used
their resources to save money, save the environment and deliver better services to their
customers. It shows how initiative and creative thinking can result in cost effective best
practices-an impetus to other businesses to follow suit and wipe out waste (Gulf News,
Sunday, May 31’ 2009). In the same issue it gives the examples of IBM and Philips as how
they are moving to new technologies to save energy and cutting cost of production and finally

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offering better value to consumers in the form of green products to use and a green environ-
ment to live.
Energy conservation is one of the major areas IBM is focusing on by working on smart
energy solutions globally. They are working towards “A Smarter Planet” which is also the
name of their campaign for making the planet green. Similarly, Philips has decided to analyze
their environmental activities by participating in the “green electronics” campaign initiated
by Greenpeace, a global non-governmental organization. In 2007, Philips unveiled their
sustainability agenda, Eco Vision, which focuses on improving the energy efficiency of its
products. Recently, the company launched 91 green products and in 2008, 25 % of their total
sales were from the eco-friendly products. They intend to increase this number to 30 % by
2012. Also, to add to their environmental drive, Philips announced a recycling system in
several countries. With the help of their partners they intend to integrate environmental costs
with their product prices, which means cost reduction and a safer planet (Gulf News, Sunday,
May31’ 2009).
We may find hundreds of such examples from companies and brands who are making
headway in this difficult arena, such as Marks & Spencer, McDonald’s, Sky, Virgin, Toyota,
Tesco, O2 to realize the potential of green marketing and green philosophy that the future
needs to embrace. The recently published Forrester study titled “Making the Case for Envir-
onmentally and Socially Responsible Consumer Products” states the findings of a survey
conducted between April and May of 2008, including over 5,400 U.S. adults asking about
their purchasing habits. Surprisingly, 65% of these consumers confirmed that they are highly
concerned about the environment or issues of global warming (this trend is up nearly 23%
from a November’ 2007 study). Also findings of this study reveal that 53% of these consumers
were concerned about sustainability. In short, we can state that the businesses that understood
this unique opportunity of becoming green and have been quick to leverage this philosophy
with their products and value chain are more successful than others.
As one aspect of green marketing ensures lot of new opportunities for sustainable con-
sumption and sustainable development, the other aspect reflects numerous challenges to
corporate. Bill Roth says in his MSNBC column (Entrepreneur.com) that green marketing
is full of challenges including a lack of standards determining what it means to be a green
product or green company and total cost of entry into the market by practicing green philo-
sophy. According to a survey of marketing managers at Eloqua’s user conference, two of
top factors preventing organizations from taking a shot at green marketing are a lack of
awareness and costs. Though market entry may be a challenge, nearly 60% of respondents
said they believe green marketing can provide a competitive advantage and 90% think the
industry has a responsibility to become more environmentally friendly. According to a recent
review of S&P 100 companies, industries that were once under high levels of government
regulation and public scrutiny in the past tend to have the most effective sustainable growth.
“The bottom line is that from challenges comes opportunity”.
It is only since 1990’s that the researchers have started academically analyzing consumers
and industry’s attitude towards green marketing, and providing guidelines to industries to
save cost on resources, recycle waste, adapt sustainable technologies, practicing green
philosophy and transforming into a green company to gain competitive advantage and sus-
tainable growth. But, most of such studies are done in the context of developed countries
and such studies however, remain conspicuously missing in the context of developing nations
like India. This research is an attempt to fill some gap in this discipline in the developing

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countries. The present exploratory research discusses the concept of green marketing and
its interface with consumers. The study is based on the data collected through a field survey
of consumers to understand their behavior towards green marketing and green products.

Review of Literature
During the last two decades the burgeoning environmental movement was named as the
“green movement”; environmentally aware consumers called the “green consumers”, product
designed to protect the environment called the “green products” and marketing that uses the
environmental claims called the “green marketing” (Peattie,1997). According to the authors
like Ottaman, (1993) and Ken Peattie, (1993) conventional marketing is out and Green
Marketing is in.
According to Hawken (Ecology of Commerce, 1995) business has three issues to face.
These are what it takes, what it makes and what it wastes. What it takes is materials from
the environment, (its ecosystem) through extracting, mining, cutting, hunting and other
means. What it makes is the products of commerce, goods and services that are derived from
the natural environment through the process of conversion and transformation. What it wastes
represents eco-costs arising from garbage, pollution and destruction of natural systems,
which are the consequences of taking and making processes. And these costs are not intern-
alized in most of the accounting systems so far.
The critical importance of industrial greening, in particular, is highlighted by a consider-
ation of the factors that contribute to large-scale environmental deterioration. Environmental
Impact equals a product of population (P), time’s affluence (A), time’s technology (T)
(Ehrlich and Ehrlich 1991).

I=PxAxT

P and A are socio-political phenomena and are beyond the control of an industry or business.
However, technology co-efficient is controllable. Technology applications reflect consumption
of resources in qualitative and quantitative terms, energy used and the efficiency level of
production & marketing and disposal of wastes. These are controllable technology decisions
that can increase or reduce eco-costs. The goal is to reduce the use of unsustainable techno-
logies and increase the use of clean technologies so that in the long run T is reduced to Zero
which theoretically means I (environmental impact) would be Zero at any quantity of P and
A.
It is predicted that the future markets would be directly linked to the development, transfer
and implementation of eco-friendly technologies, referred to as Environmental Technologies
(ET). All kinds of ET are available now. Also, technology has made available substitutes,
which are less resource intensive, for example, Copper has been substituted by fiber optic
cables in telecommunication industry, thus reducing the demand for copper as well impact
on environment associated with copper mining. IBM is in the process of developing ‘smart
grids’, which will bring into effect smart energy management, which is crucial for the reduc-
tion of greenhouse emissions. Additionally, it will provide reliable usage information to
consumers. The Beacon Institute in New York has collaborated with IBM to position floating
sensors in the Hudson River to monitor how the river reacts in different situations and thus
conserving water by using the optimized solution, an excellent example of CSR. In Germany,

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an energy provider works with IBM to provide customers with pricing information, as it alters
during the day. This allows the customers to modify their consumption behavior in order to
utilize the least amount of power during peak hours. In addition to the customers saving
money, it reduces consumers billing complaints, a classic example of green marketing.
Greening product or market is viewed as the outcome of rational strategic choice. It may
thus involve the search for different types of competitive advantage (Gladwin, 1992a). As
a result of staggering pollution levels and the diversity of environmental concerns, a wide
range of pressures is coming to bear upon industry/firms from many sides. The intensity of
these pressures varies by country, sector, industry and firm. It is clear, however, that firms
need to respond in order to ensure further use of scarce resources, public and political legit-
imacy, profitability and financial assurance (Schot, Johan & Fisher, Kurt 1993). These green
pressure groups can be classified as follows, which poses challenges to industries :

Customers Pressure: Consumers are increasingly better informed and becoming aware
of the environmental impact of consumer products and are thus demanding that industry
improves the environmental performance of its products. Today consumers are more
enlightened and especially in developed countries, they even seek for sustainable devel-
opment for their children.

Government Pressure: The threat of tougher legislation and the rising costs of com-
plying with environmental regulations and penalties in case of noncompliance are
possible motivating factors for firms to incorporate environmental concerns in their
strategies (Banerjee 1998). In India the Governments enacted laws concerning pollution
control and environmental protection, including Environment (Protection) Act 1986,
the Air (Prevention & Control of Pollution) Act 1981 & the Water (Prevention &
Control of Pollution) Act 1974. While environmental legislation represents the main
pressure, increasing costs associated with managing emissions are also an important
factor. Legislation can lead to different degrees of corporate environmentalism, depend-
ing on the level of strategy in which the firm includes environmental concerns. At a
purely functional level, responses to legislative pressure can mean complying with ex-
isting regulations. At a higher corporate level of strategy, threat of environmental legis-
lation and liability could influence decision on new business opportunities.

Investor Pressure: Investors are increasingly examining the environmental records of

potential investments, and some are showing a tendency to invest in “Greener” compan-
ies. This behaviour is based on the expectations that these companies will benefit
commercially from their green image and there are efficiency gains associated with the
adoption of cleaner technologies (Kahlenborn, Walter 1999).A survey indicated that,
among the different kinds of environmental information required by investors, liabilities
and litigation were ranked first and second respectively (Mastrandonas and Strife, 1992).
The US Securities and Exchange Commission have also mandated that corporation
must disclose estimates of current and future environmental expenditures and liabilities.
Companies are liable not only for any present damage to the environment but also for
all future damage and they must disclose the environmental risks known to be potentially
significant.

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Community Pressure: Local communities represent a powerful pressure for improved

environmental performance, particularly where firms are located in close proximity to
residential areas. This is applicable to both developed and developing countries. Where
problems and nuisance are associated with noise, vibration, and dirty/ foul smell; local
communities, both directly and indirectly through complaints to local environmental
health departments are capable of bringing considerable pressure to reduce environmental
problems. The result of many national polls tracking environmental concern among the
general public indicate that environmental protection remains high on the agenda of
the public in many countries, despite escalating economic woes in some areas. Three
separate national surveys, conducted in the US more than a decade ago by the
Yankelovich Organisation, the Roper Organization and Simmons Market Research
Bureau, indicate that between 25 % and 43 % of the American population constitute
the “Green” segment: consumers who are concerned about the environment (Earle,
1993). Many industries, such as the chemicals industry or the oil industry, by the very
nature of their products and processes, have a negative environmental image in the
public. This probably explains why the most visible polluters such as the chemical in-
dustry and the oil industry are the ones that are publicly and privately paying utmost
attention to the environmental impact of their operation. A negative public image can
influence firms in this industry to adopt corporate environmentalism as a strategy to
survive and grow in the marketplace. All the chemical corporations publicly affirm
their commitment to environmental protection and have developed environmental
mission statements or policy statements.

Business-to-Business Customers Pressure: They evaluate supplies on ISO 14000

standards, the environmental counterpart to ISO 9000, the International quality standard.
Moreover, the buyer looks for suppliers who follow environmental friendly processes
or Good Manufacturing Practices (GMP).

Employees Pressure: The interests and aspiration of the work force of trade unions
represent potential pressure resulting in lies a strong interest in the environmental per-
formance and health and safety aspects of the plant.

Other stakeholders include environmentalist, academicians, scientific community, media,

retailers, local government, suppliers and buyers. On the basis of the attitude and behavior
of all the corporate stakeholders, we realize that however, the task of practicing green
philosophy is quite challenging and full of pressures and tensions, but at the same time it
offers enormous opportunities to corporate in today’s highly competitive global environment.
Companies which can establish themselves with a green image will enjoy many distinctive
advantages in the marketplace, such as a positive company image; increased sales and market
share; improved employee morale and productivity; access to superior talent; enhanced
competitive advantage and gaining sustainable growth.
In the developed countries, the surge of environmental consciousness that followed Earth
Day in 1990 washed over the marketplace rapidly. In poll after poll, consumers claim they
are willing to change their buying habits – and even pay more for products – to protect the
environment (Pearce, 1990; Consumer Reports, 1991; Berger and Corbin, 1992; Coddington,
1993; Davis, 1993; McDougall, 1993; Ottoman, 1993). Manufacturers got the message that

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the Marketing Intelligence Service (Consumer Reports, 1991), which tracks new product
introductions, reports that the percentage of new packaged products making some kind of
green claim more than doubled between 1989 and 1990, rising from 4.5% to 11.4% of the
total. During the same year, the number of green advertisements appearing on television and
in major print outlets more than quadrupled, according to an audit by the advertising agency
J. Walter Thompson (Consumer Reports, 1991).
It is a fact that most studies on green consumers and green marketing have been carried
out in developed countries and only a few of them originate from developing countries. Such
studies are conspicuously lacking in the Indian context. It is against this backdrop that a
survey of Indian Consumers was carried out to know their perception towards green market-
ing. Whether, the companies in developing countries like India could also gain competitive
advantage by following the philosophy of green marketing and practicing the green business
strategies.

Methodology
Premise of this study is based on four assumptions (hypothesis) based on the above literature
review, that these days consumers prefer green products over non-green (grey) products;
their awareness for environmental concerns is high; they feel in future more and more people
will prefer green products as their attitude for consumption is changing; and companies who
practice green philosophy will have better opportunities for sustainable growth.
Exploratory research design is used to set and test the above hypothesis. A structured
questionnaire was executed on 400 consumers and a five point balanced Likert Scale was
used for understanding consumer behavior towards green marketing and green brands.
Cronbach Alpha Index has been used for checking the validity and reliability of hypothesis
and corresponding questions in the questionnaire. It was found that the set four hypotheses
are reliable on the basis of their respective Cronbach alpha value. The internal consistency
of data has been very high as Cronbach alpha value for all the hypothesis was found on the
upper side. Non probability approach of sampling was adopted by the researchers, and a
combination of Judgment and convenience sampling was used for selecting the subjects to
ensure the heterogeneity in the sample i.e. to include the respondents of both genders and
their marital status, different age groups, education level, income level, occupation and
residing areas. Out of the total sample of 400 consumers, researchers found 321 responses
valid to include in the study. Collected data was analyzed by using Parametric Tests (inde-
pendent samples equal variance-T Test).

Findings and Analysis

The findings of the study show that consumers of both the genders, whether married or un-
married, belonging to different age groups, having different qualifications and income status,
and stay in different locations, in general have an overall positive perception for green
products and green marketing philosophy, as in each of these segments mean scores of their
perception towards green marketing was found more than 3.5 on a 5-Point Likert Scale i.e.
towards higher degree of agreement. However, a little variation in their scores were observed
for example people who are married, more mature in age, having little higher income and
education level, and residing in cities and metros are comparatively more positive in their

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attitude towards green products and green marketing. To measure this variation Co-efficient
of variation can be calculated and compared to understand the difference in the attitude of
males and females, and similarly for married and unmarried. One way ANOVA can be applied
on different age groups, income levels, education levels and location categories to measure
the difference in attitude between the bands in each demographic variable. Profiling of re-
spondents is the future scope of our study, and is not performed in this study.

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Results
Levene’s test for equality of variances (t-test) indicates that results are highly significant at
1% for all the four hypothesis. From the above statistics we will observe that for each hypo-
thesis p-value is 0.0 even less than 0.01, and t-calculated is much higher as compared to t
critical at 1% (2.326), hence in each case null hypothesis (H0) is rejected and alternate hy-
pothesis (H1) is supported.

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The above results of the study provide strong evidence to conclude that these days’ con-
sumers prefer green products over non-green (grey) products (H1). Their awareness and
concern for environment protection is high (H2). They believe in future more and more
people will prefer green products (H3). Also, they feel that in future the companies who
practice green philosophy will have better opportunities for sustainable growth (H4).

Conclusion
In today’s global environment “green marketing” offers a unique set of challenges and ample
opportunities. It is quite evident from the above findings and discussions that consumers
these days are more aware and concerned about environmental protection and in general
their preferences are changing from non-green to green products. Also, they are of the
opinion that in future preference and consumption of green products will increase and com-
panies who follow the green philosophy will enjoy distinctive advantage in the market and
will register sustainable growth in today’s highly competitive global environment.
With the increase in consumer awareness about green revolution and their changing attitude
from non-green to green products, marketers are seeing a growing demand for eco-labeling,
green products, green advertising and the overall importance of energy conservation and
renewable energy oriented products and projects. These days, throughout the globe so many
new and old companies jump on the “green philosophy” bandwagon. We all know the success
story of McDonald’s whose growth worldwide continues due to its timely strategic changes
and adapting to changing customer needs. It faced severe challenges at different times, and
has evolved successfully with the health food revolution, launching dozens of new products
and moving toward environmentally-safe packaging and recyclable goods. GE’s “Ecomagin-
ation” campaign shown a spotlight on leading edge technologies, and in doing so, provided
tangible evidence to customers, investors, employees and other stakeholders that the GE is
making progress in a way that will help the environment and the bottom line. DuPont known
as America’s worst polluter in 20th century, is now transforming itself from a down-and-
dirty oil-and-chemicals business into a 21st century, eco-friendly life sciences firm. Dell’s
initiative of recycling computers and message to its customers states “Friendly to the envir-
onment. Friendly to your wallet”, it is another example of company’s efforts for sustainable
growth, generating profits while saving the planet. This new era of globalization, at one end
creates several challenges for industries but at the other end presents an array of opportunities,
where correct, appropriate and timely strategic decisions in practicing green philosophy may
lead a company towards sustainable growth.

Scope for Further Research

The authors are of the view that there is a scope for in-depth studies on green marketing to
be conducted in developing countries like India, not only on understanding consumers’ be-
havior or their perception or attitude towards green marketing but to study the detailed profile
of such consumers who have a more positive attitude towards green marketing and green
products. As reported by Mintel in their recent study that approximately 12% of consumers
in the U.S. can be identified as “True Greens” who seek-out and regularly purchase green
products. With them, 68% can be thought of as “Light Greens” those who buy green on
specific occasions. Such similar studies can be performed in the context of developing

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countries. Also, studies can be performed to assess consumers’ price sensitivity in accepting
green products. Studies relating to measure the influence of green branding, green packaging,
green labeling and green advertising on consumer behavior can be performed in different
Nations. As of now, a very limited literature on such researches is available in developing
countries, being this concept relatively not much old in these nations; therefore authors feel
that there is immense scope for further research in this field on consumers and industries
across different sectors and segments.

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 RAVINDRA P. SAXENA, PRADEEP K. KHANDELWAL

About the Authors

Dr. Ravindra P. Saxena
Dr. Ravindra P. Saxena is a faculty of Strategic Marketing at University of Wollongong in
Dubai. He has Masters Degree in Economics and a Masters degree in Business Administration
with specialization in Marketing. He did his Ph.D. in Economics in the field of marketing
of financial services. Dr. Saxena has his research interest in the area of Consumer Behavior,
CRM, Green Marketing and Marketing Communications. He has presented his research
work in a number of National and International Conferences. He has a large number of
publications in reputed journals and is on the editorial board of a few journals.

Dr. Pradeep K. Khandelwal

Dr. Pradeep K. Khandelwal is a successful entrepreneur and has a chemical industry in India.
He holds a Masters Degree in Chemistry and a Masters degree in Business Administration.
He did his Ph.D. in the field of Green Marketing. Dr. Khandelwal is an adjunct faculty of
Marketing in a few well reputed management schools in Delhi, India. He has published his
research work in a number reputed journals and has presented his work in seminars and
conferences at National and International level.

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