Green Marketing Definition

Green Marketing Definition explained by professional Forex trading experts the “ForexSQ” FX trading team. 

Green Marketing Definition

Green Marketing Definition

Green marketing refers to the process of selling products and/or services based on their environmental benefits. Such a product or service may be environmentally friendly in itself or produced in an environmentally friendly way, including:

  • Being manufactured in a sustainable fashion
  • Not containing toxic materials or ozone-depleting substances
  • Able to be recycled and/or is produced from recycled materials
  • Being made from renewable materials (such as bamboo, etc.)
  • Not making use of excessive packaging
  • Being designed to be repairable and not “throwaway”

Green Marketing and Sustainable Development

Green marketing is typically practiced by companies that are committed to sustainable development and corporate social responsibility. More organizations are making an effort to implement sustainable business practices as they recognize that in doing so they can make their products more attractive to consumers and also reduce expenses, including packaging, transportation, energy/water usage, etc. Businesses are increasingly discovering that demonstrating a high level of social responsibility can increase brand loyalty among socially conscious consumers.

Public Works and Government Services Canada has information on green procurement principles and resources for businesses. Ethical sourcing has become important to companies and consumers alike.

Are Consumers Willing to Pay More for Green Products?

The obvious assumption of green marketing is that potential consumers will view a product or service’s “greenness” as a benefit and base their buying decision accordingly. The not-so-obvious assumption is that consumers will be willing to pay more for green products than they would for a less-green comparable alternative product.

Is this true?

Apparently, yes. The 2014 Nielsen Global Survey on Corporate Social Responsibilitypolled 30,000 consumers from 60 countries to determine statistics on consumer preferences for sustainable purchasing, and found that:

  • 55% of consumers were willing to pay extra for products and services from companies committed to positive social and environmental impact (up from 45% in 2011)
  • 52% made at least one purchase in the past six months from at least one socially responsible company
  • 52% check product packaging to ensure sustainable impact

Interestingly, consumers in the Asia-Pacific region, Latin America, and the Middle East/Africa showed a higher preference (64%, 63%, 63%) to pay extra, whereas the preference in North America and Europe was lower (42% and 40%).

The Nielsen survey also looked at retail purchase statistics, and according to sales data brands that advertised sustainability on packaging had 2% year-over-year increase in sales from 2011 to 2014, as compared with 1% for those that did not.

Misrepresenting Products or Service as Green Can Backfire

While green marketing is growing greatly as increasing numbers of consumers are willing to back their environmental consciousnesses with their dollars, it can be dangerous.

The public tends to be skeptical of green claims to begin with and companies can seriously damage their brands and their sales if a green claim is discovered to be false or contradicted by a company’s other products or practices. Presenting a product or service as green when it’s not is called greenwashing.

For example, in 2012 a CBC Marketplace study found that Dawn Antibacterial dish soap, which featured a label showing baby seals and ducklings and claiming that “Dawn helps save wildlife” was found to contain Triclosan which has been officially declared as being toxic to aquatic life – environmental groups have called for it to be banned. Understandably, Proctor & Gamble, maker of Dawn products, refused an interview request by Marketplace.

Examples of Green Marketing

  • Grocers that advertise organic produce. The organic food industry has grown in leaps and bounds as consumers express an increased preference for non genetically modified foods that are free of pesticides.
  • Restaurants that promote “locally sourced” meats, vegetables, fish, wines, etc. Local sourcing is attractive to consumers as it projects an image of sustainability and willingness to invest in the community.
  • Toyota’s marketing of the Prius hybrid. (The Prius outsells all other hybrid vehicles, mostly because its unique styling reflects the typical owner’s passion for sustainability.)

Green marketing can be a very powerful marketing strategy though when it’s done right. See Three Keys to Successful Green Marketing.

Corporations That Are Embracing Sustainable Development

PepsiCo is one of the world’s largest food and beverage producers with annual revenues of more than $65 billion and a product line that includes brands such as Quaker, Gatorade, Pepsi-Cola, and Frito-Lay. Over the past decade PepsiCo has become a leader among corporations in water conservation and energy usage. In 2012 PepsiCo received the Stockholm Industry Water Award in recognition of its efforts to reduce water and energy usage across all of its business operations, from supply chains to factories.

PepsiCo sustainability efforts include:

  • Working with farmers to monitor water usage and carbon emissions and maximize crop yields
  • Retrofitting factories and corporate offices to improve energy efficiency – for example the 350 employee Casa Grande Frito Lay facility in Arizona generates half the plant’s electricity requirements with solar power, water is recycled to drinking standards, and waste is recycled wherever possible. The facility is one of over 20 other PepsiCo sites certified to LEED sustainability standards.

Also Known As: Environmental Marketing, Ecological Marketing, Eco-Marketing.

Examples: Chad’s green marketing campaign bombed because he made the mistake of packaging his environmentally friendly product in styrofoam.

See also:

10 Ways to Green your Business

Green Business Ideas for Entrepreneurs

Going Green Ideas for the Office

Green Marketing Definition Conclusion

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