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Asia-Pacific Journal of Management Research

and Innovation
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Green Branding and Eco-innovations for Evolving a Sustainable Green Marketing Strategy
A.N. Sarkar
Asia-Pacific Journal of Management Research and Innovation 2012 8: 39
DOI: 10.1177/2319510X1200800106

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Article

Green Branding and Eco-innovations Asia-Pacific Journal of Management


Research and Innovation

for Evolving a Sustainable Green 8(1) 3958


2012 Asia-Pacific
Institute of Management
Marketing Strategy SAGE Publications
Los Angeles, London,
New Delhi, Singapore,
Washington DC
DOI: 10.1177/2319510X1200800106
http://apjmri.sagepub.com
A.N. Sarkar

Abstract
Green marketing is a new and evolving concept of marketing green and eco-products with well-defined eco-standardsconsisting of
wide-ranging eco-friendly products, satisfying eco-labelling and eco-footprinting standard norms. The article focuses on the significance
of green branding and eco-labelling with stress on eco-innovations with a view to developing a sound and sustainable green market-
ing strategy. The article examines how green consumerism can be linked to eco-market and to what extent this can be influenced by
cross-cultural differences in consumer behaviour. The scope of involving green marketing with corporate ethics and corporate social
responsibility (CSR) for inclusive growth of green markets has been explored. The article also examines how the green branding can
leverage the eco-market through the mechanism of eco-labelling and eco-footprinting, complimented by green supply chain manage-
ment practices. Finally, the article studies, at some length, the desirability of considering the aspects of sustainability factor and eco-
innovations which can help promote green consumerism.

Keywords
Green marketing, eco-market, green branding, eco-labelling, carbon footprinting, eco-innovations, green supply chain management,
green consumerism

Introduction a sharper focus since 1962, when Rachel Carsons (1962)


book, Silent Spring, was published, and it drew peoples
Green Marketing: The Concept attention to the anthropocentric root and frightening extent
and Significance of environmental problems arising out of industrial and
As a matter of common knowledge and understanding, economic activities (Kilbourne & Beckmann, 1998). From
green marketing broadly refers to the promotion or adver- the 1970s, ecological green marketing had been flourish-
tising of products with eco-concerns. Generally, terms like ing largely in the developed countries. In this early period,
bacteria-free, recyclable, refillable, ozone friendly, zero attention was paid to specific environmental problems,
carbon, renewable and eco-friendly, etc., are some of the and solutions were searched for them separately. This is
common expressions consumers most often associate with precisely the reason why only few products, companies
green marketing. In general, green marketing is a much and industries were influenced by this new trend. Main
broader concept; one that can be applied to consumer aims of green marketing at that stage were to minimise
goods, industrial goods and even services. Thus, green the dependency syndrome on special product groups
marketing encompasses a broad range of activities, includ- responsible for environmental pollution and to increase
ing product modification, changes to the production proc- awareness of new product categories. From the second
ess, packaging changes, remodelling and stylising as well part of the 1980s, a gradual shift had been experienced in
as modifying advertising. The terminology used in this the role and necessity of ecological marketing. Great
area has varied, and it inter alia includes green marketing, environmental catastrophes of the 1980s (such as the
environmental marketing and ecological marketing. explosion in the nuclear reactor of Chernobyl, water pol-
As for the genesis of green marketing as a concept, it lution caused by oil tankers and discovery of the ozone
is well worth looking at its evolutionary development hole) directed the attention even more to the interaction
over a time horizon. Environmental problems have got into between economy and environment, and in the process,

A.N. Sarkar, Officiating Director and Dean (Research), Asia-Pacific Institute of Management, 3&4 Institutional Area, Jasola (Opp.
Sarita Vihar), New Delhi 110025. E-mail: ansarkar1@gmail.com

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40 A.N. Sarkar

led to the evolution of sustainable eco-technology. By the during manufacture, use or disposal; consume a dispropor-
late 1980s and the 1990s, the notion of green products tionate amount of energy; cause unnecessary waste; use
became somewhat trendier, and the practice of marketing materials derived from threatened species or environments;
products as such became more commonplace in niche involve unnecessary use of, or cruelty to, animals; and
markets. But it was not until the start of the twenty-first adversely affect other countries. Polonsky (1994), how-
centurywhen concerns over global warming and conse- ever, argued that a majority of people believe that green
quential eco-degradation started gaining momentum marketing refers solely to the promotion or advertising of
that green moved towards mainstream and began influ- products having environmental characteristics, with terms
encing the practices of green product manufacturers. such as recyclable, refillable and ozone friendly being
This was synchronous with the promulgation of the some of the things consumers most often associate with
Kyoto Protocol that heralded the beginning of the clean green marketing. While these terms are green marketing
and green technology as well as Clean Development claims, in general, it is a much broader concept, one that
Mechanism (CDM) concept to save the environment can be applied to consumer goods, industrial goods and
from the emerging ecological disaster. even services (Roberts & Bacon, 1997). Green marketing,
According to a survey carried out by the Roper thus, understandably incorporates a broad range of activi-
Organization (in 1990), about 82 per cent of the American ties that include modification or changes into the design,
consumers were ready to pay 5 per cent more premium production process, packaging as well as advertising of the
price for products which were eco-friendly. On the basis of product (Polonsky, 1994). Elaborating it further, Polonsky
these results, not only the value-conscious firms can bene- stated that green or environmental marketing consists of all
fit from green marketing but also those who focus on the activities designed to generate and facilitate any exchanges
eco-friendly consumers. The most important concepts of intended to satisfy human needs or wants with minimal
the 1980s in essence were as follows: sustainability, clean detrimental impact on the natural environment. This was
technologies, environmental performance and green con- supported by Peattie (1995), who defined green marketing
sumers. Beginning in the 1990s, the agenda of green mar- as the holistic management process that is customised to
keting began to expand as new topics emerged that are identifying, anticipating and satisfying the requirements of
related to individuals motivation, such as perceived con- various stakeholders in a profitable and sustainable
sumer effectiveness, cooperative behaviours and strategic manner.
alliances (Kilbourne & Beckmann, 1998), and these, put Green or environmental marketing has also been
together, paved the way for green marketing. viewed, in recent times, as a tool towards sustainable
According to the American Marketing Association development and for strengthening brand image (Banyt &
(AMA, 2007, 2008, 2010), green marketing is the market- Gadeikien, 2008). As rising environmental concerns are
ing of products that are presumed to be environmentally encouraging consumers to have greater awareness of their
safe. Thus, green marketing incorporates a broad range of purchase decisions, firms are implementing measures
activities, including product modification, changes to the geared to offering green substitutes for traditional prod-
production process, packaging changes as well as modify- ucts. Consumers and companies alike are consequently
ing advertising. Thus, green marketing now refers to holis- more willing to pay premium prices for green alternatives
tic marketing concept wherein the production, marketing (Laroche et al., 2001). This corroborates well with what
consumption and disposal of products and services take Maxwell et al. (2000) mentioned: all things being equal,
place in a manner that is less damaging to the environment, consumers would prefer a green product over the one that
with growing awareness about the implications of global is less friendly to the environment with a growing number
warming, non-biodegradable solid waste, harmful impact of people willing to pay a premium price for the former
of pollutants, etc. In this sphere, both marketers and con- from organic foods to energy-efficient appliances
sumers are becoming increasingly sensitive to the need for (DSouza et al., 2004).
a gradual shift toward green products and services. Grant (2007) has suggested that primary objective of
According to Pride and Ferrell (1993, 1995), green market- green marketing is to educate and make people willing to
ingalso alternatively known as environmental marketing go green, because it has an influence on changing the life-
and sustainable marketingrefers to an organisations style and behaviour of potential consumers. There are
efforts at designing, promoting, pricing and distributing steady movements in public interest and concerns about
products that will not harm the environment. Elkington the environmental issues. Companies like BASF and DuPont
(1994) defined green consumer as one who avoids prod- are leading the greening of heavy industry and have had
ucts that are likely to endanger the health of the consumer the biggest impact on environment. Simula et al. (2009)
or others; cause significant damage to the environment stated that the word green is widely used today for new

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Green Branding and Eco-innovations 41

technologies and new products which have more sustainable environmentally responsible. Many years later, the Federal
impact on the environment. Green, pro-environmental, Trade Commissions (FTC) guidelines were established to
sustainability, environmentally friendly and ecology set national green marketing standards (FTC, 2009, 2010),
are the terms commonly being used to describe that the but it received several criticisms. The concept of sustaina-
firms processes and products consume less energy, they bility, intrinsically bound to green concept, reflects the
are recyclable, lessen waste and pollution and conserve long-term holistic understanding of a products impact.
natural resources. Viewed from that perspective, green Therefore, when reviewing a product for its degree of
marketing tries to harmonise environmental concerns and greenness, one must also consider the impact of its entire
individual interests. According to Peattie (2001), the evolu- life cycle from the point of raw materials extraction to the
tion of green marketing has three phases. First phase was manufacturing process, to consumer use and finally, to the
termed as ecological green marketing, and during this end-of-life waste passage. This is called a life cycle assess-
period, all marketing activities were planned to help envi- ment (LCA) and ensures that all the products impacts are
ronment problems and provide remedies for environmental taken into consideration. Life cycle analysis (LCA) and/or
problems. Second phase was environmental green mar- product line analysis (PLA) studies measure the cumula-
keting, in which the focus shifted on clean technology tive environmental impact of products over their entire life
that involved designing of innovative new products which cyclefrom extraction of the resources used to create the
take care of pollution and waste issues. Third phase was product to all aspects of production (refining, manufactur-
sustainable green marketing. It came into prominence in ing and transportation), to its use and ultimate disposal.
the late 1990s and early 2000s. The LCA can be measured in terms of reduction of impact
on the environment, or for reasons of better safety and
health considerations for builders and occupants. Green
What Makes a Product Green?
products also show an increasing return on investment
Beyond the assumption that the term green indicates through energy savings, increased productivity of building
environmentally friendly attributes, the term is quite occupants and overall resale values in buildings (Intini &
vague and subject to multiple interpretations, depending Khtz, 2010) because of vastly expanding eco-market
on any number of factors, including local, national and potentials and spiralling demand of green products with
international business practices; market structures; soci- fast changing lifestyle.
etal norms; politics; and government regulations. In their Today, terms like green and greener have become
book, The Green Consumer, John Elkington, Julia Hailes buzzwords of choice to describe all things sustainable and
and John Makower (1993) discussed several characteris- environmentally friendly. While they are often used inter-
tics that a product must have to be regarded as a green changeably, each term actually means something different.
product. They contended that a green product should not In their critical essay, Green Versus Sustainability: From
(ibid.): Semantics to Enlightenment, Yanarella et al. (1999)
explained that green refers to individual products and
1. endanger the health of people or animals; processes, whereas sustainable relates to whole systems
2. damage the environment at any stage of its life, of which individual consumer products and other commer-
including manufacture, use and disposal; cial materials are a part. According to the authors, Green
3. consume a disproportionate amount of energy and evokes small incremental improvements in social prac-
other resources during manufacture, use or tices, modern technology and human habitats, while sus-
disposal; tainability implies a revolution in organising our personal
4. cause unnecessary waste, either as a result of exces- and collective lives and inhabiting the planet. The expres-
sive packaging or a short useful life; sion environmentally friendly refers to products or serv-
5. involve the unnecessary use of or cruelty to ices that are not harmful to the outdoor environment or its
animals; inhabitants. However, for more than a decade, the US FTC
6. use materials derived from threatened species or (2010) has issued warnings about products or services mar-
environments. keted as environmentally friendly, environmentally safe,
environmentally preferable or eco-safe, noting that prod-
Stephen and Kane (1996) noted in Business Horizons ucts, packaging and services have some environmental
that a product can be recognised to be green if it runs impact and that such marketing terms do not help consum-
cleaner, works better or saves money and energy through ers make informed choices (FTC, 1999, 2010). These stip-
efficiency. Practising green is inherently proactive; it ulations will be relevant to all products claimed to be green
means finding ways to reduce waste and otherwise be more and eco-friendly.

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42 A.N. Sarkar

Objectives cent). In recent time, growing public awareness of environ-


mental issues has brought with it a corresponding change
Given the broad scenario about the currently evolving con- in the buying decisions of a significant segment of American
cepts of green marketing, green branding, eco-labelling consumers. As the Encyclopedia of the Environment
and green innovations, the broad objectives of the article observed that many consumers, and not just the most envi-
may be stated as follows: ronmentally conscious ones, are seeking ways to lessen the
environmental impacts of their personal buying decisions
1. To look at how green consumerism can be linked to through the purchase and use of products and services
eco-market, and in doing so, what should be the perceived to be environmentally friendly (Stoeckle et al.,
future marketing strategy and to what extent this can 1994).
be influenced by cross-cultural differences in con- In the field of green marketing, different studies have
sumer behaviour. classified consumers based on different demographic, psy-
2. To study how the green marketing concept can be chographic, cultural and personality variables. The most
enlarged in the broader context of green environ- useful classification in the Indian context was found to be
mentalism and corporate social responsibility. based on three parameters: concern for the environment,
3. To examine how the green branding can leverage the awareness of environmental issues and environmentally
eco-market through the mechanism of eco-labelling, friendly behaviour (Davis, 1993; Jain & Kaur, 2004). The
carbon footprinting, standardisation and certification. key findings of these studies show that though Indians lack
4. To study how the corporations can create environ- sufficient knowledge about environmental issues, there is a
mentally friendly eco-market by making green generally high concern for the environment and most sur-
claims in terms of maintaining eco-footprinting prisingly, Indian consumers score very high on environ-
standard norms. mentally friendly behaviour, especially with respect to
5. To study how critical is the supply chain manage- conservation of resources and purchase decisions, espe-
ment in effective green marketing. cially for buying greener products. The most important
6. To study how the sustainability factor and eco- benefit that individuals seek from environmentally respon-
innovations can help promote green consumerism sible behaviour is the desire to act in an environmentally
under a holistic green market framework. responsible manner.
Many companies are competing to push their green
Green Consumerism: A Vital Link products in the eco-market space, and their green brand-
ing mechanisms are different. For instance, green market-
to Eco-market
ing encompasses special eco-centric focus and efforts
A green consumer is someone who is very concerned about such as Procter & Gambles developing disposable dia-
the environment and therefore, only purchases products pers that can be composted and detergents that are degra-
that are environmentally friendly or eco-friendly with little dable, concentrated towards reducing packaging bulk in
or no packaging, products made from natural ingredients landfills. AT&T has substituted biodegradable cardboard
and products that are made without causing pollution or for plastic foam packaging. AlbertoCulver markets
detriment to the environmental quality (like emission haz- ozone friendly hairspray containing no chlorofluorocar-
ards). The green consumer would be the type to drive a bons (CFCs). The Body Shop has over 700 boutiques
hybrid vehicle and buy products made with hemp or those worldwide selling its non-animal tested, mostly natural,
made from recycled or waste materials.1 Green consumer- product line with recycling/refilling policies. A Canadian
ism is essentially a movement to encourage people to buy survey of marketing executives from that countrys 500
food and other products, such as organic foods or lead-free largest firms found that 47 per cent had already altered
petrol, which are regarded as environmentally friendly their packaging to make their products more environmen-
goods. One of the possible goals of green products is to tally friendly. Biodynamic Agricultural Society of
encourage consumers to modify behaviour. For example, Australia and New Zealand has a focus on export-oriented
some studies suggest that consumers are willing to pay organic farming as a green marketing strategy.
more for some green goods at premium prices (Ottman, Companies use green marketing not only to increase con-
1992, 1993), although more recent results in the Morgan sumers positive response but also to cut costs to make prod-
Polls (Ha, 2008; Mobium, 2007) suggest that, globally, the ucts economical to customers. For example, McDonalds
majority of consumers believe green goods are overpriced used recyclable materials for wrappers and reduced its
(Australia, 65 per cent; New Zealand, 66 per cent; the environmental waste by 60 per cent; their give a tree away
United Kingdom [UK], 74 per cent; and the US, 72 per day led the way for other fast food companies to follow

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Green Branding and Eco-innovations 43

suit. All of McDonalds napkins and tray liners in the res- redesigning them, eliminating some of them, modifying
taurants are made from recycled paper, as are the carry-out technology and/or inducting new technologyall with the
drink trays and even the stationery used at the headquar- objective of reducing the environmental impact aggre-
ters. By making its drinking straw 20 per cent lighter, gated for all stages. Ottman et al. (2006) suggested that all
McDonalds has saved one million pounds of waste per marketing activities must convince the consumers through
year. The effective use of green marketing has made the identifying the basic product features by resorting to the
public aware that McDonalds Corporation is an environ- following strategies:
mentally concerned company, and this has generated not
only publics consumer approval but additional revenues as 1. Consumer value positioning: A firm should focus in
well. American seafood producers and distributors of tuna designing a product which is differentiated from and
fish certify their products as dolphin-free tuna and take performs better than the alternatives.
stringent measures to minimise dolphin deaths in the tuna 2. Calibration of consumer knowledge: In designing
fishing industry. The increased environmental concern over marketing communication, a firm should always
dolphin-free tuna by the US has effectively convinced present the products unique features, environmental
foreign firms to follow stringent US eco-conservation benefits and solutions that match with the customer
standards. norms and values.
3. Credibility of product claim: By certification of
claimed green products.
Sustainable Green Marketing
Strategy A firm should build confidence in the consumers minds
For environmental advertising to be successful, a firm must by presenting or communicating benefits of the products
first have an environmental strategy put in place (Easterling that are specific and meaningful and satisfy the consumers.
et al., 1996). Advertising strategies have changed dramati- While consumers decisions are influenced by the media,
cally over time, from image orientation to product ori- as a stakeholder, the role of media cannot be ignored, and
entation in the 1990s (ibid.). Process and factual orien- it is the only source through which consumers receive
tations are the least utilised orientations which some much of environment-related information (Ottman, 1993).
management workers suggest to be a business opportunity Davis (1993) and Glaser (2009) explained that consumers
(ibid.). Two dimensions of the positioning strategies of want more particular and specific information about the
newly created green brands are seen to have a significant product or service which they are about to buy in case they
impact on brand attitudes, namely, the functional and are claimed to be environmentally friendly. Vaccaro (2009)
emotional dimensions, according to Hartmann et al. presented two main strategies for the companies in respond-
(2005). Their study indicates that there is an overall posi- ing to their external environment as proactive strategies
tive influence of green brand positioning on brand attitude. (first mover) and reactive strategies. The proactive strate-
While the emotional dimension proves to be more effective gies and reactive strategies move in a continuum and the
for the product (a car) used in the study, it cannot, however, response time may vary widely depending on the customer
be concluded decisively which dimensional aspect is more behaviour and the lifestyle.
effective. Both language and images can be used to craft Companies make their offerings competitive through
such messages by promoting particular interests and ide- price/quality or prestige/image strategies from their com-
ologies (Hansen & Machin, 2008). Rivera-Camino (2007) petitors, but eco-friendliness and social responsibility can
suggests that a firms greening process is not linear, but make companies more profitable on a sustainable basis.
an uneven process which several green marketing strat- Early mover companies have enhanced their image as
egists have used to target different stakeholders. environment friendly. The municipality-owned electricity
Clearly, green marketing should be an integral part of companies of Stockholm and Goteborg set an example as
the overall corporate strategy for the firms specialising in early movers. In 1999, Swedish state-owned railway
green eco-products (Menon & Menon, 1997). Green mar- company, SJ, bought Bra Miljval labelled electricity
keting also ties closely with issues of industrial ecology (Kaberger, 2003). Other studies conducted, such as by
and environmental sustainability, such as extended pro- Karna et al. (2003), have suggested that companies can
ducers liability, life cycle analysis, material use and create competitive advantage if they use innovations related
resource flows and eco-efficiency. Firms can go green in to environmental sustainability rather than simply comply
three ways: value-addition processes (firm level), man- with the government regulations. Fuller (1999) has pre-
agement systems (firm level) and/or products (product sented the strategy matrix of environmentally improved
level). Greening the value-addition processes could entail and reinvented green products, as illustrated in Figure 1.

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44 A.N. Sarkar

Figure 1. S trategy Matrix of Environmentally Improved and through its environmentally sound attributes. Ecologically,
Reinvented Products sustainable products will not be commercially successful if
Column 1 Column 2 green brand attributes are not effectively communicated
(Pickett et al., 1995). Coddington (1993) and Meffert and
Environmentally Environmentally Kirchgeorg (1993) suggest that green positioning is an
Improved Products Reinvented Products essential factor in the success of green branding
strategies.
Market Product Development
Current
Penetration/Product Strategy Cross-cultural Difference: The Epicentre of
Markets
Improvement Strategy
Green Marketing Strategy
Market Development Diversification Strategy Green marketing actually began in the early 1980s in
New
Strategy
Markets Europe when European companies began selling green
productsnew types of disposable diapers, detergents,
Source: Fuller (1999).
batteries, aerosols and other productsthat do not damage
the environment. This manufacturing of new types of prod-
ucts grew quickly and soon caught on in the US and other
1. The strategies presented in Column 1, Market parts of the world. For the British, damage to the environ-
Penetration/ Product Improvement Strategy and ment ranks with a world war as the most important threat to
Market Development Strategy, are based on mak- mankind. Air pollution in Athens has long been the subject
ing some changes in the product attributes and man- of deep popular discontent and partly explains why the
ufacturing process. Greek government has aligned itself with hardline northern
2. The strategies presented in Column 2, Product European Union (EU) countries in leading the fight to
Development Strategy and Diversification Strategy, impose stricter new limits on auto emissions. The growing
require high management commitment and product political power of green parties in Scandinavia, the Benelux
is reinvented according to the ecosystems impact and especially Germany has combined with public concern
(Fuller, 1999). over such issues as the death of the forest (Waldsterben)
from acid rain to force mainstream political parties to endorse
Similarly, Simula et al. (2009) proposed that in order to tough environmental legislation. In Italy, public outcry over
develop the product, companies should understand cus- the waste exported to developing countries prompted the
tomer attitudes and norms towards greenness, by using country to adopt a tough new hazardous waste bill.
pre-marketing campaigns. Simula et al. (2009) have pre- In Italy, Fiat leads the world in green cars. Since the
sented a quadratic model of actual verses perceived green- 1970s, Fiat has been recycling 80 per cent of its factory
ness of the product (see Figure 2). waste, and it was one of the first European car manufactur-
Herein sustainability superiority and actual greenness, ers to produce cars which ran on lead-free fuel. Fiat has
based on standardised certification procedure, have a also established a huge recycling scheme called Fiat Auto
greater chance for market attractiveness to cater to envi- Recycling.2 Under this scheme, second-hand cars are col-
ronment-friendly green consumerism. Positioning a brand lected with the aim of recycling 100 per cent of the cars.
as a green brand, in this case, entails an active communi- Fiat is also the world leader in diesel car and electric vehi-
cation and differentiation of the brand from its competitors cle technology. The electric car that was developed by Fiat
is the first truly green standard production car, a worlds
Figure 2. Simulas Actual versus Perceived Greenness Model first one which will likely be the start of a new generation
of cars which are designed to support the environment.
High Green washed Sustainability
BMW and Mercedes Benz are examining clean technology
product superiority
Perceived for cars.
Greenness An honest Non- Missed Germany has passed the strictest green marketing laws.
green product Opportunity The German Blue Angel eco-label (first introduced in
Low 1978) is used as a symbol of environmental friendliness in
Germany, and by 1993, over 4,000 products in 58 catego-
Low High
Actual Greenness ries carried the label. This Blue Angel logo originated
because of the growing consumer demand in Germany for
Source: Simula et al. (2009). environmentally friendly products. Eighty per cent of

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Green Branding and Eco-innovations 45

German households are aware of the eco-label and it Economic Bureau found that consumers named Kao as the
receives widespread support from manufacturers. On 1 most environmentally conscious company in the country.
December 1991, the German Packaging Order (called the Kao reduced its overall energy use by 40 per cent in the last
Topfer Law after its environment minister) became law. 17 years. Japans Health Ministry devoted its 1990 White
The guiding objective of the order is waste avoidance; Paper to the environment, but the Japanese Environmental
waste which cannot be avoided shall be recycled (Micklitz, Agency has far less enforcement power than US
1999). Hoover was the first manufacturer to be awarded an Environmental Protection Agency (EPA). Some 28,000
EU eco-label and claims that as a result, its sales in Germany locally tailored environmental agreements in force between
have trebled and sales in the premium sector of the UKs Japanese industry and local communities act as a non-tariff
washing machine market have doubled (EU Cross-border barrier (Back to basics, 1993).
Monitor, 1995). Other nations are also sponsoring eco-la- In countries bordering on the Mediterranean, the eco-
belling programmes. Canada has issued Environmental logical awareness of the average household is much less
Choice, guidelines for products ranging from paints to strongly developed than in countries further to the north,
reusable cloth diapers. Japan has its own eco-mark pro- such as Germany, Holland or Norway (Simon, 1992). For
gramme; its symbol consists of two arms embracing the example, in Italy, environmental issues are not nearly as
world (Codington, 1993). important as in Germany. In Denmark, soft drinks may be
In many Latin American countries, including Mexico, sold only in glass bottles with refundable deposits. In the
packaging requirements are less stringent and less sophis- Netherlands, old or broken appliances must be returned to
ticated. As such, it is difficult to meet the standards of the manufacturer for recycling (Oatis, 1996). Green con-
Europe. Although they may cry foul, proposing these are sumerism first appeared in the Netherlands with a boycott
hidden protectionist requirements, General Agreement on of aerosols containing CFCs, and spread to Germany,
Tariffs and Trade (GATT) makes it clear that countries do thanks to consumer magazines which rated brands green
have the right to impose stringent rules for environmental qualities through their own laboratories. In Denmark, a
reasons. Mexicans are more concerned with economic pri- power plant, an enzyme plant, a refinery and a wallboard
orities (basic necessities of life) rather than societal or factory, all use one anothers by-products as source materi-
environmental concerns. An economically developed als. The Netherlands has effluent charges. Deposits are
country like the US or western Europe has the luxury of mandatory for bottles in Germany and cans in Norway.
putting environmental and societal issues at the top of their
agendas. This is not so for undeveloped or developing
Green Marketing vis--vis Corporate
countries like Mexico. Colombia is one Latin American
Social Responsibility
country that is developing an eco-labelling programme.
The objectives of the Colombian eco-label are to promote Society expects businesses to act in a more responsible
environmental conservation in several sectors, addressing manner towards the social community as well as provide
a variety of aspects, including polluting emissions and goods and services efficiently. By this, the social responsi-
energy and natural resource use, as well as to provide the bilities of any corporate house have become an important
domestic industry with the means and incentives to increase aspect of the modern era, in which conscious efforts are
its competitiveness through the implementation of envi- being made by an organisation to maximise its positive
ronmental management strategies. This programme also impact and minimise its negative impact on society as a
assisted Colombian export firms in penetrating foreign whole and on various groups and individuals within soci-
markets, especially those such as the EU, with considerable ety (Davis & Fredric, 1984; Dutta, 2009). The European
green consumerism interest (Gaviria, 1995). Commission defined corporate social responsibility (CSR)
Japan is ambiguous about the environment. Japanese as a concept whereby companies integrate social and envi-
government budget allocation to the environment has ronmental concerns in their business operations and in their
increased from $617 million in 1988 to $3.5 billion in 1991 interaction with their stakeholders on a voluntary basis
and doubled again through 1995. Japanese consumers are (Juscius & Snieska, 2008). Companies should work for
becoming more bargain conscious, frugal and environmen- betterment of society as a whole, and more greening of the
tally aware. Recycling of second-hand goods is flourish- world. Sirsly and Lametrz (2008) suggested that CSR is
ing. Consumers are leaning towards healthier, ecologically not always meant to be generating the monetary and eco-
sounder products. Suntorya Japanese beer company nomic value for the firms, but it helps to promote firms
sells a brand called The Earth, with cans and bottles embla- unique efforts towards society. When a third party endorsed
zoned with the slogan Suntory is thinking about the Earth. its corporate efforts, the reputation of a firm is reinforced in
The can has stay-on rather than pull-off tabs. Japans the eyes of both market and non market stakeholders

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46 A.N. Sarkar

(Sirsly & Lametrz, 2008). Karna et al. (2003), however, 7. Reckitt Benckiser Group Plc. has launched a global
stated that environmental issues were considered solely the campaign, Our Home Our Planet, to help consum-
responsibility of the government. Proactive marketing ers save money and minimise their carbon footprint
strategies and government support can help build long- as part of its Carbon 20 programme.
term environmental sustainability.
Globally, there has been a growing concern on issues CSR has recently become increasingly topical: Its inte-
pertaining to accountability linked to environmental qual- gration into different areas of activities, including market-
ity and its safeguard, well within the purview of green mar- ing, is becoming a necessity and a priority task for many
keting. A heightened awareness has been created in the companies. More often, the consumers need to buy eco-
minds of the consumers that their purchasing behaviour friendly, safe and clean products that can be identified.
can actually wreak a serious dent to the ecological balance This underlines implied necessity of green marketing appli-
of the planet (Rahbar, 2008). Coupled with this realisation, cation in the implementation of CSR. Since there is a lack
the shifting demands and preferences of consumers are of studies in the field of green marketing, the identification
exerting pressure on the companies to transform their busi- of its priorities in the context of green consumers decision
ness activities to cater to the environmental needs in a more making to purchase eco-friendly products is becoming
responsible way (Olson, 2009). Being socially responsible increasingly relevant. Scientific studies (Bakanauskas &
by offering environmentally sustainable products and serv- Liesionis, 2002; Ottman & Reilly, 1998; Ramanauskiene,
ices, therefore, becomes the prime concern to those compa- 2008) show that properties of eco-friendly products have a
nies that are striving to attain a competitive advantage in big influence on consumers decision-making processes
the business world (Wahid et al., 2011). Hence, ideally, regarding the buying behaviour of eco-products, even at
green marketing concept as well as the green marketing premium prices.
strategies should be built around the key focus of CSR.
Some recent corporate examples of compliance of CSR in
the context of green marketing by some Indian business
Green Branding to Leverage the
firms are illustrated next.3 Eco-market Opportunities
The going green movement continues to build momen-
1. Broadcaster New Delhi Television Ltd, or NDTV, in tum, and companies are quickly realising that they better
partnership with car maker Toyota Kirloskar Motor become eco-friendly now or risk losing business. Plenty of
Pvt. Ltd, launched Greenathon on 7 February new companies are starting out as a green brand and older
2011a 24-hour live television event to create companies want to re-brand their products to be more eco-
awareness about environmental issues. friendly. Since both new and existing customers surf the
2. Reva Electric Car Co. is developing a market for Web, one can accomplish green branding through a vari-
electric cars and thereby a sustainable business ety of ways. Implications of green branding are widely
firms are gearing up to bring about a change in the known and the emerging green consumer purchase behav-
way their businesses and products are perceived. iour suggests this scenario4:
3. Panasonic Corp. is working out a go-to-schools
interactive campaign to spread awareness among 1. Demand for green (or greener) products will increase
students on global warming and other environmen- over time as attitudes and social norms evolve.
tal issues, to begin with. 2. Demand will increase as new product choices
4. Nokia India Pvt. Ltd has launched a campaign to become available and information that enables con-
recycle electronic waste. Consumers are encouraged sumers to make informed purchase decisions (for
to dump old mobile phones and accessories, irre- example, green labels) is introduced.
spective of brand, at any of the 1,300 green recy- 3. Consumers will start to shift spending to greener
cling bins at Nokia priority dealers and Nokia care brands within a category.
centres. 4. Consumers will increasingly prefer to purchase from
5. Henkel India Ltd launched eco-learna learning companies with a brand that is perceived as green,
initiativeto inculcate environmental concern and regardless of whether or not the product that they
sustainability. ultimately purchase is one of the companys green
6. Hindustan Unilever Ltds (HUL) Surf Excel Quick products.
Wash talked about how housewives could save two
buckets of water while using premium detergent As consumer behaviour towards green consumerism
powder to wash clothes. is inflicted by the opportunistic global climate change

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Green Branding and Eco-innovations 47

challenge, companies have rapidly learned that being Emotional elements should be considered prime among
greenand being seen to be greenmakes good business the visible choices of green branding and positioning of
sense. To add value to the green products, certification eco-products. As a corporate strategy, green positioning
marks, labels and logos are increasingly being used by can be based on at least three conceptually different types
brand owners to signal their green credentials and so as to of emotional brand benefits: (a) a feeling of well-being
be able to boost their market share. A properly controlled (warm glow) associated with acting in an altruistic way;
eco-label offers consumers a guarantee that a product or (b) auto-expression benefits through the socially visible
service has been independently verified to meet given envi- consumption of green brands; and (c) nature-related bene-
ronmental standards (Bowman, 2009). In the US alone, fits stemming from sensations and feelings normally expe-
consumer spending on products and services that are per- rienced through contact with nature. These are the results
ceived to be environment-friendly will double to US$500 of a sensation of emotional affinity towards nature, for
billion, according to the 2007 Green Brands Survey con- example, loving nature or feeling one with nature. Most
ducted by Landor Associates, Penn, Schoen & Berland people experience feelings of well-being or even happiness
Associates, and Cohn & Wolfe (ImagePower Green when they are in contact with natural environment. Past
Brands Survey, 2007). Consumers not only want to buy communication campaigns for GM-Opel, British Petroleum
green but are also prepared to pay a premium price for it. (BP) and the Spanish power utility, Iberdrola, have embed-
Nearly 70 per cent of some 2,000 people surveyed in the ded the brand in pleasant imagery of natural environments,
US, the UK, Germany, the Netherlands, Australia and aiming to evoke vicarious nature experiences as emotional
Japan said they would pay a premium price for green brand benefits. All these, in sum, mean, Green consumer-
energy alternatives, such as wind, bio-energy and solar ism masks its market-driven origins under a thick layer of
power. According to last years poll by IBM Global Energy morality packaging.5 Green positioning by leveraging
and Utilities industry, Australians were the most willing to through emotional appeal to the customer can be best illus-
pay more for renewable energy, but Americans said they trated through an advertisement brought out by Mercedes
would pay the highest premium20 per cent or more. Benz.
Consumer brands have been quick to respond to shoppers Research from the Carbon Trust Standard in March
desire to buy green. Wal-Mart announced last year that it 2009 states that 62 per cent of consumers (from a sample of
would provide carbon ratings for all its electronics items. 2,000 UK consumers) are influenced by environmental
Procter & Gamble, the consumer goods giant behind such considerations in their purchasing decisions and this has
brands as Gillette and Olay, has committed to selling $30 increased from a year ago (Carbon Trust Standard, 2009).
billion worth of greener products over the next five years. Some brands of Philips and Unilever have started to inte-
Rival Unilevermakers of Dove and Liptonhas pledged grate sustainability criteria throughout their product lines,
to reduce waste and water consumption in its supply chain. introducing both green products as well as improving
In Brazil, Unilever and Wal-Mart have built sustainable standards on product lines, in order to be more environ-
houses within stores which are made from recycled prod- mentally efficient. The challenge for companies today is to
ucts, showing how to make everyday living more eco- find a balance between informing consumers of responsi-
friendly. Darnall (2008) examined the question of how an ble business practices, while innovating for a new low-
environmentally proactive hotel can gain competitive dis- carbon economy by offering choice for consumers giving
tinction by way of green branding. It demonstrates that due cognisance to implicit corporate social responsibility.
not all green branding options are created equal.
Marketing of eco-products is not quite as simple as it
Carbon Footprinting and Eco-labelling
seems. It is generally observed that the ecologically sus-
tainable products will not be commercially viable to pene- The term carbon footprint is commonly used to describe
trate the market if green brand attributes are not effectively the total amount of carbon-dioxide (CO2) and other green-
communicated. Meffert and Kirchgeorg (1993) suggest house gas (GHG) emissions for which an individual or
that green positioning is an essential factor in the success organisation is responsible. Footprints can also be calcu-
of green branding strategies. Green brand positioning strat- lated for events or products. Certification marks, labels and
egies may be classified as functional or emotional. A car logos are increasingly being used by brand owners to sig-
brand, for example, may be considered environmentally nal their green credentials and thereby boost their market
sound if the models in question cause significantly lower share. A properly controlled eco-label offers consumers a
emissions than competitors. Several Toyota car brands guarantee that a product or service has been independently
recently launched in the US are branded as green cars verified to meet given environmental standards. In
because of zero emission claims. Australia, for example, the Greenhouse Friendly label is

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48 A.N. Sarkar

a registered certification mark, administered by the gov- broad types of eco-labelling fitting under the three types of
ernments Department of Climate Change. Some compa- designation: (a) Type I (ISO 14 024); (b) Type II (ISO 14
nies are developing their own eco-standards and product 021); and (c) Type III (ISO/TR 14 025). The use of respon-
labelling. Multinational companies (MNCs) like BASF sible labelling or certification methods has become univer-
and Philips have launched their green logo and tick symbol sal in green marketing. Whether based on international
in 2011 to identify products with significantly better systems (ISO), sectoral standards (Forest Stewardship
energy efficiency than the nearest competitor products. Council) or internal programmes created by companies
Eco-labelling could be of two kinds: performance based themselves, they can greatly enhance corporate credibility
and process based. An eco-labelling scheme based on prod- if they are overseen by independent bodies. Nonetheless, a
uct performance, such as labels claiming biodegradability distinction needs to be drawn between official eco-labels
of packaging, sustainability in production processes or developed and assigned by independent bodies or institu-
non-pollutant aspects of product usage, will require certain tions and companies own eco-labelling. Scientific
trust on the part of the consumer. A systems approach to the Certification Systems offer a wide range of green product
eco-labelling of food and other products requires the certifications, including single-attribute claims, multiple-
involvement of multiple stakeholders as one partys actions attribute claims and comprehensive cradle-to-grave LCA-
affect others environmental performance. The specific cri- based claims.
teria used in eco-labels also vary. In some cases, these Comprehensive labels are generally based on LCAs and
might relate to specific types of claims being made relating attempt to evaluate the overall environmental impact of
to the composition of products and packagingbiodegrad- a product or service against a set of comprehensive pre-
able or recyclable; process issuesdolphin-free or made established criteria. Many eco-labels and certification pro-
with X per cent recycled content; use issuessaves X grammes certify products based on life cycle parameters,
energy; and certifications based internationally, nationally such as energy use, recycled content, and air and water
or by industryISO 14001, Nordic Swan, EUREPGAP, emissions from manufacturing, disposal and use. Others
Integrated Pest Management or Forestry Stewardship focus on a single attribute, such as chemical emissions
Council. In this way, labels are not merely messages but from products that directly impact indoor environmental
also claims about particular environmental properties or quality (IEQ). While credible eco-labels and product certi-
features of a product to help promote green ideas. fications certainly help prevent the use of misleading envi-
Eco-labelling is a voluntary approach to environmental ronmental claims (known as green washing), they do not
performance certification that is practised around the eliminate it. In fact, according to the 2010 TerraChoice
world. An eco-label identifies a product that meets speci- report, more than 32 per cent of green products carry a fake
fied performance criteria or standards. In contrast to green green labelup from 26.8 per cent in 2009. Product manu-
symbols or claim statements made by manufacturers and facturers and consumers, therefore, still need to be cautious
service providers, an eco-label is awarded by a third-party and vigilant (TerraChoice, 2010). In view of this scenario,
organisation for products or services that are determined to organic claims are now regulated in over 60 countries by
meet specific environmental criteria. When specifying or a certification system based on official standards.
purchasing a product that carries an Energy Star label, for Like the carbon footprinting, the ecological footprinting
example, the purchaser knows that the product meets an (EF) is among a number of emerging, progressive sustain-
energy efficiency standard set by EPA. Different types of ability indicators that attempt to arrive at a value represent-
organisations, including government, non-profit and for- ing the impact of human activities and demand on the
profit organisations, have developed eco-label programmes. Earths ecosystems. The EF compares human demand with
The breadth of, and issues addressed by, eco-label pro- the planet Earths ecological capacity to regenerate, and
grammes vary. For example, Energy Star is focused on represents the amount of biologically productive land and
energy use during equipment operation, while other eco- sea areas, measured in global hectares (gha), needed to
labels address life cycle environmental concerns and still regenerate the resources a human population consumes and
others cover ergonomic and worker health and safety to absorb and render harmless the corresponding waste
issues. (Wackernagel, 2000). Ecological footprint is a tool for meas-
Worldwide, there are numerous eco-labelling pro- uring and analysing human natural resource consumption
grammes, developed by businesses, government agencies and waste output within the context of natures renewable
and non-governmental organisations. Each eco-label has and regenerative capacity (or bio-capacity). The ecological
its own criteria that products need to meet in order to be footprint is defined as the area of productive land and water
certified. The International Organization for Standardization ecosystems required for producing the resources that the
(ISO) has identified and developed standards for three population consumes and assimilate the wastes that the

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Green Branding and Eco-innovations 49

population produces, wherever on Earth the land and water considering the development of an environmental market-
is located (Wackernagel & Rees, 1996). Ecological foot- ing or green claims guide. This reference document draws
print is an ecological camera that takes a snapshot of our together the common topics and areas found across current
current demands on nature. Ecological footprint could be green claims guides known to the Working Group. This
useful in making socio-political decisions regarding opti- reference document outlines what could be considered for
mal scale. Optimal scale is an ecological and socio-political inclusion in an environmental marketing guide. However,
target for sustainability. The footprint accounting process it does not provide an exhaustive list of what may apply to
could be used to describe a rough, if cautious, target of a guide or for all situations. Further, the list is not necessar-
optimal scale. Efforts are underway to standardise and ily endorsed by all members but is provided as a sample of
refine the methodology underlying the footprint, and to examples for consideration.
incorporate areas or issues not currently captured. As the worlds foremost business organisation, the
International Chamber of Commerce (ICC) promotes high
standards of business ethics through the development and
Green Marketing Claims and
dissemination of codes and guidance on responsible mar-
Communication Norms
keting and advertising communications. The ICC recog-
A green or environmental claim is any type of claim nises that there indeed is a difference between claims that
where explicit or implicit reference is made to the environ- express an inspirational aspect of a companys commit-
mental or ecological aspects relating to the production, ment to the three pillars of sustainable development, or to
packaging, distribution, use/consumption or disposal of improving the environment, and claims about a particular
products. Environmental claims can be made in any product or service. As a general matter, the code already
medium, including packaging, labelling, package inserts, requires that all marketing communication be legal, decent,
promotional and point-of-sales materials, product litera- honest and truthful. As applied to green claims, this over-
ture, radio and television, as well as via digital or electronic arching concept means that environmental claims should
media such as e-mail, telephone and the Internet. A green be based on sound, appropriate scientific information rele-
claim can be a statement or representation about the envi- vant to actual use, operation or disposal of the advertised
ronmental benefits of a particular product or service. It can product, not unsupported assumptions. Additionally, all
relate to a single attribute of the product. Such claims can marketing communication should be prepared with a due
focus on a products chemical content, whether or not the sense of social and professional responsibility, and should
product can be recycled, emissions or impacts on specific conform to the principles of fair competition, as generally
media (air, water, land), the type of raw material used in the accepted in business. The code also provides that market-
product and other attributes that affect the environment. A ing communication should not condone or encourage
green claim can also communicate information about the actions contrary to accepted standards of environmentally
environmental impact of a companys manufacturing responsible behaviour.
practices, as well as the companys mission and values One of ICCs landmark achievements is the Consolidated
regarding its impact on the environment. Such claims may ICC Code of Advertising and Marketing Communication
refer to a carbon-neutral production process, or a com- Practice (Code) issued in 2006. The Code provides practi-
panys efforts to make its administrative functioning more cal guidance to the business sector, including advertisers
environmentally sustainable. Green claims can include and advertising agencies, as well as to self-regulatory
pictures, colours and logos as well. As with all types of advertising organisations and national governments. The
advertising, green or sustainable claims in advertising must Code defines advertisement or advertising as any form
be evaluated in their entirety to assess how the reasonable of marketing communication carried by the media, usually
consumer will interpret the advertising message. Advertisers in return for payment or other valuable consideration. It
must be especially cognisant of the potential that linking a includes a broad admonition that advertisers avoid or
single, truthful environmental claim (for example, that a appropriately qualify general claims of environmental ben-
package is recyclable) to a broad claim that the product is efit, a position that has been the underpinning of advertis-
safe for the environment, sustainable or the like, will ing guidance for years. In the UK, the Direct Marketing
mislead consumers about aspects or attributes of the prod- Association has recently issued a new code of practice that
uct that may not be so favourable. is intended to encourage green marketing. The code states
The Green Claims Working Group of the International that any environmental claim must be supported with a
Consumer Protection and Enforcement Network (ICPEN high level of substantiation and be based on the full cycle
Working Group Green Claim Report, April 2008) has of the advertised product, unless the marketing communi-
written a reference document to assist agencies who are cation states otherwise. The code also promotes the need

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50 A.N. Sarkar

for recycled materials, environmental management and an but for businesses, it is often critical. Communication
environmental policy. campaigns that highlight an organisations commitment to
One notable recent development in advertising is the sustainability may therefore be designed to embody and
proliferation of green claims and growing interest in con- convey an image change. Undertaken as part of a corpo-
cepts of environmental sustainability and sustainable rate communication approach, they always have a more or
development, with commensurate growth in general less strategic impact on brand image. Accordingly, it is
claims that products or services are eco-friendly, green, interesting to consider specific campaigns of this type
sustainable, carbon neutral and the like. Use of the term and the issues they involve for companies or organisa-
sustainable itself in marketing communications and oth- tions. The arguments used to support a change in brand
erwise may create questions about whether the reference is image can likewise be varied: new activities or new types
to environmental sustainability or to the broader concept of commitment, integration of environmental/social meas-
of sustainability linked to the World Commission on ures in production processes, development of a range of
Environment and Developments 1987 report, Our Common green products, etc. Lifestyles of Health and Sustainability
Future (United Nations UECD Report, 1987), that defined (LOHAS) is one such green brand concept to explore new
sustainable development as development that meets the emerging eco-market. It has a strong focus on environmen-
needs of the present without compromising the ability of tal sustainability.
future generations to meet their own needs. Sustainability LOHAS is a new American concept which links life-
encompasses considerations of economic activity, social styles with health, hygiene and sustainability aspects of the
values, action by public and private institutions and envi- eco-market. It describes an integrated, rapidly growing
ronmental impacts, but many sustainability claims seen market for goods and services that appeals to consumers
in the marketplace focus on the environmental aspects of whose sense of environmental and social responsibility
the product or service. influences their purchase decisions. The Natural Marketing
Institute (NMI) estimates the US LOHAS consumer mar-
ket of products and services to be US$209 billionsold
Eco-innovations for Green Branding with across all consumer segments (Cohen, 2007). LOHAS is a
Sustainability Focus demographic defining a particular market segment related
Environmental sustainability is not simply a matter of to sustainable living and green ecological initiatives, and
compliance or risk management. Business is increasingly is generally composed of a relatively upscale and well-
recognising the many competitive advantages and business educated population segment. The author Paul H. Ray, who
opportunities to be gained from eco-sustainability and coined the term cultural creatives, in his book by the same
green marketing. Worldwide evidence indicates that peo- name, explains that What you are seeing is a demand for
ple are concerned about the environment and are chang- products of equal quality that are also virtuous (Cortese,
ing their behaviour accordingly. As a result, there is a 2003; Everage, 2002). Researchers have reported a range
growing market for sustainable and socially responsible of sizes of the LOHAS market segment. For example,
products and services. The debate over sustainability has Worldwatch Institute reported that the LOHAS market seg-
ever-increasing business implications. Companies of all ment in the year 2006 was estimated at $300 billion,
sizes are facing the material impact of regulatory require- approximately 30 per cent of the US consumer market, and
ments, media scrutiny, stakeholder concerns and customer a study by the NMI showed that in 2007, 40 million
expectations. Businesses have a two-pronged equation to Americans were included within the LOHAS demograph-
solve when considering how to profitably bring sustaina- ics, as illustrated in Figure 3.
bility into the fold. One entails their internal culture, proc- The consumers attracted to this market represent a siz-
esses, materials and related supply-side issues. The other is able group in this country. Approximately 19 per cent of
how to outwardly communicate, or brand and market their the adults in the US, or 41 million people, are currently
product. Though, in many ways, the fundamentals of a considered LOHAS consumers. This is based on surveys of
green campaign are traditional, recent studies of develop- the US adult population estimated at 215 million. Research
ments in consumer expectations regarding quality, value shows that one in four adult Americans is a part of this
and trust help cast a light on how green can advance a group (nearly 41 million people). These consumers are the
brand (Laws, 2010). future of business and also the future of progressive social,
Some communication or advertising campaigns have environmental and economic change in this country. But
the objective of developing or even transforming an organ- their power as a consumer market remains virtually
isations brand image. Brand image is at the heart of any untapped. The industry that serves these consumers has
organisations communication operations and activities, been identified in a research report by the NMI and given

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Green Branding and Eco-innovations 51

Figure 3. The Distribution of the Different Types of LOHAS business. In the Environmental Technology Action Plan
NMIs 2007 US LOHAS CONSUMER SEGMENTATION (ETAP) of the EU Commission, a key policy initiative for
MODEL the promotion of eco-innovation, environmental technolo-
(% general population in NMI-defined consumer segments) gies are defined as follows:

[A]ll technologies whose use is less environmentally harm-


ful than relevant alternatives. They include technologies to
19% 17% manage pollution (e.g. air pollution control, waste manage-
LOHAS
ment); less polluting and less resource-intensive products and
NATURALITIES
services (e.g. fuel cells) and ways to manage resources more
DRIFTERS efficiently (e.g. water supply, energy-saving technologies).
19% CONVENTIONALS Other more environmentally-sound techniques are process-
26% UNCONCERNED integrated technologies in all sectors and soil remediation
techniques. (European Commission, 2004, p. 2)
19%

Source: Cohen (2007).


People have now recognised that industrialisation has
damaged the environment and also influenced their stand-
ard of living negatively. This awareness has made them
the moniker of LOHASa market conservatively esti- value real nature highly, to be interested in non-polluted
mated at $209 billion in the US, and growing. Cultural green food and also, to be linked with the natural environ-
creatives are the basis of the LOHAS market. The Japanese ment through green forest and fresh air (Kilbourne &
government recently launched Cool Biz, a campaign that Beckmann, 1998). For firms, a new perspective on con-
encouraged offices to allow their workers to remove the tie sumer acceptance and perception to green products repre-
and adopt light-coloured business suits. This made a great sents a great room of opportunities since green marketing
contribution to the environment as offices adjusted their is not purely altruistic; it can also generate profits (Grant,
thermostats up to 28 degrees Celsius, subject to the govern- 2008). The firms challenge is to satisfy the consumers
ments instruction. green demand through proper design, production, sales
and recycling of products. By bringing in innovativeness
and promotion of eco-friendly products, firms can differ-
Eco-innovation to Promote Green
entiate and position themselves from the competitors and
Consumerism
establish competitive advantage (Reinhardt, 1998). This
The environmental agenda has emerged gradually as an enhances corporate image and brand value from the con-
important policy issue over the last 45 years. During this sumers perspective (Anderson, 2004, 2008). In brief, green
period, the environmental agenda and its impact on the marketing seems to be a source of reputation, competitive-
economy has changed considerably. The last 10 to 15 years ness and financial advantage (Worcester, 1993).
have seen a marked shift from a pure regulatory approach One of the key challenges is to relate innovation per-
towards the slow rise of greening as a corporate issue. The formance to eco-efficiency gains and to macro-level
greening of markets is now becoming apparent, particularly resource efficiency indicators, which could serve as a ref-
within the last couple of years, as a consequence of the topi- erence framework for setting long-term innovation policy
cal climate debate (Andersen, 2004; Ecotec, 2002; European targets. Policy-makers thinking about eco-innovation
Commission, 2006; Frondel, Horback & Rennings, 2004; should reflect on how to use material flow measurements
Hitchens, Birnie, McGowan, Triebswetter & Cottica, 1998, in the context of innovation policy in order to embed eco-
Hitchens, Trainor, Clausen, Thankappan & De Marchi, innovation in an overall resource productivity perspective.
2002; Malaman, 1996; Organisation for Economic According to the US EPA, in 2007, the 2008 Prius was the
Co-operation and Development [OECD], 2008a, 2008b, most fuel-efficient car sold in the US, and beginning in
2009; Rand Europe, 2000a, 2000b). As the environmental 2009, the latest model became the most fuel-efficient auto-
agenda has changed, so has the notion of eco-innovation. It matic car. In the UK, the Department for Transport reported
has been referred to hitherto as environmental technolo- that the latest Prius is the second-least CO2-emitting vehi-
gies or clean technologies. With a still more preventive cle on sale in the UK with 89 g/km. One can observe that
and integrated policy approach to environmental issues, the innovation in response to environmental regulation can
focus has changed from end-of-pipe/clean-up technologies offset initial investment in research and development by
to cleaner production processes, cleaner products to the helping firms to use inputs better and to create better prod-
broader eco-innovation or, quite popular lately, clean-tech ucts (Porter & van der Linde, 1995). To create, exploit and

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52 A.N. Sarkar

deliver value to the final customers, firms must develop, While most researchers and policy-makers are well
design and implement the marketing programmes in an acquainted with the concept of innovation, eco-innovation
integrated perspective where all within the organisation is a new concept for which a standardised definition does
should be involved. not exist yet. OECD illustrates that eco-innovation differs
The holistic marketing framework highlights such proc- from generic innovation on two significant characteristics:
ess, where interactions between customers, suppliers, dis-
tributors, company, employees, etc., and others activities It is innovation that reflects the concepts explicit emphasis on
based on mutual benefits, can offer possibilities in creat- a reduction of environmental impact, whether such an effect
ing, maintaining and renewing customer value. To describe is intended or not. Nonetheless, it is not limited to innovation
the holistic marketing framework and its entire value chain, in products, processes, marketing methods and organizational
Figure 4 depicts the three paces of the value chain: the methods, but also includes innovation in social and institu-
tional structures. (OECD, 2009)
exploration, creation and delivery value procedure. One
can observe that the process is linked one to other to show
a redistribution of benefits among different components The UK environmental policy clearly sets out the
and players in this value chain. The value exploration is urgent challenges in meeting the increasing demands of
related to cognitive, competency and resource spaces, the economy while moving towards a low emission and
where companies define their strategy by identifying and sustainable environment (Department of Trade and
understanding the needs of its buyer targets as well as tak- Industry [DTI], 2003). The vast majority of, if not all,
ing into account the competences of themselves and of economic activity in Britain will have to reduce its carbon
their collaborators. The value creation is concerned with impact. This is going to transform whole economy
identifying new customer benefits by getting feedback (Bureau of Industry and Security [BIS], 2009). On the
from them to improve services and products. The deliver- way to an environmentally sustainable economic growth,
ing value is related to the management process, which is integrating environmental and innovation insights and
related to internal resource from the companys business understanding where the UK stands in terms of its exist-
domain and the management relationship process oriented ing capabilities and potential for creating eco-friendly
to companys customers and to companys partners. technologies is crucial. Recently, increasing attention has
Green marketing strategies and tactics also might require been given to the role of regulation in increasing invest-
changes in the marketing mix (product, price, place and ments in eco-innovations (Brunnermeier & Cohen, 2003).
promotion) and marketers must be conscious about such Regulation is not an undesirable cost-increasing factor
trends. Firms acquiring, for instance, an ISO 14000 certifi- but a stimulator of firms innovativeness that, in turn,
cate must produce goods with maximum recycled content, would lead to a first-mover advantage in markets for eco-
designed to have minimal environmental impact. innovations (Porter & van der Linde, 1995). Yet, an issue

Figure 4. A Holistic Marketing Framework

Customer Core Collaborative


Focus Competencies Network

Value Cognitive Competency Resource


Exploration Space Space Space

Value Customer Business Business


Creation Benefits Domain Partner

Customer Internal Business


Value
Relationship Resource Partner
Delivery
Management Management Management

Source: Kotler, Jain and Maesincee (2002, p. 29).

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Green Branding and Eco-innovations 53

that is overlooked in these studies is related to the hetero- Green Supply Chain Management
geneity in firms innovation capabilities and their respec-
tive strategies for eco-innovation. In 1996, the Manufacture Research Consortium (MRC) of
New companies wishing to use greener technologies Michigan State University first put forward the definition
may find it cost prohibitive to do so, especially in the of green supply chain management (GSCM). The defini-
energy and transport sectors where brown technologies and tion comprehensively considers the environmental influ-
carbon-intensive energy sources dominate. International ence so as to optimise resource utilisation in the supply
support must foster and incentivise technology transfer and chain in manufacture industry. At present, we have no gen-
knowledge sharing across developed and developing coun- erally accepted definition of green supply chain. The book,
tries. Continuing to promote larger global or regional net- The Peoples Republic of China National Standard Physical
works of knowledge-sharing platforms, such as United Distribution Terms,6 does not include the definition. Taking
Nations Industrial Development Organization (UNIDO) into consideration other scholars opinions, we define it
and United Nations Environment Programmes (UNEP) as follows: GSCM can also be called environmentally
National Cleaner Production Centres, could further pro- conscious supply chain management. GSCM is a kind of
mote cleaner consumption and production. Recently, the modern management model in the whole supply chain
EUs Baltic Sea Region Programme (20072013) created a management which considers the environmental influence
project, Sustainable Production through Innovation in and efficiency. It should keep in touch with suppliers, man-
Small and Medium-sized Enterprises, that aims to enhance ufacturers, sellers and consumers. The detail contents
sustainable production processes in small and medium- include the following: green designing, green production,
sized enterprises (SMEs) by providing a knowledge-sharing green package, green marketing and green recycling. The
platform, tools and funding needed to test and demonstrate main flow is as given in Figure 5.
eco-innovations (Gray & Talberth, 2011). There are four steps to implement a green supply chain.
Green growth is gaining momentum across OECD and The following model is a decision-making framework and
non-OECD economies, as a way to pursue economic growth it is based upon the best practices of several companies that
and development while preventing environmental degrada- have successfully initiated and implemented environmen-
tion, biodiversity loss and unsustainable natural resource tal accounting practices. Ideally, companies will customise
use. Green growth implies decoupling economic and envi- this approach to best suit their own organisational needs
ronmental performances, as well as making investment in and culture. The four steps are as follows: (a) identify costs;
the environment as a driver of economic growth (OECD, (b) determine opportunities; (c) calculate benefits; and (d)
2010). This will involve greening traditional sectors and decide, implement and monitor (Figure 6).
favouring the transition of all economic actors, both pro- Sarkis (1999, 2003) provides a comprehensive view of
ducers and consumers, towards sustainable practices. the state of research in this evolving topic, tracing the work
of researchers who have investigated the issues involved

Figure 5. The Flow of Green Supply Chain Management

Green Green Green Green Green


Designing Production Package Marketing Recycling
Model Design
Unloading Design
Recycling Design

Green Materials
Green Suppliers
Green Techniques

Recycling Package Materials


Green Ideas
Green Environment

Green Selling
Green Products
Green Infomation

Waste Disposal
Recycling
Recovery Processing

Source: Huang Fengwen and Wu Yuhua (2003).

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54 A.N. Sarkar

Figure 6. Four Basic Steps to Implement a Green Supply Chain for society. GSCM helps motivation of stakeholder for
environment, better image for supplier and producer, feel
Indentify Costs
good and quality of life for customer, and makes industry
move on the right track for society. He also provided exam-
ples of companies that have successfully adopted GSCM.
Duber-Smith (2005) identified 10 reasons that a company
should adopt the green: target marketing, sustainability of
Decide, Implement
and Monitor
Determine Opportunities resources, lowered costs/increased efficiency, product dif-
ferentiation and competitive advantage, competitive and
supply chain pressures, adapting to regulation and reduc-
ing risk, brand reputation, return on investment, employee
morale and the ethical imperative. In manufacturing proc-
Calculate Benefits
ess, the company can apply green by several methods to
reduce the energy and resource consumption. Several
Source: Nones, Morques and Evgenio (2004). papers have provided green practices, such as Duber-Smith
(2005). He suggested some practices, including reducing
and the reasons for incorporating these practices, and also energy consumption, recycle and reuse, using biodegrada-
the way they have been practised in different organisations. ble and non-toxic materials, minimise harmful emissions
According to him, the supply chain system should include and minimise or eliminate waste. A Chinese sugar manu-
purchasing and in-bound logistics, production, distribution facturer, Guitang Group, could reduce the wastes and
and reverse logistics. He also shows how firms focus on improve their financial performance by using waste from
total quality management (TQM), with its emphasis on the upstream as raw materials for downstream production
improving product quality, zero defects, customer satisfac- (Zhu & Cote, 2004).
tion, training and employee empowerment, etc., and inte- Apart from design and manufacturing, other depart-
grate it with environmental management resulting in total ments in an organisation can also be involved with the
quality environmental management (TQEM). This integra- green. Purchasing could become an important agent for
tion to TQEM enables organisations to move towards the change regarding environmental initiatives in the supply
source reduction of pollution philosophies and improves chain (Preuss, 2001). Walton et al. (1998) conducted a
environmental performance, marketing advantage and cor- qualitative study to explore the primary areas for change to
porate image so that the company moves on to the world- increase purchasing impact on environment. For the largest
class status. Different researchers have defined GSCM retailer in the US, Wal-Mart has an interesting story of
from different perspectives, driving forces and purposes. adopting GSCM to their organisation. In October 2005,
Sarkis (1999) refers to the supply chain as a system which Wal-Mart Chief Executive Officer (CEO) committed the
includes purchasing, production, distribution and reverse company to three goals: to be supplied 100 per cent by
logistics. A recent definition (Handfield & Nichols, 1999) renewable energy, to create zero waste and to sell products
goes as follows: The supply chain encompasses all activi- that sustain Wal-Marts resources and the environment, and
ties associated with the flow and transformation of goods Wal-Mart was launching a business sustainability strategy
from raw materials (extraction) through the end user, as to dramatically reduce the companys impact on the global
well as associated information flows. Many authors are environment and become the most competitive and innova-
exploring environmental initiatives within each of the tive company in the world (Plambeck, 2007).
major phases of the supply chain.
Conclusion
Benefits and Implementation of GSCM Green marketing is an emerging concept, which is also fast
Some studies have mentioned benefits of adopting GSCM, evolving. Going green is a buzz word that is also catching
such as Stevels (2002). He demonstrated the benefits of up fast with time and becoming increasingly trendy with the
GSCM in different roles of supply chain, including envi- corporate world at largemore prominently, however, with
ronment and society, in terms of different categories: mate- the company products that are being branded as eco-prod-
rial, immaterial and emotion. For material, GSCM helps ucts or eco-friendly products to reach out to those customers
lower environmental load for environment, lower cost who are eco-savvy. But customers preferences toward green
prices for supplier, lower cost for producer, lower cost of and/or eco-products are also coming under close scrutiny, as
ownership for customer and less consumption of resources they are seeking validation of such products that are claimed

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Green Branding and Eco-innovations 55

to be eco-products though they are being labelled and mar- 3. See Changing Perceptions: Marketing Tactics Take on a
keted as eco-products with premium prices. In other worlds, Green hue (http://www.livemint.com/2009/03/02213546/
customers are not prepared to buy or pay premium prices Changing-perceptions-Marketin.html).
unless the claimed eco-products are properly eco-labelled 4. Environmentally-Friendly Promotional Products Can Aid
with registered certification from authorised agenciesa Your Organization With Green Branding, http://www.
igreen-home.com/environmentally-friendly-promotional-
prerequisite for green branding.
products-can-aid-your-organization-with-green-branding/
Green branding and green marketing opportunities are,
(accessed 4 February 2011 by The iGreen-Home Team).
and indeed going to have to be, more intimately linked with 5. Sandilands, Catriona. On Green Consumerism: Environmental
the overall national and international environmental policy Privatization and Family Values (i.library.yorku.ca/ojs/index.
of reduction of GHG emissions, with measurable standards, php/cws/article/download/.../9498).
together with provisions of energy savings to directly 6. National Standard of the Peoples Republic of China,
respond to environmental sustainability questions in future. GB15037-2005, Replacing GB/T 15037-1994 (http://www.
Going by the recent trend, therefore, green bio-products puntofocal.gov.ar/1_reunion08/chn197_t.pdf).
(such as fruits, vegetables, fish, organic products and proc-
essed foods), automobiles, thermal power plants, green
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