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Spotlight
Green Marketing
Animesh Agrawal
Editor – “DoMination”
(Department of Management Studies, IIT-Roorkee.)
Table of Contents
1
Rural Marketing for
FMCG sector in India
Niranjan Rajpurohit
DoMS, IIT-Roorkee
4
Green Supply Chain
- Cleaning up our future
Affan Alavi
DoMS, IIT-Roorkee
6 12
Green Marketing Qutopia - 6
Tanuj Shukla -J. Arjun & Mayur Gurjar
10
Creative Section
Its wise to learn, Its GOD like to create
Chlorophyll
-Fresh Green Creativity, right from
Leaves of this newsletter to the
roots of DOMS
“The rural consumer is discerning and the rural market is vibrant. At the current rate of growth, it will
soon outstrip the urban market. The rural market is not sleeping any longer. We are.”
- Mr. Adi Godrej, Godrej Industries.
The Rural Market of India: business in rural market would be lesser compared
to urban market but reaching out to the masses is a
India is a land of villages and even today, nearly 70%
concern. It is not impossible but a bit more difficult.
of its population stays in villages. Rural India and
rural market have grown at a fast pace during the The four A’s of rural marketing are: affordability,
past two decades, thanks to the economic acceptability, availability and awareness of the
liberalization and globalisation processes initiated consumers.
by the Indian government. Rural India has a large
Challenges and Opportunities for FMCG Companies
consuming class with 41 per cent of India’s middle
in Rural India:
class and 58 per cent of the total disposable income.
The rural market accounts for 70 per cent of toilet With population in the rural areas set to rise to 160
soap users, and almost 50 per cent of TV sets, fans, million households by 2011 and with higher
pressure cookers, bicycles, washing soaps, saturation in the urban markets, future growth in
detergents, tea, salt and tooth powder. The rural the FMCG sector will come from increased rural and
market for FMCG products is growing much faster small town penetration. Technological advances
than the urban counterpart. In fact, the 20 million such as the internet and e-commerce will aid in
middle class home in rural India equal the number better logistics and distribution in these areas.
in urban India and thus have the same purchasing Already Indian corporate such as HUL and ITC have
power. The Indian rural market has been growing at identified the opportunity and have initiated
3-4% per annum, adding more than one million new projects such as 'Project Shakti' and 'e-Choupal' to
consumers every year and now accounts for close to first, expand rural income, and then, to penetrate
50% of the volume consumption of fast- moving this market. Opportunities for rural marketing are
consumer goods (FMCG) in India. the vast size of rural market in India, huge potential
market for FMCG and durables, rise in the literacy
For quite some time now, the lure of rural India has
rate of rural population, etc.
been the subject of animated discussions in
corporate suites. And there is a good reason too. While the rural market may be alluring, it is not
With urban markets getting saturated for several without its problems. Low per capita disposable
categories of consumer goods and with rising rural income, acute dependence on vagaries of monsoon,
incomes, marketing executives are fanning out and seasonal consumption linked to harvests and
discovering the strengths of the large rural markets festivals, poor connectivity, power problems,
as they try to enlarge their markets. inaccessibility to conventional communication and
advertising media, cultural and language barriers
Unlike the urban market, it is less developed in
etc. are some of the important problems influencing
terms of infrastructure and facilities. More than
the rural population. This makes capturing rural
anything else, the larger issue is to find out a
consumer more difficult. Yet, the marketers who
suitable business model and retail format to fit local
understand the rural consumer and fine-tune their
taste and preference. Of course, the cost of doing
strategies are sure to reap rich benefits.
Buying decision of the consumers of different age, family and thus should be taken into consideration
occupation differs from rural to urban area. The while planning promotional activities.
rural area is more bounded by the traditions,
While making a purchase decision consumer first
customs and values which bring a gigantic change in
tries to understand the need of the product,
the life style and personality of the consumers of
especially in rural India, where cost is still a major
rural area in comparison to urban area where
consideration and necessities are prime purchase.
people are more attracted towards the western
Information search is through the neighbors, friends
culture. Low per capita incomes of the consumers in
and society. Evaluation of alternatives is done by:
the rural area restricts them to low consumption
patterns as compared to urban population where Expectancy value model
the consumers are more brand conscious and are Lexicographic model
ready to pay high. Conjunctive model, and
Disjunctive model.
Brand choice depends on a lot of demographic
variables like age, sex, occupation, income, Depending upon the need, buying power, and other
education and caste. In addition, the head of the environmental factors, decision is then made to
family mainly takes the decision regarding the select the best alternative to consume. After the
purchase of FMCG. So the tradition and customs actual purchase, comes the after purchase behavior
which are followed by the rural consumers are very which depends upon the satisfaction or
important as decision depends upon head of the dissatisfaction level of the consumer.
The medium of communication for rural market is complexity of advertising language. Researchers
also different in comparison with the urban market. have suggested that advertisers can optimize the
Words of mouth, print, radio, puppetry, melas and strength and appeal of their messages by mixing
folk theatres are few of the medium of promotion languages and scripts. Mixing is gaining more and
where as television and print media advertisement more popularity in the advertising field not only
are the leading source of promotion for urban because it enhances communication but also
markets. Language diversification is also a problem because it brings more creativity. In effect, while
as India never had a common language which could diversity of languages in our country is an
be understood by the masses; it is a barrier in impediment to free flow of communication, viewing
effective communication in the rural market as it from a different angle, the impediment can also
languages vary from state to state, place to place be converted into an advantage by appropriately
and district to district. mixing different languages and even scripts. Religion
and spirituality have come to represent major forces
Language is an important vehicle to transmit the
in rural advertising in India. Religious appeals had
advertising message. The various aspects of
played a powerful role in shaping and reshaping
communication and language in relation to
rural advertising in the past and it will continue to
advertising, especially structural, semantic, and
be so in future too.
psycho/neuro-linguistic factors contribute to the
To be Continued……
Ever since the emergence of empires post the initiative will depend on what stage of the product
Industrial Revolution organizations have been life cycle the product is in. It is relatively easier to
plagued with the issue of Continuous Improvement address environmental issues in the initial phases of
and Sustainable Development. Continuous product development than during product maturity
Improvement meant reducing cost and improving and certainly more difficult in the final stages of the
quality whereas Sustainable development was product life cycle.
concerned with the fact that an organization in light
A more tactical set of organizational elements
of the ever changing business environment, had to
that will influence how the supply chain is to be
evolve itself to meet the challenges that this
managed (either internally or externally) can be
environment put forth. Indeed companies that have
described by the operational life cycle (or value
succeeded in answering both these questions have
chain) of an organization. The major elements of the
emerged better and stronger than their less
operational life cycle will typically include
fortunate counterparts. While the questions
procurement, production, distribution and reverse
remaining the same their answers have changed
logistics. The procurement decision will impact the
over the years. In light of the increasing pressure on
GSCM through intelligent vendor and raw material
the natural environment and the limited resources
selection. Vendors who have ISO 14001 may be
that the earth can offer, companies have begun to
preferred over others. Similarly products that can be
realize the importance of donning the green robe.
recycled or reused should be used. Production
But before that we need to be asking ourselves the
processes can influence the greening of the supply
question as to why companies care about taking up
chain in numerous ways. Some of these impacts
environmental initiatives. While some companies
include: a process’ capability to use certain
like IBM, Hewlett-Packard and Xerox aim to achieve
materials, capabilities to integrate reusable or
targets like ISO 14001, thus keeping themselves
remanufactured components into the system, and
abreast with the latest environmental management
how well the processes are designed for the
standards, others are coaxed through government
prevention of waste. Distribution would not only
policies and regulations.
require selecting mode of transportation that are
The back bone of green production is adopting a less polluting but also using packaging that can be
Green Supply Chain Management (GSCM). GSCM reused frequently. Also inventory policies help in
can defined as integrating environment thinking into reducing not only forward logistics but also reverse
supply chain management, including product design, logistics thus saving on cost and time.
material sourcing and selection, manufacturing
So what benefits can companies derive from
processes, delivery of the final product to the
adopting a green supply chain management over
consumers, and end-of-life management of the
conventional supply chain management? Well a lot.
product after its useful life. The definition
While some of the tangible benefits like reduction in
incorporates two important aspects of the
waste, lower use of toxic material and lower cost of
manufacturing i.e. the product life cycle and
production by the use of natural products are
operational life cycle.
tangible, the advantages of GSCM spill over to the
The product life cycle, which can be viewed as non tangible areas like overcoming prejudice and
the gradual introduction, growth, maturity and cynicism for environment, better image for supplier
finally decline or replacement of a product, is one of and producer, feel good and quality of life for
the strategic ways of introducing a clean technology. customer, and setting industry on the right track for
The ease of implementing an environmental friendly society.
While Green Supply Chain Management may look as itself in taking the first step. Green technologies
the answer to the future of any organizations supply have traditionally been looked as more expensive
chain, its implementation may not be very simple. than their counterparts. This is where other
While most organizations would like to improve organizations including the government need to
their environmental performance, when it comes to step up and explain the feasibility of implementing
choosing the right vendors the choices become very GSCM.
limited. Most of the SMEs do not have enough
Green Supply Chain Management is the new
resources to switch over to green technologies. But
paradigm to effectively leverage the advantages of
this does not mean that organizations leave behind
going green without compromising on the results
their old value chain partners. To terminate a long-
that supply chain management have traditionally
term supplier relationship due to their poor
succeeded in giving. With the earth’s resources
environmental performance would be undesirable,
becoming scarce, governments around the world
and may create disaster for an organization. One
have woken up from their slumber and have started
option is to provide training and technical support
tightening the noose around organizations. It is
with special credit treatment to their suppliers to
evident that businesses around the globe will have
improve the environmental performance. The other
to go green in the near future. So earlier the better.
problem is the initial reluctance by the organization
The design of green products should embody the business via Internet. When green commodities
principles of the 3R's: have already entered into relevant marketing
channels, the promotion of green product sales
1. Reduction: using relatively less raw material and
becomes the key to the success of green product
energy to reach the designated goal of
marketing in this phase.
production so that from the very beginning
great attention is paid to saving energy and REMARKS ON OPTIONS
eliminating (or reducing) pollution.
Promoting environmental protection and carrying
2. Reuse: products and packing material should, as out sustainable development strategy is not only
long as possible, be capable of being repeated India’s designated national policy but the common
use in their original forms for energy saving and aspirations of all the countries in the world as well.
environmental protection. The rise of "green marketing" in the world is both a
challenge and an opportunity for India. Our
3. Recycling: after the products have been out of
government organizations and enterprises dealing
use, they should be of being recycled for reuse.
with foreign business have to seize the opportunity,
The production of green goods must be a "clean" conform to the international trend of "green
process, that is, new technologies and techniques marketing", and alter their perspectives on a time
for saving energy, maintaining safety, and causing and situation alert basis so as to promote the
no pollution should be used as much as possible, so development of green international trade. On this
that the products would not do harm to the account, some efforts recommended to be made
environment and people's health. The packing of are outlined below:
green products requires that the packing material 1. Reinforcing government support and guidance
be easily decomposed, and recycled and poison for "green marketing”
free. Over-design should also be avoided
The detailed measures could be as follows:
2. The phase after the entry of "green products"
Establishing the system of environmental auditing
into the market
and conformation with ISO 14 000 as the core
In this phase, the working procedure of enterprises target, so as to promote and encourage enterprises
should be as follows: fixing "green prices", to carry out "green marketing".
establishing "green sales" channels and carrying out
Intensifying international cooperation and
the sales promotion of green products. When green
learning the "green marketing" experience of
products actually enter into markets, the certificates
developed countries at the enterprise level, and
issued by authorized agencies should be presented.
actively using the "green aids" from international
Generally speaking, the prices of green products are
institutions to improve the adaptability of India to
higher than the common products of the same
the worldwide trend of green consumption.
category. This is because the relevant enterprises
have inputted relatively more on developing this Increasing the inputs of green technology,
kind of products. Meanwhile, since green products strengthening the coordination and collaboration
give consumers more utility, the higher prices would among the government, enterprises, educational
be accepted by consumers. To let green goods and research institutions, so as to convert the green
smoothly reach consumers, the marketing channels technological achievements into end-products
for green products should be established. The forms suitable for commercial use.
can be monopolistic selling stores and counters,
Giving favourable policies concerning financial
wholesale markets, international ordering and so
credits, taxes and so on to the enterprises
on. Enterprises can also conduct their sales of green
implementing "green marketing“.
products on a larger scale by channelling the
2. Establishing the green commercial production requirements of environmental protection and does
system to provide a solid foundation for carrying no harm to human health. It can be applied for by
out "green marketing" and developing green enterprises undertaking "green marketing" at first,
international trade and is issued after checking and approval by an
Green commodities can be divided into two kinds: authorized institution. A kind of green mark, first
one is green food and the other is green appliance. appeared in West Germany in 1978 and then rapidly
Green food refers to the unpolluted, safe and spread to other European countries, It is a mark
nutritious food, such as the vegetables and fruits printed with a blue angel. Since the creation of this
produced without using pesticide and non-organic mark, other countries followed suit, ("ecological
fertilizers, and fish and shrimps from unpolluted mark" in Japan, "environmental selection mark" in
water, etc. Generally speaking, green food requires Canada, and "green environment mark" in the US,
that the original places for its raw materials be in etc.) In India, actively carrying out the system of
sound ecological condition. The growing process and green marks would not only be beneficial to
the conditions of water, fertilizers and soil of the environment protection but helpful to the entry of
agricultural products used as raw materials should India's commodities into international markets to
pose no hazard to the public, and the production, compete with foreign products. What is more, it
processing, storage and transportation of the goods would help improve the environmental
should be in strict compliance with local and consciousness of the general public. The functions
international health standards. Thus, we should of commodities' green marks can be explained by
actively promote our ecological agriculture based on the "signalling theory" of neo-classical economics.
China's experiences of organic agriculture. Apart Due to the vigorous advocating and wide publicizing
from food, all the daily-used commodities helpful to by the government, ecological and environmental
environmental protection should be included in the protection will come to be a prevailing new custom
category of "green appliance", consisting of the in China.
goods produced from recycling process and the In such an atmosphere, the green marks of
commodities and packaging which can be recycled. commodities will tend to be an image showing that
The development of green appliance would make the relevant enterprises attached great importance
the enterprises attach more importance to the to environmental protection. And thus the adoption
environmental effects of their production process as of green marks serves to increase greatly the sales
well as products per se. In other words, enterprises of green products. By doing so, the enterprises
are urged to exercise a kind of control over the carrying out “green marketing" would not only be
whole life span of their products or, in figurative encouraged in terms of profits, but also receive
sense, from "cradle" to "grave". This is helpful to "good reputation". At present, commodities with
make enterprises move their eyesight forward from green marks are increasingly favoured by
traditional pollutants removing exit" to the proper consumers all over the world, and the "green
technology and techniques of production. commodity heat”' is now rising. It can be expected
Moreover, it is also very useful for seeking "cleaner" that there will be more and more consumers
technology, striving for the improvement of the choosing commodities with the identification of
utilization of resources and exploring more channels green marks as their chief reliance. Therefore,
for the "medium-level resolution" of pollutants. Indian enterprises should take " green marketing" as
an important opportunity, and try hard to make
3. Actively carrying out the system of green
marketing of goods labelled with green marks as an
commodity marks
important means to explore the international
Green mark is an environment label in the form of a
market and upgrade their own competitiveness, so
certain figure stuck on a commodity or its package
as to promote the coordinated development of
certifying that the process of the commodity's
economy, trade and environment.
production, usage and disposal meets the
R. W.
Emerson
Truth,
goodness,
and beauty
are but
different
faces of the
same all.
Animesh Agrawal:
ani85pdm@iitr.ernet.in, animeshagr@gmail.com, Mobile: 09368090764