Green Marketing has evolved from ethical marketing and environmental marketing. Green marketing is about how an organization develops its strategy to take into account growing political and consumer concerns about the environment.
Environmental concerns focus on several issues, including carbon dioxide levels, the dangers of diesel on health, sustainability, and climate change. UN (United Nations) endorsements of scientists' findings and legislation passed by government organizations such as the EU (European Union) have encouraged many firms to migrate their strategy toward Green Marketing.
How Do Governments Implement Green Strategy
Governments may encourage firms and consumers to adopt "green" actions by offering grants to implement "green" initiatives. In the UK, for example, the government was funding the "Green Deal Scheme," which provided homeowners with money to make "energy-saving" home improvements. In 2021, the UK introduced the "Green Homes Grant" to help people insulate their homes or install low-carbon heating.
Similarly, in the U.S., the Inflation Reduction Act of 2022 offers significant tax credits and rebates for businesses and individuals who adopt clean energy technologies, such as solar panels and electric vehicles.
In some countries, targets and sanctions are laid down by central and local governments to ensure "green" targets such as recycling are met. The European Union fines member states that do not meet "green" targets for renewable energy, recycling, and air quality. For example, Germany has now pledged to phase out the sale of gasoline-powered vehicles by 2035.
The diagram below distinguishes between a Linear Economy and a Circular Economy which firms may decide to use in their green marketing strategy.
National Governments Response to Diesel Cars
It has been established that diesel is a dirty fuel with high levels of nitrogen, increasing asthma complaints and causing thousands of deaths around the world. Governments worldwide are trying to deal with this pollutant from cars. In April 2016, the Dutch parliament supported an initial proposal to stop the sale of petrol and diesel cars by 2025. Consumers who already own petrol or diesel cars can use them, but any new vehicles must be electric or hybrid.
In New Delhi, India, the sale of large diesel cars has been banned, and in Oslo, Norway, there are plans to ban all private cars from the city center by 2020. In addition to these efforts, Germany is leading the charge in banning diesel cars, aiming for 100% electrification by 2030.
More recently, Norway remains ahead of the curve with almost 80% of new car sales being electric in 2022. The UK is also fast-tracking a similar ban on diesel and petrol cars by 2030, supporting this shift with subsidies for electric vehicles (EVs).
These changes will force car manufacturers to think of developing greener products to remain competitive.
The Car Industry And False Test Results
There have been complaints that car manufacturer Volkswagen has been cheating diesel emission tests; making out its cars were giving out lower nitrogen levels than was the case and stating its cars gave higher miles per gallon than they actually were. This has resulted in consumers who wanted to be green left with cars that pollute and damage the environment.
In April 2016, Mitsubishi Motors admitted falsifying fuel economy data for more than 600,000 vehicles sold in Japan - "tricking" green consumers who felt they were doing their bit for the environment.
In 2022, new allegations surfaced regarding Rivian’s underreporting of vehicle defects, putting additional scrutiny on greenwashing within the automotive industry, showing that transparency remains an issue even in today's market.
The Car Industry' Green Revolution
The car industry globally is going through a green revolution. Along with established companies like Ford, Toyota, and General Motors, which have introduced electric cars, new entrants such as Tesla and Google (with rumors of Apple entering) are all working on electric cars or driverless electric cars.
Electric cars offer peace of mind that green consumers need when they sit and drive their cars. Tesla is currently ahead of the game, and they offer the first mass-produced electric car for sale. Tesla’s Model 3 is priced at $35,000, and they have already taken 400,000 pre-orders. The car can go 215 miles per charge, keeping Tesla ahead of its established manufacturer rivals.
Updated example: In 2023, Tesla’s Model Y became the world’s best-selling EV, and other manufacturers like Ford are ramping up production of models such as the Ford F-150 Lightning to meet growing demand. BMW has also announced that 50% of their global sales will come from EVs by 2030.
Consumers And Green Marketing
Government focus on "Green" measures and targets is increasing the number of consumers prepared to invest in "Green" technologies and wanting to buy from organizations with a "Green" ethos. There is a change in buying behavior as people make the transition toward being a ‘Green Consumer.’
Companies like Patagonia have gained a loyal following by promoting sustainable practices like recycling old products into new ones. Patagonia’s “Worn Wear” program encourages customers to return used clothes for repair, resale, or recycling, keeping items out of landfills.
Developing Green Marketing Strategy
If firms want to become "truly green," this must start with selecting suppliers that have the same "green" ethos as the firm. Are the raw materials sourced ethically? This means ensuring suppliers are paid a fair wage that they can live on.
Another issue is whether raw materials are organically sourced. If firms do not use chemicals or any other artificial ingredient in the development of their products, they should claim that the product is organic.
Packaging design is important. If the packaging is recyclable, it gives the green consumer the opportunity to contribute towards a green movement, which is growing. Unilever, for example, has committed to making all of its packaging recyclable, reusable, or compostable by 2025.
Is a Circular Economy Approach The Future?
Some firms are now responding to the concern that the materials and resources we use to produce products are limited; forecasts suggest that as materials run out, the price of materials, and consequently, sale prices, will become unaffordable.
To combat this, companies are now designing products that last a long time. Isla Bikes is designing bicycles that last over 50 years. The user hires rather than purchases the bike, so it can be passed on to someone else after the user finishes with it. This is an example of a Circular Economy, where products are designed to last as long as possible, and at the end of their long life, they are regenerated or recycled.
Apple's refurbishment and recycling programs also represent an excellent example of the Circular Economy, as they allow consumers to trade in old devices for recycling, reducing the demand for newly mined raw materials.
Google is implementing circular economy principles in their data hardware centers. Keep an eye out for stories about the Circular Economy; will Circular Economy Strategy replace the current Linear Economy where products are produced, used, and discarded?
Continue to Read About Green Marketing
We hope you have enjoyed reading about Green Marketing. In our next article we continue our Green Marketing discussion by focusing on Green Segmentation and in particular Green Segments as defined by Experian and LearnMarketing.net..
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