CHAPTER 2: REVIEW OF RELATED LITERATURE AND STUDIES
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter consists of information culled from studies and literature, both local and foreign, from which this particular study is premised. This will certainly help in giving the reader a better understanding of what green marketing is and how corporations use this as a marketing strategy in selling their products.
An increasing number of consumers have voiced their concerns for environmental deterioration. The environment is not what it used to be a hundred years ago. Because of careless activities by humans, the environment has been constantly and continuously corrupted. Specific causes for concern about the environment degradation due to varied technological and production processes, pollution of air and water, and endangerment and extinction of species critical to human sustenance and aesthetics, population explosion, resource depletion, over harvesting of natural resources and the general degradation of social environment due to impairments of the physical environment (, 1992; , 1992).
Consumers have had enough of these wrongful practices and hence, consumers are now actively seeking environmental performance in the products and services that communicate environmental responsibility and stewardship ( 1999). In major international markets, consumers are demanding that firms produce increasingly higher quality products and services that are consistent with societal and environmental values if they wish to remain competitive in global markets ( 2000). Hence, consumers have become more discriminating...for green products and services (, 2001). A study shows that 66% of respondents have switched product brands in an effort to obtain more environmentally sound products (, 1995). The general public is concerned about the environment and that the majority of people see the integration of environment and economy as a win-win scenario (, 1996). As consumers demand more green products and services, corporations are finding the going green makes good business sense as well as good environmental sense ( 1997). Stakeholders, such as suppliers, government agencies, and other strategic partners, as a result, become much more concerned with the corporation’s overall reputation when selecting firms to create alliances ( , 1996).
Because of the new trend in green products and services, green marketing represents both a vast opportunity and a potential minefield to all kinds of businesses (1999). Companies worldwide have used green marketing to bolster market share. Green marketing is a global development – especially in industrialized countries. With growing consumer awareness throughout the world, green marketing ...will become a powerful force in society ( 1996).
As more and more consumers are realizing the magnitude of this movement, corporations are jumping on the green bandwagon for a variety of reasons such as 1) cost cutting via waste reduction and increasing efficiency of operations 2) stay ahead of increasingly tough environmental regulations and enforcement policies and 3) improve corporate image and public relation (, 1999). Stressed manufacturers who can produce substitute for existing products...are likely to succeed ( 1998).
There is a growing evidence that suggests that enhancing environmental performance is both socially responsible and rational and builds the corporations reputational advantage (, 1997). Further, there is a strong support that being a good environmental steward helps creates a reputational advantage that leads to enhance marketing and financial performance. Monsanto’s CEO suggests that environmental sustainability, defined as the ability of a business to operate without degrading the future integrity of the natural environment, is a core strategy designed to enhance long-term corporate performance (1997). Companies that treat environmental issues as bottom-line concerns will prosper in an era when consumers and governmental mandates will force them to comply with a clean and green ethics ( 1996).
As companies become better environmental citizens, they have discovered that sound environmental policy makes them more profitable. If they pollute less, they are subject to less fines and waste less raw materials and by-products. If they use less packaging, they lower the cost of the product and boost its profitability. If they reduce the amount of materials needed to make a product, the same result is achieved. The German manufacturer AEG boosted sales 30 percent in 1989 ( in six months) after it introduced a washing machine that used less detergent and energy (, 1996).
As the current trend goes to green, several interesting green marketing facts are worth to mention. First, the number of green products in the US more that doubled since the early 90’s ( , 1997) second, sales of these kinds of good in the US have tripled since 1991 and now exceed $100 billion each year (, 1998). Third, since 1996, green product introductions have grown from 8.9% to 10.0% in 1998 (, 1998). Fourth, in 1991, in Business magazine counted 11 green retailers in the US but five years later, at least 400 environmental product retailers with such names as Earth General and Ozone Brothers have established all over the nation...including counterparts on the World Wide Web ( 1998).
The United Nation’s Environmental Program has enlisted major multinational companies in improving environmental reporting. Industrial environmental reporting is seen as a long-term ongoing process
Since the start of the 1990s, more and more people are becoming aware of the spreading environmental degradation. And it seems that companies are now taking notice of society’s changing lifestyles. Firms such as Coca-Cola, Philips, and Body Shop are integrating environmental issues into their marketing strategies. Even the government is jumping on the bandwagon by making environment-friendly legislation, such as the Clean Air Act. In addition, non-governmental organizations (NGOs) like Green Peace, PRIME (Private Sector for Managing the Environment), and Haribon are formed to do advocacy work... In the end, education is the key. Teachers and students realize that damage to the environment is irreversible. Now is the time to build up environment consciousness before it is too late. As one green marketing student remarked, “We just scratched the surface here…though we became more aware of the industries’ and businesses’ environmental responsibilities…we should have more hands-on experience.” (, October 2000)
Based on the study of , Effects of Environmental Concern On Attitudes and Behavior of Female Cosmetics Buyers: An Exploratory Study, the factors influencing purchase of consumers are brand name, minimal and disposable packaging, attractive packaging, non-animal testing, natural ingredients price, packaging with recycled content. The fact that attitudes seem to be changing in favour of the environment suggests that personal influences (beliefs and attitudes) play a big part in influencing consumer-purchasing behaviour. The majority of (Baruch College Female Students) BCFSs feel natural ingredients are safer than synthetic ingredients. 2)9 percent strongly agree, 33.1 percent somewhat agree, 32.4 percent are neutral, 2.1 percent somewhat disagree, and only .7 percent disagree when asked it they felt that natural ingredients were safer than chemical ingredients. However, as was seen in table 4.5, only .7 percent and 1.4 percent responded that they use natural ingredient cosmetic products -The Body Shop and Perscriptives. 18.6 percent reported using Revlon, a cosmetic line that is not traditionally natural but one that has discontinued animal testing, and has reduced packaging.
The numerous companies and firms that have acted with more environmentally responsible behavior have reaped the benefits of increased profit and better public relations. With the implementation of governmental regulations, mandatory environmental measures have provided incentives for innovation and higher environmental performance. Government intervention in the marketplace through public purchasing can stimulate improvement and innovation, thus supporting
industry's competitive advantage.
Green marketing is both a different marketing concept than the traditional model and it is growing in importance on a global scale. Businesses must be aware that in implementing a green marketing policy the entire organizational structure must be involved in the process. Failures provided in the paper highlight problems that can occur when businesses do not implement an overall GM strategy. Businesses should continue to pursue sustainability and not be able to excuse themselves from acting by stating that market forces can do nothing to improve the environment. According to , "Only business has the resources of technology, finances and organizational competence to implement the necessary changes.” (, p 155).
Given the new interest in developing "green consumer" markets, there is considerable potential to cultivate this young market through educating the consumers about the advantages of Non-Wood Forest Products NWFPs and their production. Training materials and informal education systems should be developed which will improve marketing skills and entrepreneurship of NWFP producers, including those of cooperatives. At the national level, government officials also need to have more familiarity with the market forces that affect communities, and policy-makers need an understanding of these basics in order to know which polices create a conducive business environment for sustainable exploitation of NWFPs. Workshops and seminars can help to target these groups.