What is Green Marketing?
It can be powerful if you stick to the definition
Green marketing refers to the process of promoting products or services based on their environmental benefits. Such a product or service may be environmentally friendly in itself or produced in an environmentally friendly way. This can include products:
- Manufactured in a sustainable fashion
- Not containing toxic materials or ozone-depleting substances
- Produced from recycled materials and/or able to be recycled
- Made from renewable materials (such as bamboo, etc.)
- Not making use of excessive packaging
- Designed to be repairable and not "throwaway"
Green marketing is the process of promoting products or services based on their environmental benefits.
Green Marketing and Sustainable Development
Green marketing is typically practiced by companies that are committed to sustainable development and corporate social responsibility. More organizations are making an effort to implement sustainable business practices as they recognize that they can make their products more attractive to consumers and also reduce expenses in packaging, transportation, energy and water usage, and more. Besides, businesses are increasingly discovering that demonstrating a high level of social responsibility can increase brand loyalty among socially conscious consumers.
The key barrier to sustainable business practices such as green procurement is the short-term cost. Going green will typically cost you more up front, but generate great rewards in the long run.
Will Customers Pay More for Green Products?
The obvious assumption of green marketing is that potential consumers will view a product or service's "greenness" as a benefit and base their buying decision accordingly. The not-so-obvious assumption is that consumers will be willing to pay more for green products than they would for a less green, comparable alternative product. Is this true?
Apparently, yes. Consider the following data, published by Nielsen in 2018:
- 48% of U.S. consumers say they would definitely or probably change consumption habits to reduce environmental impact.
- Products with sustainable attributes have been steadily taking more share of store sales, from 19.7% in 2014 to 22.3% in 2017, to an anticipated $25% in 2021.
- 90% of millennials, the generation leading the sustainability charge, say they are willing to pay more for products that contain sustainable or environmentally friendly ingredients.
A previous Nielsen survey also looked at retail purchase statistics, and according to sales data, brands that advertised sustainability on their packaging had 2% year-over-year increases in sales from 2011 to 2014, as compared with 1% for those that did not. Brands that promoted acting sustainability through their marketing saw a sales increase of 5%.
Green marketing can be a very powerful marketing strategy when it's done right.
Misrepresentation Can Backfire
While green marketing is growing, it can be dangerous. The public tends to be skeptical of green claims to begin with, and companies can seriously damage their brands and their sales if a green claim is discovered to be false or contradicted by a company's other products or practices. Presenting a product or service as green when it's not is called greenwashing.
For example, in 2012 a CBC Marketplace study found that Dawn Antibacterial dish soap, which featured a label showing baby seals and ducklings and claiming that "Dawn helps save wildlife," was found to contain Triclosan, which has been officially declared toxic to aquatic life.
Seaworld Orlando's introduction of its "Cup That Cares" in 2013 was another dismal example of green marketing gone wrong. The cup was marketed as environmentally friendly—each time a person refilled the cup at a vending machine in the park, an embedded chip would display how much carbon dioxide they had saved. These claims were never substantiated. Further, the cup—and the 40 accessories that could be purchased with it—was plastic, not a favorite of environmental advocates.
For green marketing to be successful, it has to fit with your brand. Having a single green product when the rest of your products are not, for instance, can make customers wonder about your environmental commitment.
In other words, authenticity is essential in green marketing.
Examples of Green Marketing
There are plenty of companies practicing green marketing. Here are just a few examples:
- Grocers that advertise organic produce. Organic food sales have more than doubled since 2010 as consumers increasingly prefer non-genetically modified foods that are free of pesticides.
- Restaurants that promote "locally sourced" meats, vegetables, fish, wines, and more. Local sourcing is attractive to consumers as it projects an image of sustainability and willingness to invest in the community.
- Toyota's marketing of the Prius hybrid. The Prius is the best-selling hybrid vehicle of al time, mostly because its unique styling reflects the typical owner's passion for sustainability.
A Corporate Sustainability Example
PepsiCo is one of the world's largest food and beverage producers with annual revenues of more than $64 billion and a product line that includes brands such as Quaker, Gatorade, Pepsi-Cola, and Frito-Lay. Over the past decade, PepsiCo has become a leader among corporations in water conservation and energy usage. In 2012, PepsiCo received the Stockholm Industry Water Award in recognition of its efforts to reduce water and energy usage across all of its business operations, from supply chains to factories. The company continues to set the pace for water conservation among major corporations.
PepsiCo sustainability efforts include:
- Working with farmers to monitor water usage and carbon emissions and maximize crop yields.
- Retrofitting factories and corporate offices to improve energy efficiency, such as the 300-plus-employee Casa Grande Frito Lay facility in Arizona. The facility generates half the plant's electricity requirements with solar power, water is recycled to drinking standards, and waste is recycled wherever possible. The facility is one of over 20 other PepsiCo sites certified to LEED sustainability standards.
PepsiCo's success in this area shows how effective green marketing can be, and the impact it can have on generating more sustainable practices in the marketplace.
Green Business Bureau. "Financial Benefits of an Eco-friendly Business." Accessed Jan. 22, 2020.
Harvard Business Review. "The Comprehensive Business Case for Sustainability." Accessed Jan. 22, 2020.
Nelsen. "Was 2018 the Year of the Influential Sustainable Consumer?" Accessed Jan. 22, 2020.
CBC. "10 Worst Household Products for Greenwashing." Accessed Jan. 22, 2020.
The Guardian. "Five Sustainable Boondoggles: Greenwashing All the Way to the Bank." Accessed Jan. 22, 2020.
Food Business News. "U.S. Annual Organic Food Sales Near $48 Billion." Accessed Jan. 22, 2020.
U.S. Department of Agriculture. "Why Local Food Matters: The Rising Importance of Locally Grown Food in the U.S. Food System." Accessed Jan. 22, 2020.
Marketing Week. "How Toyota Sold Six Times as Many Cars as Its Hybrid Rival." Accessed Jan. 22, 2020.
PepsiCo. "2018 Annual Report." Accessed Jan. 22, 2020.
Stockholm International Water Institute. "PepsiCo Receives the 2012 Stockholm Industry Water Award." Accessed Jan. 22, 2020.
Public Radio International. "As Environmentalists Warn About Water Scarcity, These Two Companies Are Saving Water and Money." Accessed Jan. 22, 2020.
Frito-Lay North America Inc. "PepsiCo's Frito-Lay Facility in Casa Grande Becomes First Existing Food Manufacturing Site to Achieve LEED EB Gold Certification." Accessed Jan. 22, 2020.