As consumers are getting more and more aware of the environmental benefits of purchasing green services and products, more and more companies tend to develop and offer this. I guess we can say that we have a classic “supply and demand” situation. First of all, if you want to read about how you can do marketing for green products, you should read this guide. But if you want to know more about the futuristic projections for green marketing, feel free to read this article from top to bottom. It will be worth it.
PS! In the end of the article, you will find some examples of green marketing practices from companies all around the world.
Table of Contents
- What is green marketing?
- Why does green marketing work?
- How do companies determine if they should roll out eco-friendly marketing or not?
- So where is green marketing going in the future?
- Data on shopping behavior: what is the future of green marketing?
- What can you do to convince your boss to focus on eco-friendly products & services?
- Examples of green marketing
What is green marketing?
Green marketing is offering products and services that are environmentally friendly. Part of the marketing is the product life cycle (from idea to a real product), but it also includes the external communication towards the consumers.
Why does green marketing work?
It works because people are committed to buy products and services that do not harm the environment. People tend to care more about the environment today compared to 50 years ago. These trends are quickly recognized by companies that want to profit from eco-conscious consumers. If a company starts to make more environmentally friendly products and at the same time will be able to create jobs and make profit, I guess that is what we call a “win-win situation”.
The good thing about green marketing is that it will only have a positive impact for the business and the environment. I have never in my life heard anyone say: “You know what – I am not so keen on buying this product/service as it benefits the environment!”
There are also times when green marketing does not work. Those incidents are very often related to a phenomenon called “greenwashing”. When companies tries to brand themselves as more eco-friendly than they really are, it tends to go horribly wrong. You can read more about greenwashing in the article that I linked to in the first paragraph.
How do companies determine if they should roll out eco-friendly marketing or not?
That question is highly relevant. Some companies tend to simply follow the trend in the niche they are operating in. If all of your competitors suddenly start to sell green products and succeed, chances are that you should also give it a shot. When one company offer something new and successful in a market, the competitors will follow. This is how most companies shift towards a green marketing strategy – at least for a part of their product range.
A study published by Osman et al (2016) offers a different approach. They looked into a wide range of different businesses to see which factors that determined whether or not a business would add green concepts to their marketing mix. Surprisingly, they found out that it very often came down to the personal opinion of the manager or director. In other words, if the people in charge of business decisions were in favor of taking care of the company (on a personal level), the company would be more likely to both produce and market eco-friendly products and services. This is a part of their abstract:
“The main finding was there is significant relationship between manager’s awareness on green concepts and the practice of green programs or activities at a company. The study also found correlation between manager’s awareness and the implementation of green concepts in company’s marketing mix.”
If you are really interested, I guess you can purchase this study through this external link: https://www.sciencedirect.com/science/article/pii/S2212567116000538
So where is green marketing going in the future?
The importance of green marketing is growing. 20 years ago, multinational companies did not care much about their eco-friendly practices. Companies like Apple, Coca-Cola and Disney are now competing to make business decisions that would be considered green. We can easily see a clear pattern:
1) More companies produce and sell eco-friendly products,
2) Instagram and Facebook see an increase in influencers promoting such products,
3) Consumers gain more knowledge about the importance of buying products and services that don’t harm the environment.
4) Green products will get cheaper and cheaper to produce when the demand grows. This is a principal often referred to as “economies of scale”.
The future is green.
Data on shopping behavior: what is the future of green marketing?
In order to really understand how important green marketing will be in the future for companies, we need to look into some of the reports that have been conducted on this topic. Let us start with a report that was done by a company called Nielsen in 2015. That is probably, until this date, the report that reveals the most useful data about eco-friendly shopping behavior.
What does this Nielsen report tell us?
These are some of the key takeaways:
– About 3 out of 4 “millennials“ claim that they are willing to pay more money for sustainable offerings.
– People between 15 and 20 years do also see the value in green companies. In fact, 72 % of them say that they would choose product A instead of product B if the company producing A would be “committed to positive social and environmental impact”.
– “Sustainability purchasing drivers” is a term used to describe environmental arguments for why a consumer would choose one product over. The report found out that these are the five arguments that global consumers tend to care the most about:
1) That the product is made from a company that is trusted.
2) That the product is produced by a company that is known for its health & wellness benefits.
3) That the product is made from organic and natural ingredients.
4) That the company overall got an environmentally friendly label.
5) That the company has done a lot to focus on social value.
– We see a positive trend on this topic. And, I guess, that is the most important thing. In 2013, 50 % of the global respondents in the same study claimed that they would be willing to pay extra for products and services created by companies that obviously committed to positive social and environmental impact. In 2014, that number had increased to 55 %. In 2015, 66 % of the respondents said the same.
What does this report show us?
That focusing on getting a “green profile” for your company is more important than ever.
What can you do to convince your boss to focus on eco-friendly products & services?
As I have been working in huge, private-owned e-commerce companies for many years, I have heard this conversation over and over again in various meeting rooms:
Employee A: Maybe we should try to look into producing and selling more sustainable products? After all, we are good at telling our sustainable story, but doing little or nothing to actually follow up on that.
Boss: What is the ROI [Return On Investment] on such a change?
Employee A: The immediate ROI is quite difficult to measure as it would be a long-term project to create a greener profile and….
Boss: I think we will stick to the current plan…but thanks for your input.
Employee B: Yeah, I guess so….
As you might understand, I was very often represented as “Employee A” in this scenario. Now, I have to admit that it is almost impossible to make an ROI calculation where the conclusion is that you will make an awful lot of money to sell eco-friendly products. At least unless you want to think short-term and without making too many assumptions about how consumers will think about eco-friendliness in the future.
So how can you convince your boss?
Send him or her this article. That is a good start. After all, I have documented the consumer trend that is quite obvious: people do care more about the environment than businesses believe they do.
Examples of green marketing
To give you a better understanding of the concept, I have picked a handful of companies that fit this article.
1: McDonalds going for paper over plastic
Most of us will think of cutting down the rainforest and high beef consumption when we see the words “McDonalds and environment” combined. However, they had one initiative where they swapped their polythene bags with paper bags – creating headlines all over the world. It turned out to be a very successful campaign that got a lot of news headlines in big newspapers.
I do not dare to comment on whether or not this is an example of greenwashing. They got good lawyers. ☺
2: Coca-Cola and their rainwater harvesting
Coca-Cola Company, most famous for their black soda water, have kicked off 400 rainwater harvesting projects in India. This is done in order to managing water more responsible. To be fair, they have not exactly been shy to let the world know about this project. In exchange, they have been winning several awards for this initiative.
3. Google & Apple run on renewable energy
Both tech companies have pledged to run on 100 % renewable energy. The good thing is that they both made it. In early 2018, both Apple and Google confirmed that all their facilities and offices are now running on clean energy. This is a quite interesting type of green marketing where it’s not the product nor the service that is green. However, both companies have been mentioned in newspapers that focus on innovation, tech and eco-friendliness.
4. IKEA – sustainable wood, cotton and energy
The big furniture (and restaurant) company have implemented a various range of eco-friendly practices:
– Getting about half of all their wood from sustainable foresters.
– All of the cotton they sell have been certified by an organization called Better Cotton, which have strict standards to eco-friendliness.
– Trying to push vegetable options instead of their classic “Swedish meatball dish”.
If you walk through an IKEA warehouse, which I guess you have done many times, you will understand what I mean when I say that they really focus on green marketing. Being a company that takes CSR (Corporate Social Responsibility) seriously is very important for them.
Patagonia have an awesome environmental profile and their whole business model is built upon green marketing.