Marketing Managment - Essay Example

Discuss the fact that many Products and Services have been affected by Green Issues. What are the Consequences for the Marketing Mix for these Products and Services? How has Organizations Redesigned their Marketing Mixes to take account of such Issues? The marketing field is slowly diversifying with the introduction of the new environment marketing or more popularly known as green marketing. Consumers and producers are becoming more sensitive to the environment and are thus creating more ‘environmental friendly’ products. Businesses are now modifying themselves to accommodate this new phenomenon. Environmental management systems and waste minimization are now being paid more attention to. Journals such as Business Strategy and the Environment and Greener Management International and other reports are being created to support a more ‘green environment’. Marketing itself is undergoing a new process of evolution. Yet what is green marketing? No standard definition exists that explains this new trend. Ecological marketing (which has now evolved into green marketing) is the study of the positive and negative aspects of marketing activities on pollution, energy depletion and non-energy resource depletion. This definition is highly sub-divisional and examines both the process of marketing and the environment as interdependent variables and examines their joint effort and its positive and negative consequences upon society in general. However today, this definition proposed, may be deemed inadequate or insufficient. Whilst green marketing may be the age old ecological marketing which was first discussed in 1975, over the years this process has undergone noticeable changes. The general lack of consistency in a standard definition of green marketing has led to ambiguity in research. Researchers are unsure of what all may or may not be inclusive in the subject they are researching on. Many individuals and firms have offered their own personal definitions to simplify ‘green marketing’. Most proposed definitions of green marketing integrate the standard definition of marketing which are all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants. This standard definition of marketing keeps in mind the basic purpose of marketing, to maintain and/or initiate a buyer seller relationship that is mutually beneficial to both parties. Because of this lack of a uniformed definition for green marketing, people wrongly believe that the term is restricted to goods that are recyclable, ozone friendly, refillable etc. These terms, though active terms of green marketing, fail to highlight the bigger picture that green marketing can also be applied to industrial and consumer goods and services. An excellent example of this would be resorts that promote themselves as ‘ecotourist’ with facilities that makes its customers experience nature etc. The marketing environment is among the many variables that has direct or indirect influence on a strategy. An organizations operating environment can be described as the micro-environment that deals directly or indirectly with clients. Macro-environment is more affected by external forces. Political, Economical, Social and Technological (PEST) forces while internal forces which is the internal environment that the organization has direct control over. It is based on the five M’s of men, money, machinery, materials and money. Managing internal change is called internal marketing. The external forces are however comparatively more difficult than internal. Political factors are based on the direct decisions made by the government. This comes in the form of policy/ legislation and is of grave consequence to an organization. The government’s decision in wage levels, health and safety measure effect all. In the economics sector, businesses are affected by interest rates and fiscal policies. Buyer’s behavior is determined by this. Social factors shape up individuals cognition. It imbibes the values held and ultimately plays major role in the individual’s buying behavior. (Samli, 1992) Organizations also need to keep up to date with the latest trends and likes of a particular society they are targeting. Technological factors play a crucial role in an organization. An organization needs to keep up to date with technology. A computer chip is changed every six months. If an organization is not updated it can fall prey to lagging, oblivion and finally extinction. (Morris, 1995) Green marketing or environment marketing is being applied by renowned and reputable organizations. Organizations such as The Body Shop, which were always environmentally active, established a pattern of providing alternatives to the available cosmetic products. This resulted in the creation of a new line of cosmetics that paved the way for competitors to follow. (Shapiro, 1999) In a study conducted in 1992 of sixteen countries, it was discovered that more than 50% of consumers in each country, indicated they were concerned about the environment. Whilst in another study conducted in 1994 in Australia found that 84.6% believed all individuals had a responsibility to be sensitive to the environment. 80% of the subjects claimed they had modified their behavior, including their purchasing behavior, for environmental reasons. The popularity of environment friendly products amongst the consumers, led to many organizations following in this trend. Generally there are five reasons cited as to why organizations would turn to Green Marketing which are: Organizations perceive environmental marketing to be an opportunity that can be used to achieve its objectives Organizations believe they have a moral obligation to be more socially responsible Governmental bodies are forcing firms to become more responsible Competitors environmental activities pressure firms to change their environmental marketing activities Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior One or more of these stated factors is the reason why an organization chooses to go green. Since consumers were showing a preference for ‘environment friendly’ products, organizations decided to cater to their needs. (Proctor, 2000) McDonalds is known to have changed its Clam shell packaging with waxed paper due to consumer concern over polystyrene production and Ozone depletion. In 1991, tuna manufacturers had to modify their usual fishing techniques as they were leading to the death of dolphins. Even Xerox was not detached from this environment friendly phenomenon and had to create a ‘high quality’ recycled photocopier paper to satisfy its client firms who were now demanding less environment harmful products. In the case of green marketing the government intervened and to protect consumers and society, came out with regulations to: 1) Reduce production of harmful goods or by-products 2) Modify consumer and industrys use and/or consumption of harmful goods 3) Ensure that all types of consumers have the ability to evaluate the environmental composition of goods. The government has played such an imperative role in implementing these reforms that the productions of many by-products are controlled through issuing various environmental licenses. At other times, the government tries to induce its customers to be more socially responsible. If one were to investigate the importance of green market and try and discover why it is important, one would arrive at the simple conclusion that green market is the preservation of our limited natural resources. Individuals and organizations are showing an obvious preference for green market so as to be more considerate of the environment. Companies are now realizing the social role they have to play. They are now seeing themselves as part of a greater community. Firms have found a way of adhering to this new trend of becoming environmental friendly yet keeping their objective of making profit in mind. Thus making organizations operate in such a manner, 1) They can use the fact that they are environmentally responsible as a marketing tool; or 2) They can become responsible without promoting this fact. Not every firm promotes the fact that it is environment friendly. Companies such as Coca-Cola have invested a large share of money into recycling and have modified their package to protect the environment. This is a double edged case where Coca-cola has shown their obvious concern for the environment yet has not used this as a marketing tool. This may be a reason many are unaware that Coke is a highly environmentally conscious organization. Another case is of Walt Disney World (WDW). WDW has a waste management program that is extensive and an infrastructure in place. However this is never drawn attention to hence not known. (Steiner, 2003) A reason for firms not highlighting their conscious attitude towards the environment would be that if firms were to draw attention to the fact that they are socially responsible, they face the risk of being declared negligent or harmful to the environment as with the changes and improvements in research and technology constantly in the shift. WDW and Coca-Cola are protecting themselves against any repercussion they might have to face if they are following the wrong course. An excellent example of such a case would be the aerosol industry which had to switch to Chlorofluorocarbons and then to Hydrofluorocarbons, only to later discover that hydrofluorocarbons are a greenhouse gas. Few firms have now turned to Dimethyl ether as a substitute. However this may also be damaging to the ozone layer. This is the result of limited experiments and scientific knowledge about green marketing. When we analyze the role of consumers buying behavior it is obvious the decision is based on four major factors: cultural, social, personal and psychological. These factors shape up the individuals taste and preference. This is where marketers meet a challenge. They may not be able to meet everyone’s individual tastes but have to appeal to wide mass audience. Marketers then use a variety of mix strategies to appeal to their audience. The five stages that a consumer goes through when undergoing his/her final decision to purchase is that of problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behavior. (Varey, 2001) After making a careful and concise study of these factors, one has an idea of the buyer’s buying behavior. Marketers also need to be aware of these factors individually. They need to be aware of the consumers’ culture, its subcultures and social classes. Besides these reference groups, lifestyles, occupation, stratification by location etc all play a vital role in the buyers’ decisions. Besides these variables some other factors come into count. The role of the initiator and influencer can be grave. Besides these, the buyer/s behavior in terms of their routine/ frequency, limitation in purchasing, lack of willingness to experiment with new products, extensive - if the buyer buys one or more expensive product but shops infrequently etc should also be counted. Consumers are often hesitant with new and unfamiliar products. They are passing through the phase of deciding whether or not that particular product/service should be adopted. The ‘adoption process’ consists of consumers passing through five decisive stages: awareness, interest, evaluation, trial and adoption. Organizations buying behavior is dissimilar to the consumers. Organizations are affected by environmental, organizational, interpersonal and individual factors. These individuals have their own set of behaviors and tend to influence others through interpersonal contact. In the environmental factors side, economic conditions is considered, the state of technological change is monitored, political and social factors are kept in mind and competitive developments play a major role in the company’s decision. Besides these an organizations policies, objectives, procedures etc are essential factors considered when making a decision. Interpersonal factors suggest authority (of concerned personnel), status and persuasiveness. An organization undergoes much more scrutiny when purchasing a new product and are more apprehensive then individuals. In marketing, segmentation, targeting & positioning, play a key role. Segmentation is the division of market or population into various subgroups with similarities. For example a group of people living in a particular area, demographic differences, geographic differences, psychographic differences are segmented today. (Varley, 2001) Segmenting an industrial product market is more specialized. It includes: Type of application/end Geographical Benefits sought Closely related to the above Type of customer e.g. banks or insurance companies Product/technology Customer size (amount) Usage rate / frequency Loyalty of customer Purchasing procedures Situational factors (commercial) Personal characteristics Whilst targeting is more specialized in terms of how specific segments should be approached. Positioning concentrates on conveying the product value to buyers. However of recent positioning has dropped to the point of being a simple document that simply tricks the customer into buying the product. The best positioning focuses on how the product will solve specific customer problems. The result of positioning is one can observe how a product is received and perceived and a suitable marketing mix can then onwards be designed. At present, green marketing/ environment marketing has no strategies for the conventional process of segmenting, targeting and positioning. This is due to the fact that green marketing is a relatively new phenomenon with not set rules therefore the process is constantly updated, shifted, revised and new rules are created. One can use the traditional way marketing works with segmentation, targeting and position and merge newer reforms into this. To assess green markets success in the market it needs to be made available more leniently, even across developing countries and needs to be specifically tested in certain demography’s and geographical locations. Marketing mix consists of a mixture of the product offerings, amalgamated to attract the target audience an organization aims to draw the attention of. This marketing mix consist of the product, price (value), promotion (means of promoting the product), and place (promotion) having the product available and offered to the target audience. These are the four P’s of marketing. In order for green marketing or environmental marketing to gain popularity in a vastly non-ozone friendly industry it needs to follow the four P’s of marketing to gain global awareness. Marketing mix is the mixture of all four of these factors to achieve the desired result. It is also known as the 4 P’s of marketing. It can also be explained as choices over products attributes, its distribution strategy, followed by the communication strategy and the pricing strategy a company offers its targeted markets. The marketing mix or rather the four P’s of marketing and segmentation, targeting and positioning work closely, entwined. (Fuller, 1999) For green marketing to be a globally responsive phenomenon, it needs to use the marketing mix to operate segmentation, dividing itself up in subgroups, stratifying people, targeting a fixed audience most likely to be responsive, perhaps a city/country health conscious and positioning ozone friendly products in localities where they shall be most appreciated. Also individuals should be targeted more over organization, which are, as mentioned more apprehensive towards new products. Also governments need to come out with more uniformed, more serious reforms which if, broken, shall be punishable by penalty of a heavy fine. Research conducted in the field of environment marketing, needs to be extensive and experimental. Organizations that declared their own selves to be socially responsible should understand the transitional phase green marketing in undergoing. Universities etc need to implement details about green marketing into their curriculum. Countries that are remote need to be made aware of their natural resource and taught the proper implementations of these. Above all green market is a profitable theory which needs to be realized by governments of other countries. Organizations such as The Body Shop have shown to their competitors that ozone-friendly products are in demand and appreciated by the public. However the publics of developing countries do not have this option and must be given so. Bibliography FULLER, Donald. (1999). Marketing Mix Design-for-Environment (Dfe): A Systems Approach. Journal of Business Administration and Policy Analysis MORRIS, Louis A. (1995). Consumer Comprehension of Environmental Advertising and Labeling Claims. Journal of Consumer Affairs, Vol. 29 PROCTOR, Tony. (2000). Strategic Marketing: An Introduction. Routledge SAMLI, A Coskun. (1992). Social Responsibility in Marketing: A Proactive and Profitable Marketing Management Strategy. Quorum Books SHAPIRO, Sherry B. (1999). Pedagogy and the Politics of the Body: A Critical Praxis. Garland STEINER, Michael. (2003). The Magic Kingdom: Walt Disney and the American Way of Life. The Historian, Vol. 65 VAREY, Richard J. (2001). Marketing Communication: Principles and Practice. Routledge VARLEY, Rosemary. (2001). Retail Product Management: Buying and Merchandising. Routledge Word Count: Read More