Contemporary Issues and Marketing - Assignment Example

?Contemporary Issues and Marketing Table of Contents Introduction 3 Part I. Key Environmental Development 4 Environment: Status and Trend 4 Technology Link to Global Warming: Status and Trend 5 The Role of the Automotive Industry in the CO2 Discussion 6 Part II. Assessment (or Forecast) of Marketing’s Response 8 Influences of Global Warming on the Operations of Automotive Industry 8 Green Marketing Approaches by the Automotive Industry 10 Effectiveness of the Marketing Behaviour 12 Part III. Discussion 14 New Product: Risks and Advantages 14 Effectiveness of the Marketing Behaviour 16 Conclusion and Recommendations 18 References 19 Introduction With the growing impact of environmental change, major players in the automobile industry are observed to consider the aspect of sustainable marketing with greater significance. It was in the beginning of the 21th century that automobile industry was apparently being accused for the increasing level of ecological hazards. The concerns were in general provided to the decreasing level of energy resources on earth and the increasing level of global warming due to the rapidly increasing number of automobiles used in the era. In order to minimise the impact of automobiles on the ecological balance of earth, the industry players introduced technologies which were built with the focus on fuel efficiency and minimum ‘greenhouse gas emissions’. Another motive to consider green technology in the development of fresh models was the need of competitive advantage in the fiercely competitive market. Experts have referred the era to be a transformational period for the industry with changes in technology, marketing perspective, and global outlook. However, a significant question rests on this context regarding the efficiency of these technologies in rewarding the industry players with enhanced competency and limited impact on the ecological balance. With this concern, the objective of the paper will be to critically evaluate the efficiency of green marketing in enhancing the overall successiveness of the industry. The paper will thereby intend to analyse the current trends of the industry. Furthermore, the paper will also emphasise on illustrating the marketing strategies adopted by the major companies with relation to the ecological factors with the purpose of attaining the research objective. Part I. Key Environmental Development Environment: Status and Trend Global warming has emerged to be one of the most debated topics in the modern day phenomenon. It causes various harms to the society and the environment in terms of severe diseases, drought and other environmental hazards. The recent evidences revealing the increase in the rate of global warming were observed to be the rise in the global temperature and the melting of polar bear habitation. The root causes of global warming are stated to be the increasing rate of carbon emissions as a consequence of burning of fossil fuels (Gray, 2001). Global warming is often used as a term to represent the current climate change occurring on earth. Climate change can be defined as the alteration in the global climate which chiefly encompasses with the natural environmental elements such as temperatures, rainfall patterns, expansion and reduction in ice sheets which in turn also causes fluctuations in the sea-level. Notably, these changes are recorded to occur in regional and global natural environment (Maslin, 2009). The recent status of global warming is observed to be worsening with rapid fluctuations in the global temperature. The precipitation in tropical regions is recorded to be decreasing which is stated by the experts to be a significant indication of global warming and the variations occurring in the sea-level on earth (Zhou & Et. Al., 2008). Furthermore, the current trends summarised by the experts reveal that the changes in rainfall will result in before time greening of foliage and extended thermal growing period. Effects have also been witnessed in the hydrological and biological systems on earth that comprises of fresh water resources (United Nations Framework Convention on Climate Change, 2011). Technology Link to Global Warming: Status and Trend The forecasted results of global warming depict significant decrease in the natural energy resources currently present on the earth. With its strong impact on the natural environment of the world in terms of precipitation, sea-level changes, temperature fluctuations and others, global warming has a strong influence on the technology sector of the global industry. In other words, the impact of global warming can be witnessed to transform the demographic features of various regions all around the world. This in turn will evidently have a significant effect on the operations of the industries related to technology. It is in this context that people considered the use of technology to alleviate the risk of global warming (Mohr, 2005). Along with the automotive industry, there are various other industries that have been witnessed to be strongly affected by the continuous change in global climate. For instance, the energy industry has been stated to be one of the most affected industries due to global warming. As stated by the experts, the industry is witnessed to be ineffective in supplying energy to the global customers with increasing demand and decreasing level of natural energy resources such as coal, fossil fuel, electricity and others (Jolley, 2004; Zhang & Et. Al., 2001). The impact of global warming can also be witnessed in the information technology industry. The rapidly increasing demand for mobile technologies has raised the concern regarding global warming. The increasing usage of mobile phones, computers and other electronic appliances are also alleged to play a crucial role in enhancing the threat of carbon emissions. In this regard, the current trends reveal the technology based industries to adopt energy efficient innovative strategies with due consideration to the reduction of carbon emissions (Ghosh, 2007). The Role of the Automotive Industry in the CO2 Discussion The automobile sector has been often accused on the ground of global warming. The fact has been considered by most of the top leaders in the industry. According to a majority of the organisational leaders in the automotive industry, the products play a significant role as a contributor to the ecological imbalances, especially in terms of global warming. However, the experts are somewhat reluctant to demonstrate the automobile industry as the sole contributor to the issue of global warming (Gadesmann & Kuhnert, 2007). Evidences based on the similar aspect have revealed that over the past years the public transport systems have significantly contributed to the decline of the ecological balance. Researchers have concluded that ever since the year 1990 to the year 2004, the rate of CO2 emission had increased by almost 32% globally particularly caused by transport. Therefore, it is quite apparent that the automobile companies should consider various attributes to minimise the CO2 and ‘greenhouse gas emissions’ for the overall benefit of the ecological environment of the industry (Gadesmann & Kuhnert, 2007). Figure: Carbon Emissions in European Union and the United States from 1990-2004. Source: (Gadesmann & Kuhnert, 2007). It can be apparently witnessed from the diagram represented above that the ‘greenhouse gas emissions’ or the CO2 emissions are recorded to be the highest in the US and the UK which are recognised to be the largest markets of automotive industry (Gadesmann & Kuhnert, 2007). However, in comparison to the UK the ecological effect of automotives traded in the US causes more ‘greenhouse gas emissions’. In relation to the allegation against the global automotive industry contributing largely to the global warming, it can be stated as a fact, although, the occurrence of global warming is also arguable in many stances. Part II. Assessment (or Forecast) of Marketing’s Response Influences of Global Warming on the Operations of Automotive Industry There are various evidences in the modern era that depict the marketing culture to be transforming with immense velocity. In the previous century, the prime concern of the marketers in the automobile industry was to surpass the expectations or demands of the customers in the target market. In this regard, the marketing approaches were fundamentally concerned with the pricing strategies and innovative design of the products. However, the marketing approach of the industry players in the 21st century can be observed to be significantly different from that of the previous era. The prime concern provided by the industry players in this century is related to the ecological issues, such as pollution in terms of ‘greenhouse gas emissions’, scarcity of energy, freshwater, raw materials and others. Therefore, the key environmental development in the context of ecological factors can be identified as the growing awareness of customers regarding the consequences of automobile engineering. This in turn forced the automobile companies to adopt various innovative strategies in terms of sophisticated technologies, freshly developed marketing strategies with due consideration to the ecological issues among others (Nunes & Bennett, 2008). It is due to this consideration that automobile industry intended to focus on a specified marketing dimension, which is referred to as ‘green marketing’. Comprehensively, green marketing in defined as a holistic approach towards marketing which focuses on the anticipation, identification and satisfaction of the customers as well as the society with due consideration to the ecological sustainability of the industry at large (Charter & Polonsky, 1999). Considering the occurrence of global warming as a fact and that the automotive industry is a major contributor to the aspect, it can be stated that the ecological factor will have a substantial influence on the operations of the industry and its strategies in turn. With this concern, the automotive industry is witnessed to adopt various strategies in order to reduce the amount of carbon emissions and develop fuel efficiency in cars. This would in turn facilitate the storage of natural resources in terms of fossil fuel and also control global warming by reducing carbon emission that is considered to be the most vital reasons for the hazard. However, the initiatives were essentially due to the enforcement of legal barriers and the awareness among the customers that led to the execution of green marketing in the global automotive industry (Charter & Polonsky, 1999). The automotive manufacturers have also been observed to provide significant consideration to the aspect of fuel efficiency. The cars designed by the manufacturing companies in the automotive industry tend to be concentrated on the fuel efficient aspects in order to minimise the total amount of fuel consumed by the industry customers. This will also actively support the ‘greenhouse gas emission’ strategies adopted by the industry players. Furthermore, with the decreasing supply of the fossil fuel energy in the international market, this strategy is also expected to attract customers’ preference towards cost effective and eco friendly transport options (Levy & Rothenberg, 2008). The core strategies undertaken by the major industry players are mostly related to the development of clean vehicles which are focused on fuel efficiency, limited carbon emissions and cost effective concepts. The marketing strategies adopted by Toyota can be illustrated in this context. In order to minimise the carbon emissions the company introduced its Ultimate Eco-Car which is based on fuel efficient technology and concentrates simultaneously on maintaining the performance of the vehicle. The company also introduced hybrid cars with the similar purpose of fuel efficiency. Furthermore, Toyota also launched electric vehicle which were entirely based on electricity and were termed to be completely free from carbon emissions. The company can also be observed to concentrate on developing new technologies to support its aim, i.e. to minimise the amount of carbon emission from its vehicles to a significant level without disturbing the performance of the vehicles in terms of quality services (Toyota Motor Corporation, 2011). Green Marketing Approaches by the Automotive Industry Evidences reveal that the automotive industry is tending to adopt green marketing strategies to limit its participation in the ‘greenhouse gas emission’ and global warming in turn. Almost every major industry player is concentrated on developing innovative and more sophisticated fuel efficient technologies. For instance, the current trend depicts that the focus of the technology strategies adopted by the major industry players are shifting towards electric vehicles and hybrid cars. To be mentioned, electric vehicles are termed to be the automotive products which are solely based on electricity power. On the similar context, the hybrid cars are manufactured with concentration to the aspect of fuel efficiency through the partial implication of electricity power (Deloitte, 2009). With the purpose of obtaining an in-depth understanding of the green marketing approaches adopted by the major players in the global automotive industry, the strategic alliances undertaken by one of the leading automobile companies, i.e. Toyota will be analysed in this section. Toyota has always been considered as a pioneer of green marketing in the automobile industry. Various strategies were implemented by the leading automobile marketer which can be identified as its green marketing approaches in the international market. For instance, the introduction of Toyota Prius in the year 2009 in the US brought a new revolution to the green marketing approach in the industry. The vehicle was based on hybrid technology and was stated to be significantly fuel efficient (Ottman, 2011). Toyota Motor Corporation has also introduced many other technologies and products to support the vision of the company, i.e. to minimise the carbon emissions caused by the automobile factors. In this regard, the company introduced Lexus RX400h, Toyota AYGO and many other freshly designed clean technology based vehicles with more sophisticated engine concepts. It is worth mentioning that the prime aim of the company is to achieve ‘zero emissions’. With this concern the major strategies applied by the company are related to the development of hybrid synergy drive technologies, fuel cell systems, ‘clean power’ D-4D. Furthermore, the company also concentrates on recyclability and zero waste approaches in its organisational operations, especially related to the manufacturing units (Toyota, 2005). Few other technologies that have been introduced by the company recently are the Plug-in HVs (Hybrid Vehicles) and further developed EVs (Electric Vehicles) with equal consideration to the aspect of customer service along with the prime aim of achieving ‘zero emissions’. A major approach undertaken by the company was the introduction of Plug-in Hybrid Taxicabs in Kyoto. The company thereby not only focuses on the low carbon emission systems in terms of technology and product designs but also provides significant consideration to the aspects of logistics and stakeholder services (Toyota Motor Corporation, 2010). Effectiveness of the Marketing Behaviour The aforementioned strategies implemented by the major corporate players of the global automotive industry are most likely to have a strong impact on the marketing behaviour of the companies. The attributes of marketing behaviour are identified as the pricing strategies of the company, its promotion strategies, and others which in turn affect various market variables such as customer buying behaviour, employment, efficiency in the products and services rendered by the automobile companies and others (Falk, 2004). In this context, the market behaviour considered by the companies is related to the production system implemented in relation to the impact of global warming and climate change. As mentioned above, almost of every company tends to focus on the green marketing aspect through implementing hybrid and electric technology. The prime concentration of the companies is to minimise the ‘greenhouse gas emission’ and fuel consumption of the vehicles. However, proper consideration has also been provided to the aspect of water and air pollution due to which the companies initiated to reduce water consumption and reprocessing of water, wastes, as well as products to reduce the environmental hazards. The effectiveness of these strategies in attracting customers worldwide and enhancing the revenue can be observed from the performance of these companies over the precedent few years. To be illustrated, Ford Motor Company had been witnessed to earn a total of $ 119,280 million in the year 2010 which was a significant rise over the revenue earned in 2009, i.e. $ 103,868 million. According to the company report, other than Volvo, almost every brand manufactured by the company had performed as per the expectation, especially the vehicles that were based on fuel economy concept (Ford Motor Company, 2010). Daimler also earned a significant increment in the total revenue earned from the sales in 2010 from that of 2009. For instance, the revenue earned in 2009 amounted to € 78,924 million which increased to € 97,761 million in 2010 (Daimler AG, 2011). The revenue earned by Honda Motors in the automobile sector has further been witnessed to contribute almost 75% to its net earnings, i.e. $ 92,210 million. This revenue was recorded to be 3.6% increase to the total revenue earned by the company in 2009 from the automobile sector particularly (Honda Motor Co., Ltd., 2010). Furthermore, the marketing behaviour of General Motors also seems to be attracting customers which in turn have certainly enhanced its market potential. Subsequently, the company witnessed a significant rise in the total sales of products based on fuel economy in the year 2010 (General Motors Company, 2011). Toyota, as a green marketer has also earned a significant advantage from the marketing behaviour with its focus on hybrid technology (Toyota Motor Corporation, 2010). From the above description regarding the performance of the companies implementing green marketing approaches, it is quite apparent that the market behaviour is effective in attracting customers and enhancing the market potential of the company. The findings obtained in this section will be discussed in the further study. Part III. Discussion New Product: Risks and Advantages Various risks and advantages can be observed in the marketing approaches adopted by the automobile industry. For instance, reduction had been witnessed in the total consumption of water and chemicals in the manufacturing plants of various automobile companies which can be identified as a significant advantage of green marketing. Furthermore, the researchers have also stated that road safety and recycling initiatives has also provided with considerable significance by the automobile companies which in turn have contributed to the reduction in the hazardous impact of automobile sector on the climate change and global warming (United Nations Environment Programme, 2002). Along with these advantages of green marketing, the automobile companies also face noteworthy risks associated with the implementation of green marketing approaches. For instance, the manufacturing of fuel efficient products such as hybrid cars, electric vehicles and other technologies cause considerable increment in the production cost incurred by the company. For instance in case of the company Toyota, the total costs were recorded to be increasing in prior years to 2010. Due to this reason the company had to implement few noteworthy strategies in order to reduce its costs such as cost retrenchment in financing operations, research and development and others (Toyota Motor Corporation, 2010). This in turn can affect the pricing strategies of the company and thus hamper the customer preference. Another risk associated with the implication of the approach is that hybrid cars and electric vehicles are stated to be low performers in comparison to the heavy vehicles. Moreover, the technologies are also considered to possess ineffective longevity and safety of passengers which can seriously affect the interest of the customers in the global market (European Communities, 2005). It is worth mentioning in this context that clean technology has also been criticised in terms of its inefficiency to reduce CO2 emissions. As stated by the experts, although the developed products are observed to efficiently reduce the amount of CO2 emissions, the charges can be transferred to the various other entities contributing to the automobile industry as suppliers. For instance, the steel industry uses coal and fossil fuel for the manufacturing of steel and thus, contributes a large amount in the ‘greenhouse gas emissions’ and climate change at large. Other supporting industries can also be alleged for the similar kind of functioning (Toyota Motor Corporation, 2010). One of the strategies was to introduce the Kyoto protocol. This protocol was enforced on the automotive product manufacturing companies to focus on limited amount of ‘greenhouse gas emission’ since 2005 (Gopal, n.d.). Effectiveness of the Marketing Behaviour The effectiveness of the green marketing approaches adopted by the companies can be quantified in with due consideration to the aspects of customer buying behaviour as well as the reduction in CO2 emissions which had been recorded as the prime objective of the marketing approach. According to the findings of the research, the companies had achieved considerable growth in terms of favourable customer buying behaviour. Another major objective of the companies was to attain competitive advantage in the rapidly changing industry scenario. Studies in this regard depicts that the initiative of green marketing had provided the automobile companies with a significant benefit in terms of technology, innovation, and research and development. Critics in this context have stated that the initiative to adopt the approach of green marketing was actually driven by the global crisis and the urgency of differentiation in the global industry rather than climate change and global warming. It is worth mentioning that whatever the reason is, green marketing approach has been quite effective in rewarding the global automobile industry with enhanced efficiency in technology and services rendered to the ultimate customers (Wad, 2010). The strategies adopted by the automobile companies were not only recorded as effective in rewarding the industry players with competitive advantage and increased revenue, but were also effective in reducing the amount of ‘greenhouse gas emission’ to a significant level. According to the evidences, the market of the US which was recorded as the most affected region due to greenhouse gas emission had more than 80% of clean cars in 2009. Subsequently, in the EU region and Japan it was witnessed that the noise pollution has diminished considerably. For instance, in comparison to 1990s the noise pollution decreased by 90% in 2007 due to the introduction of clean technology in the automobile sector. On the similar context, evidences have revealed that the use of elevated carbon fuels utilised in the automobiles and which were stated to be one of the major sources of CO2 emissions, had decreased significantly over ten years, i.e. since 1992 to 2002 (United Nations Environment Programme, 2002). Toyota was also highly benefited by the green marketing approach with steep increase in its sales revenue and brand awareness (Toyota Motor Corporation, 2010). This indicates a favourable market demand for the clean technologies but subject to efficient customer services. In the case of Ireland, the failure of electric and hybrid vehicles were apparently witnessed by the researchers due to the aforementioned reasons. In the automobile market of Ireland, the electric vehicles were witnessed to be ineffective in gaining customer attention, although, the hybrid technology sustained for a longer period with better prospects of growth. The major reasons for the failure of the clean technology were the smaller size, inefficient services, and others (Sustainable Energy Ireland, 2005). With an in-depth perspective, it can be stated that global automobile industry has moved a step further from its previous position in green marketing. However, the industry requires moving faster and in a more effective manner to gain the complete advantage of the approach in the near future. Conclusion and Recommendations The study of factors that influences the international automobile companies to implement green marketing approaches has revealed various aspects regarding the advantages and disadvantages of green marketing. With reference to the findings of the study, it can be stated that automobile industry plays a significant role in climate change and global warming. It is due to this reason that the companies have initiated to imply green marketing approach through the introduction of clean technologies. Another reason to adopt the strategic approach was to gain competitive advantage in the global market as stated by the experts (Wad, 2010). The approach has evidently supported the growth and competency of the automobile companies in terms of enhanced customer service quality and technological innovations. However, the approach also suffers from few limitations. For instance, inefficient performance of the products, ineffective quality, increased capital costs and others are few of the limitations possessed by the approach. Moreover, the industry has also been stated to have an ineffective influence over the supporting industries which results in less effective control of climate change and global warming through CO2 emissions (Sustainable Energy Ireland, 2005). With this concern, the industry players should initiate to influence the supporting industries to adopt sustainable strategies in minimising ‘greenhouse gas emissions’. The industry should intend to take the support of political, technological and social factors to eradicate the limitation. Furthermore, the industry players should initiate measures to develop their products more effective to reduce the technical limitations causing low quality services. References Charter, M. & Polonsky, M. J., 1999. Greener Marketing: A Global Perspective on Greening Marketing Practice. Greenleaf Publishing. Daimler AG, 2011. Five Year Summary. Investor Relations. 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