The Green Businesses and Green Marketing Issues of Patagonia Company - Term Paper Example

Marketing and growing green This essay is based on the green businesses and green marketing issues of Patagonia Company. Three different growth options for green businesses are discussed in the paper with reference to sustainability, strategy formation, positioning and marketing issues. These pathways are to go green via acquiring the green business, accentuate in the same capacity or architecting their business as a green business. Green washing and competitor intelligence are used as marketing tools for getting benefit from green business. Today’s world has created green image a necessity for businesses to grow, not only from environmental issues but also from competitive advantage’s point of view. Most of the businesses are adopting green image to be environment friendly. Some businesses follow green marketing to sell the benefits of the products while other in this capacity follows green businesses by running their operations in a green environment. Marketing- Growing Green This paper deals with marketing issues dealt in “Growing Green; The smart paths to developing sustainable products by Gregory Unruh & Richard Ettenson.” Thorough analysis of this article mentions the methods and problems related to growing green businesses. Green competition is increasing in today’s world due to resource allocation with respect to environmental issues. With the advent in knowhow of green products, marketing and businesses; most companies are adopting it as their competitive advantage. Patagonia is also one of them, who shifted their strategies towards environment friendly culture. Patagonia started as a small business to assist the climbers and surfers by making tools for them. Their main focus was to target all silent sport lovers by providing them with cloths and tools for climbing. This business was the main inspiration by the interest of the founder in these sports. Patagonia not only cared for the customer but also have a great love for the nature and its beauty. The notion of saving the environment brought them towards ecofreindly production. Their aim was not only to go green but also to take others “go green” in the industry. First green strategy of Patagonia was use of ecofriendly raw material in their cloths production. They used recycled polyester rather than cotton which usually contains pesticides. They have developed very high standards for being environment friendly users. They modify their product designs, manufacturing capacities, utilization of raw material and energy sources to reduce the effect of these entire on environment. (Rarick, Charles A, Feldman, Lori S, 2008) They company started their journey of green image in early summer of 1994. This was the immediate response to the harmful impacts of their company on the environment. Research and development department conducted a thorough research on use of fibers predcted the major cause of dreadful impact on earth. "If we continue to make clothes with conventionally grown cotton, knowing what we know now, were toast anyway. Lets do it; lets go organic."(Yvon, 1994) He advised the company to go green. There came an issue of dealing with the resources, company had and growing green through manufacturing of green products. For Patagonia it was difficult to sustain their image as a green business due to fewer resources, but it was necessary to do as a right thing for the environment. The sense of environmental responsibility can be use as a source of business differentiation and company growth through competitor’s intelligence. (Unrah. G, Ettenson. R, 2010) Green product development brought unique cultural and execution challenges to the company. This was important to address properly for the sustainability of the green business. In the case of growing green by Gregory Unrah and Richard Ettenson, many marketing issues related to green businesses were dealt. They mainly focused on the following issues. Sustainability Strategy formation Advertisement Positioning of the brand Green marketing Execution Same faced the Patagonia while changing their business strategies in response to growing green concept. They lowered their concentration from many other things to lower the cost of developing green products. It was difficult for the company to sustain their image. They didn’t make “green” as their selling point. Their strategy was to encourage the whole industry for growing green and moved their advertisement towards the benefits of green. This took them to move as a green business first rather than doing green marketing for their products. The main reason was insufficient resources and capacities for the organization. Patagonia not only had to change their strategies, while they also focused on introducing this opportunity to other businesses in the industry. They developed the notion of keeping concurrent resource management and green image. Green growth became a priority in many businesses with the need for environment saving efforts. Many countries took their lead towards fight against environment saving. At the 60th anniversary of Republic of Korea, its president declared the nation as a green nation through minimal use of carbon in upcoming 60 years. This became the motto of their mation to use less carbon for environment survival. (Ki-jong, Woo, 2010) Many different strategies can be used to go green either through marketing or business, depending upon the nature of the organization. After deciding the company’s capabilities and industry’s position, one can find a way to go green. All strategies depend upon the nature and resources of businesses. If companies have fewer resources, they can go green by adopting low cost strategies. Organizations with well defined standards in respective industries and less sustainability capabilities can adopt those standards benefiting from the marketplace. Wal-Mart planned to develop a “sustainable product index” for supplier products. This strategy was developed to keep a check on the product’s effects on natural environment. Through sustainable products index, other organizations can also consider the need of green image and operations in the industry. Due to the development of sustainable product index, Wal-Mart suppliers compelled to attain those standards to keep their products on store. (Unrah. G, Ettenson. R, 2010) Growing green’s is not always clear to the objectives and execution plan of the company. There always exists some ambiguity. There are three different pathways discussed in the case of growing green by Gregory Unrah and Richard Ettenson. First pathway to go green is Accentuate the organization. This is the easy and best approach for organizations to go green. Organizations can move into any of their capacity like product, manufacturing, supply chain, packaging and communication etc. this pathway needs not to go for something very new and innovative for themselves but can go green in what they already have in their resources. Nike moved towards green image creation for the company not only by the manufacturing of green products but also through keeping their supply chain green. (Reena Jana, 2009) Future goal for the Nike was equally set not only for the customer satisfaction by providing sustainable benefits from ecofreindly products but also for the factory workers to work in a green environment and rewards for the stakeholders was kept at a preference. (Stephanie Schomer, 2010) this increased the Nike’s capacity of bringing green products with equal benefits for customers, employees and stakeholders. Second strategy to go green is through acquiring someone else’s green business. There are some issues of strategic fit and culture clash in acquiring other’s green business. Acquiring someone’s business is difficult too due to adverse effect on brand image, if not properly managed. Toms of Maine started manufacturing personal care items and toothpastes as first one to bring green products in the industry. (Ilana DeBare, 2007) Colgate Palmolive acquired it for going green and accepted all the challenges of acquisition with a green business. This could create a culture conflict between Colagte and Tom’s of Miane, if not managed properly. The third way to be a green business is by “Architect”. This strategy is good for businesses which are highly motivated in product development and innovation. This method of going green is rather costly and slow. The launch of hybrid Prius by Toyata made it leader in auto industry as a green product launcher. (Katie Rawls, 2008) These all three growth options for green businesses and becoming green are related to marketing and business strategies in a direct way. Marketing deals with developing a value for the customer and green businesses also create value through selling benefits of green products. This is known as “Green Marketing”. All businesses opt for growth whether they are green or not. Different businesses strategies are made to achieve company’s goals effectively and efficiently. But now days it is necessary for businesses to add an element of green in their operations and activities. A case by Unrah and Richard Ettenson discussed the green businesses pathways and corporate examples. They used two different terminologies in the article which should be clear. Greenwashing Competitor intelligence The term Greenwashing is originated from a combination of green and white wash. This is the marketing tool to connect or develop a link between any type of institution and environmental issues for unsustainable products. It motivates organizations to develop a positive association with environment. Some businesses who offer green range of products follow this as a green marketing dtrategy to sell the benefits of their ecofriendly products. Competitor’s intelligence is the core of strategic planning, and is related to achieve the competitive edge. As for current industry scenarios, organizations are doing more research on ways to go green in response to customer needs and finding a way to go ahead of competitors. These two terminologies are important in developing business and marketing strategies for organizations going green. The relationship between organization’s green business and green marketing is very strong. Both views of “going green” need to be addressed in the operations of business, properly. For this business and marketing strategies complement each other specially in the case of attaining green image. Green image of the business is now the need for businesses to grow in an environment friendly environment as most of the businesses are adopting green marketing strategies and green growth options. It has become a necessity for organizations to make green as their selling point and competitive edge. To have a competitive edge on the competitors within industry, organizations need to have the image of “go green” in consumers mind. These issues, discussed above, were the main consideration in case of “growing green by Unrah and Richard Ettenson”. This has developed the link in businesses and green image. With the advent of green image in Patagonia Company, their growth moved to a new postion. Keeping in mind other considerations for the company, many people argued that Patagonia could grow at much faster pace if it goes public with this green image. But the strategy of Patagonia was to slowly kill the competition in the market. By going public and green can boost up the sales but that would also lead to the end of the company’s aim and goals. Patagonia charged higher prices for green products which add more operating margins to their financials than the industry average. Patagonia is slowly increasing its customers by developing more awareness of ecofriendly product needs and customer satisfaction. At the other side, critics said that this company can do much better for the environment by taking public and green image side by side. With this need for green image and environment safety issues, many companies like Patagoonia became green but others took sustainability issues itno their considerations without moving as green businesses in the industry. (Rarick, Charles A, Feldman, Lori S, 2008) Besides different corporate examples of adopting green growth options, Patagonia moved towards green approach through architecting their business as a green business. In start they didn’t go for green marketing but added it in their marketing approach afterwards with the increase in resources for a green business to run. Their aim was to cut the usage of non environment friendly material and moved into their capacities as ecofriendly products. This was a lead by Patagonia to move in the industry while taking sustainable products with less impact on the environment. References 1. Unrah, Ettenson . R. (2010). Growing green: three smart paths to developing sustainable products. Harvard Business review, 94-100. 2. Unrah, Ettenson . R. (2010). Winning in the green frenzy: don’t let you competitors control what sustainable means in your industry. Harvard Business review, 110-116. 3. Ilana DeBare. (2007). The world according to Tom’s of Maine. Chronicle, retrieved from http://articles.sfgate.com/2007-10-10/bay-area/17264209_1_natural-products-natural-toothpaste-oral-care 4. Stephanie Schomar. (2010). Nike’s green innovation evolution. Fast company, retrieved from http://www.fastcompany.com/blog/stephanie-schomer/write/nikes-green-innovation-evolution 5. Patagonia and Organic Cotton: A Case Study, Patagonia.com. Retrieved from http://www.patagonia.com/us/patagonia.go?assetid=2066 6. Rarick, Charles A, Feldman, Lori S. (2008). Patagonia: climbing to new highs with a smaller carbon footprint. Journal of international academy for case studies, retrieved from http://findarticles.com/p/articles/mi_qa5452/is_200807/ai_n27899750/pg_3/ Read More