FACTORS AFFECTING GREEN MARKETING IN

INDIA: A STUDY OF METRO CONSUMERS

Dissertation Submitted to the Padmashree Dr. D. Y .Patil

University,

Department of Business Management

in partial fulfillment of the requirements for the award of the

Degree of

MASTER OF PHILOSOPHY in

BUSINESS MANAGEMENT

Submitted by ARTEE AGGRAWAL

(Enrollment No. DYPMPHIL076990001)

Research Guide

Dr. R. GOPAL
DIRECTOR, DEAN AND HEAD OF THE DEPARTMENT

PADMASHREE DR. D.Y. PATIL UNIVERSITY, DEPARTMENT

OF BUSINESS MANAGEMENT, Sector 4, Plot No. 10,
CBD Belapur, Navi Mumbai 400 614
August 2010
I
FACTORS AFFECTING
GREEN MARKETING IN
INDIA:
A STUDY OF METRO
CONSUMERS
II
DECLARATION

I hereby declare that the Dissertation entitled Factors Affecting Green

Marketing In India: A Study Of Metro Consumers submitted for the Award

of Master of Philosophy in Business Management at the Padmashree Dr. D.Y.
Patil University Department of Business Management is my original work and
the thesis has not formed the basis for the award of any degree, associate
ship, fellowship or any other similar titles.

Place:

Date:

Signature of the Guide Signature of the Head of the dept. Signature of

the student
III
CERTIFICATE

This is to certify that the dissertation entitled Factors Affecting Green

Marketing In India: A Study Of Metro Consumers submitted by Ms. Artee

Aggrawal is a bonafide research work for the award of the Doctor of
Philosophy in Business Management at the Padmashree Dr. D. Y. Patil
University Department of Business Management in partial fulfillment of the
requirements for the award of the Degree of Master of Philosophy in

Business Management and that the dissertation has not formed the basis for
the award previously of any degree, diploma, associate ship, fellowship or
any other similar title of any University or Institution.

Also certified that the thesis represents an independent work on the part of
the candidate.

Place:

Date:

Signature of the
Head of the department Signature of the Guide

IV
ACKNOWLEDGEMENT

In the first place, I am indebted to the Padmashree Dr. D.Y. Patil University

Department of Business Management, which has accepted me for

Doctorate program and provided me with an excellent opportunity to carry out
the present research project.

The research work embodied in this dissertation has been carried out under
the expert guidance and supervision of Dr. R. Gopal, Dean and Director,

Department of Business Management, Padamshree Dr. D. Y. Patil

University. It was only due to his valuable guidance and cheerful enthusiasm
that I was able to complete my research work in a respectable manner. My
profound gratitude and most sincere acknowledgement are extended to him
for his constant encouragement and intellectual insights and also the
constructive criticism that was of immense help from the outset to the finale.

Last but not the least I want to acknowledge the contribution of all those
people who helped me in the one way or the other in compilation of my
dissertation work especially the administrative staff and the library staff at
Department of Business Management, Padamshree Dr. D. Y. Patil University.

Place:

Date: Signature of the student

V
CONTENTS

CHAPTER NO.
TITLE
PAGE NO.

List of Tables
VIII

List of Figures
IX

EXECUTIVE SUMMARY
X

1
Introduction to Green
1

Marketing

2
Kyoto-protocol and Clean
17

Development Mechanism

3
Green Marketing: Literature
56

Review
4
Green Marketing: Case
78

Studies

5
Objective of the Study and
105

Research Methodology

6
Profile of the Respondents
114

7
Factors Affecting Green
122

Marketing

8
Summary and Conclusion
146

Bibliography
156

Annexure
164

Questionnaire
168

Repot on Green Marketing

177

VI
LIST OF TABLES

Table No.
Title
Page No.

6.1
Age of the Respondents
116

6.2
Qualification of the Respondents
118

6.3
Working Status of the Respondents
119

6.4
Gender of the Respondents
121

7.1
Factor Affecting Green Marketing
125

7.2
Importance of Factors affecting Green
129
Marketing

7.3
Factor Affecting Green Marketing by
132

Age

7.4
Factor Affecting Green Marketing by
135

Qualification

7.5
Factor Affecting Green Marketing by
137

Gender

7.6
Understanding of Consumer for
142

Green product

7.7
Understanding of customers for
144

green symbol
7.8
Awareness of Green products present
145

in the market

VII
LIST OF FIGURES
Figure No.
Title
Page No.

2.1
CDM Project cycle
51

3.1
Awareness Stages in Economic
73

Development of Industries

3.2
Stake holders for Go-Green Strategy
74

5.1
Framework for Factors affecting Green
112

Purchasing Behaviour

6.1
Age of the Respondents
117

6.2
Qualification of the Respondents
118

6.3
Working Status of the
120

Respondents

6.4
Gender of the Respondents
121

7.1
Factor Affecting Green Marketing
133

by Age

7.2
Factor Affecting Green Marketing
136

by Qualification

7.3
Factor Affecting Green Marketing
137

by Gender

7.4
Awareness about Eco-certification
139

among consumers

VIII
EXECUTIVE SUMMARY

The last decade has witnessed a dramatic increase in environmental

consciousness worldwide. One recent survey found that 82 per cent of British
citizens rated the environment as an immediate and urgent problem, while
another study established that 69 per cent of the general public believes that
pollution and other environmental damage are impacting on their everyday
life. The increase in environmental consciousness has had a profound effect
on consumer behaviour, with the green product market expanding at a
remarkable rate. Companies all over the world are striving to reduce the
impact of products and services on the climate and other environmental
parameters. Marketers are taking the cue and are going green.

Green marketing refers to the process of selling products and/or services

based on their environmental benefits. Such a product or service may be
environmentally friendly in it or produced and/ or packaged in an
environmentally friendly way. 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.

In order to position green product offerings, companies must first segment the
market according to levels of pro-environmental purchase behaviour and then
target the greener consumer segments. However, a review of the literature

IX
indicates that socio-demographic and personality indicators have had only
limited success in profiling consumers according to their proenvironmental
purchasing behaviour. The demand for green products has been shown to be
uneven across different market segments. Thus, for organizations to position
green products, or communicate their environmental efforts, to members of
the population who are likely to be concerned about environmental issues,
green consumer segments need to be identified.

This research work aims to illustrate how the green challenge is exerting an
influence on current marketing practice and how its implications will require a
more profound shift in the marketing paradigm, if marketers are to continue
delivering customer satisfaction at a profit throughout this new millennium.

The study is empirical in nature and has been designed to find out the
consumer perception of the green products and the factors that affect their
purchasing behaviour for the green products.

OBJECTIVE OF THE RESEARCH

The objective of the present study is

To determine the factors affecting Green purchasing behaviour among Indian

consumers

To determine most important and least important factors affecting green

purchasing behaviour.

X
To give recommendations and suggestions to increase the uptake of green
products in India.

PROPOSED HYPOTHESIS

The hypothesis framed to test the proposed objectives are-

H10 : Age has no significant relationship with green purchasing behaviour. H 11 :

Age has significant relationship with green purchasing behaviour.

H20 : Gender has no significant relationship with green purchasing behaviour.

H21 : Gender has significant relationship with green purchasing behaviour.
H30: Qualification has no significant relationship with green purchasing
behaviour.
H31: Qualification has significant relationship with green purchasing

behaviour.

RESEARCH METHODOLOGY
Development of Questionnaire

The questionnaire was designed by consulting many studies to understand

the various constructs for the designing of

the questionnaire and by
conducting a brain storming session on
factors affecting Green

purchase behavior in India with 120 students and faculty members of a

management institute. Many factors have been identified such as ecological
awareness, social responsibility towards environment, health awareness,

XI
stressful life, promotion of green products, presence, packaging, eco-
certification etc. Based upon these various factors a framework has been
developed.

Based on the developed framework a questionnaire was designed with 640

questions. Then on the basis of face validity and repeatability, the numbers of
questions were reduced to 150.

The questionnaire was divided into three parts-

Environmental awareness

Eco purchasing behaviour

Demographic profile

A pilot testing was done with these 150 questions and finally an instrument of
43 questions was developed. A five point likart scale was used to collect the
responses. Data has been collected from 695 respondents from various parts
of Mumbai and Navi Mumbai.

DATA ANALYSIS

Data analysis of the filled questionnaire has been done using SPSS. Primarily
a factor analysis was done on the questionnaire to identify the important
factors affecting Green Marketing among Indian Consumers.

Total 11 factors have been identified in the studies that have the egenvalue of
more then 1.

The factors identified are-

XII
S.No
Factors

1
Concern for health and environment

2
Eco buying attitude

3
Social Responsibility

4
Eco certification

5
Social awareness and value

6
Lifestyle

7
Absence of marketing

8
Promotion

9
Brand consciousness

10
Indifferent attitude

11
Packaging
An analysis of mean and standard deviation of these factors showed that
Concern for health and environment was considered as most important factor
by the Indian consumers in green purchasing behaviour, followed by
packaging as the second, Eco-certification as the third, and Lifestyle as the
fourth most important factor while Indifferent attitude is considered as least
important factor, followed by brand consciousness and eco-buying attitude.

The results showed that Gender and Qualification has a significant

relationship with green purchasing behaviour and Age has no significant
relationship with it.

XIII
CONCLUSIONS

Green marketing is still in its infancy in India still this study shows that it is

offering a number of significant benefits to Indian Market:

Marketers get access to new markets and gain an advantage over

competitors that are not advocating greenness.

Marketers can charge a premium on products that are seen as more eco-
responsible.

Organizations that adopt green marketing are perceived to be more socially

responsible.

Green marketing builds brand equity and wins brand loyalty among
customers.

Most customers choose to satisfy their personal needs before caring for the
environment.

Overemphasizing greenness rather than customer needs can prove

devastating for a product.

Many customers keep away from products labeled green because they see
such labeling as a marketing gimmick, and they may lose trust in an
organization that suddenly claims to be green.

Green marketers need to find out the value their customers place on green
benefits. It is important that they position the product on the

XIV
basis of the functional need it caters to and then talk about the

additional benefits of greenness.

Marketers need to find out whether, by adopting green marketing, their

organizations will be perceived as more socially responsible. They need to
know whether their customers understand the benefits of green products and
value them enough. If they do not, then the marketers may also need to
invest in customer education in order to make their marketing efforts
successful.

However, Green marketing should not neglect the economic aspect of

marketing. Marketers need to understand the implications of green marketing.
Marketers also have the responsibility to make the consumers understand the
need for and benefits of green products as compared to non-green ones. In
green marketing, consumers are willing to pay more to maintain a cleaner and
greener environment. Finally, consumers, industrial buyers and suppliers
need to pressurize effects on minimize the negative effects on the
environment-friendly. Green marketing assumes even more importance and
relevance in developing countries like India & Pakistan.

XV
CHAPTER-1

INTRODUCTION TO

GREEN MARKETING
XVI
CHAPTER-1

INTRODUCTION TO GREEN MARKETING

Beginning of the twenty-first century is witnessing the growing social

and environmental issues as a consequence of increased economic
growth. Increasing levels of greenhouse gasses in the atmosphere, a
hole in the ozone layer caused by CFC releases, widespread destruction
of the rain forests, and a growing list of endangered species and
ecosystems are just a few of the indicators that all is not well. World
Bank (Word Bank Report, 2000) figures showed that nearly half the
worlds population lives on under $2 per day. For this half of the world,
issues of consumer choice and sovereignty or discretionary spending
have little meaning, and promises that the growth in the industrialized
economies would lead to a better quality of life for them have generally
not been fulfilled.

For the new century, the key challenge for mankind is to find more
sustainable and equitable ways to produce consume and live.
Sustainability was once a vision of the future shared by an
environmentally-orientated few. The publication of the Brundtland

Report Our Common Future in 1987 brought the issue into the
mainstream. In the wake of the 1992 Rio Earth Summit, the worlds
governments and major corporations have increasingly adopted the

XVII
pursuit of sustainability as a goal. The real challenge lies in turning
these good intentions into meaningful progress in the face of powerful
vested interests, a deeply entrenched and environmentally-hostile
management paradigm, and a global economy with tremendous
momentum on a trajectory which aims towards conventional economic
growth.

Todays scenario of continuous change in lifestyles and demands of

consumers has raised the concern of the organizations to tap the
market with new strategies. Environmental concern is a new mantra
today to showcase their contribution for environmental awareness and
corporate accountability towards real improvement in environmental
degradation caused by various factors. Organizations success is no
more measured not only by financial performance, but also by their
ecological and social accomplishments. In addition, the current
economic climate has reinforced the need to plan for long-term
sustainability of organization as well as natural resources. The Triple
Bottom Line of people, planet and profit is incentivizing companies to
innovate in order to satisfy society and shareholders alike, and to
explore and gauge the potential of newer methods and markets.

For marketing, the challenge is twofold. In the short term, ecological

and social issues have become significant external influences on
companies and the markets within which they operate. Companies have
to react to changing customer needs, new regulations and a new social

XVIII
zeitgeist which reflects increasing concern about the socio-
environmental impacts of business. In the longer term, the pursuit of
sustainability will demand fundamental changes to the management
paradigm which underpins marketing and the other business functions
(Shrivastava, 1994).

Balancing economic interests along with social and environmental

responsibility is referred to as sustainability, a growing approach to
business that has led stakeholders to put increased pressure on
companies to optimize their goals and corporate responsibility. Yet the
messages are mixed and quite fuzzy. Shareholders expect from
companies to generate profits, but they also want from these companies
to make a positive contribution towards society through negating
environmental impact. Employees, regulators and, the customers all
want a company to do well in financial and growth term, but they also
want it to do good. Innovative organizations that are successful in this
space have explored competitive advantages inherent in embracing
sustainability.

Consumer is ruling the market today and they are exercising their

vote with everything they purchase (Ottman, 2006; Polonsky,1994;

Prakash, 2002). By a conscious decision to exchange money for a good

or service, a consumer is validating the importance of that good or
service. Today customers put a lot of emphasis on choosing products
that they believe in on an ethical level. On one level, this might mean,

XIX
say, avoiding clothing stitched by child laborers. For another consumer,
the tipping point might be the way the company treats the environment
in their design, testing, and production processes.

Successful businesses have realized that at the end of the day a

business is going to be assessed by its profits as well as contribution to
human potential and harmony with other resources, both natural and
artificial. However, Selling environment-friendly products is almost as
difficult as cleaning it up. It entails much more than a new package,
using recycled material instead of virgin ones and natural and organic
ingredients instead of artificial ones. Marketers have historically faced
an uphill battle when it comes to marketing eco-friendly goods. Simply
put, it is difficult to influence consumer purchase behavior without first
impacting attitudes and values (Thogersen and Olander, 2002). These
values, however, take a concerted effort over a long period of time to
change.

More than 12 other studies in the US, Brazil, Europe, Mexico, South
Korea and Taiwan have established links between air pollutants and low
birth weight premature birth still birth and infant death. Thus the
growing awareness among the consumers all over the world regarding
protection of the environment in which they live, People do want to
bequeath a clean earth to their offspring. Various studies by
environmentalists indicate that people are concerned about the
environment and are changing their behavior pattern so as to be less

XX
hostile towards it. Now we see that most of the consumers, both
individual and industrial, are becoming more concerned about
environment-friendly products. Most of them feel that environment-
friendly products are safe to use. Worldwide evidence indicates people
are concerned about the environment and are changing their behavior.
As a result of this, green marketing has emerged which speaks for
growing market for sustainable and socially responsible products and
services. As resources are limited and human wants are unlimited, it is
important for the marketers to utilize the resources efficiently without
waste as well as to achieve the organization's objective.

GREEN MARKETING

Green marketing is the process of developing products and services

and promoting them to satisfy the customers who prefer products of
good quality, performance and convenience at affordable cost, which at
the same time do not have a detrimental impact on the environment. It
includes a broad range of activities like product modification, changing
the production process, modified advertising, change in packaging, etc.,
aimed at reducing the detrimental impact of products and their
consumption and disposal on the environment.

Green marketing refers to the process of selling products and/or

services based on their environmental benefits. Such a product or
service may be environmentally friendly in it or produced and/or
packaged in an environmentally friendly way. The obvious assumption

XXI
of green marketing is that potential consumers will view a product or
service's "greenness" as a benefit and base their buying decision
accordingly. Companies all over the world are striving to reduce the
impact of products and services on the climate and other environmental
parameters. Marketers are taking the cue and are going green.

Green marketing offers business bottom line incentives and top line
growth possibilities. While modification of business or production
processes may involve start-up costs, it will save money in the long
term. For example the cost of installing solar energy is an investment in
future energy cost savings. Companies that develop new and improved
products and services with environmental impacts in mind give
themselves access to new markets, substantially increase profits and
enjoy competitive advantages over those marketing non-
environmentally responsible alternatives.

According to a recent study for North America, Eco Markets 2009 (Kate
Rusnak, 2009), respondents attributed some importance to all of the
purchasing factors indicated in the survey, price and performance were
ranked as most important in a list chat also included environmental and
social considerations. Comparing "green" packaging products against
traditionally used containers, bags and sacks revealed that slightly
more purchasers believe that green packaging costs more while 30%
see it as costing the same. Throughout the Eco Markets study, findings
suggest there is plenty of room for green product growth in the

XXII
marketplace. When it comes to selecting green products, eco-labels can
increase trust and confidence in green products.

However, Selling environment-friendly products is almost as difficult as

cleaning it up. It entails much more than a new package, using recycled
material instead of virgin ones and natural and organic ingredients
instead of artificial ones. Marketers have historically faced an uphill
battle when it comes to marketing eco-friendly goods. Simply put, it is
difficult to influence consumer purchase behavior without first
impacting attitudes and values (Thogersen and Olander, 2002). These
values, however, take a concerted effort over a long period of time to
change.

GREEN MARKETING: DEFINITION

Most of the definitions of Green Marketing are focused on

environmental friendliness and offering product to customers by
labeling Green. The consumer perspective is highly neglected (Ottman,
Stanford and Hartman, 2006). Ottman et all (2006) related the reasons in
developed countries to efficiency and cost effectiveness, health and
safety, performance, symbolism, convenience and bundling. Some
studies from South Asia (Kaman Lee, 2008) showed that social influence
was the top predictor of Hong Kong adolescents green purchasing
behaviour, followed by environmental concern as the second, concern
for self-image in environmental protection as the third, and perceived
environmental responsibility as the fourth top predictor.

XXIII
From developing countries perspective the most important aspect to be
considered primarily is creation of awareness among consumers and
creating cost effective technologies which involves not only a stake
from producers and consumers but also the role of state is very crucial.

PROPOSED DEFINITION FOR THE STUDY

Green Marketing is an art of creating awareness among consumers

about carefully planned and developed eco compliance products and
services using competitive pricing, promotion and distribution
strategies that lead to increased uptake of product and services
increase in ROI and finally consumer satisfaction.

Green Marketing encompasses:

Being Green or using eco-friendly technology in various process of

manufacturing and

Spreading Green ie. Creating awareness among consumers for high

uptake of green products.

While more and more companies are focusing on Being Green less
attention has been paid on spreading green and since attitude and
perceptions are socially constructed it cannot develop without focusing
efforts on creating awareness for eco-friendly technology.

All types of consumers, both individual and industrial are becoming

more concerned and aware about the natural environment. In a 1992
study of 16 countries, more than 50% of consumers in each country,

XXIV
other than Singapore, indicated they were concerned about the
environment. A 1994 study in Australia found that 84.6% of the sample
believed all individuals had a responsibility to care for the environment.
A further 80% of this sample indicated that they had modified their
behavior, including their purchasing behavior, due to environmental
reasons. As demands change, many firms see these changes as an
opportunity to be exploited. It can be assumed that firms marketing
goods with environmental characteristics will have a competitive
advantage over firms marketing non-environmentally responsible
alternatives.

There are numerous examples of firms who have strived to become

more environmentally responsible, in an attempt to better satisfy their
consumer need. McDonald's replaced its clam shell packaging with
waxed paper because of increased consumer concern relating to
polystyrene production and Ozone depletion. Xerox introduced a "high
quality" recycled photocopier paper in an attempt to satisfy the
demands of firms for less environmentally harmful products. This is not
to imply that all firms who have undertaken environmental marketing
activities actually improve their behavior. In some cases firms have
misled consumers in an attempt to gain market share. In other cases
firms have jumped on the green bandwagon without considering the
accuracy of their behavior, their claims, or the effectiveness of their

XXV
products. This lack of consideration of the true "greenness" of activities
may result in firms making false or misleading green marketing claims.

INDIA: NEED FOR GREEN MARKETING

India is worlds 2nd largest populated country and the natural resources
are under tremendous pressure and therefore there is an urgent need to
pay attention for a right balance between consumption with
conservation of natural resources. This paper reviews the existing
literature on Green Marketing and proposes the role of different
stakeholders in Green marketing strategy. Further it examine the
various factors hampering the uptake of Green products in India and
highlight the need of creating consumer awareness and extensive use
of cleantech (environmental friendly technology) to address green
myopia in India.

India is currently facing the challenge of degraded environment and is

paying heavy health and economic price for it (Nagdeve, 2002). After
Copenhagen, Indian market is swamped with commodities claming to
be green. State has declared subsidies on the production of green
products and for complying with the CDM norms to reduce carbon
prints. Corporate world has also geared up to encash the profits coming
from claming green from state as well as consumers.

Market is trying to pull the consumers who are exercising their vote
with everything they purchase (Ottman et all, 2006; Polonsky,1994;
Prakash, 2002) by putting a lot of emphasis on choosing products that

XXVI
they believe in on an ethical level. Despite all efforts put forth by
companies to sell the products with green labels, the uptake of the
green products in Indian market is still near to the ground (Aggrawal et
all, 2010). Consumer perception for GREEN is still unclear (Chris Ely,
2010). Studies from the developed countries reported 90 percent of
consumers familiarity with terms like recycling, energy efficiency,
organic and global warming and consumers purchase
environmentally friendly products, even if that means paying a higher
price (Hume 1997; Miller 1993). Having addressed consumer behaviour
and behaviour related to green concepts and activities, one of the
biggest questions facing the industry is how environmental awareness
and concerns translate when it comes time to buy. The demand for
green products has been shown to be uneven across different market
segments (Ottman, 1992; Peattie, 1992). Thus, For organizations to
position green products, or communicate their environmental efforts, to
members of the population who are likely to be concerned about
environmental issues, green consumer segments need to be identified
(Bohlen et al., 1993, p. 415). There is an attitude-behaviour gap' where
30% of consumers report that they are very concerned about
environmental issues but they are struggling to translate this into
purchases (Young, Hwang & Caroline J Oates, 2010). This gap is even
larger in emerging economies like India. Realizing this gap the present

XXVII
study has been designed to understand the factors affecting the green
purchasing behaviour in India.

This research work aims to illustrate how the green challenge is

exerting an influence on current marketing practice and how its
implications will require a more profound shift in the marketing
paradigm, if marketers are to continue delivering customer satisfaction
at a profit throughout this new millennium. Green marketing subsumes
greening products as well as greening firms. In addition to manipulating
the 4Ps (product, price, place and promotion) of the traditional
marketing mix, it requires a careful understanding of public policy
processes. Green marketing also ties closely with issues of industrial
ecology and environmental sustainability such as extended producers
liability, life-cycle analysis, material use and resource flows, and eco-
efficiency. Thus, the subject of green marketing is vast, having
important implications for business strategy and public policy. Firms
can green themselves in three ways: value-addition processes (firm
level), management systems (firm level) and/or products (product level).
Firms could also adopt management systems that create conditions for
reducing the environmental impact of value-addition processes. By
having measurable (therefore, easily monitored and understood)
performance indicators, firms can make verifiable claims about the
environmental impact of their management systems. The third greening
strategy pertains to products. This could take place in the following

XXVIII
ways: (i) repair (ii) recondition iii) remanufacture (iv) reuse (v) recycle
and (vi) reduce.

The work would focus primarily on the above issues and strategies for
promoting products by employing claims about their environmental
attributes or about firms that manufacture and/or sell them. Secondarily,
it would focus on studying product and pricing issues.
XXIX
CHAPTER-2

KYOTO PROTOCAL

AND CLEAN

DEVELOPMENT

MECHANISM
XXX
CHAPTER-2

KYOTO PROTOCAL AND CLEAN

DEVELOPMENT MECHANISM (CDM)

Environmental technology or green technology or clean technology

(abbreviated as cleantech) is the application of the environmental
science to conserve the natural environment and resources, and to
curb the negative impacts of human involvement. Sustainable
development is the core of environmental technologies. When applying
sustainable development as a solution for environmental issues, the
solutions need to be socially equitable, economically viable, and
environmentally sound.

The technologies include, but are not limited to, the following areas:

Recycling

Water Purification

Sewage Treatment

Environmental remediation

Solid Waste Management

Renewable Energy

Management theory in general is firmly rooted in an economic and

technical systems perspective which concentrates on exchanges,

XXXI
products, production and profits. Over time it has evolved to become
more human, with the emergence of disciplines like organizational
behaviour, human resource management, business ethics and societal
marketing. The fact that businesses are physical systems which exist
within a finite and vulnerable physical environment has, until recently,
largely been ignored as a management and marketing issue. During the
1990s, the marketing discipline began to seriously discuss the physical
implications and sustainability of marketing (e.g. OHara, 1995; van Dam
and Apeldoorn, 1996).

The first United Nations Conference on the Human Environment

(UNCHE) was held in Stockholm, Sweden from June 5 to June 16, 1972.
Representatives from 113 countries were present, as well as
representatives from many international non-governmental
organizations, intergovernmental organizations, and many other
specialized agencies. This was the first United Nations conference on
the environment as well as the first major international gathering
focused on human activities in relationship to the environment, and it
laid the foundation for environmental action at an international level.
The conference acknowledged that the goal of reducing human impact
on the environment would require extensive international cooperation,
as many of the problems affecting the environment are global in nature.
Following this conference, the United Nations Environmental

XXXII
Programme (UNEP) was launched in order to encourage United Nations
agencies to integrate environmental measures into their programs.

The UNCHE emphasized that defending and improving the environment

must become a goal to be pursued by all countries. The Stockholm
Declaration and Action Plan defined principles for the preservation and
enhancement of the natural environment, and highlighted the need to
support people in this process. The Conference indicated that

industrialized environmental problems, such as habitat degradation,

toxicity andacid rain , were not necessarily relevant issues for all
countries. In particular, development strategies were not meeting the
needs of the poorest countries and communities.

Some of the specific issues addressed were the role which

industrialized countries should have in the process of protecting the
environment, stating that industrial countries should help to close the
gap between them and underdeveloped countries while keeping their
own priorities and the protection and improvement of the environment
in mind. The conference developed a long set of recommendations to
act as goals to pursue its mission. Recommendations included that
governments communicate about environmental issues that have
international implications (such as air pollution), that governments give
attention to the training of those who plan, develop, and manage
settlement areas, and that agencies work together to address many
issues, such as access to clean water and population growth. However,

XXXIII
it was the pending environmental problems that dominated the meeting
and led to wider public environmental awareness.

United Nations Environment Program: One of the greatest achievements

of the UNCHE was the creation of the United Nations Environment
Program (UNEP), based in Nairobi, Kenya. The mission of UNEP is "to
provide leadership and encourage partnership in caring for the
environment by inspiring, informing, and enabling nations and peoples
to improve their quality of life without compromising that of future
generations." UNEP is the voice for the environment within the United
Nations system and works toward this mission by:

Encouraging international participation and cooperation in addressing

environmental issues and environmental policy

Monitoring the status of the global environment and interpreting

environmental data collected

Creating environmental awareness in governments, society, and the

private sector

Coordinating UN activities pertaining to the environment

Developing regional programs for sustainability

Helping environmental authorities, especially those in developing

countries, form and implement policy

Helping to develop international environmental law

XXXIV
Carbon Footprint

A carbon footprint is "the total set of greenhouse gases (GHG)

emissions caused by an organization, event or product". For simplicity

of reporting, it is often expressed in terms of the amount of carbon
dioxide, or its equivalent of other GHGs, emitted.

The concept name of the carbon footprint originates from ecological

footprint discussion. The carbon footprint is a subset of the ecological
footprint and of the more comprehensive Life Cycle Assessment (LCA).

An individual, nation, or organization's carbon footprint can be

measured by undertaking a GHG emissions assessment. Once the size

of a carbon footprint is known, a strategy can be devised to reduce it,
e.g. by technological developments, better process and product

management, changed Green Public or Private Procurement (GPP),

Carbon capture, consumption strategies, and others.

The mitigation of carbon footprints through the development of

alternative projects, such as solar or wind energy or reforestation,
represents one way of reducing a carbon footprint and is often known
as Carbon offsetting.

The United Nations Framework Convention on

Climate Change

The United Nations Framework Convention on Climate

Change (UNFCCC or FCCC) is an international environmental treaty

XXXV
produced at the United Nations Conference on Environment and
Development (UNCED), informally known as the Earth Summit, held in
Rio de Janeiro from 3 to 14 June 1992. The objective of the treaty is to
stabilize greenhouse gas concentrations in the atmosphere at a level
that would prevent dangerous anthropogenic interference with the
climate system.

The treaty itself sets no mandatory limits on greenhouse gas emissions

for individual countries and contains no enforcement mechanisms. In
that sense, the treaty is considered legally non-binding. Instead, the
treaty provides for updates (called "protocols") that would set

mandatory emission limits. The principal update is the Kyoto

Protocol, which has become much better known than the UNFCCC
itself.

The UNFCCC was opened for signature on May 9, 1992, after an

Intergovernmental Negotiating Committee produced the text of the
Framework Convention as a report following its meeting in New York
from 30 April to 9 May 1992. It entered into force on March 21, 1994. As
of December 2009, UNFCCC had 192 parties.

One of its first tasks was to establish national greenhouse gas

inventories of greenhouse gas (GHG) emissions and removals, which
were used to create the 1990 benchmark levels for accession of Annex I
countries to the Kyoto Protocol and for the commitment of those

XXXVI
countries to GHG reductions. Updated inventories must be regularly
submitted by Annex I countries.

The UNFCCC is also the name of the United Nations Secretariat

charged with supporting the operation of the Convention, with offices in
Haus Carstanjen, Bonn, Germany. From 2006 to 2010 the head of the
secretariat was Yvo de Boer; on May 17, 2010 his successor, Christiana
Figures from Costa Rica has been named. The Secretariat, augmented
through the parallel efforts of the Intergovernmental Panel on Climate
Change (IPCC), aims to gain consensus through meetings and the
discussion of various strategies.

The parties to the convention have met annually from 1995 in

Conferences of the Parties (COP) to assess progress in dealing with
climate change. In 1997, the Kyoto Protocolwas concluded and
established legally binding obligations for developed countries to
reduce their greenhouse gas emissions.

Annex I, Annex II countries and developing

countries

Parties to UNFCCC are classified as:

Annex I countries - industrialized countries and economies in transition

Annex II countries - developed countries which pay for costs of
developing countries

Developing countries.

XXXVII
Annex I countries which have ratified the Protocol have committed to
reduce their emission levels of greenhouse gasses to targets that are
mainly set below their 1990 levels. They may do this by allocating
reduced annual allowances to the major operators within their borders.
These operators can only exceed their allocations if they buy emission
allowances, or offset their excesses through a mechanism that is
agreed by all the parties to UNFCCC.

Annex II countries are a sub-group of the Annex I countries. They

comprise the OECD members, excluding those that were economies in
transition in 1992.

Developing countries are not required to reduce emission levels unless

developed countries supply enough funding and technology. Setting no
immediate restrictions under UNFCCC serves three purposes:

It avoids restrictions on their development, because emissions are

strongly linked to industrial capacity

They can sell emissions credits to nations whose operators have

difficulty meeting their emissions targets

They get money and technologies for low-carbon investments from

Annex II countries.

Developing countries may volunteer to become Annex I countries when

they are sufficiently developed.

XXXVIII
Some opponents of the Convention argue that the split between Annex I
and developing countries is unfair, and that both developing countries
and developed countries need to reduce their emissions unilaterally.
Some countries claim that their costs of following the Convention
requirements will stress their economy. This was one reason given by
George W. Bush, then President of the United States, for not forwarding
the Kyoto Protocol to the United States Senate for ratification. Other
countries point to research, such as the Stern Report, that calculates
the cost of compliance to be less than the cost of the consequences of
doing nothing.

Annex I countries

There are 40 Annex I countries and the European Union is also a

member. These countries are classified as industrialized countries and
countries in transition:

Australia, Austria, Belarus, Belgium, Bulgaria, Canada, Croatia,

CzechR epublic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Iceland, Ireland, Italy, Japan,Latvia, Liechtenstein,
Lithuania, Luxembour g, Monaco, Netherlands, New

Zealand, Norway, Poland, Portugal, Romania, Russian

Federation, Slovakia, Slovenia, Spain, Sweden,Switzerland, Turkey,

Ukra ine, United Kingdom, United States of America

Annex II countries

XXXIX
There are 23 Annex II countries and the European Union. Turkey was
removed from the Annex II list in 2001 at its request to recognize its
economy as a transition economy. These countries are classified as
developed countries which pay for costs of developing countries:

Australia, Austria, Belgium, Canada, Denmark, Finland, France,

German y, Greece, Iceland, Ireland, Italy, Japan, Luxembourg,
Netherlands, New Zealand, Norway, Portugal, Spain,Sweden,
Switzerland, United Kingdom, United States of America

U.N. Framework Convention on Climate Change

(UNFCCC)

The United Nations Framework Convention on Climate Change

(UNFCCC) was opened for signature at the 1992 United Nations
Conference on Environment and Development(UNCED) in Rio de
Janeiro (known by its popular title, the Earth Summit). On June 12,
1992, 154 nations signed the UNFCCC that upon ratification committed
signatories' governments to a voluntary "non-binding aim" to reduce
atmospheric concentrations of greenhouse gases with the goal of
"preventing dangerous anthropogenic interference with Earth's climate
system." These actions were aimed primarily at industrialized countries,
with the intention of stabilizing their emissions of greenhouse gases at
1990 levels by the year 2000; and other responsibilities would be
incumbent upon all UNFCCC parties. The parties agreed in general that

XL
they would recognize "common but differentiated responsibilities," with
greater responsibility for reducing greenhouse gas emissions in the
near term on the part of developed/industrialized countries, which were
listed and identified in Annex I of the UNFCCC and thereafter referred to
as "Annex I" countries.

On September 8, 1992, the US president George Bush transmitted the

UNFCCC for advice and consent of the U.S. Senate to ratification. The
Foreign Relations Committee approved the treaty and reported it
(Senate Exec. Rept. 102-55) October 1, 1992. The Senate consented to
ratification on October 7, 1992, with a two-thirds majority vote. President
Bush signed the instrument of ratification October 13, 1992, and
deposited it with the U.N. Secretary General.

According to terms of the UNFCCC, having received over 50 countries'

instruments of ratification, it entered into force March 21, 1994.

Benchmarking

In the context of the UNFCCC, benchmarking is the setting of emission

reduction commitments measured against a particular base year. The
only quantified target set in the original FCCC was for developed
countries to reduce their greenhouse gas emissions to 1990 levels by
the year 2000 (Goldemberg et al., 1996, pp. 3233). There are issues with
benchmarking that can make it potentially inequitable (Goldemberg et
al., 1996, pp. 3233). For example, take two countries that have identical

XLI
emission reduction commitments as measured against the 1990 base
year. This might be interpreted as being equitable, but this is not
necessarily the case. One country might have previously made efforts
to improve energy efficiency in the years preceding the benchmark year,
while the other country had not. In economic terms, the marginal cost
curve for emissions reductions rises steeply beyond a certain point.
Thus, to meet its emission reduction commitment, the country with
initially high energy efficiency might face high costs. But for the country
that had previously encouraged overconsumption of energy, e.g.,
through subsidies, the costs of meeting its commitment would
potentially be lower.

Precautionary principle

In decision making, the precautionary principle is considered when

possibly dangerous, irreversible, or catastrophic events are identified,
but scientific evaluation of the potential damage is not sufficiently
certain (Toth et al., 2001, pp. 655656). The precautionary principle
implies an emphasis on the need to prevent such adverse effects.

Uncertainty is associated with each link of the causal chain of climate

change. For example, future GHG emissions are uncertain, as are
climate change damages. However, following the precautionary
principle, uncertainty is not a reason for inaction, and this is
acknowledged in Article 3.3 of the UNFCCC (Toth et al., 2001, p. 656).

XLII
Conferences of the Parties

Since the UNFCCC entered into force, the parties have been meeting
annually in Conferences of the Parties (COP) to assess progress in
dealing with climate change, and beginning in the mid-1990s, to
negotiate the Kyoto Protocol to establish legally binding obligations for
developed countries to reduce their greenhouse gas emissions. From
2005 the Conferences have met in conjunction with Meetings of Parties
of the Kyoto Protocol (MOP), and parties to the Convention that are not
parties to the Protocol can participate in Protocol-related meetings as
observers.

1995 - COP 1, The Berlin Mandate

The first UNFCCC Conference of Parties took place in March 1995 in

Berlin, Germany. It voiced concerns about the adequacy of countries'
abilities to meet commitments under the Convention. These were
expressed in a U.N. ministerial declaration known as the "Berlin
Mandate", which established a 2-year Analytical and Assessment Phase
(AAP), to negotiate a "comprehensive menu of actions" for countries to
pick from and choose future options to address climate change which
for them, individually, made the best economic and environmental
sense. The Berlin Mandate exempted non-Annex I countries from
additional binding obligations, in keeping with the principle of "common

XLIII
but differentiated responsibilities" established in the UNFCCC even
though, collectively, the larger, newly industrializing countries were
expected to be the world's largest emitters of greenhouse gas
emissions 15 years hence. In order to monitor the implementation of the
Convention, COP1 also established two permanent subsidiary bodies:
the Subsidiary Body for Scientific and Technological Advice (SBSTA)
and the Subsidiary Body for Implementation (SBI).

1996 - COP 2, Geneva, Switzerland

COP 2 took place in July 1996 in Geneva, Switzerland. Its Ministerial

Declaration was noted (but not adopted) July 18, 1996, and reflected a
U.S. position statement presented by Timothy Wirth, former Under
Secretary for Global Affairs for the U.S. State Department at that
meeting, which Accepted the scientific findings on climate change
proffered by the Intergovernmental Panel on Climate Change (IPCC) in
its second assessment (1995); Rejected uniform "harmonized policies"
in favor of flexibility; Called for "legally binding mid-term targets."

1997 - COP 3, The Kyoto Protocol on Climate

Change

COP 3 took place in December 1997 in Kyoto, Japan. After intensive

negotiations, it adopted the Kyoto Protocol, which outlined the
greenhouse gas emissions reduction obligation for Annex I countries,
along with what came to be known as Kyoto mechanisms such as

XLIV
emissions trading, clean development mechanism and joint
implementation. Most industrialized countries and some central
European economies in transition (all defined as Annex B countries)
agreed to legally binding reductions in greenhouse gas emissions of an
average of 6 to 8% below 1990 levels between the years 2008-2012,
defined as the first emissions budget period. The United States would
be required to reduce its total emissions an average of 7% below 1990
levels; however neither the Clinton administration nor the Bush
administration sent the protocol to Congress for ratification. The Bush
administration explicitly rejected the protocol in 2001.

1998 - COP 4, Buenos Aires, Argentina

COP 4 took place in November 1998 in Buenos Aires. It had been

expected that the remaining issues unresolved in Kyoto would be
finalized at this meeting. However, the complexity and difficulty of
finding agreement on these issues proved insurmountable, and instead
the parties adopted a 2-year "Plan of Action" to advance efforts and to
devise mechanisms for implementing the Kyoto Protocol, to be
completed by 2000. During COP4, Argentina and Kazakhstan expressed
their commitment to take on the greenhouse gas emissions reduction
obligation, the first two non-Annex countries to do so.

1999 - COP 5, Bonn, Germany

XLV
COP 5 took place between October 25 and November 5, 1999, in Bonn,
Germany. It was primarily a technical meeting, and did not reach major
conclusions.

2000 - COP 6, The Hague, Netherlands

COP 6 took place between November 13-November 25, 2000, in The

Hague, Netherlands. The discussions evolved rapidly into a high-level
negotiation over the major political issues. These included major
controversy over the United States' proposal to allow credit for carbon
"sinks" in forests and agricultural lands, satisfying a major proportion
of the U.S. emissions reductions in this way; disagreements over
consequences for non-compliance by countries that did not meet their
emission reduction targets; and difficulties in resolving how developing
countries could obtain financial assistance to deal with adverse effects
of climate change and meet their obligations to plan for measuring and
possibly reducing greenhouse gas emissions. In the final hours of COP
6, despite some compromises agreed between the United States and
some EU countries, notably the United Kingdom, the EU countries as a
whole, led by Denmark and Germany, rejected the compromise
positions, and the talks in The Hague collapsed. Jan Pronk, the
President of COP 6, suspended COP-6 without agreement, with the
expectation that negotiations would later resume . It was later
announced that the COP 6 meetings (termed "COP 6 bis") would be
resumed in Bonn, Germany, in the second half of July. The next

XLVI
regularly scheduled meeting of the parties to the UNFCCC - COP 7 - had
been set for Marrakech, Morocco, in October-November 2001.

2001 - COP 6, Bonn, Germany

COP 6 negotiations resumed July 1727, 2001, in Bonn, Germany, with

little progress having been made in resolving the differences that had
produced an impasse in The Hague. However, this meeting took place
after George W. Bush had become the President of the United States
and had rejected the Kyoto Protocol in March 2001; as a result the
United States delegation to this meeting declined to participate in the
negotiations related to the Protocol and chose to take the role of
observer at the meeting. As the other parties negotiated the key issues,
agreement was reached on most of the major political issues, to the
surprise of most observers, given the low expectations that preceded
the meeting. The agreements included:

Flexible Mechanisms: The "flexibility" mechanisms which the United

States had strongly favored when the Protocol was initially put together,
including emissions trading; Joint Implementation (JI); and the Clean
Development Mechanism (CDM) which allow industrialized countries to
fund emissions reduction activities in developing countries as an
alternative to domestic emission reductions. One of the key elements of
this agreement was that there would be no quantitative limit on the
credit a country could claim from use of these mechanisms provided

XLVII
domestic action constituted a significant element of the efforts of each
Annex B country to meet their targets.

Carbon sinks: It was agreed that credit would be granted for broad
activities that absorb carbon from the atmosphere or store it, including
forest and cropland management, and re-vegetation, with no over-all
cap on the amount of credit that a country could claim for sinks
activities. In the case of forest management, an Appendix Z establishes
country-specific caps for each Annex I country. Thus, a cap of 13 million
tons could be credited to Japan (which represents about 4% of its base-
year emissions). For cropland management, countries could receive
credit only for carbon sequestration increases above 1990 levels.

Compliance: Final action on compliance procedures and mechanisms

that would address non-compliance with Protocol provisions was
deferred to COP 7, but included broad outlines of consequences for
failing to meet emissions targets that would include a requirement to
"make up" shortfalls at 1.3 tons to 1, suspension of the right to sell
credits for surplus emissions reductions, and a required compliance
action plan for those not meeting their targets.

Financing: There was agreement on the establishment of three new

funds to provide assistance for needs associated with climate change:

(1) a fund for climate change that supports a series of climate

measures; (2) a least-developed-country fund to support National

XLVIII
Adaptation Programs of Action; and (3) a Kyoto Protocol adaptation
fund supported by a CDM levy and voluntary contributions.

A number of operational details attendant upon these decisions

remained to be negotiated and agreed upon, and these were the major
issues considered by the COP 7 meeting that followed.

2001 - COP 7, Marrakech, Morocco

At the COP 7 meeting in Marrakech, Morocco from 29 October to 10

November 2001, negotiators wrapped up the work on the Buenos

Aires Plan of Action, finalizing most of the operational details and

setting
the
stage
for
nations
to
ratify
the
Kyoto
Protocol.deadlink deadlink The
completed
package of
decisions is

known as the Marrakech Accords. The United States delegation

maintained its observer role, declining to participate actively in the
negotiations. Other parties continued to express hope that the United
States would re-engage in the process at some point and worked to
achieve ratification of the Kyoto Protocol by the requisite number of
countries to bring it into force (55 countries needed to ratify it, including
those accounting for 55% of developed-country emissions of carbon
dioxide in 1990). The date of the World Summit on Sustainable
Development (August-September 2002) was put forward as a target to
bring the Kyoto Protocol into force. The World Summit on Sustainable
Development (WSSD) was to be held in Johannesburg, South Africa.

The main decisions at COP 7 included:

XLIX
Operational rules for international emissions trading among parties to
the Protocol and for the CDM and joint implementation;

A compliance regime that outlined consequences for failure to meet

emissions targets but deferred to the parties to the Protocol, once it
came into force, the decision on whether those consequences would be
legally binding;

Accounting procedures for the flexibility mechanisms;

A decision to consider at COP 8 how to achieve a review of the

adequacy of commitments that might lead to discussions on future
commitments by developing countries.

2002 - COP 8, New Delhi, India

Taking place from October 23 November 1, 2002, COP8 adopted the

Delhi Ministerial Declaration that, amongst others, called for efforts by
developed countries to transfer technology and minimize the impact of
climate change on developing countries.

2003 - COP 9, Milan, Italy

1 12 December 2003 The parties agreed to use the Adaptation Fund

established at COP7 in 2001 primarily in supporting developing
countries better adapt to climate change. The fund would also be used
for capacity-building through technology transfer. At COP9, the parties
also agreed to review the first national reports submitted by 110 non-
Annex I countries.

L
2004 - COP 10, Buenos Aires, Argentina

6 17 December 2004. See also Climate ethics: The Program on the

Ethical Dimensions of Climate Change COP10 discussed the progress
made since the first Conference of the Parties 10 years ago and its
future challenges, with special emphasis on climate change mitigation
and adaptation. To promote developing countries better adapt to climate
change, the Buenos Aires Plan of Action was adopted. The parties also
began discussing the post-Kyoto mechanism, on how to allocate
emission reduction obligation following 2012, when the first
commitment period ends.

2005 - COP 11/MOP 1, Montreal, Canada

COP 11 (or COP 11/MOP 1) took place between November 28 and

December 9, 2005, in Montreal, Quebec, Canada. COP 11 was also the
first Meeting of the Parties (MOP-1) to the Kyoto Protocol since their
initial meeting in Kyoto in 1997. It was therefore one of the largest
intergovernmental conferences on climate change ever. The event
marked the entry into force of the Kyoto Protocol. Hosting more than
10,000 delegates, it was one of Canada's largest international events
ever and the largest gathering in Montreal since Expo 67. The Montreal
Action Plan is an agreement hammered out at the end of the conference
to "extend the life of the Kyoto Protocol beyond its 2012 expiration date
and negotiate deeper cuts in greenhouse-gas emissions." dead

LI
 link Canada's environment minister, at the time,Stphane Dion, said
the agreement provides a "map for the future."[5]

2006 - COP 12/MOP 2, Nairobi, Kenya

COP 12/MOP 2 took place between 6 and 17 November 2006 in Nairobi,

Kenya. At the meeting, BBC reporter Richard Black coined the phrase

climate tourists to describe some delegates who attended to see

Africa, take snaps of the wildlife, the poor, dying African children and
women. Black also noted that due to delegates concerns over
economic costs and possible losses of competitiveness, the majority of
the discussions avoided any mention of reducing emissions. Black
concluded that was a disconnect between the political process and the
scientific imperative. Despite such criticism, certain strides were made
at COP12, including in the areas of support for developing countries
and clean development mechanism. The parties adopted a five-year plan
of work to support climate change adaptation by developing countries,
and agreed on the procedures and modalities for the Adaptation Fund.
They also agreed to improve the projects for clean development
mechanism.

2007 - COP 13/MOP 3, Bali, Indonesia

COP 13/MOP 3 took place between December 3 and December 15, 2007,
at Nusa Dua, in Bali, Indonesia. Agreement on a timeline and
structured negotiation on the post-2012 framework (the end of the first

LII
commitment period of the Kyoto Protocol) was achieved with the
adoption of the Bali Action Plan (Decision 1/CP.13). The Ad Hoc Working
Group on Long-term Cooperative Action under the Convention (AWG-
LCA) was established as a new subsidiary body to conduct the
negotiations aimed at urgently enhancing the implementation of the
Convention up to and beyond 2012. These negotiations took place
during 2008 (leading to COP 14/MOP 4 in Poznan, Poland) and 2009
(leading to COP 15/MOP 5 in Copenhagen).

2008 United Nations Climate Change

Conference

2008 United Nations Climate Change Conference COP 14 in Poznan.

COP 14/MOP 4 took place from 1 to12 December 2008 in Pozna,
Poland. Delegates agreed on principles for the financing of a fund to
help the poorest nations cope with the effects of climate change and
they approved a mechanism to incorporate forest protection into the
efforts of the international community to combat climate change.

2009 - COP 15/MOP 5, Copenhagen, Denmark

COP 15 took place in Copenhagen, Denmark, from 7 December to 18

December 2009.

LIII
The overall goal for the COP 15/MOP 5 United Nations Climate Change
Conference in Denmark was to establish an ambitious global climate
agreement for the period from 2012 when the first commitment period

under the Kyoto Protocol expires. However, on 14 November 2009,

the New York Times announced that "President Obama and other world
leaders have decided to put off the difficult task of reaching a climate
change agreement... agreeing instead to make it the mission of the
Copenhagen conference to reach a less specific politically binding

agreement that would punt the most difficult issues into the

future." Ministers and officials from 192 countries took part in the
Copenhagen meeting and in addition there were participants from a
large number of civil society organizations. As many Annex 1
industrialized countries are now reluctant to fulfill commitments under
the Kyoto Protocol, a large part of the diplomatic work that lays the
foundation for a post-Kyoto agreement was undertaken up to the
COP15.

The conference did not achieve a binding agreement for long-term

action. A 13-paragraph 'political accord' was negotiated by
approximately 25 parties including US and China, but it was only 'noted'
by the COP as it is considered an external document, not negotiated
within the UNFCCC process. The accord was notable in that it referred
to a collective commitment by developed countries for new and
additional resources, including forestry and investments through

LIV
international institutions that will approach USD 30 billion for the period
2010 - 2012. Longer-term options on climate financing mentioned in the
accord are being discussed within the UN Secretary General's High
Level Advisory Group on Climate Financing, which is due to report in
November 2010. The negotiations on extending the Kyoto Protocol had
unresolved issues as did the negotiations on a framework for long-term
cooperative action. The working groups on these tracks to the
negotiations are now due to report to COP 16 and MOP 6 in Mexico.

2010 - COP 16/MOP 6, Cancun, Mexico

COP 16 is expected to be held in Cancn, Mexico, from 29 November to

10 December 2010.

2011 - COP 17/MOP 7, South Africa

The 2011 COP 17 is to be hosted by South Africa from 28 November to

9 December 2011. It is likely that the event will be hosted in
Johannesburg.

2012 - COP 18/MOP 8

Two countries, Qatar and South Korea, are currently bidding to host
the 2012 COP 18.

The Kyoto Protocol

The Kyoto Protocol is a protocol to the United Nations Framework

Convention on Climate Change (UNFCCC or FCCC), aimed at fighting
global warming. The UNFCCC is an international environmental

LV
 treaty with the goal
of achieving "stabilization
of greenhouse
gas concentrations in
the atmosphere at a level
that would

prevent dangerous anthropogenic interference with the climate system."

The Protocol was initially adopted

on
11 December
1997
in Kyoto, Japan and entered into force on
16
February 2005.
As of
November 2009, 187 states have signed and ratified the protocol.

Under the Protocol, 39 industrialized countries and the European

Union(called "Annex I countries") commit themselves to a reduction of

four greenhouse gases (GHG) (carbon

dioxide, methane, nitrous
oxide, sulphur
hexafluoride)
and
two
groups
of
gases

(hydrofluorocarbons and perfluorocarbons) produced by them, and all

member countries give general commitments. Annex I countries agreed
to reduce their collective greenhouse gas emissions by 5.2% from the
1990 level. Emission limits do not include emissions by international
aviation and shipping, but are in addition to the industrial
gases,chlorofluorocarbons, or CFCs, which are dealt with under the
1987 Montreal Protocol on Substances that Deplete the Ozone Layer.

The benchmark 1990 emission levels were accepted by the Conference

of the Parties of UNFCCC (decision 2/CP.3) were the values of "global
warming potential" calculated for the IPCC Second Assessment
Report. These figures are used for converting the various greenhouse
gas emissions into comparable CO2 equivalents (CO2-eq) when
computing overall sources and sinks.
LVI
The Protocol
allows
for several
"flexible mechanisms", such
as emissions
trading,
the clean
development mechanism (CDM)

and joint implementation to allow Annex I countries to meet their GHG

emission limitations by purchasing GHG emission reductions credits
from elsewhere, through financial exchanges, projects that reduce
emissions in non-Annex I countries, from other Annex I countries, or
from annex I countries with excess allowances.

Each Annex I country is required to submit an annual report of

inventories of all anthropogenic greenhouse gas emissions from
sources and removals from sinks under UNFCCC and the Kyoto
Protocol. These countries nominate a person (called a "designated
national authority") to create and manage its greenhouse gas
inventory. Virtually all of the non-Annex I countries have also
established a designated national authority to manage its Kyoto
obligations, specifically the "CDM process" that determines which GHG
projects they wish to propose for accreditation by the CDM Executive
Board.

CLEAN DEVELOPMENT MECHANISM

The central feature of the Kyoto Protocol is its requirement that

countries limit or reduce their greenhouse gas emissions. By setting
such Targets, emission reductions took on economic value. To help
countries meet their emission targets, and to encourage the private

LVII
sector and developing countries to contribute to emission reduction
efforts, negotiators of the Protocol included three market-based
mechanisms Emissions Trading, the Clean Development Mechanism
and Joint Implementation.

Clean Development Mechanism

The CDM allows emission-reduction (or emission removal) projects in

developing countries to earn certified emission reduction (CER) credits,
each equivalent to one tonne of CO2. These CERs can be traded and
sold, and used by industrialized countries to a meet a part of their

emission reduction targets under the Kyoto Protocol.

The mechanism stimulates sustainable development and emission

reductions, while giving industrialized countries some flexibility in how

they meet their emission reduction limitation targets.

The projects must qualify through a rigorous and public registration and
issuance process designed to ensure real, measurable and verifiable
emission reductions that are additional to what would have occurred
without the project. The mechanism is overseen by the CDM Executive
Board, answerable ultimately to the countries that have ratified the
Protocol.

In order to be considered for registration, a project must first be

approved by the Designated National Authorities (DNA).

LVIII
Operational since the beginning of 2006, the mechanism has already
registered more than 1,000 projects and is anticipated to produce CERs
amounting to more than 2.7 billion tonnes of CO2 equivalent in the first
commitment period of the Kyoto Protocol. The mechanism is seen by
many as a trailblazer. It is the first global, environmental investment and
credit scheme of its kind, providing a standardized emission offset
instrument, CERs.

CDM INDIA

India is a Party to the United Nations Framework Convention on Climate

Change (UNFCCC) and the objective of the Convention is to achieve
stabilization of greenhouse gas concentrations in the atmosphere at a
level that would prevent dangerous anthropogenic interference with the

climate system.

To strengthen the developed country commitments under the

Convention, the Parties adopted Kyoto Protocol in 1997, which commits
developed country Parties to return their emissions of greenhouse
gases to an average of approximately 5.2% below 1990 levels over the
period 2008-12

Figure 2.1: CDM Project Cycle

LIX
L
X
Legend

PP
-
Project Proponent

DOE
-
Designated Operational Entities

AE
-
Applicant Entity

EB
-
Executive Board

COP/MOP
-
Conference of the Parties and Meetings serving as

the meeting of the Parties to the Kyoto Protocol

CER
-
Certified Emission Reductions

DNA
-
Designated National Authority
Green Trade & Development

Used for years in local and regional pollution control programs in the
United States, market approaches are now recognized for their ability to
provide cost savings and flexibility to companies and countries
committed to greenhouse gas control. Green Markets believes that well-
crafted rules and oversight are needed to assure that pollution trading
does not compromise environmental objectives. With greenhouse gas
trading, though, the benefits can go well beyond compliance flexibility
and economic efficiency.

The greenhouse gas reduction market can potentially catalyze projects

with important local environmental, economic, and quality-of-life
benefits. The Kyoto Protocols Clean Development Mechanism (CDM),

LXI
for example, enables trading between industrial and developing nations,
providing a framework that can result in capital flows to environmentally
beneficial development activities. Although the United States is not
participating in the Kyoto Protocol, several US programs enable similar
transactions on a voluntary and regulatory basis.

While international trade in greenhouse gas reductions holds

substantial promise as a source of new funding for sustainable
development, this market can be largely inaccessible to many smaller-
scale projects, remote communities, and least developed localities. To
facilitate participation and broaden the benefits, several barriers must
be overcome, including: a lack of market awareness among
stakeholders and prospective participants; specialized, somewhat
complicated participation rules; and the need for simplified participation
mechanisms for small projects, without which transaction costs can
overwhelm the financial benefits of participation. If the barriers are
adequately addressed, greenhouse gas trading can play an important
role supporting activities that benefit peoples lives and the
environment.

Green Markets Programs

In collaboration with others, through a mix of technical assistance,

educational outreach, and other strategies, Green Markets has strived to
increase the use of renewable energy and energy efficiency for
environmental protection and economic development. Many programs

LXII
have helped to enhance the capacity of sustainable energy stakeholders
to participate in the international carbon market, and included direct
technical support for carbon market participation. Currently Green
Markets provides resources through its website to help build knowledge
about carbon market logistics and opportunities, and about other
mechanisms to support the expanded use of renewable energy, energy
efficiency, and other climate protection options.

Carbon Market Information

Sustainable Energy Acceleration

Carbon Market Information

A range of activities can generate greenhouse gas reductions while

advancing sustainable development. The carbon offsets market holds
substantial promise as a source of catalytic funding, but barriers often
impede market access for small and medium sized enterprises, local
government bodies, and development organizations.

Green Markets' carbon market information program provides

information and links to resources to increase knowledge about the
greenhouse gas reduction market so that it can become more broadly
inclusive, with the goal of helping to enable carbon market access for
small-scale activities and for initiatives conceived and implemented by
stakeholders who might otherwise be left out.

LXIII
CHAPTER-3

GREEN MARKETING
LITERATURE REVIEW

LXIV
CHAPTER-3

GREEN MARKETING: LITERARURE REVIEW

Over the last 50 years, since evolution, Green Marketing has witnessed
many success and pitfalls in both academics and markets. It has
evolved from the term marketing of environmental friendly products to
marketing of green products to green marketing.

Literature Review

To get an in-depth insight into the topic of green marketing an extensive

literature review is done on e-libraries like proquest and ebsco,
departmental library, journals, books etc.

A search on Ebsco on the topic green marketing had generated 239

peer-reviewed full text papers and a search on proquest generated 171
results. The earliest article found in the search result dated back to 1971
in Journal of Marketing which shows that in early 70s academicians
started thinking about environment and social responsibility. Though
many studies are there but very few work has been done in India on
Green marketing.

LXV
EVOLUTION OF GREEN MARKETING

Green Marketing has been an important academic research topic since

its inception. The concept of green marketing has been around at least
since the first Earth Day in 1970 and later when the American Marketing
Association organized workshop on Ecological Marketing in 1975. But
the idea did not catch on until the 1980s, when rising public interest in
the environment led to a demand for more green products and services.
The evolution of green marketing involves three phases.

First phase was termed as "Ecological" green marketing, and during

this period all marketing activities were concerned to help environment
problems and provide remedies for environmental problems.

Second phase was "Environmental" green marketing and the focus

shifted on clean technology that involved designing of innovative new
products, which take care of pollution and waste issues.

Third phase is "Sustainable" green marketing. It came into prominence

in the late 1990s and early 2000.

The concept of green marketing seems to take its foundations into the
concept of traditional marketing itself (Polonsky, 1994; Charter et al,
1999). According to Prakash (2002), the relationship between the
marketing discipline, the public policy process and the natural
environment is important. This relationship is described by many terms:
environmental marketing (Coddington, 1993), ecological marketing
(Fisk, 1974; Henion and Kinnear, 1976), green marketing (Peattie, 1995;

LXVI
Ottman, 1992), sustainable marketing (Fuler, 1999) and greener
marketing (Charter and Polonsky, 1999). Task of marketing now is to
walk on a tight rope to achieve the triple bottom line of PPP.

The first substantial work on ecological marketing came into existence

by Henion and Kinnear in 1976 (as quoted by Polonsky 1994). In their
publications in 1976 Henion and Kinnear defined the ecological
marketing as the study of the positive and negative aspects of
marketing activities on pollution, energy depletion and non-energy
resource depletion (Henion and Kinnear quoted by Polonsky 1994, p2).
They further defined ecological marketing as The implementation of
marketing programs directed at the environmentally conscious market
segment (Henion 1976). The concept is further evolved to The process
of planning, implementing and controlling the development, pricing,
promotion and distribution of products in a manner that satisfies the
following criteria- Customer needs are met, Organizational goals are
attained, And the processes are compatible with ecosystems (Fuller

1999).

According to Ottman (1993) Green Marketing serves two key objectives-

To develop products that incorporates consumer need for

convenience, affordable prices and performance while having minimal
impact on the environment

LXVII
 To project an image of high quality, including environmental aspects,
both in regards to product attributes and the manufacturer's track
record for environmental compliance.

First consumer survey was conducted by Vandermerwe and Ollif (1990)

stating that more then 92% European multinationals clamed to have
changed their products in response to green concern. Green products
introduction increased by more then double to 11.4% of all new
household products in the USA between 1989 and 1990 and continued
to rise to 13.4% in 1991. In spite of its growing popularity, the green
marketing movement faced serious setbacks in the late 1980s (Peattie
and Crane 2005). A 2001 survey conducted by Roper indicates that
during the 1990s approximately 2/3 of all consumers believed that
environmental protection and economic development can go hand in
hand. While perception is important, actual behavior is crucial to market
success. A report (conducted by Mintel 1995) showed only a very slight
increase in green consumer since 1990 and a significant gap between
concern and actual purchasing.

The setback came because many industries made false claims about
their products and services. For instance, the environmental
organization CorpWatch, which issues annually a list of the top ten
"greenwashing" companies, included BP Amoco for advertising its
"Plug in the Sun" program, in which the company installed solar panels
in two hundred gas stations, while continuing to aggressively lobby to

LXVIII
drill for oil in the Arctic National Wildlife Refuge. The media came up
with the term "Greenwashing" to describe cases where organizations
misrepresented themselves as environmentally responsible. To put it
this way-

"I'm skeptical sometimes because [a product] will have a green logo but
no explanation as to how it is green. This leads me to think they just
slapped a sucker on... as a consumer, you can't always believe what
you are told." (Audray Gray, 2009).

Without environmental labeling standards, consumers could not tell

which products and services were truly beneficial. Consumers ended up
paying extra for misrepresented products. So In 1992, to prevent the
further deception, the Federal Trade Commission (FTC) stepped in and
created guidelines for the use of environmental marketing claims such
as "recyclable," "biodegradable," "compostable," and the like. The FTC
and the U.S. Environmental Protection Agency defined "environmentally
preferable products" as products and services that have a lesser or
reduced effect on human health and the environment when compared to
other products and services that serve the same purpose. The label
"environmentally preferable" considers how raw materials are acquired,
produced, manufactured, packaged, distributed, reused, operated,
maintained, or how the product or service is disposed. These guidelines
helped the customers to identify the compatible products but still the

LXIX
uptake of Green Products is very less throughout leading us to Green

Myopia.

Attention towards this phenomenon is drawn by Ottman, Stanford and

Hartman (2006) where they defined it as Green marketing must satisfy

two objectives:

Improved environmental quality

Customer satisfaction.

Misjudging either or overemphasizing the former at the expense of the

latter can be termed green marketing myopia. Miller (2008) claims that
green marketing is a concept that, when implemented effectively, can
improve the customer relationships, image in the market and ability to
reach the most targeted audience, while helping grow the bottom line.

Various views have been developed in order to implement a green

marketing strategy. Glorieux-Boutonnat (2004) argues that the concept
tries to mix two concepts which have diverging goals. According to her
the marketing focuses on seducing consumers and generating
profitable sales rapidly and they take the environment into
consideration as far as it helps achieving that goal. Polonsky (1994)
however noticed that unfortunately a majority of people believes that
green marketing refers solely to the promotion or advertising of
products with environmental characteristics. This also explains why the
concept is often linked with terms like phosphate free, recyclable,
refillable, ozone friendly... He also claims that the green marketing

LXX
incorporates a broad range of activities, including product modification,
changes to the production, packaging changes, as well as advertising. A
study by Nancy E. Furlow (2010) described the phenomena of Green
washing in an elaborated way and also gave the managerial
implications. According to that article early 1990s saw a rapid rise in
products touting environmental claims. The "green" phenomenon of the
'90s disappeared as rapidly as it appeared, but today many
manufacturers are again revisiting the value of promoting their
products, or even themselves, as being green to attract a growing
environmentally aware segment. In attracting a green audience,
companies often use claims that sound environmentally friendly, but are
actually vague, and at times may be false. As a result, "Greenwashing"
has become commonplace in market. Green washing is the
dissemination of false or incomplete information by an organization to
present an environmentally responsible public image.

The proliferation of environmental disinformation, or greenwashing, has

become so common and is of such a concern, that EnviroMedia
developed the Greenwashing Index to monitor environmental claims
used by manufacturers (Miller, 2008). On the web site, anyone can post
ads deemed to be misleading and rate how the deception compares with
other advertisements. Greenwashingindex.com is the result of the
incredible growth of green claims in the past few years. The site allows
consumers an outlet to express concerns and raise questions about

LXXI
these environmental claims. By giving the public a channel to judge
these messages, consumers have put marketers on guard that
environmental claims will not go unchecked.

When pointing to green-washing, one of the most cited examples is

Ford Motor Company's "It Isn't Easy Being Green" campaign for the
hybrid Escape SUV. While touting itself as being environmentally
friendly, Ford's cars were considered the worst carbon emitters and had
the worst fuel efficiency trend of any major automaker according to
Union of Concerned Scientists (Friedman & Mackenzie, 2004). Since its
early and much-criticized entry into the hybrid market, Ford has backed
away from promoting itself as the green car choice.

General Electric has also been cited as a green-washer. The company's

"EcoImagination" campaign highlights the work the company is doing
in the environmental arena, but GE's environmental practices have been
largely criticized. In 2000, GE went as far as the Supreme Court to fight
the new clean air EPA requirements. Moreover, GE is still fighting an
EPA-ordered clean up of the Hudson River where it dumped PCBs
between 1940 to 1977, not to mention the other dozen or so superfund
sites it is still fighting (Source Watch, 2008).

In an industry considered to be anything but environmentally friendly,

petroleum giant BP has decided to label itself as the green oil company.
Admittedly, the company is not as "brown" as other oil giants, but by
claiming to be earth conscious, BP has set itself up to be widely

LXXII
criticized. Since 2000, BP has used the tag line "Beyond Petroleum" as
part of its green campaign. The overhaul of BP's image has been
celebrated by some as a rebranding success and decried by others as a
perfect example of greenwashing (Solman, 2008). BP's less than green
activities include lobbying efforts to open restricted spaces such as the
Arctic National Wildlife Refuge to drilling and illegally dumping
hazardous waste from the Endicott Island oil field between 1993 and
1995. The company was even named as one of the 10 worst companies
in 2005 by Multinational Monitor. Most recently, BP was forced to shut
down operations in 2006 in Prudhoe Bay as the result of a ruptured
decayed pipeline. Even with its questionable environmental track
record, BP has undoubtedly been successful in painting itself green. BP
ranked highest among energy companies for being green in the
"ImagePower Green Brands Survey" conducted last year and 49 percent
of respondents felt that BP had become greener in the past five years
(Solman, 2008).

The multitude of vague and misleading environmental claims has

caused consumers to question corporate honesty, and cry
greenwashing at every turn. The concern over greenwashing is not only
that it misleads consumers, but also that if unscrupulous marketers
continue to claim to be environmentally friendly, then companies true to
their environmental mission lose their competitiveness. In addition,
overuse and misuse of the "green" claims can saturate the market to the

LXXIII
point that the greenness of the product may become meaningless to the
consumer (Zimmer et. al, 1994).

Another reason why consumers may be suspicious of green advertising

claims is that the scientific knowledge required to understand many
environmental issues is often complex and subject to change, thereby
making it difficult for the general public to comprehend. In addition,
comparisons made between products are frequently limited to a single
environmental benefit, making the claim incomplete and misleading (for
example paper vs. plastic). Whole Foods is under attack for this very
reason. The Environmental Affairs Council filed action last year with the
Federal Trade Commission over the grocery chain's claim of greenness
for using only 100% recycled paper bags (Enviros to FTC, 2008).

The implications of green-washing are wide spread. Consumers may

become confused about which products actually do help the
environment. Because of increased consumer skepticism, legitimate
attempts by companies to become less environmentally harmful will
lose any competitive edge they might have gained. Finally, there will be
fewer rewards and therefore less motivation for companies to make
environmentally helpful products, as consumers will "discount" all
environmental marketing claims. Therefore, in the end, inaccurate
environmental marketing will not only hurt consumers and firms, but it
will also harm our environment (Polansky, et. al, 1998). If the consumer
finds the claim to be unreliable, they are likely to disregard all

LXXIV
environmental claims, thereby avoiding any product that may in fact be
better for the environment (Mayer, et. al, 1993).

The decision to use environmental claims in marketing communications

is a serious one. Environmental claims must be honest, sincere and a
reflection of the organization's mission. The role of a sustainability
officer has become more commonplace as research indicates that
consumers today equate environmental behavior to a corporation's
social responsibility track record (Frazier, 2008). Case in point, Wal-Mart
has come out of the shadows about its steps to become environmental,
and, much like other companies, has named a "sustainability officer" to
oversee environmental practices of the company.

Here we can say that a plethora of literature is coming on explaining the

concept of Green Marketing and various phenomena related to the
concept. Still there is a lack of proper perceptive on consumer behavior
towards their response to Green products.

LITERATURE REVIEW ON VARIOUS VARIABLES USED IN

VARIOUS STUDIES

There has been a whole wealth of research, using a variety of

segmentation variables, attempting to profile the environmentally
conscious members of the population in general.

The measures that have been used in various studies on green

marketing fall into two distinct categories:

LXXV
Socio-demographics, such as sex, age, education and social class (see
Schlegelmilch et al., 1994),

Personality measures- such as locus of control, alienation,

conservatism and dogmatism (e.g. Balderjahn, 1988; Crosby et al., 1981;
Henion and Wilson, 1976; Kinnear et al., 1974).

Given the relative ease with which socio-demographics can be

measured and applied, it is not surprising these have been the most
widely used variables for profiling purposes. However, recent evidence
illustrates that there is very little value in the use of socio-demographic
characteristics for profiling environmentally-conscious consumers in

the UK (Schlegelmilch et al . 1994, p. 348), with only very weak

relationships uncovered on a bivariate basis.

Indeed, focusing specifically on pro-environmental purchasing

behaviour, Schlegelmilch et al. (1994) explained, less than 10 per cent of
variation through multiple regression procedures; this is in line with US
studies that have performed multivariate analyses to link such
characteristics to measures of green behaviour (Van Liere and Dunlap,
1980). The limited utility of sociodemographics may be explained by the
fact that the environment is no longer a marginal issue; indeed,

environmental concern is becoming the socially accepted norm

(Schwepker and Cornwell, 1991, p. 85). Thus, it perhaps should not be

expected that high levels of green purchasing behaviour would only be
reflected in certain socio-demographic sectors of the consumer base.

LXXVI
Personality variables have been found to have somewhat higher
linkages to individuals environmental consciousness (Kinnear et al.,

1974; Schwepker and Cornwell, 1991). However, while this is true for
general environmental measures, the results are somewhat inconsistent
for specific pro-environmental behaviours, such as green purchasing
decisions (see Balderjahn, 1988). Furthermore, personality variables
have been shown to explain only a small part of the total variability of
the behavioural measures used (Webster, 1975, p. 196). Indeed, Hooley
and Saunders (1993; p. 145) suggest that caution should be taken in
using personality variables for market segmentation according to
behavioural criteria: In most instances, personality measures are most
likely to be of use for describing segments once they have been defined
on some other basis. It is quite possible, indeed probable, that
behaviour and reasons behind it will vary within segments defined on
the basis of personality characteristics alone. Moreover, personality
variables do not easily lead to segmentation strategy (Webster, 1975,
p. 196) due to the inherently complex processes involved in their
measurement and interpretation.

Given the failures of the above two classes of variables, a study by

Schlegelmilch et.all (1996) proposes a new segmentation approach,
through an analysis of the linkages between proenvironmental purchase
behaviour and measures of environmental consciousness. The rationale
for this approach rests on the fact that consumers have traditionally

LXXVII
been shown to express their environmental consciousness through the
products they purchase.

ECONOMIC EVOLUTION OF GREEN MARKETING

Tracing back the historical evolution of economic activities carried out

by the human kind in order to survive begins with the origin of
civilization and trading with barter system. Industrial revolution in
eighteenth century turned the wheel and made earning profits from
economic activities as the prime motive. Exploitation of people and
planet had become prime aim to earn profits. Later towards the end of
19th century corporate world realized the importance of people in
economic activities. This was the time when development became the
agenda and many organizations started implementing OB tools to
improve the work place and work culture. Holistic development and
work life balance became the talk of the town. Many strategies have
been applied to bring a balance in the life of workers, work hours got
fixed and HR people started working on compensations and leaves. No
doubts these strategies improved the quality of living condition of many
workers but still environment was something nobody was talking about.
With the increase in the environmental degradation and pollution levels
there is concern for better human life and more then that the existence
of future generations. Beginning of twenty first century is witnessing a
paradigm shift from people concern to environmental concern. The

LXXVIII
demand of a sustainable economy is calling a balanced integration of all
three factors profit, people and planet.

Twentieth Century

PLANET

Late Nineties

PEOPLE
Eighteenth

PROFIT

AWARENESS STAGES IN ECONOMIC DEVELOPMENT OF INDUSTRIES

Social and environmental responsibility of a nation involves many stake

holders. Prizewinning author and New York Times columnist Thomas
L. Friedman argues that government policy and industry should engage
in a geo-green strategy to promote energy efficiency, renewable
energy, and other clean-tech innovations to help alleviate the nations
dependency on oil from politically conflicted regions of the world
(Jacquelyn A. Ottman, Edwin R. Stafford, and Cathy L. Hartman, 2006).

LXXIX
Besides state and industry it is consumer who is an integral part of the
value chain of go green. Arnulf Grubler (A. Grubler, 2006) wrote in

Environment, To minimize environmental impacts by significant orders

of magnitude requires the blending of good engineering with good
economics as well as changing consumer preferences.

INDUSTRY STATE

CONSUMER

STAKE HOLDERS FOR GO GREEN STRATEGY

So to implement the Go Green strategy and to make it successful in any

nation it is an integrated effort required from state, Industry and
consumers to make this planet a safer place to live. Though government
of both developed and developing nations is taking several steps to
conserve energy and bringing in cleantech innovation, Companies are

LXXX
also finding it as a lucrative strategy to tap the consumer market.
According to Ottman (2006) a strong commitment to environmental
sustainability in product design and manufacturing can offer to
companies opportunities to grow their businesses, to innovate or to
build brand equity. However to exploit these economic opportunities to
steer global commerce onto a more sustainable path, green products
must appeal to consumers outside the traditional green niche. The
marketing discipline has long argued that innovation must consider an
intimate understanding of the customer and a close look at green
marketing practices over time reveals that green products must be
positioned on a consumer value sought by targeted consumers.

Though a plethora of literature is coming on Green Marketing still there

is a lack of proper perceptive on consumer behavior towards their
response to Green products (Artee Aggrawal et all., 2010). Asian-based
green marketing studies are relatively scant when compared to the
Western works (Kaman Lee (2008). There are only few to name (Chan,
2001; Yam-Tang and Chan, 1998), exploring the potential consumers in
Asian market. This raises the inquisitiveness of understanding the
customers in growing economies like India and various factors that
affect consumer Green purchase behaviour.

LXXXI
Specifically, it is predicted that many international companies will
aggressively initiate green marketing strategies in the Asian markets for
the following reasons:

The resource exploitation and pollution associated with the

unprecedented economic development in many Asian countries (such
as China) have raised local and global concerns about the quality of
environment in Asia (Martinsons et al., 1997)

Citizens in Asian societies are increasingly becoming conscious of

alarming environmental problems (Johri and Sahasakmontri, 1998)
Governmental policies and business strategies in many Asian countries
are being reshaped to give more consideration to long-term sustainable
developments including environment protection (Johri and
Sahasakmontri, 1998; Martinsons et al., 1997);

And the fast-growing economies in Asia have led to a vigorous rise of

financially-empowered consumers across Asia willing to spend more
than previous generations (Li and Su, 2007; Tai and Tam, 1997; The
Economist, 2006).

In view of the potentially prosperous green market in Asia, many

Western firms are preparing to capitalise on the predicted demand for a
greener lifestyle among Asian consumers in the near future.

Notwithstanding the growing interest in culture among marketing

scholars, surprisingly little research informs on how Asian consumers
interpret and react to green marketing. Certainly, green marketing is

LXXXII
emerging in many Asian countries. However, because little research has
been conducted in an Asian culture, international green marketers have
expressed that the unavailability of market information in foreign
countries often becomes a major hindrance to the success of
international expansion of their green products (Gurau and Ranchhod,

2005).
LXXXIII
CHAPTER-4

GREEN MARKETING:

CASE STUDIES
LXXXIV
CHAPTER-4

GREEN MARKETING: CASE STUDIES

When consumers are convinced of non-green benefits, they are more

inclined to adopt green products. Green products succeed when
marketers kept their eyes on The Three Cs:

Consumer value positioning

Calibration of consumer knowledge

Credibility of product claims.

The 4 P's of green marketing, according to a study, are that of

conventional marketing but the challenge before marketers is to use 4
P's in an innovative manner. Like conventional marketers, green
marketers must address the Four Ps in innovative ways:

Product

Entrepreneurs wanting to exploit emerging green markets either:

Identify customers environmental needs and develop products to

address these needs or

Develop environmentally responsible products to have less impact than

competitors.

LXXXV
The increasingly wide variety of products on the market that support
sustainable development and are good for the triple bottom line include
products made from recycled goods, such as QuikN Tuff housing
materials made from recycled broccoli boxes and products that can be
recycled or reused. Efficient products, which save water, energy or
gasoline, save money and reduce environmental impact. Queenslands
only waterless printer, Print point, reduces operating costs by using
less water than conventional printers and is able to pass the savings on
to customers. Products with environmentally responsible packaging,
McDonalds, for example, changed their packaging from polystyrene
clamshells to paper.

Products with green labels, as long as they offer substantiation, Organic

products many consumers are prepared to pay a premium for organic
products, which offer promise of quality. Organic butchers, for example,
promote the added qualities such as taste and tenderness. A service
that rents or loans products such as toy libraries, Certified products,
which meet or exceed environmentally responsible criteria. Whatever
the product or service, it is vital to ensure that products meet or exceed
the quality expectations of customers and is thoroughly tested.

LXXXVI
Price

Pricing is a critical element of the marketing mix. Most customers are

prepared to pay a premium if there is a perception of additional product
value. This value may be improved performance, function, design,
visual appeal or taste. Environmental benefits are usually an added
bonus but will often be the deciding factor between products of equal
value and quality. Environmentally responsible products, however, are
often less expensive when product life cycle costs are taken into
consideration. For example fuel-efficient vehicles, water-efficient
printing and non-hazardous products.

Place

The choice of where and when to make a product available, has a

significant impact on the customers being attracted. Very few
customers go out of their way to buy green products merely for the sake
of it. Marketers looking to successfully introduce new green products
should, in most cases, position them broadly in the market place so
they are not just appealing to a small green niche market. The location
must also be consistent with the image which a company wants to
project. The location must differentiate a company from its competitors.
This can be achieved by in-store promotions and visually appealing

LXXXVII
displays or using recycled materials to emphasize the environmental
and other benefits.

Promotion

Promoting products and services to target markets includes paid

advertising, public relations, sales promotions, direct marketing and on-
site promotions. Smart green marketers will be able to reinforce
environmental credibility by using sustainable marketing and
communications tools and practices. For example, many companies in
the financial industry are providing electronic statements by email, e-
marketing is rapidly replacing more traditional marketing methods, and
printed materials can be produced using recycled materials and efficient
processes, such as waterless printing. Retailers, for example, are
recognizing the value of alliances with other companies, environmental
groups and research organizations when promoting their environmental
commitment. To reduce the use of plastic bags and promote their green
commitment, some retailers sell shopping bags, under the banner of the
Go Green Environment Fund. The key to successful green marketing is
credibility. Never overstate environmental claims or establish unrealistic
expectations, and communicate simply and through sources that people
trust.

LXXXVIII
CASE STUDIES OF GREEN PRODUCTS AND

SERVICES:

As the worlds center of gravity shifts decisively in favor of emerging

markets, competitive challenges and opportunities are being continually
and dramatically transformed. And, no emerging market offers as much
long-term opportunity for multinationals as India does-

Indias 1.15 billion population, and the worlds largest population in the
"Under 25 years age group

The largest democracy in the world, with greater political and social
stability than China.

The second fastest growing economy, and the 4th largest economy PPP
(purchasing power parity), in the world

Second only to the United States in English-speaking scientific

manpower

A well diversified industrial base in all core manufacturing and service

industries

Over 100 global companies have R&D centers in India, and

thousands more sell to India or otherwise leverage Indias resources to

become more competitive themselves

LXXXIX
It is because of all these reasons that multinationals today are eyeing
India and introducing their products in the Indian market. Many Green
products have been launched here and the performance of these
products is good among Indian consumers. Some of the successful
case studies of green marketing are-

CNG TRANSPORT IN NEW DELHI

New Delhi, capital of India, was being polluted at a very fast pace until
Supreme Court of India forced a change to alternative fuels. In 2002, a
directive was issued to completely adopt CNG in all public transport
systems to curb pollution.

GOING GREEN: TATAS NEW MANTRA :

Tata group of companies in India has taken considerable Steps to Cut

Carbon Emission across Companies, Value Chain. If globalization was
the driving factor for Tata Group in the last decade, going green is the
buzzword for the present one. From being on the fringe, the green
movement is gaining momentum within the group. Indias oldest
industrial house is stepping up efforts to reduce its carbon footprint
across the value chain from manufacturing processes to distribution
networks to ecofriendly consumer products. For instance, Tata Steel
aims to reduce carbon dioxide emissions at its Jamshedpur plant from
the current 1.8 tone to 1.7 tons per ton of liquid steel made by 2012. The
ideal global benchmark though is 1.5.

XC
Tata Motors is setting up an eco-friendly showroom using natural
building material for its flooring and energy efficient lights. Tata Motors
said the project is at a preliminary stage.

The Indian Hotels Company, which runs the Taj chain, is in the process
of creating eco rooms which will have energy-efficient mini bars,
organic bed linen and napkins made from recycled paper. But there
wont be any carpets since chemicals are used to clean those. And
when it comes to illumination, the rooms will have CFLs or LEDs. About
5% of the total rooms at a Taj hotel would sport a chic eco-room design.
One of the most interesting innovations has come in the form of a
biogas-based power plant at Taj Green Cove in Kovalam, which uses the
waste generated at the hotel to meet its cooking requirements. Tata had
launched a low-cost water a low-cost water purifier made from natural
ingredients. Another eco-friendly consumer product that is in the works
is Indica EV, an electric car that will run on polymer lithium ion batteries.
Tata Motors plans to introduce the Indica EV in select

European markets this year. The groups large companies such as Tata
Steel, Tata Motors, Tata Chemicals and Tata Consultancy Services
contribute 80% of the groups overall emissions and a panel, headed by

Tata Sons director JJ Irani, has been formed to address this issue.
Several companies have already or are in the process of implementing
clean development mechanism (CDM) projects. Tata Steel said it is
currently working on more than 17 CDM projects with Ernst & Young

XCI
and these projects are at various stages of approval at United Nations
Framework Convention on Climate Change. Tata Power has said that of
the total power it would generate in the next 10 years, 25% would be
from renewable energy sources. Tata Motors is collecting environmental
and energy data across its dealer and supply chain to compute their
carbon footprint and identity opportunities for cutting down on carbon
dioxide emission. This initiative will enable sharing and deployment of
ideas throughout the value chain.

A source in Indian Hotels said that all of its domestic and international
hotels would be certified by Green Globe, an international agency by the
end of 2010. Clean Technology Tata Steel aims to reduce carbon dioxide
emissions at its Jamshedpur plant from 1.8 tons to 1.7 tons per ton of
liquid steel made by 2012. Global benchmark is 1.5. Tata Motors is
setting up an eco-friendly showroom using natural materials.

NGOs Campaigning Against Polythene

Self help groups in Uttarakhand, India have launched a campaign to

banish polythene bags by replacing them with paper bags and providing
them to shop keepers at lucrative prices. "Pahal" is one such group that
has been training women to make paper bags from old newspapers.
Women in this group are now earning anything between Rs 300 to Rs

XCII
4,000 per month from their own homes. This drive has produced a
sustainable livelihood for the poor women in that area.

Green Building Initiatives in India

GREEN BUILDING DEFINED

"A green building is one which uses less water, optimises energy
efficiency, conserves natural resources, generates less waste and
provides healthier spaces for occupants, as compared to a conventional
building."

India is serious about green initiatives and is well on its way to

implementing them in future projects. The changes would come by way
of spreading awareness, dispelling myths and educating the trade and
industry in the benefits of going green.

The rapid progress made by the Indian Green Building Council in India
and the prestigious green building projects being awarded the Platinum,
Gold and Silver ratings already in operation in India.

SCORECARD

944 members (82 Founding Members)

687 registered buildings

117 certified buildings

433.26 million sqft Green building footprint

XCIII
The only deterrent for going green, apparently, is the myth that project
costs are prohibitive and unaffordable. The construction industry and
upcoming Special Economic Zones would certainly welcome these
changes and implement them with the same approach as Indias was
to USA offer the carbon-credit carrot for implementation, but not to
make it mandatory and impose penalties or fines for non-conforming to
stipulated norms.

ITC-CHAIN OF GREEN HOTELS IN INDIA

ITC Welcomgroup, India's premier chain of luxury hotels was launched

on October 18, 1975, with the opening of its first hotel - Chola Sheraton
in Chennai. Since then the ITC-Welcomgroupbrand has become
synonymous with Indian hospitality. With over 100 hotels in more than
80 destinations, ITC-Welcomgroup has set new standards of excellence
in the hotel industry in Accommodation, Cuisine, Environment and
Guest Safety. A leader in the premium hospitality segment, ITC-Welcom
group Hotels have had the privilege of hosting world leaders, Heads of
State and discerning guests from across the world and within.

ITC- Welcomgroup is actively committed to the environment.

WelcomEnviron is vision for a green world. Its a multi-faceted

programme started in order to propagate environmental causes in the
cities where ITC-Welomgroups hotels are located. The guiding principle

XCIV
is Reduce, Reuse and Recycle. Each hotel has its own programme,
encompassing local participation, creating awareness among
employees and internal conservation through energy-saving gadgets
and environment-friendly material. Guests are also encouraged to be a
part of campaign, Give back as much as you take from the
environment.

Awards

ITC Mughal won the Golden Peacock award for the year 2004.

ITC Maratha won the FHRAI Environment Champion award.

ITC Green Centre was given the US Green Building Council Platinum
Rating.

ITC Hotels received the PATA Gold Environment Award in 2005 in the
Corporate category

ITC Green Centre

The ITC Green Centre in Gurgaon is the physical expression of this

commitment to sustainability - Ecological, Social and Economic. The
building was awarded Platinum rating by the US Green Building Council

LEED.

Greening of the supply chain (GSC)

ITC Hotels made a humble start in the 'Greening' of the supply chain (GSC)

XCV
recently, with the clear intent of attempting to work towards'creating a sea of
excellence' as opposed to an'island of excellence' in the economic domain
through industry initiative, by inducing our suppliers to adopt cleaner & greener
production (C & GP) practices.

NTPC

Badarpur Thermal Power station of NTPC in Delhi is devising ways to

utilize coal-ash that has been a major source of air and water pollution.
Barauni refinery of IOC is taken steps for restricting air and water
pollutants.

SOME OTHER SUCCESS STORIES

Conceived and designed by a pharmacy student from Jeypore College

of Pharmacy in Visakhapatnam, the bike, if brought into the market, will
make commuting easier for those with dysfunctional arms and hands. It
does not have handles and can be used to go out on the road. bike has
a seat and two footrests on either side. The user can navigate the bike
using push buttons fitted in a corner of one of the footrests.

Some projects were designed completely for philanthropic purposes

like Project Banana by an entrepreneur from Andhra Pradesh. For the
past three years, his teams have been collecting banana peels from the
areas near Godavari and produce thread out of it. Local women and
seasonal farmers are then put to weaving rugs and making paper.

XCVI
Gujarat University converts banana plant waste into useful products. A
Gujarat based agriculture university has successfully converted those
parts of the fruit's plant which are usually thrown away as waste into
highly useful products, including an edible candy with nutritional
values. The other products include fibre for textile and paper industry
and organic liquid fertilizer which have been developed under the
project which aims for efficient use of each and every component of
banana plant. This candy is made from the central core of the banana
plant pseudostem, which is a nutrition-rich part. The candy has been
developed on experimental basis and we are in the process of
standardising the product. And also looking at the demand for banana
in the international market and with new technologies evolved for better
yield, farmers have shown interest in its cultivation in state mainly in
districts of south Gujarat.

Unleashes yet another technological revolution JK Tyre - India's No.1

manufacturer of four-wheeler tyres and pioneers of radial tyre
technology in India, unveiled nation's first eco-friendly colored radials.
Developed indigenously at JK Tyre's state-of-the-art R&D facilities
HASETRI (Hari Shankar Singhania Elastomer and Tyre Research
Institute), these tyres employ path-breaking technology which replaces
the traditionally used Carbon Black with environment friendly material
Silica. Besides being environmentally less hazardous, silica also
promises higher fuel efficiency as a result of its lower rolling

XCVII
resistance.

These tyres will also have longer life due to advanced compounding
technology - offering excellent performance, handling and braking that
are a hallmark of tyres from JK Tyre. A result of JK Tyre's pioneering
research initiatives into new-age environment-friendly raw materials,
these tyres are made from silica based tread compounds. The tyres also
offer higher durability as compared to normal radials and offer better
resistance against cuts - thanks to its superior compounding
technology.

According to the consumer study, Eco Pulse 2009, by the Shelton

Group, product labels are more important than advertising for finding
out about green products. Of course untruthful labels can be illegal by
breaking Fair Trade Commission Standards or considered to be green
washing by consumers, so creating an affective label can be a tricky
task.

Buildings have a profound impact on the environment, which is why

green-building practices are becoming the norm of the day. Real estate
developers, architects and the public are increasingly becoming aware
of the green house effect and the benefits of harnessing the limited
natural resources. It is extremely important to reduce and perhaps, one
day, eliminate those impacts. Green buildings bring together a vast
array of practices and techniques to reduce and eliminate their impact
on human health and environment. Effective green buildings are not just

XCVIII
a random collection of environment friendly technologies. They require
careful and systematic attention to the full life cycle impacts of the
resources, the resource consumption, and pollution emissions over a
buildings complete life cycle. As a society, we, in India, are more
conscious and sensitive to the impact of thoughtless over-exploitation
of our resources on environment. This awareness is thanks to our
culture, heritage and traditions brought forth with the Vaastu science,
which is as old as our civilization. Green design is a philosophy of
designing a building that is in harmony with the natural features and
resources surrounding the site. There are several key steps in
designing sustainable green buildings, such as, green building
materials are obtained from local sources that reduce loads, optimizes
systems, and generate on-site renewable energy. Building materials
considered to be green include products that are reusable, renewable,
non-toxic, and/or recyclable. Building materials should be extracted and
manufactured near the building site to minimize the energy wasted in
their transportation.

To lessen the energy loads within and on the structure, it is critical to

orient a building to take advantage of the cooling breeze and sunlight.
Day lighting with ample windows will eliminate the need to turn on
electric lights during the day. These buildings also harvest solar energy
with 20% of their energy requirement coming from solar cells. Solar

XCIX
energy can warm a building in winter. Prevailing breeze and convection
currents can passively cool a building in summer. Usage of thermal
mass can help store the heat gained during the day and release it at
night, thereby minimizing the swings in temperature. Thermal mass can
also both heat a building in winter and cool it during summer. Insulation
is the final step to optimizing a structure. Well-insulated windows,
doors, and ceilings and walls help reduce energy loss, thereby reducing
energy usage.

SOME INTERNATIONAL CASE STUDIES

PHILIPS- EARTHLIGHT: AN EARLY EXPERIMENT IN GREEN

MARKETING

In 1994, Philips launched the EarthLight,a super energy-efficient

compact fluorescent light (CFL) bulb designed to be an environmentally
preferable substitute for the traditional energy-intensive incandescent
bulb. The CFLs clumsy shape, however, was incompatible with most
conventional lamps, and sales languished. After studying consumer
response, Philips reintroduced the product in 2000 under the name

Marathon, to emphasize the bulbs five-year life. New designs offered

the look and versatility of conventional incandescent light bulbs and the
promise of more than $20 in energy savings over the products life span
compared to incandescent bulbs. Philips Lighting's first shot at
marketing a standalone compact fluorescent light (CFL) bulb was Earth
C
Light, at $15 each versus 75 cents for incandescent bulbs. The product
had difficulty climbing out of its deep green niche. The company re-
launched the product as "Marathon," underscoring its new "super long
life" positioning and promise of saving $26 in energy costs over its five-
year lifetime. Finally, with the U.S. EPA's Energy Star label to add
credibility as well as new sensitivity to rising utility costs and electricity
shortages, sales climbed 12 percent in an otherwise flat market.

THE HEWLETT-PACKARD COMPANY

The consumer electronics sector provides room for using green

marketing to attract new customers. One example of this is HP's
promise to cut its global energy use 20 percent by the year 2010. To
accomplish this reduction below 2005 levels, The Hewlett-Packard
Company announced plans to deliver energy-efficient products and
services and institute energy-efficient operating practices in its facilities
worldwide.

Car-sharing services address the longer-term solutions to consumer

needs for better fuel savings and fewer traffic tie-ups and parking
nightmares, to complement the environmental benefit of more open
space and reduction of greenhouse gases. They may be thought of as a
"time-sharing" system for cars. Consumers who drive less than 7,500
miles a year and do not need a car for work can save thousands of
dollars annually by joining one of the many services springing up,

CI
including Zip Car (East Coast), Flex Car (Washington State), and Hour
Car (Twin Cities)

COKE INC

Coke's campaign broadens the definition beyond environmentalism,

centering on the concept of "sustainable well-being." The first two
executions, for example, don't focus at all on environmentalism and
instead paint the soft-drink giant as a corporate good guy concerned
with meeting consumer needs and supporting worthy local education
and sports programs.

MCDONALD
McDonald's restaurant's napkins, bags are made of recycled paper.

RECYCLING NEWSPAPER IN TAIWAN

An eco-conscious couple in Taiwan has opened a small schoolhouse

built with donated newspapers fed through a homemade blender.
Canadian-born John Lamorie and his Taiwanese wife, Shelly Wu, used
more than 1,000 kg of newspapers, many collected from students who
would turn them over for points in class, to build the 75 sq-metre
schoolhouse. The project took about a year, with school now set to
open ahead of schedule news of the unusual construction method
spreads in the rural area of Pingtung County. Papercrete, though
patented in 1928, remains far outside the mainstream of construction
materials. It can be labour intensive and tough to use despite its

CII
environmental friendliness. The schoolhouses walls are coated with a
silicone coating to guard against rain damage. The school can
accommodate about 16 students.

SILICON-AIR BATTERY

In Washington scientists at the Technion-Israel Institute of Technology

have developed a new, environmentally friendly silicon-air battery
capable of supplying non-stop power for thousands of hours without
needing to be replaced. Created from oxygen and silicon, such batteries
would be lightweight, have an unlimited shelf life, and have a high
tolerance for both humid and extremely dry conditions. Potential uses
include medical applications (for example, powering diabetic pumps or
hearing aids), sensors and microelectronics structured from silicon.
Silicon-air batteries would be able to provide significant savings in cost
and weight because they lack the built-in cathode used in conventional
batteries.

IBM

Project Big Green, an IBM service initiative is aimed at building and

redesigning datacenters that consume less energy. With the launch of
its second phase of the project, the team from IBM Global Technology
Services (GTS) is now targeting large corporate customers in India. The
initiative for an average 25,000 square foot data centre, the potential
energy savings should be upwards of 42 percent, which based on the
US energy terms, would equate to a 7,439-tonne reduction in carbon

CIII
emissions per year. IBM claims that the savings for customers are great
in going green, by using IBM technologies such as their blade servers
instead of other vendor's technologies, a customer with a 25,000-
square-foot data center should be able to save as much as 42 percent
on energy consumption.

VIDEOCON

The Videocon Group has embarked upon a massive re-branding

exercise in order to position itself as a younger, fresher, eco-friendly
and a with-it brand; ahead of its foray into diverse areas such as DTH
and telecom. As a first step towards the revamp, the conglomerate has
unveiled a new logo, designed by Inter brand Singapore. The new V is
a more fluid version of the erstwhile logo and comprises two green lava-
like shapes. The two animated characters have been named Chouw
and Mouw and the agency has conceptualized a series of five films,
each telling a simple story while reinforcing the brands new positioning
statement, Experience Change. For instance the first film titled Hot
shows the two characters flying up to the cloud and making it burst to
help water a flower that is drying up.

Green Telecom India 2010 to promote Greener Initiatives in

Indian Telecom Industry

Energy consumption is one of the leading drivers of operating expenses

for both fixed and mobile network operators. Reliable access to
electricity is limited in many developing countries that are currently the

CIV
high-growth markets for telecommunications. At the same time, many
operators have adopted corporate social responsibility initiatives with a
goal of reducing their networks' carbon footprints, and network
infrastructure vendors are striving to gain competitive advantage by
reducing the power requirements of their equipment. According to an
industry report, all of these factors will continue to converge over the
next several years, and 'green' network equipment will grow to
represent 46% of the $277 billion global telecom infrastructure market

by
2013.

INITIATIVES IN WASTE MANAGEMENT IN INDIA

About 40 million tonnes of municipal waste is generated in India every

year. The waste management scenario continues to be grim, even
though there have been some commendable initiatives by scattered
municipalities, individuals, groups and NGOs. As of today, open dumps
are the major mode of waste disposal. Composting, biomethanation and
thermal processing are being attempted as the options for waste
processing.

Municipal solid waste (MSW) includes household garbage and rubbish,

street sweeping, construction and demolition debris, sanitation
residues, trade and non hazardous industrial refuse and treated bio-
medical solid waste. The management of MSW is an area of universal
concern for both the developed and developing world. It is a major

CV
problem in Indian cities and towns with the urban areas of India
producing about 40 million tons of solid waste from household and
commercial activities every year. As the Solid Waste Management
(SWM) is of local nature it is the responsibility of the State which in turn
has entrusted it to local authorities who carry out the solid waste
management in areas under their control using mostly their own funds,
staff and equipment. The urban local bodies spend approximately
Rs.500 to Rs.1500 (approx. USD 12 - 36) per tonne on solid waste for
collection, transportation, treatment and disposal. About 60-70% of this
amount is spent on collection, 20-30% on transportation and less than
5% on processing and final disposal. Out of the total municipal waste
collected, about 94% is disposed by open dumping and the rest is
composted (Visvanathan et al.,2004).

The 2001 Census has put the number of urban centres as 5144 out of
which 464 centres have a population greater than 1 lakh. According to
the Central Pollution Control Board(CPCB) the average waste generated
for small towns is 0.1 kg per person per day; for medium towns/city is
0.3 to 0.4 kg per person per day; and for large cities around 0.5 kg per
person per day (CPCB, 2000). The typical rate of increase of waste
generation in Indian cities has been estimated at around 1.3% annually.
The expected generation of Lesson from Municipal Solid Waste
Processing Initiatives in India International Symposium MBT 2007 IN -
www.wasteconsult.de 9 3

CVI
MSW in 2025 will therefore be around 700 grams per capita per day.
Considering that the urban population of India is expected to grow to
45% of total from the prevailing 28%, the magnitude of problem is likely
to grow to even larger proportions (World Bank, 2006).

The socio-economic structure of the Indian society not only makes per
capita generation of waste much less compared to that of the western
societies, it has also brought in a system of waste recycling and reusing
not common in developed societies, though these systems are fast
loosing ground. A substantial amount of MSW is recycled and reused
through the primary intervention of ragpickers and second-hand
markets, though there are problems like the health hazard to the
ragpickers and the degradation and devaluation of the recyclables.

Since the experience in the towns all over India regarding waste
processing has not been encouraging and since the States were not
observed to take any specific initiative in this regard various
committees were appointed by the Central Government and as a result
of these committees various projects were initiated. The two leading
methods of waste processing being adopted in India include
composting (aerobic composting, anaerobic, vermicomposting, etc.)
and waste-to-energy (bio-methanation, pelletisation, incineration)
(CPHEEO,2000). The larger (50-60%) proportion of organic matter in
Indian MSW indicates the desirability of biological processing of
wastes. This paper is aimed at analyzing the performance of these

CVII
waste processing plants on technical aspects (i.e. processing
technology and quality of product), the type of management and
performance, institutional aspects (i.e. government policies and
regulations, stakeholder cooperation) and environmental health
aspects. This also includes aspects such as the technology maturity,
input quality/ quantity flexibility and local availability of technology and
expertise.

Some more Initiatives

Hotel offers free meal to guests who are willing to generate electricity.
The Crown Plaza Hotel in Copenhagen, Denmark , is offering a free meal
to any guest who is able to produce electricity for the hotel on an
exercise bike attached to a generator. Guests will have to produce at
least 10 watt hours of electricity - roughly 15 minutes of cycling for
someone of average fitness. They will then be given meal vouchers
worth $36 (26 euros).

Disco pub gets electricity produced by people dancing at specially

modified dance floo . All the flashing strobes and pounding speakers at
the dance club are massive consumers of electrical power. So Bar
Surya, in London, re-outfitted its floor with springs that, when
compressed by dancers, could produce electrical current that would be
stored in batteries and used to offset some of the club's electrical
burden. The club's owner, Andrew Charalambous, said the dance floor
can now power 60 percent of the club's energy needs.

CVIII
Company creates a desktop printer that doesn't use ink nor paper .
Different from conventional printers, PrePeat adopts a thermal head to
print on specially-made plastic sheets. These plastic sheets are not
merely water-proof, but could be easily erased, just feed the sheets
through the printer again, and a different temperature will erase
everything or just write over it. Also claimed by the manufacturer, such
one sheet could be used up to 1,000 times so that you'll reduce your
expenses on paper for sure.

University constructs a green roof as a gathering place Green design is

an enormously popular trend in modern architecture, just take a look at
this amazing green roof at the School of Art, Design and Media at
Nanyang Technological University in Singapore . This 5-story facility
sweeps a wooded corner of the campus with an organic, vegetated form
that blends landscape and structure, nature and high-tech and
symbolizes the creativity it houses. The roofs serve as informal
gathering spaces challenging linear ideas and stirring perception. The
roofs create open space, insulate the building, cool the surrounding air
and harvest rainwater for landscaping irrigation. Planted grasses mix
with native greenery to colonize the building and bond it to the setting.

Designer creates a sink that uses wasted water to grow a plant . Made of
polished stained concrete, the Zen Garden Sink has a channel that
allows the water used while washing your hands to water a plant.

CIX
Created by young Montreal designer Jean-Michel Gauvreau the sink
comes in single or double basin model. The sink is designed in a way
you won't get your plants all soapy. There is a main drain at the bottom
of the basin for soapy grime. Your little plant friend just gets whatever
you choose to dole out.

Designer creates a shower that forces you to leave when you've wasted
too much water. 20% of our total domestic energy usage is from hot
water for showering and bathing. That's over 6 times the energy usage
of domestic lighting. So designer Tommaso Colia came up with his eco-
friendly shower design that will force you to get out when you take too
long and waste much water. The eco_drop shower features beautiful
concentric circles that will rise to force you to stop showering when you
take too long, and accordingly save water.

Designer creates light-switch that changes colors to teach children how

to save energy. Teaching the importance of energy conservation is the
goal of this design from Tim Holley. He calls it Tio, and it's a ghost-
shaped light switch that gives kids a visual reminder of how much
energy they've used by leaving lights on. Tio starts out green and
smiling. If the light is left on for more than four hours, he turns yellow
and looks shocked. And if you dare to leave that light on for more than
eight hours, sweet little Tio turns into a raging red hulk, complete with
frowny mouth and angry eyes. But he won't just visually remind your
kids about their energy habits; information from the light switch is sent

CX
to Tio's computer program so the entire family can see how they're
doing. In a brilliant piece of visual positive reinforcement, Holley's
program lets kids grow a virtual tree which gets bigger and healthier the
more energy they save.

Environmental company creates a staple-free stapler to avoid staple

pollution. Staples are supposed to be so bad to the environment that a
company decided to create a staple-free stapler. This product promises
to make collation eco-friendly. Instead of using those thin metal planet-
killers, the staple-free stapler "cuts out tiny strips of paper and uses the
strips to stitch up to five pieces of paper together." You can even order
them customized with your corporate logo so you can, you know, brag
about what your company is doing to stop the staple epidemic.

Designer creates an iPhone charger powered by a hand grip A green

idea that gives you a great hand workout as well.

CXI
CHAPTER- 5

OBJECTIVE OF THE

STUDY AND

RESEARCH

METHODOLOGY
CXII
CHAPTER-5

OBJECTIVE OF THE STUDY AND RESEARCH

METHODOLOGY

In order to position their green product offerings, companies must first

segment the market according to levels of pro-environmental purchase
behaviour and then target the greener consumer segments. However,
a review of the literature indicates that socio-demographic and
personality indicators have had only limited success in profiling
consumers according to their proenvironmental purchasing behaviour.
The demand for green products has been shown to be uneven across
different market segments. Thus, for organizations to position green
products, or communicate their environmental efforts, to members of
the population who are likely to be concerned about environmental
issues, green consumer segments need to be identified.

This research work aims to illustrate how the green challenge is

exerting an influence on current marketing practice and how its
implications will require a more profound shift in the marketing
paradigm, if marketers are to continue delivering customer satisfaction
at a profit throughout this new millennium.

CXIII
The study is empirical in nature and has been designed to find out the
consumer perception of the green products and the factors that affect
their purchasing behaviour for the green products.

OBJECTIVE OF THE STUDY

The objective of the present study is

To determine the factors affecting Green purchasing behaviour among

Indian consumers

To determine most important and least important factors affecting green

purchasing behaviour.

To give recommendations and suggestions to increase the uptake of

green products in India.

RESEARCH METHODOLOGY
Development of Questionnaire

The questionnaire was designed by consulting many studies to

understand the various constructs for the designing of the
questionnaire (Kaman Lee, 2008;) and by conducting a brain storming
session on factors affecting Green purchase behavior in India with 120
students and faculty members of a management institute. Many factors
have been identified such as ecological awareness, social responsibility
towards environment, health awareness, stressful life, promotion of
green products, presence, packaging, eco-certification etc. Based upon
these various factors a framework has been developed.

CXIV
FRAMEWORK FOR FACTORS AFFECTING

GREEN PURCHASE BEHAVIOUR IN EMERGING

ECONOMIES

Studies by Samli (1992) and Miller (1993) both concluded demographics

were an important variable in green product purchase behavior. Roberts
(1996) found that older females with higher education tended to be
greener. Women appeared to be less aware of environmental issues
compared with men (Mohamed M. Mostafa, 2007)

This leads to our first proposition:

Pl: Demographics relate to green consumer behavior. Specifically,

higher incomes and levels of education, as well as other demographic
factors such as gender, are more likely to lead to green purchases than
lower levels of education and income

Green purchases are facilitated by positive attitudes of consumers

toward (a) environmental protection, (b) fair trade, (c) local products,
and (d) availability of action-related knowledge (Tanner C & Kas, 2007)
which in turn affects firms operational and commercial performance
and influence their economic results. (Andre et al., 2008). Social
influence was the top predictor of green purchasing behaviour ( Kaman
Lee, 2008).

Social responsibility has been considered as an important influencing

variable for green purchase behaviour (Gerpott & Mahmudova, 2010).

CXV
Lifestyle or status symbol also influences the purchase decision. (
Griskevicius, Tybur,& Bergh, 2010)

This leads to our second proposition:

P2: Environmental awareness relate to green consumer behavior.

Specifically, social responsibility, concern for health and environment,
eco-buying attitude, social awareness more likely to lead to green
purchases.

Consumers are expecting greater corporate environmental activism and

that green promotion is obviously an effort to convince the consumer of
the firms commitment to environmental issues, it is important to
understand the factors that contribute to the consumers perception of
green marketing. DSouza et al. (2006) identify six factors:

perception of the company as a whole,

compliance with environmental regulation,

perception of the relationship between price and quality,

perception of the product characteristics,

product labeling, and

previous consumer experience with the company or product. This leads

to our third proposition:

P3: Market presence and promotion relate to green consumer behavior.

Specifically, green packaging, price, promotion and availability more
likely to lead to green purchases

CXVI
Framework for Factors Affecting Green Purchase

Behaviour

MARKETING

AWARENESS ASPECT

ASPECT

1. Concern for health and

environment

1.
Product

2. Eco buying attitude

2.
Price

3. Social Responsibility

3.
Promotion

4. Eco authenticity

4.
Place

5. Social awareness and

DEMOGRAPHIC ASPECT

Age,

Gender

3.
Family dimension
GREEN PURCHASE
4.
Education

5.
Occupation
BEHAVIOUR
6.
Income

CXVII
Based on the above framework a questionnaire was designed with 640
questions. Based on the face validity and repeatability the number of
questions was reduced to 150.

The questionnaire was divided into three parts-Environmental

awareness

Eco purchasing behaviour Demographic profile

A pilot testing was done with these 150 questions and finally an
instrument of 43 questions was developed. A five point likart scale was
used to collect the responses. Data has been collected from 695
respondents from various parts of Mumbai and Navi Mumbai.
CXVIII
CHAPTER-6

PROFILE OF THE

RESPONDENTS
CXIX
CHAPTER- 6

PROFILE OF THE RESPONDENTS

The survey for the research work was conducted in the city of Mumbai
and Navi Mumbai keeping in mind that Green Marketing is still a metro
phenomenon in the developing economies like India. A sample of 1000
respondents was selected randomly for the survey. Out of which only
694 questionnaires were found completely filled hence considered for
the study.

AGE OF THE RESPONDENTS

From the table 6.1 it is evident that out of the total 649 respondents,
more then 27% are below 25 years of age group, maximum i.e. 39% are
from age group of 26 years to 35 years. Nearly 20% are from the age
group of 36 years to 45 years and rest of the 15% is from age group of
46 years and above.

CXX
Table 6.1- AGE OF THE RESPONDENTS

Age of the Respondents Frequency

Percent

Up to 25
189
27.2

26-35
267
38.5

36-45
135
19.5
46 and above
103
14.8

Total
694
100

CXXI
Figure 6.1 - AGE OF THE RESPONDENTS (Bar Chart)

QUALIFICATION OF THE RESPONDENTS

From the table 6.2 it is evident that out of total 694 respondents, 56% are
graduate and 24% are post graduate where as only 20% are SSC and
HSC passed which clearly indicates the high literacy ratio in the metro
areas.
CXXII
Table-6.2: QUALIFICATION OF THE RESPONDENTS

Qualification
Frequency
Percent

SSC
30
4.3

HSC
109
15.7

Graduate
390
56.2

PG and above
165
23.8

Total
694
100
WORKING STATUS OF THE RESPONDENTS

CXXIII
From the table 6.3 it is evident that out of total 694 respondents, 73% are
working and 27% are nonworking respondents

Table 6.3: WORKING STATUS OF RESPONDENTS

Professional Status
Frequency
Percent

Working
506
72.9

Nonworking
188
27.1

Total
694
100
Figure 6.3: WORKING STATUS OF RESPONDENTS

CXXIV
GENDER OF THE RESPONDENTS

From the table 6.4 it is evident that out of total 694 respondents, 60% are
male respondents and 40% are female respondents.
Table-6.4: GENDER OF THE RESPONDENTS

CXXV
Gender
Frequency
Percent

Male
416
59.9

Female
278
40.1

Total
694
100

Figure- 6.4: GENDER OF THE RESPONDENTS

Gender

Male

Female
CXXVI
CHAPTER-7

FACTORS AFFECTING

GREEN MARKETING IN

INDIA
CXXVII
CHAPTER-7

FACTORS AFFECTING GREEN MARKETING IN

INDIA

Before analyzing consumer buying behaviour, it is necessary to

understand the main factors affecting buying behaviour in the field of
Green Marketing. To understand various factors, we have designed the
questionnaire and collected the responses on a five point scale. Based
on the fact that there are differences between individuals in regard to
their pro-environmental behaviour and attitudes, and that the number of
variables used in this research is quite extensive, an exploratory factor
analysis was used to simplify the interpretation of the variables.

FACTORS AFFECTING GREEN MARKETING

Factor analysis is a statistical method used to

describe variability among observed variables in terms of a potentially

lower number of unobserved variables called factors. In other words, it
is possible, for example, that variations in three or four observed
variables mainly reflect the variations in a single unobserved variable,
or in a reduced number of unobserved variables. Factor analysis
searches for such joint variations in response to unobserved latent
variables. The observed variables are modeled as linear

CXXVIII
 combinations of the potential factors, plus "error" terms. The
information gained about the interdependencies between observed
variables can be used later to reduce the set of variables in a dataset.

Factor analysis is related to principal component analysis (PCA) but

not identical. Because PCA performs a variance-maximizing rotation of
the variable space, it takes into account all variability in the variables. In
contrast, factor analysis estimates how much of the variability is due to
common factors ("communality"). The two methods become essentially
equivalent if the error terms in the factor analysis model can be
assumed to all have the same variance.

In order to carry out the factor analysis, the principal components

method was used to extract the factors. The variables were grouped into
eleven factors and, all together, account for 53.43 per cent of the total
variance. In order to facilitate the understanding and interpretation of
the results, the factors were rotated using the Varimax method. The
description of the factors is shown in Table 7.I.

As can be seen, according to the score obtained in the Kaiser-Meyer-

Olkin measure, the results of the analysis can be considered excellent

(Kaiser, 1974). Bartletts test of sphericity has a significance level of

0.000, showing that there is a high degree of correlation between the

variables, which means that the factor analysis was suitable (Hair et al.,
1998).

Table 7.I- Factors affecting Green Marketing

CXXIX
Factor-1 Concern for health and environment

Loading

1
Awareness of green product like
fuel

0.646

efficient vehicles should be spread

2
I am concerned about me and my familys

0.747

health

3
The uses of green product can save our

0.705

earth
4
Consumption of green products
will

0.646

positively affect the environment

When I have a choice between two equal products, I always

purchase the one
0.504

which is less harmful to other people and the environment

6 I am concerned about my environment 0.605

Factor-2 Eco-buying attitude

1 I make every effort to buy paper products

0.636
made from recycled paper

2 I use a low-phosphate detergent (or soap)

0.592
for my laundry

I have convinced members of my family or friends not to buy

some products which 0.533 are harmful to the environment

I try only to buy products that can be 0.636

CXXX
recycled

5
I promote environmental awareness by

0.618

working in different social campaign

Factor-3 Social Responsibility

1
To save energy, I use public transport as
0.571

much as possible

2
I buy
energy
efficient

household

0.691

appliances

3
I have
switched products for
ecological

0.542

reasons

Factor-4 Eco-certification

1
I look for eco friendly certification while

0.529

buying any product

2
Quality
is the
only
criteria when I look

0.613

green product

Factor-5 Social awareness and value

1
I get value for money while buying Green
0.588

Product

2
There
are
campaigns
to
provide

0.711

awareness of saving environment

3
Now a days people are more environment
0.508

friendly then ever

Factor-6 Lifestyle

CXXXI
1

0.696

It is prestigious to buy green products

2
Green products are high quality products
0.593

Factor-7 Absence of marketing

1
The green products are not well promoted

0.737

in the market

2
The green products are not available at

0.571

affordable prices

Factor-8 Promotion

1
I look for good offers to buy green

0.719

products

2
I look for variety while buying eco-friendly

0.612

products

Factor-9 Brand consciousness

1
I am not brand conscious for eco friendly

0.7384

products

Factor-10 Indifferent attitude

I usually purchase the lowest priced product, regardless of its

impact on 0.7621 society

Since one person cannot have any effect

upon pollution and natural resource 0.6227 problems, it doesn't

make any difference

CXXXII
what I do

Factor-11 Packaging

1
Packaging
attracts me
to buy green

0.703

products

Kaiser-Meyer-Olkin
Measure
of
Sampling

.891
Adequacy.

Bartlett's Test of Sphericity, Sig.

.000

Kaiser criterion: The Kaiser rule is to drop all components with eigen
values under 1.0.

IMPORTANCE OF VARIOUS FACTORS AFFECTING GREEN

MARKETING IN INDIA

As clear from Table 7.1, there are total 11 factors affecting green
purchase behaviour according to this study. Further as a market person,
we are interested in understanding the importance of these factors as
per customer ratings on various factors.

To understand the importance of each factor as per respondents rating

we have calculated the mean values of all the 11 factors and standard
deviation.

Table 7.2: Importance of Factors affecting green marketing

S.No
Factors
Mean
Std.

CXXXIII
Deviation

Concern
for health
and

1
environment

3.88
0.82

2
Eco buying attitude

2.99
0.86

3
Social Responsibility

3.21
0.90

4
Eco certification

3.27
0.99

Social
awareness
and

5
value

3.41
0.89

6
Lifestyle

3.25
1.04
7
Absence of marketing

3.29
1.03

8
Promotion

3.23
1.02

9
Brand consciousness

2.53
1.24
10
Indifferent attitude

2.50
1.02

11
Packaging

3.61
1.19

Result from Table-7.2 showed that Concern for health and environment
was considered as most important factor by the Indian consumers in
green purchasing behaviour, followed by packaging as the second, Eco-
certification as the third, and Lifestyle as the fourth most important
factor while Indifferent attitude is considered as least important factor,
followed by brand consciousness and eco-buying attitude.

CXXXIV
FACTOR AFFECTING GREEN MARKETING BY

DEMOGRAPHICS

As a marketer it is important for us to understand the demand of the

different segment so as to capture the market share. For the purpose we
have analysed the important factors of green marketing on
demographics i.e age, qualification and gender.

FACTOR AFFECTING GREEN MARKETING BY AGE

Analysis of table 7.3 showed that across the age groups up to 25 years,
26-35 years, 36-45 years and 46 years and above concern for health and
environment is the most important factor affecting their buying
behaviour for green products. The second most important factor

Packaging is also across the age group. Social awareness and values
is third most important factor for age group up to 45 years while eco-
certification is important for age group more then 45 years.

While indifferent attitude is least preferred by age group upto 35 years

branding is least preferred by 35 years and above.

Table 7.3: Factor Affecting Green Marketing By Age

CXXXV
Up to 25
26-35
36-45
46 and

Factors

Years
yrs
yrs
above

Concern for health and

environment

3.90
3.95
3.84
3.73

Eco buying attitude

2.87
3.06
2.99
3.01
Social Responsibility

3.01
3.32
3.31
3.16

Eco certification

3.15
3.31
3.33
3.32
Social awareness
and

value

3.37
3.45
3.41
3.38

Lifestyle

3.28
3.29
3.21
3.16

Absence of marketing

3.20
3.34
3.35
3.23
Promotion

3.36
3.24
3.23
2.98

Brand consciousness

2.66
2.57
2.33
2.44

Indifferent attitude

2.59
2.46
2.41
2.52
Packaging

3.55
3.77
3.44
3.52

CXXXVI

Packaging Indifferent
attitude
Concern for health
and environment

Brand consciousness 0 1 2
3 4
5

Promotion

Absence of

marketing

Lifestyle

Social awareness and value

Eco certification

Social

Responsibility

46 and above

36-45 yrs
Eco buying attitude
26-35 yrs

Up to 25 Years

CXXXVII
FACTOR AFFECTING GREEN MARKETING BY QUALIFICATION Analysis
of table 7.4 showed that across the qualification groups HSC,

Graduation, PG and above concern for health and environment is the

most important factor affecting their buying behaviour for green
products but for SSC it is Social awareness and values. The second
most important factor Packaging is also across the qualification HSC,
graduation and PG and above. While for qualification upto SSC it is

concern for health and environment.

While indifferent attitude is least preferred by qualification groups HSC,

Graduation, PG and above branding is least preferred by consumers
having qualification upto SSC..
CXXXVIII
Table 7.4: Factor Affecting Green Marketing By Qualification

PG and
Factors

SSC
HSC
Graduate
above

Concern for health

and

environment

3.67
3.63
3.98
3.84

Eco buying attitude

3.10
2.80
3.00
3.06

Social Responsibility

3.59
2.94
3.22
3.29

Eco certification

3.22
3.02
3.30
3.36

Social awareness and value

3.71
3.16
3.46
3.41

Lifestyle

3.32
3.26
3.32
3.08

Absence of marketing

3.30
3.26
3.27
3.36

Promotion
3.30
3.15
3.33
3.04

Brand consciousness

2.13
2.58
2.59
2.42

Indifferent attitude

2.30
2.56
2.48
2.52
Packaging

3.60
3.48
3.66
3.57

CXXXIX
Packaging

Indifferent

attitude

Brand
consciousness

Promotion

Absence of

marketing

R
e

L
i

E
c

S
o
C
o

E P
c

H
S
o

0.00 1.00

2.00

3.00

4.00

5.00
CXL
FACTOR AFFECTING GREEN MARKETING BY GENDER

Analysis of table 7.6 showed that for both male and female respondents

concern for health and environment is the most important factor

affecting their buying behaviour for green products. The second most
important factor is Packaging. Social awareness and values is third
most important factor for both the gender. Indifferent attitude is least
preferred by both males and females.

Table 7.4: Factor Affecting Green Marketing By Gender

Factors
Male
Female

Concern for health and environment

3.83
3.96

Eco buying attitude

3.02
2.95

Social Responsibility
3.24
3.16

Eco certification
3.20
3.37

Social awareness and value

3.41
3.41
Lifestyle
3.21
3.31

Absence of marketing
3.29
3.29

Promotion
3.28
3.16

Brand consciousness
2.58
2.45

Indifferent attitude
2.54
2.43

Packaging
3.53
3.73

CXLI
Packaging

Indifferent

attitude

Brand
consciousness

Promotion

Absence of

marketing

R
e

L
i

E
c

S
o

C
o

E
c

S
o

0.00 1.00

2.00

3.00

4.00

5.00

AWARENE
SS ABOUT
ECO-
CERTIFICA
TION
AMONG
CONSUME
RS

CXLII
Green gap exists around terms such as energy efficiency, energy
conservation, demand response, smart energy and clean energy, and
customers understanding, acceptance and perceptions of value around
those terms, according to an EcoPinion survey from EcoAlign, a new
marketing agency launched by the Distributed Energy Financial Group.

The green gap in communications is contributing to a growing

misalignment between customers stated intentions, e.g., their desire to
be more green or frugal with energy consumption, and their actual
behavior.

According to the survey most consumers cant articulate the difference

between the phrases energy conservation and energy efficiency,
while only 13 percent of respondents thinking energy efficiency has to
do with saving money or cutting down on fuel costs.

CXLIII
UNDERSTANDING OF THE CUSTOMERS FOR GREEN PRODUCTS ON

FOLLOWING OPTIONS Green colored products Natural / organic products

Recycled / recyclable products Bio-degradable products Vegetarian

products

Fresh products

Ayurvedic / Herbal products Healthy products

Products related to Islam Good quality products Highly priced products

Energy saving products Others_____________

CXLIV
80

74
76

70

63

60

55

50

48
43

40

43
42

30
24

32

20

10
0

Green Products

Figure 7.5: Understanding Of The Customers for Green Products

6.19 Analysis of Figure 6.5 shows that Green symbolize Healthy to 76%
respondents while natural/ organic to 74% of the total respondents. 63%
and 55% of respondents relate the term to vegetarian and fresh
respectively.
CXLV
UNDERSTANDING OF THE CUSTOMERS FOR GREEN SYMBOL ON

FOLLOWING OPTIONS

Vegetarian

Natural / organic

Recycled / recyclable

Ayurvedic / Herbal

Company logo

Fresh

Healthy

Good quality

Highly priced
CXLVI
Meaning of symbol
4%
0%
9%

10%

Vegetarian

8%

19%

Natural / Organic
Recycled / Recyclable

Ayurvedic / herbal

6%

Company Logo
Fresh

2%

Healthy
Good quality

42%

Highly priced

Figure 7.6: Understanding Of th Customers for Green Symbol Analysis

of Figure 7.6 shows that Green symbol symbolize high priced product
to 42% respondents while natural/ organic to 19% of the total
respondents.

AWARENESS OF THE CUSTOMERS FOR GREEN PRODUCTS

PRESENT IN THE MARKET

CXLVII
Figure 7.7: Awareness of the Customers for Green products present in
the market

Analysis of Figure 7.7 shows maximum respondent i.e 36% are not
aware of presence of green products in the market.
CXLVIII
CHAPTER-7

SUMMARY AND

CONCLUSIONS
CXLIX
Chapter-7

SUMMARY AND CONCLUSION

There are a number of western derived models of buyer behaviour that

research has shown need to be modified when doing business in
developing countries. Different tastes, customs and habits are likely to
result in different preferences. Also the popularity of western luxury
goods among non-western consumers may be due to different factors
such as saving or giving face or peer pressure, rather than because of
perceptions of value. These factors explain why people in the
developing countries are brand-conscious, especially for aspirational
reasons.

The model of innovation diffusion for example does not apply uniformly
to all international markets. In many respects this is due to differences
in culture. Different cultures have a different attitude towards the past,
present and the future which in turn impacts on degree of enthusiasm
for adopting new technologies. Also different cultures exhibit different
degrees of individualism and collectivism which influence readiness to
adopt something new or preference to wait until many others have
adopted the technology. Bradley (2003, p.108) shows that in eastern
countries the response pattern is different to that in the west and the
life cycle much shorter.

CL
Another model is Maslows hierarchy of needs which show the order in
which needs are satisfied by buyers. Research by Schutte and Ciarlante
(1998, p.93) shows that in Asia not only is the order in which these
needs are satisfied, different but also the needs themselves vary
compared to the west. The problem with these models is that they view
eastern or Asian markets as being similar and do not differentiate
between groups within such markets on socio economic lines as buyer
behaviour is likely to be markedly different between the wealthy
elite/growing urban middle class on the one hand and the urban
poor/rural masses on the other.

A clever marketer is one who not only convinces the consumer, but also
involves the consumer in marketing his product. Green marketing
should not be considered as just one more approach to marketing, but
has to be pursued with much greater vigor, as it has an environmental
and social dimension to it. With the threat of global warming looming
large, it is extremely important that green marketing becomes the norm
rather than an exception or just a fad. Recycling of paper, metals,
plastics, etc., in a safe and environmentally harmless manner should
become much more systematized and universal. It has to become the
general norm to use energy-efficient lamps and other electrical goods.

Marketers also have the responsibility to make the consumers

understand the need for and benefits of green products as compared to
non-green ones. In green marketing, consumers are willing to pay more

CLI
to maintain a cleaner and greener environment. Finally, consumers,
industrial buyers and suppliers need to pressurize effects on minimize
the negative effects on the environment-friendly. Green marketing
assumes even more importance and relevance in developing countries
like India.

Green marketing covers more than a firm's marketing claims. While

firms must bear much of the responsibility for environmental
degradation, ultimately it is consumers who demand goods, and thus
create environmental problems. One example of this is where
McDonald's is often blamed for polluting the environment because
much of their packaging finishes up as roadside waste. It must be
remembered that it is the uncaring consumer who chooses to disposes
of their waste in an inappropriate fashion. While firms can have a great
impact on the natural environment, the responsibility should not be
theirs alone.

It appears that consumers are not overly committed to improving their

environment and may be looking to lay too much responsibility on
industry and government. Ultimately green marketing requires that
consumers want a cleaner environment and are willing to "pay" for it,
possibly through higher priced goods, modified individual lifestyles, or
even governmental intervention. If you think customers are not
concerned about environmental issues or will not pay a premium for
products that are more eco-responsible, think again. You must find an

CLII
opportunity to enhance you product's performance and strengthen your
customer's loyalty and command a higher price.

Until this occurs it will be difficult for firms alone to lead the green
marketing revolution. It must not be forgotten that the industrial buyer
also has the ability to pressure suppliers to modify their activities.

Thus an environmental committed organization may not only produce

goods that have reduced their detrimental impact on the environment,
they may also be able to pressure their suppliers to behave in a more
environmentally "responsible" fashion. Final consumers and industrial
buyers also have the ability to pressure organizations to integrate the
environment into their corporate culture and thus ensure all
organizations minimize the detrimental environmental impact of their
activities. Green marketing is still in its infancy and a lot of research is
to be done on green marketing to fully explore its potential.

CONTRIBUTION OF GREEN MARKETING

First and foremost, a good green marketing program is one that either:
adds renewables that would not already be added or supports
renewable projects that might not otherwise continue to operate. If
these things are already happening and being paid for by all, then the
program doesn't meet the bottom-line test: green marketing programs
must make a difference.

2) A sign of a good green marketing program is one that has strong

links to local environmental groups and that achieves broad support

CLIII
among regional and national groups with an interest in promoting
renewable power. Public Service of Colorado, for example, has
developed a close working partnership with the Land and Water Fund
and other environmental groups in the state.

A green marketer that is seriously interested in greening the electric

system will have a program that is linked to a larger vision and a
strategic plan for making renewables an increasingly larger part of the
generation mix. A good example of this is Central and Southwest's
recent decision to acquire a significant amount of renewables capacity,
with the intent of rate basing a good portion of it, and subscribing the
rest through a green pricing program.

For green marketing programs to be successful in the long run, they

should both improve the environment and be fair to consumers. Prices
should not be excessively higher than the actual cost of the resources
in the portfolio. This is particularly true for green pricing programs,
which are scrutinized by regulators, and in imperfectly competitive
markets, because in these cases, there is no real competition in the
green market. In markets that are vibrantly competitive and in which
consumers have good information, this is less of a problem since lower-
cost providers can compete to displace those providers charging
excessive prices.

CLIV
Green marketing is offering a number of significant

benefits to Indian Market:

10. Marketers get access to new markets and gain an advantage over

competitors that are not advocating greenness.

Marketers can charge a premium on products that are seen as more

eco-responsible.

Organizations that adopt green marketing are perceived to be more

socially responsible.

Green marketing builds brand equity and wins brand loyalty among
customers.

However, green marketing poses huge dangers for marketers if they get
it wrong:

Most customers choose to satisfy their personal needs before caring for
the environment.

Overemphasizing greenness rather than customer needs can prove

devastating for a product.

Many customers keep away from products labeled green because

they see such labeling as a marketing gimmick, and they may lose trust

in an organization that suddenly claims to be green.

CLV
Green marketers need to find out the value their customers place on
green benefits. It is important that they position the product on the
basis of the functional need it caters to and then talk about the
additional benefits of greenness.

Marketers need to find out whether, by adopting green marketing, their

organizations will be perceived as more socially responsible. They need
to know whether their customers understand the benefits of green
products and value them enough. If they do not, then the marketers may
also need to invest in customer education in order to make their
marketing efforts successful.

Green marketing is still in its infancy and a lot of research is to be done

on green marketing to fully explore its potential. Green marketing
should not neglect the economic aspect of marketing. Marketers need to
understand the implications of green marketing. Marketers also have
the responsibility to make the consumers understand the need for and
benefits of green products as compared to non-green ones. In green
marketing, consumers are willing to pay more to maintain a cleaner and
greener environment. Finally, consumers, industrial buyers and
suppliers need to pressurize effects on minimize the negative effects on
the environment-friendly. Green marketing assumes even more
importance and relevance in developing countries like India & Pakistan.
The significance India will have on the the world in the future will be
extraordinary; weve only scratched the surface. The thing that remains

CLVI
to be seen is the importance green business has in India. Tackling mass
poverty is the first thing that is happening, and it should be the first
thing that the country emphasizes. India will be an economic
powerhouse, and could be a leader in green business if they choose to
be. The direction that business takes in India will have massive impact
on the world. If business leaders there recognize the vast potential that
green business has, and then decide to invest time, money, and effort,
the world would only benefit. India is in a very unique position right
now, they could either lead the world, or potentially aid in its
destruction.
CLVII
BIBLIOGRAPHY
CLVIII
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pp. 18-39.

Arbuthnot Jack (1977), "The Roles of Attitudinal and Personality

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Brooker George (1976), "The Self- Analyzing Socially Conscious

Consumer", Journal of Consumer Research, Vol. 3, September, pp. 107-
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CLXI
Buttel F H and Flinn W L (1978), "Social Class and Mass Environmental
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CLXII
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CLXV
ANNEXURE
LIST OF COUNTRIES ANNEX-1 AND ANNEX-2

CLXVI
Annex I Countries

UNFCCC Annex I Countries - (Developed Nations and Nations with

Economies in Transition (EIT))

Australia
Austria
Belarus a/
Belgium
Bulgaria a/
Canada
Croatia*
Czech Republic a/ *
Denmark
European Union
Estonia a/
Finland
France
Germany
Greece
Hungary a/
Iceland
Ireland
Italy
Japan
Latvia a/
Liechtenstein*

Lithuania

CLXVII
Luxembourg
Monaco*
Netherlands
New Zealand
Norway
Poland a/
Portugal
Romania a/
Russian Federation a/
Slovakia a/*
Slovenia a/*
Spain
Sweden
Switzerland
Turkey
Ukraine a/

United Kingdom of Great Britain and Northern Ireland

United States of America

a/ Countries with Economies in Transition (EIT)

* Countries added to Annex I by an amendment that entered into force

on 13 August 1998,

pursuant to decision 4/CP.3 adopted at COP 3.

UNFCCC Annex II Countries

(Annex I countries without the countries with Economies in Transition

(EIT))

Australia

Luxembourg

Austria

Monaco*

CLXVIII

Belgium

Netherlands

Canada

New Zealand

Croatia*

Norway

Denmark

Portugal

European Union

Spain

Finland

Sweden

France

Switzerland

Germany

Turkey

Greece

United Kingdom of Great Britain

Iceland
and Northern Ireland

Ireland

United States of America

Italy

Japan

Liechtenstein*
* Countries added to Annex I by an amendment that entered into force
on 13 August 1998,

pursuant to decision 4/CP.3 adopted at COP 3.

(Sources: United Nations Framework of Climate Change Convention

(UNFCCC) and Organisation for Economic Co-operation and
Development (OECD))

CLXIX
The non-annex I countries are the developing countries
CLXX
QUESTIONNAIRE
Questionnaire

1) Gender

CLXXI
2) Age

3) Education

4) What do you understand from green products? (Tick more than one)
a) Green colored products

b) Natural / organic products

c) Recycled / recyclable products d) Bio-degradable products

e) Vegetarian products f) Fresh products

g) Ayurvedic / Herbal products h) Healthy products

i) Products related to Islam j) Good quality products k) Highly priced

products

Energy saving products

Others_____________

5. What does the symbol on the right signify? (Tick any one)

CLXXII
a. Vegetarian

b. Natural / organic

c. Recycled / recyclable

d. Ayurvedic / Herbal e. Company logo

Fresh

Healthy

Good quality

Highly priced

6. Do you consider your effect on the environment as a consumer before

purchasing general day to day products?

a. Yes

b. No c. Dont know / Cant say / Not Sure

7. Do you encourage recycling of products?

a. Yes

CLXXIII
b. No

c. Dont know / Cant Say / Not Sure

8. Have you ever sent old or broken household electronic products (Mobile
phone, Television, Refrigerator, Air-conditioned, Car battery.etc) for
recycling?

a. Yes b. No

9. Are you aware of any products that are designed with environmental
issues in mind? If yes, kindly mention the same.

10. Choose the energy saving electronics from following which are used by
you currently?

(a) CFL Bulb

CLXXIV
(b) Solar water heater

(c) Solar cooker

(d) Solar electric products

(e) Solar mobile

(f) Five star energy saving rated Air - conditioner

(g) Five star energy saving rated Television

(h) Five star energy saving rated Fridge

(i) Electric bike

(j) Dont know / Cant say / Not sure

(k) None

11. Have you ever bought or considered buying products which are
designed with environmental issues in mind?

a. Yes b. No

c. Dont Know / Cant say / Not Sure

If No please specify why;

(a) Reduced performance

(b) Products appearance

(c) Too expensive

(d) Arent aware of any such products

CLXXV
(e) Other (specify)_____________________________

12. If given a choice, please choose the kind of vehicle from the following
that youd prefer to own.

(a) Petrol

(b) Diesel

(c) Gas

(d) Electric

(e) Solar

13. What was the reason for your choice?

(a) Low cost of car

(b) Low maintenance

(c) Durability of engine

(d) Eco friendly

(e) Saving on fuel expenses

(f) Others___________________

(g) Dont know / Cant say / Not sure

CLXXVI
New Report: American Consumers Lead the World in
Environmental Skepticism; Consumers Globally
Exhibit Different Attitudes and Behaviors on Green
Living in Five Distinct Population Segments
PR Newswire. New York: Sep 22, 2010.

Abstract (Summary)

The report also identifies five distinct groups of environmental

consumers ranging from the critical, "Jaded" category, who tend to
exhibit the least concern about the environment, to the "Green inDeed,"
the group of consumers who are not only green in their lifestyles but
advocate for others to become environmentally responsible as well.

NEW YORK, Sept. 22 /PRNewswire/ -- The United States is one of the

more environmentally cynical nations in the world with only 62% of the
population believing that environmental pollution is a serious issue
according to the findings from the new Green Gauge Global report from
GfK Roper Consulting, a division of GfK Custom Research North
America. This ranks the US 24th out of 25 markets around the world -
close to dead last.

CLXXVII
The GfK Roper Green Gauge(R) Global report, which examines the
green habits of 36,000 consumers in 25 countries worldwide, found that
American consumers are also skeptical about the cost and efficacy of
green products and their impact on the environment. Approximately two
in three Americans perceive green products to be too costly and one-
third believes they don't work as well as "regular" products.

In the USA, these numbers also represent a dramatic increase from just
two years ago.

"In the US and around the world, marketers are being challenged by
consumers to produce better green products that don't cost too much.
To that end, marketers need to be cognizant of the distinctive
perceptions and attitudes about green products in order to convey
these products as a smart, pragmatic purchase," said Timothy Kenyon,
Director of the GfK Roper Green Gauge study at GfK Custom Research
North America.

The report also identifies five distinct groups of environmental

consumers ranging from the critical, "Jaded" category, who tend to
exhibit the least concern about the environment, to the "Green inDeed,"
the group of consumers who are not only green in their lifestyles but
advocate for others to become environmentally responsible as well.

CLXXVIII
Between these segments lie the "Carbon Cultured," consumers who are
concerned about the environment, yet their green behaviors tend to lag
a bit, as well as the status-seeking "Glamour Greens." "Green in Need"
consumers have the desire, but lack the means to be environmentally
responsible.

"Our Green Gauge Global report not only discusses the unique
elements of each of these population segments, but it also provides
actionable strategies for developing green marketing campaigns and
tailored customer communications in every region across the globe,"
said Kenyon. "Now, more than ever, there is no one-size-fits-all
approach to reach those consumers across the globe who embrace
green behaviors compared to others who are less passionate about the
environment."

As consumer perceptions of green products continue to evolve globally,

marketers should keep in mind that not every consumer is out to
change the world one purchase at a time. However, by understanding
the varying green attitudes and behaviors globally, marketers can more
effectively tailor their communications and strategies to reach their
target audiences.

CLXXIX
CLX
XX