Green marketing and product development

A quality issue of growing importance the world over, especially in Europe and the United States is green marketing. Europe has been at the forefront of the green movement wit strong public opinion and specific legislation favoring environmentally friendly marketing and products. Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities. In the United States Japanese car manufacturers are taking advantage of their gas guzzling American cousins as consumers become more concerned about the environmental effects of SUVs like the General Motors Hummer. The European Commission has passed legislation to control all kinds of packaging waste throughout the European Union. Two critical issues that affect product development are the control of the packaging component of solid waste and consumer demand for environmentally friendly products.

The European Commission issued guidelines for eco-labeling that became operational in 1992. Under the directive, a product is evaluated on all significant environmental effects throughout its life cycle from manufacturing to disposal – a cradle to grave approach. A detergent formulated to be biodegradable and non-polluting would be judged friendlier than a detergent whose formulation would be harmful when discharged into the environment. Aerosol propellants that do not deplete the ozone layer are another example of environmentally friendly products. No country’s laws yet require products to carry an eco-label however. The destination that a product is environmentally friendly is voluntary and environmental success depends on the consumer selecting the ecology friendly product.

Since the introduction of the eco-label idea Hoover washing machines have been the only products that have gained approval for the eco-label. Interestingly enough, the benefits of winning the symbol have resulted in Hoover tripling its market share in Germany and doubling its share of the premium sector of the UK washing machine market. The approval process seems to be deterring many European manufacturers, many of whom are using their own, unofficial symbols. The National Consumer Council a consumer watchdog group, reports that many consumers are so confused and cynical about the myriad symbols that they are giving up altogether on trying to compare the green credentials of similar products.

Laws that mandate systems to control solid waste while voluntary in one sense do carry penalties. The EU Laws requires that packaging material through all levels of distribution from the manufacture to the consumer, be recycled or reused. Currently between 50 percent and 65 percent of the weight of the packaging must be recovered, and between 25 per cent and 45 per cent of the weight of the totality of packaging materials contained in packaging waste be recycled.

Each level of the distribution chain is responsible for returning all packaging, packing and other waste materials up the chain. The biggest problem is with the packaging the customer takes home by law the retailer must take back all packaging from the customer if no central recycling locations are available. For the manufacturer’s product to participate in direct collection and not have to be returned to the retailer for recycling, the manufacturer must guarantee financial support for curbside or central collection of all materials. The growing public and political pressure to control solid waste is a strong incentive for compliance.

Although the packaging and solid waste rules are burdensome there have been successful cases of not only meeting local standards but also being able to transfer this approach to other markets. Procter & Gamble’s international operations integrated global environmental concerns as a response to increasing demands in Germany. It introduced Lenor, a fabric softener in a super concentrated form, and sold it in a plastic refill pouch that reduced packaging by 85 per cent. This move increased brand sales by 12 per cent and helped set a positive tone with government regulators and activists. The success of Lenor was transferred to the United States, where P&G faced similar environmental pressures. A super concentrated Downy the US brand of fabric softener, was repackaged in refill pouches that reduced package size by 75 per cent thereby costing consumers less and actually increasing Downy market share. The global marketer should not view green marketing as a European problem; concern for the environment is worldwide and similar legislation is sure to surface elsewhere. This is another example of the need to adapt products fir global marketing.