Asia-Pacific Journal of Management Research

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Green Branding and Eco-innovations for Evolving a Sustainable Green Marketing Strategy
A.N. Sarkar
Asia-Pacific Journal of Management Research and Innovation 2012 8: 39
DOI: 10.1177/2319510X1200800106

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Article

Green Branding and Eco-innovations Asia-Pacific Journal of Management

Research and Innovation

for Evolving a Sustainable Green 8(1) 3958

2012 Asia-Pacific
Institute of Management
Marketing Strategy SAGE Publications
Los Angeles, London,
New Delhi, Singapore,
Washington DC
DOI: 10.1177/2319510X1200800106
http://apjmri.sagepub.com
A.N. Sarkar

Abstract
Green marketing is a new and evolving concept of marketing green and eco-products with well-defined eco-standardsconsisting of
wide-ranging eco-friendly products, satisfying eco-labelling and eco-footprinting standard norms. The article focuses on the significance
of green branding and eco-labelling with stress on eco-innovations with a view to developing a sound and sustainable green market-
ing strategy. The article examines how green consumerism can be linked to eco-market and to what extent this can be influenced by
cross-cultural differences in consumer behaviour. The scope of involving green marketing with corporate ethics and corporate social
responsibility (CSR) for inclusive growth of green markets has been explored. The article also examines how the green branding can
leverage the eco-market through the mechanism of eco-labelling and eco-footprinting, complimented by green supply chain manage-
ment practices. Finally, the article studies, at some length, the desirability of considering the aspects of sustainability factor and eco-
innovations which can help promote green consumerism.

Keywords
Green marketing, eco-market, green branding, eco-labelling, carbon footprinting, eco-innovations, green supply chain management,
green consumerism

Introduction a sharper focus since 1962, when Rachel Carsons (1962)

Green Marketing: The Concept
and Significance
As a matter of common knowledge and understanding,
green marketing broadly refers to the promotion or adver-
tising of products with eco-concerns. Generally, terms like
bacteria-free, recyclable, refillable, ozone friendly, zero
carbon, renewable and eco-friendly, etc., are some of the
common expressions consumers most often associate with
green marketing. In general, green marketing is a much
broader concept; one that can be applied to consumer
goods, industrial goods and even services. Thus, green
marketing encompasses a broad range of activities, includ-
ing product modification, changes to the production proc-
ess, packaging changes, remodelling and stylising as well
as modifying advertising. The terminology used in this
area has varied, and it inter alia includes green marketing,
environmental marketing and ecological marketing.
As for the genesis of green marketing as a concept, it
is well worth looking at its evolutionary development
over a time horizon. Environmental problems have got into
book, Silent Spring, was published, and it drew peoples
attention to the anthropocentric root and frightening extent
of environmental problems arising out of industrial and
economic activities (Kilbourne & Beckmann, 1998). From
the 1970s, ecological green marketing had been flourish-
ing largely in the developed countries. In this early period,
attention was paid to specific environmental problems,
and solutions were searched for them separately. This is
precisely the reason why only few products, companies
and industries were influenced by this new trend. Main
aims of green marketing at that stage were to minimise
the dependency syndrome on special product groups
responsible for environmental pollution and to increase
awareness of new product categories. From the second
part of the 1980s, a gradual shift had been experienced in
the role and necessity of ecological marketing. Great
environmental catastrophes of the 1980s (such as the
explosion in the nuclear reactor of Chernobyl, water pol-
lution caused by oil tankers and discovery of the ozone
hole) directed the attention even more to the interaction
between economy and environment, and in the process,

A.N. Sarkar, Officiating Director and Dean (Research), Asia-Pacific Institute of Management, 3&4 Institutional Area, Jasola (Opp.
Sarita Vihar), New Delhi 110025. E-mail: ansarkar1@gmail.com

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40 A.N. Sarkar
led to the evolution of sustainable eco-technology. By the
late 1980s and the 1990s, the notion of green products
became somewhat trendier, and the practice of marketing
products as such became more commonplace in niche
markets. But it was not until the start of the twenty-first
centurywhen concerns over global warming and conse-
quential eco-degradation started gaining momentum
that green moved towards mainstream and began influ-
encing the practices of green product manufacturers.
This was synchronous with the promulgation of the
Kyoto Protocol that heralded the beginning of the clean
and green technology as well as Clean Development
Mechanism (CDM) concept to save the environment
from the emerging ecological disaster.
According to a survey carried out by the Roper
Organization (in 1990), about 82 per cent of the American
consumers were ready to pay 5 per cent more premium
price for products which were eco-friendly. On the basis of
these results, not only the value-conscious firms can bene-
fit from green marketing but also those who focus on the
eco-friendly consumers. The most important concepts of
the 1980s in essence were as follows: sustainability, clean
technologies, environmental performance and green con-
sumers. Beginning in the 1990s, the agenda of green mar-
keting began to expand as new topics emerged that are
related to individuals motivation, such as perceived con-
sumer effectiveness, cooperative behaviours and strategic
alliances (Kilbourne & Beckmann, 1998), and these, put
together, paved the way for green marketing.
According to the American Marketing Association
(AMA, 2007, 2008, 2010), green marketing is the market-
ing of products that are presumed to be environmentally
safe. Thus, green marketing incorporates a broad range of
activities, including product modification, changes to the
production process, packaging changes as well as modify-
ing advertising. Thus, green marketing now refers to holis-
tic marketing concept wherein the production, marketing
consumption and disposal of products and services take
place in a manner that is less damaging to the environment,
with growing awareness about the implications of global
warming, non-biodegradable solid waste, harmful impact
of pollutants, etc. In this sphere, both marketers and con-
sumers are becoming increasingly sensitive to the need for
a gradual shift toward green products and services.
According to Pride and Ferrell (1993, 1995), green market-
ingalso alternatively known as environmental marketing
and sustainable marketingrefers to an organisations
efforts at designing, promoting, pricing and distributing
products that will not harm the environment. Elkington
(1994) defined green consumer as one who avoids prod-
ucts that are likely to endanger the health of the consumer
or others; cause significant damage to the environment
Asia-Pacific Journal of Management Research and Innovation, 8, 1 (2012): 3958
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during manufacture, use or disposal; consume a dispropor-
tionate amount of energy; cause unnecessary waste; use
materials derived from threatened species or environments;
involve unnecessary use of, or cruelty to, animals; and
adversely affect other countries. Polonsky (1994), how-
ever, argued that a majority of people believe that green
marketing refers solely to the promotion or advertising of
products having environmental characteristics, with terms
such as recyclable, refillable and ozone friendly being
some of the things consumers most often associate with
green marketing. While these terms are green marketing
claims, in general, it is a much broader concept, one that
can be applied to consumer goods, industrial goods and
even services (Roberts & Bacon, 1997). Green marketing,
thus, understandably incorporates a broad range of activi-
ties that include modification or changes into the design,
production process, packaging as well as advertising of the
product (Polonsky, 1994). Elaborating it further, Polonsky
stated that green or environmental marketing consists of all
activities designed to generate and facilitate any exchanges
intended to satisfy human needs or wants with minimal
detrimental impact on the natural environment. This was
supported by Peattie (1995), who defined green marketing
as the holistic management process that is customised to
identifying, anticipating and satisfying the requirements of
various stakeholders in a profitable and sustainable
manner.
Green or environmental marketing has also been
viewed, in recent times, as a tool towards sustainable
development and for strengthening brand image (Banyt &
Gadeikien, 2008). As rising environmental concerns are
encouraging consumers to have greater awareness of their
purchase decisions, firms are implementing measures
geared to offering green substitutes for traditional prod-
ucts. Consumers and companies alike are consequently
more willing to pay premium prices for green alternatives
(Laroche et al., 2001). This corroborates well with what
Maxwell et al. (2000) mentioned: all things being equal,
consumers would prefer a green product over the one that
is less friendly to the environment with a growing number
of people willing to pay a premium price for the former
from organic foods to energy-efficient appliances
(DSouza et al., 2004).
Grant (2007) has suggested that primary objective of
green marketing is to educate and make people willing to
go green, because it has an influence on changing the life-
style and behaviour of potential consumers. There are
steady movements in public interest and concerns about
the environmental issues. Companies like BASF and DuPont
are leading the greening of heavy industry and have had
the biggest impact on environment. Simula et al. (2009)
stated that the word green is widely used today for new
Green Branding and Eco-innovations 41
technologies and new products which have more sustainable
impact on the environment. Green, pro-environmental,
sustainability, environmentally friendly and ecology
are the terms commonly being used to describe that the
firms processes and products consume less energy, they
are recyclable, lessen waste and pollution and conserve
natural resources. Viewed from that perspective, green
marketing tries to harmonise environmental concerns and
individual interests. According to Peattie (2001), the evolu-
tion of green marketing has three phases. First phase was
termed as ecological green marketing, and during this
period, all marketing activities were planned to help envi-
ronment problems and provide remedies for environmental
problems. Second phase was environmental green mar-
keting, in which the focus shifted on clean technology
that involved designing of innovative new products which
take care of pollution and waste issues. Third phase was
sustainable green marketing. It came into prominence in
the late 1990s and early 2000s.
What Makes a Product Green?
Beyond the assumption that the term green indicates
environmentally friendly attributes, the term is quite
vague and subject to multiple interpretations, depending
on any number of factors, including local, national and
international business practices; market structures; soci-
etal norms; politics; and government regulations. In their
book, The Green Consumer, John Elkington, Julia Hailes
and John Makower (1993) discussed several characteris-
tics that a product must have to be regarded as a green
product. They contended that a green product should not
(ibid.):
1. endanger the health of people or animals;
2. damage the environment at any stage of its life,
including manufacture, use and disposal;
3. consume a disproportionate amount of energy and
other resources during manufacture, use or
disposal;
4. cause unnecessary waste, either as a result of exces-
sive packaging or a short useful life;
5. involve the unnecessary use of or cruelty to
animals;
6. use materials derived from threatened species or
environments.
Stephen and Kane (1996) noted in Business Horizons
that a product can be recognised to be green if it runs
cleaner, works better or saves money and energy through
efficiency. Practising green is inherently proactive; it
means finding ways to reduce waste and otherwise be more
Asia-Pacific Journal of Management Research and Innovation, 8, 1 (2012): 3958
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environmentally responsible. Many years later, the Federal
Trade Commissions (FTC) guidelines were established to
set national green marketing standards (FTC, 2009, 2010),
but it received several criticisms. The concept of sustaina-
bility, intrinsically bound to green concept, reflects the
long-term holistic understanding of a products impact.
Therefore, when reviewing a product for its degree of
greenness, one must also consider the impact of its entire
life cycle from the point of raw materials extraction to the
manufacturing process, to consumer use and finally, to the
end-of-life waste passage. This is called a life cycle assess-
ment (LCA) and ensures that all the products impacts are
taken into consideration. Life cycle analysis (LCA) and/or
product line analysis (PLA) studies measure the cumula-
tive environmental impact of products over their entire life
cyclefrom extraction of the resources used to create the
product to all aspects of production (refining, manufactur-
ing and transportation), to its use and ultimate disposal.
The LCA can be measured in terms of reduction of impact
on the environment, or for reasons of better safety and
health considerations for builders and occupants. Green
products also show an increasing return on investment
through energy savings, increased productivity of building
occupants and overall resale values in buildings (Intini &
Khtz, 2010) because of vastly expanding eco-market
potentials and spiralling demand of green products with
fast changing lifestyle.
Today, terms like green and greener have become
buzzwords of choice to describe all things sustainable and
environmentally friendly. While they are often used inter-
changeably, each term actually means something different.
In their critical essay, Green Versus Sustainability: From
Semantics to Enlightenment, Yanarella et al. (1999)
explained that green refers to individual products and
processes, whereas sustainable relates to whole systems
of which individual consumer products and other commer-
cial materials are a part. According to the authors, Green
evokes small incremental improvements in social prac-
tices, modern technology and human habitats, while sus-
tainability implies a revolution in organising our personal
and collective lives and inhabiting the planet. The expres-
sion environmentally friendly refers to products or serv-
ices that are not harmful to the outdoor environment or its
inhabitants. However, for more than a decade, the US FTC
(2010) has issued warnings about products or services mar-
keted as environmentally friendly, environmentally safe,
environmentally preferable or eco-safe, noting that prod-
ucts, packaging and services have some environmental
impact and that such marketing terms do not help consum-
ers make informed choices (FTC, 1999, 2010). These stip-
ulations will be relevant to all products claimed to be green
and eco-friendly.
42 A.N. Sarkar
Objectives
Given the broad scenario about the currently evolving con-
cepts of green marketing, green branding, eco-labelling
and green innovations, the broad objectives of the article
may be stated as follows:
1. To look at how green consumerism can be linked to
eco-market, and in doing so, what should be the
future marketing strategy and to what extent this can
be influenced by cross-cultural differences in con-
sumer behaviour.
2. To study how the green marketing concept can be
enlarged in the broader context of green environ-
mentalism and corporate social responsibility.
3. To examine how the green branding can leverage the
eco-market through the mechanism of eco-labelling,
carbon footprinting, standardisation and certification.
4. To study how the corporations can create environ-
mentally friendly eco-market by making green
claims in terms of maintaining eco-footprinting
standard norms.
5. To study how critical is the supply chain manage-
ment in effective green marketing.
6. To study how the sustainability factor and eco-
innovations can help promote green consumerism
under a holistic green market framework.
Green Consumerism: A Vital Link
to Eco-market
A green consumer is someone who is very concerned about
the environment and therefore, only purchases products
that are environmentally friendly or eco-friendly with little
or no packaging, products made from natural ingredients
and products that are made without causing pollution or
detriment to the environmental quality (like emission haz-
ards). The green consumer would be the type to drive a
hybrid vehicle and buy products made with hemp or those
made from recycled or waste materials.1 Green consumer-
ism is essentially a movement to encourage people to buy
food and other products, such as organic foods or lead-free
petrol, which are regarded as environmentally friendly
goods. One of the possible goals of green products is to
encourage consumers to modify behaviour. For example,
some studies suggest that consumers are willing to pay
more for some green goods at premium prices (Ottman,
1992, 1993), although more recent results in the Morgan
Polls (Ha, 2008; Mobium, 2007) suggest that, globally, the
majority of consumers believe green goods are overpriced
(Australia, 65 per cent; New Zealand, 66 per cent; the
United Kingdom [UK], 74 per cent; and the US, 72 per
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cent). In recent time, growing public awareness of environ-
mental issues has brought with it a corresponding change
in the buying decisions of a significant segment of American
consumers. As the Encyclopedia of the Environment
observed that many consumers, and not just the most envi-
ronmentally conscious ones, are seeking ways to lessen the
environmental impacts of their personal buying decisions
through the purchase and use of products and services
perceived to be environmentally friendly (Stoeckle et al.,
1994).
In the field of green marketing, different studies have
classified consumers based on different demographic, psy-
chographic, cultural and personality variables. The most
useful classification in the Indian context was found to be
based on three parameters: concern for the environment,
awareness of environmental issues and environmentally
friendly behaviour (Davis, 1993; Jain & Kaur, 2004). The
key findings of these studies show that though Indians lack
sufficient knowledge about environmental issues, there is a
generally high concern for the environment and most sur-
prisingly, Indian consumers score very high on environ-
mentally friendly behaviour, especially with respect to
conservation of resources and purchase decisions, espe-
cially for buying greener products. The most important
benefit that individuals seek from environmentally respon-
sible behaviour is the desire to act in an environmentally
responsible manner.
Many companies are competing to push their green
products in the eco-market space, and their green brand-
ing mechanisms are different. For instance, green market-
ing encompasses special eco-centric focus and efforts
such as Procter & Gambles developing disposable dia-
pers that can be composted and detergents that are degra-
dable, concentrated towards reducing packaging bulk in
landfills. AT&T has substituted biodegradable cardboard
for plastic foam packaging. AlbertoCulver markets
ozone friendly hairspray containing no chlorofluorocar-
bons (CFCs). The Body Shop has over 700 boutiques
worldwide selling its non-animal tested, mostly natural,
product line with recycling/refilling policies. A Canadian
survey of marketing executives from that countrys 500
largest firms found that 47 per cent had already altered
their packaging to make their products more environmen-
tally friendly. Biodynamic Agricultural Society of
Australia and New Zealand has a focus on export-oriented
organic farming as a green marketing strategy.
Companies use green marketing not only to increase con-
sumers positive response but also to cut costs to make prod-
ucts economical to customers. For example, McDonalds
used recyclable materials for wrappers and reduced its
environmental waste by 60 per cent; their give a tree away
day led the way for other fast food companies to follow
Green Branding and Eco-innovations 43
suit. All of McDonalds napkins and tray liners in the res-
taurants are made from recycled paper, as are the carry-out
drink trays and even the stationery used at the headquar-
ters. By making its drinking straw 20 per cent lighter,
McDonalds has saved one million pounds of waste per
year. The effective use of green marketing has made the
public aware that McDonalds Corporation is an environ-
mentally concerned company, and this has generated not
only publics consumer approval but additional revenues as
well. American seafood producers and distributors of tuna
fish certify their products as dolphin-free tuna and take
stringent measures to minimise dolphin deaths in the tuna
fishing industry. The increased environmental concern over
dolphin-free tuna by the US has effectively convinced
foreign firms to follow stringent US eco-conservation
standards.
Sustainable Green Marketing
Strategy
For environmental advertising to be successful, a firm must
first have an environmental strategy put in place (Easterling
et al., 1996). Advertising strategies have changed dramati-
cally over time, from image orientation to product ori-
entation in the 1990s (ibid.). Process and factual orien-
tations are the least utilised orientations which some
management workers suggest to be a business opportunity
(ibid.). Two dimensions of the positioning strategies of
newly created green brands are seen to have a significant
impact on brand attitudes, namely, the functional and
emotional dimensions, according to Hartmann et al.
(2005). Their study indicates that there is an overall posi-
tive influence of green brand positioning on brand attitude.
While the emotional dimension proves to be more effective
for the product (a car) used in the study, it cannot, however,
be concluded decisively which dimensional aspect is more
effective. Both language and images can be used to craft
such messages by promoting particular interests and ide-
ologies (Hansen & Machin, 2008). Rivera-Camino (2007)
suggests that a firms greening process is not linear, but
an uneven process which several green marketing strat-
egists have used to target different stakeholders.
Clearly, green marketing should be an integral part of
the overall corporate strategy for the firms specialising in
green eco-products (Menon & Menon, 1997). Green mar-
keting also ties closely with issues of industrial ecology
and environmental sustainability, such as extended pro-
ducers liability, life cycle analysis, material use and
resource flows and eco-efficiency. Firms can go green in
three ways: value-addition processes (firm level), man-
agement systems (firm level) and/or products (product
level). Greening the value-addition processes could entail
Asia-Pacific Journal of Management Research and Innovation, 8, 1 (2012): 3958
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redesigning them, eliminating some of them, modifying
technology and/or inducting new technologyall with the
objective of reducing the environmental impact aggre-
gated for all stages. Ottman et al. (2006) suggested that all
marketing activities must convince the consumers through
identifying the basic product features by resorting to the
following strategies:
1. Consumer value positioning: A firm should focus in
designing a product which is differentiated from and
performs better than the alternatives.
2. Calibration of consumer knowledge: In designing
marketing communication, a firm should always
present the products unique features, environmental
benefits and solutions that match with the customer
norms and values.
3. Credibility of product claim: By certification of
claimed green products.
A firm should build confidence in the consumers minds
by presenting or communicating benefits of the products
that are specific and meaningful and satisfy the consumers.
While consumers decisions are influenced by the media,
as a stakeholder, the role of media cannot be ignored, and
it is the only source through which consumers receive
much of environment-related information (Ottman, 1993).
Davis (1993) and Glaser (2009) explained that consumers
want more particular and specific information about the
product or service which they are about to buy in case they
are claimed to be environmentally friendly. Vaccaro (2009)
presented two main strategies for the companies in respond-
ing to their external environment as proactive strategies
(first mover) and reactive strategies. The proactive strate-
gies and reactive strategies move in a continuum and the
response time may vary widely depending on the customer
behaviour and the lifestyle.
Companies make their offerings competitive through
price/quality or prestige/image strategies from their com-
petitors, but eco-friendliness and social responsibility can
make companies more profitable on a sustainable basis.
Early mover companies have enhanced their image as
environment friendly. The municipality-owned electricity
companies of Stockholm and Goteborg set an example as
early movers. In 1999, Swedish state-owned railway
company, SJ, bought Bra Miljval labelled electricity
(Kaberger, 2003). Other studies conducted, such as by
Karna et al. (2003), have suggested that companies can
create competitive advantage if they use innovations related
to environmental sustainability rather than simply comply
with the government regulations. Fuller (1999) has pre-
sented the strategy matrix of environmentally improved
and reinvented green products, as illustrated in Figure 1.
44 A.N. Sarkar

Figure 1. S trategy Matrix of Environmentally Improved and through its environmentally sound attributes. Ecologically,
Reinvented Products sustainable products will not be commercially successful if
Column 1 Column 2 green brand attributes are not effectively communicated
(Pickett et al., 1995). Coddington (1993) and Meffert and
Environmentally Environmentally Kirchgeorg (1993) suggest that green positioning is an
Improved Products Reinvented Products essential factor in the success of green branding
strategies.
Market Product Development
Current
Penetration/Product Strategy Cross-cultural Difference: The Epicentre of
Markets
Improvement Strategy
Green Marketing Strategy
Market Development Diversification Strategy Green marketing actually began in the early 1980s in
New
Strategy
Markets Europe when European companies began selling green
productsnew types of disposable diapers, detergents,
Source: Fuller (1999).
batteries, aerosols and other productsthat do not damage
the environment. This manufacturing of new types of prod-
ucts grew quickly and soon caught on in the US and other
1. The strategies presented in Column 1, Market parts of the world. For the British, damage to the environ-
Penetration/ Product Improvement Strategy and ment ranks with a world war as the most important threat to
Market Development Strategy, are based on mak- mankind. Air pollution in Athens has long been the subject
ing some changes in the product attributes and man- of deep popular discontent and partly explains why the
ufacturing process. Greek government has aligned itself with hardline northern
2. The strategies presented in Column 2, Product European Union (EU) countries in leading the fight to
Development Strategy and Diversification Strategy, impose stricter new limits on auto emissions. The growing
require high management commitment and product political power of green parties in Scandinavia, the Benelux
is reinvented according to the ecosystems impact and especially Germany has combined with public concern
(Fuller, 1999). over such issues as the death of the forest (Waldsterben)
from acid rain to force mainstream political parties to endorse
Similarly, Simula et al. (2009) proposed that in order to tough environmental legislation. In Italy, public outcry over
develop the product, companies should understand cus- the waste exported to developing countries prompted the
tomer attitudes and norms towards greenness, by using country to adopt a tough new hazardous waste bill.
pre-marketing campaigns. Simula et al. (2009) have pre- In Italy, Fiat leads the world in green cars. Since the
sented a quadratic model of actual verses perceived green- 1970s, Fiat has been recycling 80 per cent of its factory
ness of the product (see Figure 2). waste, and it was one of the first European car manufactur-
Herein sustainability superiority and actual greenness, ers to produce cars which ran on lead-free fuel. Fiat has
based on standardised certification procedure, have a also established a huge recycling scheme called Fiat Auto
greater chance for market attractiveness to cater to envi- Recycling.2 Under this scheme, second-hand cars are col-
ronment-friendly green consumerism. Positioning a brand lected with the aim of recycling 100 per cent of the cars.
as a green brand, in this case, entails an active communi- Fiat is also the world leader in diesel car and electric vehi-
cation and differentiation of the brand from its competitors cle technology. The electric car that was developed by Fiat
is the first truly green standard production car, a worlds
Figure 2. Simulas Actual versus Perceived Greenness Model first one which will likely be the start of a new generation
of cars which are designed to support the environment.
High Green washed Sustainability
BMW and Mercedes Benz are examining clean technology
product superiority
Perceived for cars.
Greenness An honest Non- Missed Germany has passed the strictest green marketing laws.
green product Opportunity The German Blue Angel eco-label (first introduced in
Low 1978) is used as a symbol of environmental friendliness in
Germany, and by 1993, over 4,000 products in 58 catego-
Low High
Actual Greenness ries carried the label. This Blue Angel logo originated
because of the growing consumer demand in Germany for
Source: Simula et al. (2009). environmentally friendly products. Eighty per cent of

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Green Branding and Eco-innovations 45
German households are aware of the eco-label and it
receives widespread support from manufacturers. On 1
December 1991, the German Packaging Order (called the
Topfer Law after its environment minister) became law.
The guiding objective of the order is waste avoidance;
waste which cannot be avoided shall be recycled (Micklitz,
1999). Hoover was the first manufacturer to be awarded an
EU eco-label and claims that as a result, its sales in Germany
have trebled and sales in the premium sector of the UKs
washing machine market have doubled (EU Cross-border
Monitor, 1995). Other nations are also sponsoring eco-la-
belling programmes. Canada has issued Environmental
Choice, guidelines for products ranging from paints to
reusable cloth diapers. Japan has its own eco-mark pro-
gramme; its symbol consists of two arms embracing the
world (Codington, 1993).
In many Latin American countries, including Mexico,
packaging requirements are less stringent and less sophis-
ticated. As such, it is difficult to meet the standards of
Europe. Although they may cry foul, proposing these are
hidden protectionist requirements, General Agreement on
Tariffs and Trade (GATT) makes it clear that countries do
have the right to impose stringent rules for environmental
reasons. Mexicans are more concerned with economic pri-
orities (basic necessities of life) rather than societal or
environmental concerns. An economically developed
country like the US or western Europe has the luxury of
putting environmental and societal issues at the top of their
agendas. This is not so for undeveloped or developing
countries like Mexico. Colombia is one Latin American
country that is developing an eco-labelling programme.
The objectives of the Colombian eco-label are to promote
environmental conservation in several sectors, addressing
a variety of aspects, including polluting emissions and
energy and natural resource use, as well as to provide the
domestic industry with the means and incentives to increase
its competitiveness through the implementation of envi-
ronmental management strategies. This programme also
assisted Colombian export firms in penetrating foreign
markets, especially those such as the EU, with considerable
green consumerism interest (Gaviria, 1995).
Japan is ambiguous about the environment. Japanese
government budget allocation to the environment has
increased from $617 million in 1988 to $3.5 billion in 1991
and doubled again through 1995. Japanese consumers are
becoming more bargain conscious, frugal and environmen-
tally aware. Recycling of second-hand goods is flourish-
ing. Consumers are leaning towards healthier, ecologically
sounder products. Suntorya Japanese beer company
sells a brand called The Earth, with cans and bottles embla-
zoned with the slogan Suntory is thinking about the Earth.
The can has stay-on rather than pull-off tabs. Japans
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Economic Bureau found that consumers named Kao as the
most environmentally conscious company in the country.
Kao reduced its overall energy use by 40 per cent in the last
17 years. Japans Health Ministry devoted its 1990 White
Paper to the environment, but the Japanese Environmental
Agency has far less enforcement power than US
Environmental Protection Agency (EPA). Some 28,000
locally tailored environmental agreements in force between
Japanese industry and local communities act as a non-tariff
barrier (Back to basics, 1993).
In countries bordering on the Mediterranean, the eco-
logical awareness of the average household is much less
strongly developed than in countries further to the north,
such as Germany, Holland or Norway (Simon, 1992). For
example, in Italy, environmental issues are not nearly as
important as in Germany. In Denmark, soft drinks may be
sold only in glass bottles with refundable deposits. In the
Netherlands, old or broken appliances must be returned to
the manufacturer for recycling (Oatis, 1996). Green con-
sumerism first appeared in the Netherlands with a boycott
of aerosols containing CFCs, and spread to Germany,
thanks to consumer magazines which rated brands green
qualities through their own laboratories. In Denmark, a
power plant, an enzyme plant, a refinery and a wallboard
factory, all use one anothers by-products as source materi-
als. The Netherlands has effluent charges. Deposits are
mandatory for bottles in Germany and cans in Norway.
Green Marketing vis--vis Corporate
Social Responsibility
Society expects businesses to act in a more responsible
manner towards the social community as well as provide
goods and services efficiently. By this, the social responsi-
bilities of any corporate house have become an important
aspect of the modern era, in which conscious efforts are
being made by an organisation to maximise its positive
impact and minimise its negative impact on society as a
whole and on various groups and individuals within soci-
ety (Davis & Fredric, 1984; Dutta, 2009). The European
Commission defined corporate social responsibility (CSR)
as a concept whereby companies integrate social and envi-
ronmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis
(Juscius & Snieska, 2008). Companies should work for
betterment of society as a whole, and more greening of the
world. Sirsly and Lametrz (2008) suggested that CSR is
not always meant to be generating the monetary and eco-
nomic value for the firms, but it helps to promote firms
unique efforts towards society. When a third party endorsed
its corporate efforts, the reputation of a firm is reinforced in
the eyes of both market and non market stakeholders
46 A.N. Sarkar
(Sirsly & Lametrz, 2008). Karna et al. (2003), however,
stated that environmental issues were considered solely the
responsibility of the government. Proactive marketing
strategies and government support can help build long-
term environmental sustainability.
Globally, there has been a growing concern on issues
pertaining to accountability linked to environmental qual-
ity and its safeguard, well within the purview of green mar-
keting. A heightened awareness has been created in the
minds of the consumers that their purchasing behaviour
can actually wreak a serious dent to the ecological balance
of the planet (Rahbar, 2008). Coupled with this realisation,
the shifting demands and preferences of consumers are
exerting pressure on the companies to transform their busi-
ness activities to cater to the environmental needs in a more
responsible way (Olson, 2009). Being socially responsible
by offering environmentally sustainable products and serv-
ices, therefore, becomes the prime concern to those compa-
nies that are striving to attain a competitive advantage in
the business world (Wahid et al., 2011). Hence, ideally,
green marketing concept as well as the green marketing
strategies should be built around the key focus of CSR.
Some recent corporate examples of compliance of CSR in
the context of green marketing by some Indian business
firms are illustrated next.3
1. Broadcaster New Delhi Television Ltd, or NDTV, in
partnership with car maker Toyota Kirloskar Motor
Pvt. Ltd, launched Greenathon on 7 February
2011a 24-hour live television event to create
awareness about environmental issues.
2. Reva Electric Car Co. is developing a market for
electric cars and thereby a sustainable business
firms are gearing up to bring about a change in the
way their businesses and products are perceived.
3. Panasonic Corp. is working out a go-to-schools
interactive campaign to spread awareness among
students on global warming and other environmen-
tal issues, to begin with.
4. Nokia India Pvt. Ltd has launched a campaign to
recycle electronic waste. Consumers are encouraged
to dump old mobile phones and accessories, irre-
spective of brand, at any of the 1,300 green recy-
cling bins at Nokia priority dealers and Nokia care
centres.
5. Henkel India Ltd launched eco-learna learning
initiativeto inculcate environmental concern and
sustainability.
6. Hindustan Unilever Ltds (HUL) Surf Excel Quick
Wash talked about how housewives could save two
buckets of water while using premium detergent
powder to wash clothes.
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7. Reckitt Benckiser Group Plc. has launched a global
campaign, Our Home Our Planet, to help consum-
ers save money and minimise their carbon footprint
as part of its Carbon 20 programme.
CSR has recently become increasingly topical: Its inte-
gration into different areas of activities, including market-
ing, is becoming a necessity and a priority task for many
companies. More often, the consumers need to buy eco-
friendly, safe and clean products that can be identified.
This underlines implied necessity of green marketing appli-
cation in the implementation of CSR. Since there is a lack
of studies in the field of green marketing, the identification
of its priorities in the context of green consumers decision
making to purchase eco-friendly products is becoming
increasingly relevant. Scientific studies (Bakanauskas &
Liesionis, 2002; Ottman & Reilly, 1998; Ramanauskiene,
2008) show that properties of eco-friendly products have a
big influence on consumers decision-making processes
regarding the buying behaviour of eco-products, even at
premium prices.
Green Branding to Leverage the
Eco-market Opportunities
The going green movement continues to build momen-
tum, and companies are quickly realising that they better
become eco-friendly now or risk losing business. Plenty of
new companies are starting out as a green brand and older
companies want to re-brand their products to be more eco-
friendly. Since both new and existing customers surf the
Web, one can accomplish green branding through a vari-
ety of ways. Implications of green branding are widely
known and the emerging green consumer purchase behav-
iour suggests this scenario4:
1. Demand for green (or greener) products will increase
over time as attitudes and social norms evolve.
2. Demand will increase as new product choices
become available and information that enables con-
sumers to make informed purchase decisions (for
example, green labels) is introduced.
3. Consumers will start to shift spending to greener
brands within a category.
4. Consumers will increasingly prefer to purchase from
companies with a brand that is perceived as green,
regardless of whether or not the product that they
ultimately purchase is one of the companys green
products.
As consumer behaviour towards green consumerism
is inflicted by the opportunistic global climate change
Green Branding and Eco-innovations 47
challenge, companies have rapidly learned that being
greenand being seen to be greenmakes good business
sense. To add value to the green products, certification
marks, labels and logos are increasingly being used by
brand owners to signal their green credentials and so as to
be able to boost their market share. A properly controlled
eco-label offers consumers a guarantee that a product or
service has been independently verified to meet given envi-
ronmental standards (Bowman, 2009). In the US alone,
consumer spending on products and services that are per-
ceived to be environment-friendly will double to US$500
billion, according to the 2007 Green Brands Survey con-
ducted by Landor Associates, Penn, Schoen & Berland
Associates, and Cohn & Wolfe (ImagePower Green
Brands Survey, 2007). Consumers not only want to buy
green but are also prepared to pay a premium price for it.
Nearly 70 per cent of some 2,000 people surveyed in the
US, the UK, Germany, the Netherlands, Australia and
Japan said they would pay a premium price for green
energy alternatives, such as wind, bio-energy and solar
power. According to last years poll by IBM Global Energy
and Utilities industry, Australians were the most willing to
pay more for renewable energy, but Americans said they
would pay the highest premium20 per cent or more.
Consumer brands have been quick to respond to shoppers
desire to buy green. Wal-Mart announced last year that it
would provide carbon ratings for all its electronics items.
Procter & Gamble, the consumer goods giant behind such
brands as Gillette and Olay, has committed to selling $30
billion worth of greener products over the next five years.
Rival Unilevermakers of Dove and Liptonhas pledged
to reduce waste and water consumption in its supply chain.
In Brazil, Unilever and Wal-Mart have built sustainable
houses within stores which are made from recycled prod-
ucts, showing how to make everyday living more eco-
friendly. Darnall (2008) examined the question of how an
environmentally proactive hotel can gain competitive dis-
tinction by way of green branding. It demonstrates that
not all green branding options are created equal.
Marketing of eco-products is not quite as simple as it
seems. It is generally observed that the ecologically sus-
tainable products will not be commercially viable to pene-
trate the market if green brand attributes are not effectively
communicated. Meffert and Kirchgeorg (1993) suggest
that green positioning is an essential factor in the success
of green branding strategies. Green brand positioning strat-
egies may be classified as functional or emotional. A car
brand, for example, may be considered environmentally
sound if the models in question cause significantly lower
emissions than competitors. Several Toyota car brands
recently launched in the US are branded as green cars
because of zero emission claims.
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Emotional elements should be considered prime among
the visible choices of green branding and positioning of
eco-products. As a corporate strategy, green positioning
can be based on at least three conceptually different types
of emotional brand benefits: (a) a feeling of well-being
(warm glow) associated with acting in an altruistic way;
(b) auto-expression benefits through the socially visible
consumption of green brands; and (c) nature-related bene-
fits stemming from sensations and feelings normally expe-
rienced through contact with nature. These are the results
of a sensation of emotional affinity towards nature, for
example, loving nature or feeling one with nature. Most
people experience feelings of well-being or even happiness
when they are in contact with natural environment. Past
communication campaigns for GM-Opel, British Petroleum
(BP) and the Spanish power utility, Iberdrola, have embed-
ded the brand in pleasant imagery of natural environments,
aiming to evoke vicarious nature experiences as emotional
brand benefits. All these, in sum, mean, Green consumer-
ism masks its market-driven origins under a thick layer of
morality packaging.5 Green positioning by leveraging
through emotional appeal to the customer can be best illus-
trated through an advertisement brought out by Mercedes
Benz.
Research from the Carbon Trust Standard in March
2009 states that 62 per cent of consumers (from a sample of
2,000 UK consumers) are influenced by environmental
considerations in their purchasing decisions and this has
increased from a year ago (Carbon Trust Standard, 2009).
Some brands of Philips and Unilever have started to inte-
grate sustainability criteria throughout their product lines,
introducing both green products as well as improving
standards on product lines, in order to be more environ-
mentally efficient. The challenge for companies today is to
find a balance between informing consumers of responsi-
ble business practices, while innovating for a new low-
carbon economy by offering choice for consumers giving
due cognisance to implicit corporate social responsibility.
Carbon Footprinting and Eco-labelling
The term carbon footprint is commonly used to describe
the total amount of carbon-dioxide (CO2) and other green-
house gas (GHG) emissions for which an individual or
organisation is responsible. Footprints can also be calcu-
lated for events or products. Certification marks, labels and
logos are increasingly being used by brand owners to sig-
nal their green credentials and thereby boost their market
share. A properly controlled eco-label offers consumers a
guarantee that a product or service has been independently
verified to meet given environmental standards. In
Australia, for example, the Greenhouse Friendly label is
48 A.N. Sarkar
a registered certification mark, administered by the gov-
ernments Department of Climate Change. Some compa-
nies are developing their own eco-standards and product
labelling. Multinational companies (MNCs) like BASF
and Philips have launched their green logo and tick symbol
in 2011 to identify products with significantly better
energy efficiency than the nearest competitor products.
Eco-labelling could be of two kinds: performance based
and process based. An eco-labelling scheme based on prod-
uct performance, such as labels claiming biodegradability
of packaging, sustainability in production processes or
non-pollutant aspects of product usage, will require certain
trust on the part of the consumer. A systems approach to the
eco-labelling of food and other products requires the
involvement of multiple stakeholders as one partys actions
affect others environmental performance. The specific cri-
teria used in eco-labels also vary. In some cases, these
might relate to specific types of claims being made relating
to the composition of products and packagingbiodegrad-
able or recyclable; process issuesdolphin-free or made
with X per cent recycled content; use issuessaves X
energy; and certifications based internationally, nationally
or by industryISO 14001, Nordic Swan, EUREPGAP,
Integrated Pest Management or Forestry Stewardship
Council. In this way, labels are not merely messages but
also claims about particular environmental properties or
features of a product to help promote green ideas.
Eco-labelling is a voluntary approach to environmental
performance certification that is practised around the
world. An eco-label identifies a product that meets speci-
fied performance criteria or standards. In contrast to green
symbols or claim statements made by manufacturers and
service providers, an eco-label is awarded by a third-party
organisation for products or services that are determined to
meet specific environmental criteria. When specifying or
purchasing a product that carries an Energy Star label, for
example, the purchaser knows that the product meets an
energy efficiency standard set by EPA. Different types of
organisations, including government, non-profit and for-
profit organisations, have developed eco-label programmes.
The breadth of, and issues addressed by, eco-label pro-
grammes vary. For example, Energy Star is focused on
energy use during equipment operation, while other eco-
labels address life cycle environmental concerns and still
others cover ergonomic and worker health and safety
issues.
Worldwide, there are numerous eco-labelling pro-
grammes, developed by businesses, government agencies
and non-governmental organisations. Each eco-label has
its own criteria that products need to meet in order to be
certified. The International Organization for Standardization
(ISO) has identified and developed standards for three
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broad types of eco-labelling fitting under the three types of
designation: (a) Type I (ISO 14 024); (b) Type II (ISO 14
021); and (c) Type III (ISO/TR 14 025). The use of respon-
sible labelling or certification methods has become univer-
sal in green marketing. Whether based on international
systems (ISO), sectoral standards (Forest Stewardship
Council) or internal programmes created by companies
themselves, they can greatly enhance corporate credibility
if they are overseen by independent bodies. Nonetheless, a
distinction needs to be drawn between official eco-labels
developed and assigned by independent bodies or institu-
tions and companies own eco-labelling. Scientific
Certification Systems offer a wide range of green product
certifications, including single-attribute claims, multiple-
attribute claims and comprehensive cradle-to-grave LCA-
based claims.
Comprehensive labels are generally based on LCAs and
attempt to evaluate the overall environmental impact of
a product or service against a set of comprehensive pre-
established criteria. Many eco-labels and certification pro-
grammes certify products based on life cycle parameters,
such as energy use, recycled content, and air and water
emissions from manufacturing, disposal and use. Others
focus on a single attribute, such as chemical emissions
from products that directly impact indoor environmental
quality (IEQ). While credible eco-labels and product certi-
fications certainly help prevent the use of misleading envi-
ronmental claims (known as green washing), they do not
eliminate it. In fact, according to the 2010 TerraChoice
report, more than 32 per cent of green products carry a fake
green labelup from 26.8 per cent in 2009. Product manu-
facturers and consumers, therefore, still need to be cautious
and vigilant (TerraChoice, 2010). In view of this scenario,
organic claims are now regulated in over 60 countries by
a certification system based on official standards.
Like the carbon footprinting, the ecological footprinting
(EF) is among a number of emerging, progressive sustain-
ability indicators that attempt to arrive at a value represent-
ing the impact of human activities and demand on the
Earths ecosystems. The EF compares human demand with
the planet Earths ecological capacity to regenerate, and
represents the amount of biologically productive land and
sea areas, measured in global hectares (gha), needed to
regenerate the resources a human population consumes and
to absorb and render harmless the corresponding waste
(Wackernagel, 2000). Ecological footprint is a tool for meas-
uring and analysing human natural resource consumption
and waste output within the context of natures renewable
and regenerative capacity (or bio-capacity). The ecological
footprint is defined as the area of productive land and water
ecosystems required for producing the resources that the
population consumes and assimilate the wastes that the
Green Branding and Eco-innovations 49
population produces, wherever on Earth the land and water
is located (Wackernagel & Rees, 1996). Ecological foot-
print is an ecological camera that takes a snapshot of our
current demands on nature. Ecological footprint could be
useful in making socio-political decisions regarding opti-
mal scale. Optimal scale is an ecological and socio-political
target for sustainability. The footprint accounting process
could be used to describe a rough, if cautious, target of
optimal scale. Efforts are underway to standardise and
refine the methodology underlying the footprint, and to
incorporate areas or issues not currently captured.
Green Marketing Claims and
Communication Norms
A green or environmental claim is any type of claim
where explicit or implicit reference is made to the environ-
mental or ecological aspects relating to the production,
packaging, distribution, use/consumption or disposal of
products. Environmental claims can be made in any
medium, including packaging, labelling, package inserts,
promotional and point-of-sales materials, product litera-
ture, radio and television, as well as via digital or electronic
media such as e-mail, telephone and the Internet. A green
claim can be a statement or representation about the envi-
ronmental benefits of a particular product or service. It can
relate to a single attribute of the product. Such claims can
focus on a products chemical content, whether or not the
product can be recycled, emissions or impacts on specific
media (air, water, land), the type of raw material used in the
product and other attributes that affect the environment. A
green claim can also communicate information about the
environmental impact of a companys manufacturing
practices, as well as the companys mission and values
regarding its impact on the environment. Such claims may
refer to a carbon-neutral production process, or a com-
panys efforts to make its administrative functioning more
environmentally sustainable. Green claims can include
pictures, colours and logos as well. As with all types of
advertising, green or sustainable claims in advertising must
be evaluated in their entirety to assess how the reasonable
consumer will interpret the advertising message. Advertisers
must be especially cognisant of the potential that linking a
single, truthful environmental claim (for example, that a
package is recyclable) to a broad claim that the product is
safe for the environment, sustainable or the like, will
mislead consumers about aspects or attributes of the prod-
uct that may not be so favourable.
The Green Claims Working Group of the International
Consumer Protection and Enforcement Network (ICPEN
Working Group Green Claim Report, April 2008) has
written a reference document to assist agencies who are
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considering the development of an environmental market-
ing or green claims guide. This reference document draws
together the common topics and areas found across current
green claims guides known to the Working Group. This
reference document outlines what could be considered for
inclusion in an environmental marketing guide. However,
it does not provide an exhaustive list of what may apply to
a guide or for all situations. Further, the list is not necessar-
ily endorsed by all members but is provided as a sample of
examples for consideration.
As the worlds foremost business organisation, the
International Chamber of Commerce (ICC) promotes high
standards of business ethics through the development and
dissemination of codes and guidance on responsible mar-
keting and advertising communications. The ICC recog-
nises that there indeed is a difference between claims that
express an inspirational aspect of a companys commit-
ment to the three pillars of sustainable development, or to
improving the environment, and claims about a particular
product or service. As a general matter, the code already
requires that all marketing communication be legal, decent,
honest and truthful. As applied to green claims, this over-
arching concept means that environmental claims should
be based on sound, appropriate scientific information rele-
vant to actual use, operation or disposal of the advertised
product, not unsupported assumptions. Additionally, all
marketing communication should be prepared with a due
sense of social and professional responsibility, and should
conform to the principles of fair competition, as generally
accepted in business. The code also provides that market-
ing communication should not condone or encourage
actions contrary to accepted standards of environmentally
responsible behaviour.
One of ICCs landmark achievements is the Consolidated
ICC Code of Advertising and Marketing Communication
Practice (Code) issued in 2006. The Code provides practi-
cal guidance to the business sector, including advertisers
and advertising agencies, as well as to self-regulatory
advertising organisations and national governments. The
Code defines advertisement or advertising as any form
of marketing communication carried by the media, usually
in return for payment or other valuable consideration. It
includes a broad admonition that advertisers avoid or
appropriately qualify general claims of environmental ben-
efit, a position that has been the underpinning of advertis-
ing guidance for years. In the UK, the Direct Marketing
Association has recently issued a new code of practice that
is intended to encourage green marketing. The code states
that any environmental claim must be supported with a
high level of substantiation and be based on the full cycle
of the advertised product, unless the marketing communi-
cation states otherwise. The code also promotes the need
50 A.N. Sarkar
for recycled materials, environmental management and an
environmental policy.
One notable recent development in advertising is the
proliferation of green claims and growing interest in con-
cepts of environmental sustainability and sustainable
development, with commensurate growth in general
claims that products or services are eco-friendly, green,
sustainable, carbon neutral and the like. Use of the term
sustainable itself in marketing communications and oth-
erwise may create questions about whether the reference is
to environmental sustainability or to the broader concept
of sustainability linked to the World Commission on
Environment and Developments 1987 report, Our Common
Future (United Nations UECD Report, 1987), that defined
sustainable development as development that meets the
needs of the present without compromising the ability of
future generations to meet their own needs. Sustainability
encompasses considerations of economic activity, social
values, action by public and private institutions and envi-
ronmental impacts, but many sustainability claims seen
in the marketplace focus on the environmental aspects of
the product or service.
Eco-innovations for Green Branding with
Sustainability Focus
Environmental sustainability is not simply a matter of
compliance or risk management. Business is increasingly
recognising the many competitive advantages and business
opportunities to be gained from eco-sustainability and
green marketing. Worldwide evidence indicates that peo-
ple are concerned about the environment and are chang-
ing their behaviour accordingly. As a result, there is a
growing market for sustainable and socially responsible
products and services. The debate over sustainability has
ever-increasing business implications. Companies of all
sizes are facing the material impact of regulatory require-
ments, media scrutiny, stakeholder concerns and customer
expectations. Businesses have a two-pronged equation to
solve when considering how to profitably bring sustaina-
bility into the fold. One entails their internal culture, proc-
esses, materials and related supply-side issues. The other is
how to outwardly communicate, or brand and market their
product. Though, in many ways, the fundamentals of a
green campaign are traditional, recent studies of develop-
ments in consumer expectations regarding quality, value
and trust help cast a light on how green can advance a
brand (Laws, 2010).
Some communication or advertising campaigns have
the objective of developing or even transforming an organ-
isations brand image. Brand image is at the heart of any
organisations communication operations and activities,
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but for businesses, it is often critical. Communication
campaigns that highlight an organisations commitment to
sustainability may therefore be designed to embody and
convey an image change. Undertaken as part of a corpo-
rate communication approach, they always have a more or
less strategic impact on brand image. Accordingly, it is
interesting to consider specific campaigns of this type
and the issues they involve for companies or organisa-
tions. The arguments used to support a change in brand
image can likewise be varied: new activities or new types
of commitment, integration of environmental/social meas-
ures in production processes, development of a range of
green products, etc. Lifestyles of Health and Sustainability
(LOHAS) is one such green brand concept to explore new
emerging eco-market. It has a strong focus on environmen-
tal sustainability.
LOHAS is a new American concept which links life-
styles with health, hygiene and sustainability aspects of the
eco-market. It describes an integrated, rapidly growing
market for goods and services that appeals to consumers
whose sense of environmental and social responsibility
influences their purchase decisions. The Natural Marketing
Institute (NMI) estimates the US LOHAS consumer mar-
ket of products and services to be US$209 billionsold
across all consumer segments (Cohen, 2007). LOHAS is a
demographic defining a particular market segment related
to sustainable living and green ecological initiatives, and
is generally composed of a relatively upscale and well-
educated population segment. The author Paul H. Ray, who
coined the term cultural creatives, in his book by the same
name, explains that What you are seeing is a demand for
products of equal quality that are also virtuous (Cortese,
2003; Everage, 2002). Researchers have reported a range
of sizes of the LOHAS market segment. For example,
Worldwatch Institute reported that the LOHAS market seg-
ment in the year 2006 was estimated at $300 billion,
approximately 30 per cent of the US consumer market, and
a study by the NMI showed that in 2007, 40 million
Americans were included within the LOHAS demograph-
ics, as illustrated in Figure 3.
The consumers attracted to this market represent a siz-
able group in this country. Approximately 19 per cent of
the adults in the US, or 41 million people, are currently
considered LOHAS consumers. This is based on surveys of
the US adult population estimated at 215 million. Research
shows that one in four adult Americans is a part of this
group (nearly 41 million people). These consumers are the
future of business and also the future of progressive social,
environmental and economic change in this country. But
their power as a consumer market remains virtually
untapped. The industry that serves these consumers has
been identified in a research report by the NMI and given
Green Branding and Eco-innovations 51
Figure 3. The Distribution of the Different Types of LOHAS
NMIs 2007 US LOHAS CONSUMER SEGMENTATION
MODEL
(% general population in NMI-defined consumer segments)
19% 17%
LOHAS
NATURALITIES
DRIFTERS
19% CONVENTIONALS
26% UNCONCERNED
19%
Source: Cohen (2007).
the moniker of LOHASa market conservatively esti-
mated at $209 billion in the US, and growing. Cultural
creatives are the basis of the LOHAS market. The Japanese
government recently launched Cool Biz, a campaign that
encouraged offices to allow their workers to remove the tie
and adopt light-coloured business suits. This made a great
contribution to the environment as offices adjusted their
thermostats up to 28 degrees Celsius, subject to the govern-
ments instruction.
Eco-innovation to Promote Green
Consumerism
The environmental agenda has emerged gradually as an
important policy issue over the last 45 years. During this
period, the environmental agenda and its impact on the
economy has changed considerably. The last 10 to 15 years
have seen a marked shift from a pure regulatory approach
towards the slow rise of greening as a corporate issue. The
greening of markets is now becoming apparent, particularly
within the last couple of years, as a consequence of the topi-
cal climate debate (Andersen, 2004; Ecotec, 2002; European
Commission, 2006; Frondel, Horback & Rennings, 2004;
Hitchens, Birnie, McGowan, Triebswetter & Cottica, 1998,
Hitchens, Trainor, Clausen, Thankappan & De Marchi,
2002; Malaman, 1996; Organisation for Economic
Co-operation and Development [OECD], 2008a, 2008b,
2009; Rand Europe, 2000a, 2000b). As the environmental
agenda has changed, so has the notion of eco-innovation. It
has been referred to hitherto as environmental technolo-
gies or clean technologies. With a still more preventive
and integrated policy approach to environmental issues, the
focus has changed from end-of-pipe/clean-up technologies
to cleaner production processes, cleaner products to the
broader eco-innovation or, quite popular lately, clean-tech
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business. In the Environmental Technology Action Plan
(ETAP) of the EU Commission, a key policy initiative for
the promotion of eco-innovation, environmental technolo-
gies are defined as follows:
[A]ll technologies whose use is less environmentally harm-
ful than relevant alternatives. They include technologies to
manage pollution (e.g. air pollution control, waste manage-
ment); less polluting and less resource-intensive products and
services (e.g. fuel cells) and ways to manage resources more
efficiently (e.g. water supply, energy-saving technologies).
Other more environmentally-sound techniques are process-
integrated technologies in all sectors and soil remediation
techniques. (European Commission, 2004, p. 2)
People have now recognised that industrialisation has
damaged the environment and also influenced their stand-
ard of living negatively. This awareness has made them
value real nature highly, to be interested in non-polluted
green food and also, to be linked with the natural environ-
ment through green forest and fresh air (Kilbourne &
Beckmann, 1998). For firms, a new perspective on con-
sumer acceptance and perception to green products repre-
sents a great room of opportunities since green marketing
is not purely altruistic; it can also generate profits (Grant,
2008). The firms challenge is to satisfy the consumers
green demand through proper design, production, sales
and recycling of products. By bringing in innovativeness
and promotion of eco-friendly products, firms can differ-
entiate and position themselves from the competitors and
establish competitive advantage (Reinhardt, 1998). This
enhances corporate image and brand value from the con-
sumers perspective (Anderson, 2004, 2008). In brief, green
marketing seems to be a source of reputation, competitive-
ness and financial advantage (Worcester, 1993).
One of the key challenges is to relate innovation per-
formance to eco-efficiency gains and to macro-level
resource efficiency indicators, which could serve as a ref-
erence framework for setting long-term innovation policy
targets. Policy-makers thinking about eco-innovation
should reflect on how to use material flow measurements
in the context of innovation policy in order to embed eco-
innovation in an overall resource productivity perspective.
According to the US EPA, in 2007, the 2008 Prius was the
most fuel-efficient car sold in the US, and beginning in
2009, the latest model became the most fuel-efficient auto-
matic car. In the UK, the Department for Transport reported
that the latest Prius is the second-least CO2-emitting vehi-
cle on sale in the UK with 89 g/km. One can observe that
innovation in response to environmental regulation can
offset initial investment in research and development by
helping firms to use inputs better and to create better prod-
ucts (Porter & van der Linde, 1995). To create, exploit and
52 A.N. Sarkar
deliver value to the final customers, firms must develop,
design and implement the marketing programmes in an
integrated perspective where all within the organisation
should be involved.
The holistic marketing framework highlights such proc-
ess, where interactions between customers, suppliers, dis-
tributors, company, employees, etc., and others activities
based on mutual benefits, can offer possibilities in creat-
ing, maintaining and renewing customer value. To describe
the holistic marketing framework and its entire value chain,
Figure 4 depicts the three paces of the value chain: the
exploration, creation and delivery value procedure. One
can observe that the process is linked one to other to show
a redistribution of benefits among different components
and players in this value chain. The value exploration is
related to cognitive, competency and resource spaces,
where companies define their strategy by identifying and
understanding the needs of its buyer targets as well as tak-
ing into account the competences of themselves and of
their collaborators. The value creation is concerned with
identifying new customer benefits by getting feedback
from them to improve services and products. The deliver-
ing value is related to the management process, which is
related to internal resource from the companys business
domain and the management relationship process oriented
to companys customers and to companys partners.
Green marketing strategies and tactics also might require
changes in the marketing mix (product, price, place and
promotion) and marketers must be conscious about such
trends. Firms acquiring, for instance, an ISO 14000 certifi-
cate must produce goods with maximum recycled content,
designed to have minimal environmental impact.
Figure 4. A Holistic Marketing Framework
Customer
Focus
Value Cognitive
Exploration Space
Value Customer
Creation Benefits
Customer
Value
Relationship
Delivery
Management
Source: Kotler, Jain and Maesincee (2002, p. 29).
Asia-Pacific Journal of Management Research and Innovation, 8, 1 (2012): 3958
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While most researchers and policy-makers are well
acquainted with the concept of innovation, eco-innovation
is a new concept for which a standardised definition does
not exist yet. OECD illustrates that eco-innovation differs
from generic innovation on two significant characteristics:
It is innovation that reflects the concepts explicit emphasis on
a reduction of environmental impact, whether such an effect
is intended or not. Nonetheless, it is not limited to innovation
in products, processes, marketing methods and organizational
methods, but also includes innovation in social and institu-
tional structures. (OECD, 2009)
The UK environmental policy clearly sets out the
urgent challenges in meeting the increasing demands of
the economy while moving towards a low emission and
sustainable environment (Department of Trade and
Industry [DTI], 2003). The vast majority of, if not all,
economic activity in Britain will have to reduce its carbon
impact. This is going to transform whole economy
(Bureau of Industry and Security [BIS], 2009). On the
way to an environmentally sustainable economic growth,
integrating environmental and innovation insights and
understanding where the UK stands in terms of its exist-
ing capabilities and potential for creating eco-friendly
technologies is crucial. Recently, increasing attention has
been given to the role of regulation in increasing invest-
ments in eco-innovations (Brunnermeier & Cohen, 2003).
Regulation is not an undesirable cost-increasing factor
but a stimulator of firms innovativeness that, in turn,
would lead to a first-mover advantage in markets for eco-
innovations (Porter & van der Linde, 1995). Yet, an issue
Core Collaborative
Competencies Network
Competency Resource
Space Space
Business Business
Domain Partner
Internal Business
Resource Partner
Management Management
Green Branding and Eco-innovations 53
that is overlooked in these studies is related to the hetero-
geneity in firms innovation capabilities and their respec-
tive strategies for eco-innovation.
New companies wishing to use greener technologies
may find it cost prohibitive to do so, especially in the
energy and transport sectors where brown technologies and
carbon-intensive energy sources dominate. International
support must foster and incentivise technology transfer and
knowledge sharing across developed and developing coun-
tries. Continuing to promote larger global or regional net-
works of knowledge-sharing platforms, such as United
Nations Industrial Development Organization (UNIDO)
and United Nations Environment Programmes (UNEP)
National Cleaner Production Centres, could further pro-
mote cleaner consumption and production. Recently, the
EUs Baltic Sea Region Programme (20072013) created a
project, Sustainable Production through Innovation in
Small and Medium-sized Enterprises, that aims to enhance
sustainable production processes in small and medium-
sized enterprises (SMEs) by providing a knowledge-sharing
platform, tools and funding needed to test and demonstrate
eco-innovations (Gray & Talberth, 2011).
Green growth is gaining momentum across OECD and
non-OECD economies, as a way to pursue economic growth
and development while preventing environmental degrada-
tion, biodiversity loss and unsustainable natural resource
use. Green growth implies decoupling economic and envi-
ronmental performances, as well as making investment in
the environment as a driver of economic growth (OECD,
2010). This will involve greening traditional sectors and
favouring the transition of all economic actors, both pro-
ducers and consumers, towards sustainable practices.
Figure 5. The Flow of Green Supply Chain Management
Green Green Green
Designing Production Package
Model Design
Unloading Design
Recycling Design
Green Materials
Green Suppliers
Green Techniques
Recycling Package Materials
Green Ideas
Green Environment
Source: Huang Fengwen and Wu Yuhua (2003).
Asia-Pacific Journal of Management Research and Innovation, 8, 1 (2012): 3958
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Green Supply Chain Management
In 1996, the Manufacture Research Consortium (MRC) of
Michigan State University first put forward the definition
of green supply chain management (GSCM). The defini-
tion comprehensively considers the environmental influ-
ence so as to optimise resource utilisation in the supply
chain in manufacture industry. At present, we have no gen-
erally accepted definition of green supply chain. The book,
The Peoples Republic of China National Standard Physical
Distribution Terms,6 does not include the definition. Taking
into consideration other scholars opinions, we define it
as follows: GSCM can also be called environmentally
conscious supply chain management. GSCM is a kind of
modern management model in the whole supply chain
management which considers the environmental influence
and efficiency. It should keep in touch with suppliers, man-
ufacturers, sellers and consumers. The detail contents
include the following: green designing, green production,
green package, green marketing and green recycling. The
main flow is as given in Figure 5.
There are four steps to implement a green supply chain.
The following model is a decision-making framework and
it is based upon the best practices of several companies that
have successfully initiated and implemented environmen-
tal accounting practices. Ideally, companies will customise
this approach to best suit their own organisational needs
and culture. The four steps are as follows: (a) identify costs;
(b) determine opportunities; (c) calculate benefits; and (d)
decide, implement and monitor (Figure 6).
Sarkis (1999, 2003) provides a comprehensive view of
the state of research in this evolving topic, tracing the work
of researchers who have investigated the issues involved
Green Green
Marketing Recycling
Green Selling
Green Products
Green Infomation
Waste Disposal
Recycling
Recovery Processing
54 A.N. Sarkar
Figure 6. Four Basic Steps to Implement a Green Supply Chain
Indentify Costs
Decide, Implement
and Monitor
Determine Opportunities
Calculate Benefits
Source: Nones, Morques and Evgenio (2004).
and the reasons for incorporating these practices, and also
the way they have been practised in different organisations.
According to him, the supply chain system should include
purchasing and in-bound logistics, production, distribution
and reverse logistics. He also shows how firms focus on
total quality management (TQM), with its emphasis on
improving product quality, zero defects, customer satisfac-
tion, training and employee empowerment, etc., and inte-
grate it with environmental management resulting in total
quality environmental management (TQEM). This integra-
tion to TQEM enables organisations to move towards the
source reduction of pollution philosophies and improves
environmental performance, marketing advantage and cor-
porate image so that the company moves on to the world-
class status. Different researchers have defined GSCM
from different perspectives, driving forces and purposes.
Sarkis (1999) refers to the supply chain as a system which
includes purchasing, production, distribution and reverse
logistics. A recent definition (Handfield & Nichols, 1999)
goes as follows: The supply chain encompasses all activi-
ties associated with the flow and transformation of goods
from raw materials (extraction) through the end user, as
well as associated information flows. Many authors are
exploring environmental initiatives within each of the
major phases of the supply chain.
Benefits and Implementation of GSCM
Some studies have mentioned benefits of adopting GSCM,
such as Stevels (2002). He demonstrated the benefits of
GSCM in different roles of supply chain, including envi-
ronment and society, in terms of different categories: mate-
rial, immaterial and emotion. For material, GSCM helps
lower environmental load for environment, lower cost
prices for supplier, lower cost for producer, lower cost of
ownership for customer and less consumption of resources
Asia-Pacific Journal of Management Research and Innovation, 8, 1 (2012): 3958
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for society. GSCM helps motivation of stakeholder for
environment, better image for supplier and producer, feel
good and quality of life for customer, and makes industry
move on the right track for society. He also provided exam-
ples of companies that have successfully adopted GSCM.
Duber-Smith (2005) identified 10 reasons that a company
should adopt the green: target marketing, sustainability of
resources, lowered costs/increased efficiency, product dif-
ferentiation and competitive advantage, competitive and
supply chain pressures, adapting to regulation and reduc-
ing risk, brand reputation, return on investment, employee
morale and the ethical imperative. In manufacturing proc-
ess, the company can apply green by several methods to
reduce the energy and resource consumption. Several
papers have provided green practices, such as Duber-Smith
(2005). He suggested some practices, including reducing
energy consumption, recycle and reuse, using biodegrada-
ble and non-toxic materials, minimise harmful emissions
and minimise or eliminate waste. A Chinese sugar manu-
facturer, Guitang Group, could reduce the wastes and
improve their financial performance by using waste from
the upstream as raw materials for downstream production
(Zhu & Cote, 2004).
Apart from design and manufacturing, other depart-
ments in an organisation can also be involved with the
green. Purchasing could become an important agent for
change regarding environmental initiatives in the supply
chain (Preuss, 2001). Walton et al. (1998) conducted a
qualitative study to explore the primary areas for change to
increase purchasing impact on environment. For the largest
retailer in the US, Wal-Mart has an interesting story of
adopting GSCM to their organisation. In October 2005,
Wal-Mart Chief Executive Officer (CEO) committed the
company to three goals: to be supplied 100 per cent by
renewable energy, to create zero waste and to sell products
that sustain Wal-Marts resources and the environment, and
Wal-Mart was launching a business sustainability strategy
to dramatically reduce the companys impact on the global
environment and become the most competitive and innova-
tive company in the world (Plambeck, 2007).
Conclusion
Green marketing is an emerging concept, which is also fast
evolving. Going green is a buzz word that is also catching
up fast with time and becoming increasingly trendy with the
corporate world at largemore prominently, however, with
the company products that are being branded as eco-prod-
ucts or eco-friendly products to reach out to those customers
who are eco-savvy. But customers preferences toward green
and/or eco-products are also coming under close scrutiny, as
they are seeking validation of such products that are claimed
Green Branding and Eco-innovations 55
to be eco-products though they are being labelled and mar-
keted as eco-products with premium prices. In other worlds,
customers are not prepared to buy or pay premium prices
unless the claimed eco-products are properly eco-labelled
with registered certification from authorised agenciesa
prerequisite for green branding.
Green branding and green marketing opportunities are,
and indeed going to have to be, more intimately linked with
the overall national and international environmental policy
of reduction of GHG emissions, with measurable standards,
together with provisions of energy savings to directly
respond to environmental sustainability questions in future.
Going by the recent trend, therefore, green bio-products
(such as fruits, vegetables, fish, organic products and proc-
essed foods), automobiles, thermal power plants, green
buildings (for example, hospitals, hotels, airports, holiday
resorts, etc.), polluting industries (for example, cement,
steel, pulp and paper, sugar, leather and tannery, fertilizers,
etc.) are going to be some of the prominent industries that
need to undergo rigorous screening process for carbon foot-
printing and eco-labelling. This would also need more and
more planned eco-innovations strategy with sustainability
focus across different domain areas and verticals. The arti-
cle has brought out very clearly as to how green consumer-
ism can be linked to eco-market, and to what extent this can
be influenced by cross-cultural differences in consumer
behaviour. The scope of involving green marketing with
corporate ethics and CSR for inclusive growth of green
markets has been explored. However, for effective promo-
tion and popularisation of quality green products in the mar-
ket, the governmental regulations prescribing standards for
registration of certified green products, before they are
marketed for mass consumption, would also need highest
attention and intervention by the government for their
validation.
Green marketing and advertising, including web mar-
keting, accompanied by sound, integrated as well as highly
networked GSCM systems, is going to open up a new fron-
tier of hyper-competitiveness among the market players,
globally. But, then, in this endeavour, what is going to have
to be most crucial is the validation of the claims for the
green/eco-products and the close scrutiny of communica-
tion messages to the eco-friendly customers agreeable to
pay premium prices, compatible with their modern
lifestyles.
Notes
1. See What is a Green Consumer?, http://wiki.answers.
com/Q/What_is_a_%27green%27_consumer (accessed on
27 January 2012).
2. See PROGETTO F.A.R.E Fiat Auto Recycling (http: //www.
ninofalasca.it/fare.htm).
Asia-Pacific Journal of Management Research and Innovation, 8, 1 (2012): 3958
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3. See Changing Perceptions: Marketing Tactics Take on a
Green hue (http://www.livemint.com/2009/03/02213546/
Changing-perceptions-Marketin.html).
4. Environmentally-Friendly Promotional Products Can Aid
Your Organization With Green Branding, http://www.
igreen-home.com/environmentally-friendly-promotional-
products-can-aid-your-organization-with-green-branding/
(accessed 4 February 2011 by The iGreen-Home Team).
5. Sandilands, Catriona. On Green Consumerism: Environmental
Privatization and Family Values (i.library.yorku.ca/ojs/index.
php/cws/article/download/.../9498).
6. National Standard of the Peoples Republic of China,
GB15037-2005, Replacing GB/T 15037-1994 (http://www.
puntofocal.gov.ar/1_reunion08/chn197_t.pdf).
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