Significance of the Study

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CHAPTER 2 LITERATURE REVIEW

A. Theoretical Framework 1. Green Marketing Definition

Henion 1976 in Bäverstam and Larsson 2009: 1 firstly explains green marketing as the implementation of marketing programs directed at the environmentally conscious market segment Banerjee, 1999: 18 in Bäverstam and Larsson 2009: 1. On the contrary, Prakash 2002: 286 views green marketing is “the strategies to promote products by employing environmental claims either about their attributes or the systems, policies and processes of the firms that manufacture or sell them”. Henion seems to be program oriented, while Prakash is persistent with a strategy-based approach. Both definitions are not solely approved by company-wide and scholars. Although there is no single commonly accepted definition, some scholars contribute various ideas from different disciplines. People may use “environmental” Kärnä et al., 2001: 60, “ecological”, or “sustainable” terms Simula et al., 2009 to supersede “green”. Notwithstanding, the key comprehension of green marketing is to deeply understand whatsoever business activities that a company may exercise as long as it is responsible to the nature. In addition to a green marketing definition debate, there are myriad perspectives to encounter aforementioned interpretations. Peattie 1995 stipulates green marketing as “the holistic management process responsible for identifying, anticipating and satisfying the requirements of customers and society, in a profitable 13 and sustainable way”. On the other hand, Mintu and Lozada 1993 hold that green marketing is the application of marketing tools to facilitate exchanges that satisfy organizational and individual goals in such a way that the preservation, protection, and conservation of the physical environment is upheld. Peattie 1995 tries to generalize management process without specifying in what value chain activities a company should engage in and he identifies two stakeholders only should be taken into account in the process. On the contrary, Mintu and Lozada 1993 try to integrate organizational and individual interests with environmentally friendly marketing tools. In another occasion, Peattie 2001 in Simula et al., 2009: 322 suggested that ‘‘green marketing has been used to describe marketing activities which attempt to reduce the negative social and environmental impacts of existing products and production systems, and which promote less damaging products and services’’. A bit different from his prior definition, Peattie emphasizes product and production processes as core activities which contribute to degradation of environment. Therefore, he encourages companies to design and create product, and to run production process that enable minimum detrimental effects generated by both activities. To enrich green marketing definition, Polonsky and Resenberger 2001 in Simula et al., 2009: 322 asserted that ‘‘green marketing is a holistic, integrated approach that continually re-evaluates how firms can achieve corporate objectives and meet consumer needs while minimizing long-term ecological harm’’. They utilize holistic and integrated terms to elaborate the concept, means that green marketing is not constrained to making good environmental claim or how many green products 14 sold, but it encompasses a firm’s strategy to achieve its objectives in accordance with environmental protection. In a search for comprehensive green marketing definition, Charter 1992 in Simula et al., 2009: 322 referred green marketing to ‘‘a holistic and responsible management process that identifies, anticipates, satisfies and fulfils stakeholder requirements, for a reasonable reward, that does not adversely affect human or natural environmental wellbeing’’. In this definition, he just strengthened the notion that green marketing is a holistic process –not only associated with sales and promotion- that addresses stakeholders’ demand –not limited to shareholder’s interest, and keeps environmental concerns as a focus for formulating corporate strategy. Speaking of a more holistic green marketing definition, Fuller 1999 views green marketing is the process of planning, implementing, and controlling the development, pricing, promotion, and distribution of products in a manner that satisfies the following three criteria: 1 customer needs are met, 2 organizational goals are attained, and 3 the process is compatible with ecosystems. This notion seems to complement previous definitions discussed above. Since there is no universally agreed definition, it is imperative to encounter one definition to others in order to build strong fundamental concept that embrace multi-faceted aspects of green marketing. Therefore, to integrate definitions elaborated above, the researcher defines green marketing as a strategy that embraces systems, policies, and process Prakash, 2002, of which pricing, promotion, distribution, and development of products Fuller, 1999 in Bäverstam and Larsson, 2009: 1 satisfy interest of multiple internal and external stakeholders, as well as balancing economic, social, and environmental goals Elkington, 1997.