Green Marketing Strategies Proposed by Cronin et al. 1 Green Innovation
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Closed-loop supply chain CLSC constitutes the combination of forward supply chain FSC activities and reverse supply chain RSC activities
,
with the potential to improve the environmental performance of industrial operations to new
standards, and to maximize profit and competitive advantages. Talbot et al., 2007. FSC entails the flow from new product development, environmental product design,
product research and development, and development of responsible manufacturing, which pertains to total quality management, just-in-time manufacturing, and lean
manufacturing Talbot et al., 2007. RSC deals with product returns, such as manufacturing, distribution, and customer returns Talbot et al., 2007 to the selling
company, while the cycle will end when the company recovers the products maximum possible value Cronin et al., 2010.
The integration between FSC and RSC can create a cradle-to-cradle life cycle for goods manufactures, sold, and returned and reused, as opposed to cradle-to-grave
flow Cronin et al., 2010. Cradle-to-grave C2G is a full life cycle assessment from manufacture –known as cradle- to use phase and disposal phase, called grave
Wikipedia.org, 2011. It is seen as traditional notion, known as end-of-pipe solutions. On the contrary, cradle-to-cradle has similar approach with cradle-to-grave
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while the end-of-life disposal stage for a product is a recycling process. It is utilized to
minimize the environmental impact of products by exercising sustainable production, operation, and disposal practices, as well manifesting social responsibility into
product development Wikipedia.org. CLSC activities provide benefit in improving the environmental performance
of industrial operations and increasing firms competitiveness and product differentiation Talbot et al., 2007. Furthermore, it should be managed to achieve
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maximum profit, comply with regulatory standards, and provide excellent customer service to customers and suppliers altogether Cronin et al., 2010.
3 Green Alliances
The last important point in incorporating green marketing strategies is forming partnership. Past researches discussed the imperatives of eco- or green alliance in
formulating green strategies Mendleson and Polonsky 1995; Hartman, 1997; Crane, 1998; Hartman and Stafford, 1998; Stafford et al., 2000; Polonsky, 2001; Ählström
and Sjöström, 2005. Stafford et al. 2000 emphasize alliance with environmental non-governmental organizations NGOs, which can result in operational efficiencies,
new technologies and marketable green products. They also identify stakeholder characteristics and partnership outcomes. The same idea was also proposed by
Hartman 1997, Hartman and Stafford 1998, and Polonsky 2001, which corroborates the significance of incorporating alliance with environmental group to
achieve competitive advantage and integrating corporate environmental responsibilities in market goals.
4. Why Do Companies Need Green Marketing Strategy? – The Greenwashing Risk
The environmental or green claims of some companies have got many critiques by some scholars Chatterjee, 2009: 367; King, 1985; Mohr, et al., 1998;
Peattie and Crane, 2005: 360 and by special interest groups SIGs. Once companies did not practice the claim in day-to-day operations, these groups are the front liners
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which may accuse them and subsequently shock their brand equity. Some companies have experienced the shortcomings of accusation demonstrated by these groups, such
as Nike vs Kasky case, GE’s poisoning of Hudson River with PCBs, Exxon Valdez spill, the relatively fresh BP’s spill on Gulf of Mexico, and the likes. The cost of
accusation has led their brand equity weakened and stock price plummeted. By then, the SIGs’ pressure keeps some of them silent in promoting green campaign publicly.
Due to the growing concern of market research exploring green or environmental consciousness in two decades ago has pulled some companies to
practice “me too” effect of green buzzwords. Some of the researches Peattie and Crane, 2005: 358; Chatterjee, 2009: 367 indicate consumers are willing to pay more
for green or eco-conscious products, making the existing companies turned their attention to create more environmentally friendly products, promote them with eco-
label or colored green in shelf tag, and then charge consumer with premium price. Research conducted by the Natural Marketing Institute NMI estimates the
market size of the environmentally friendly or green products to reach 420 billion by 2010 Bonini and Oppenheim, 2008 in Chatterjee, 2009: 367. Jeff Immelt, CEO of
General Electric even predicted GEs Ecomagination efforts will lead GE to sales target of US20 billion in 2010 SourceWatch.org, 2008. There is always short-term
orientation benefited from environmentally friendly or socially responsible movement. Thus, the profit-driven companies which seek to target new eco-conscious
market sometimes fail to make appropriate environmental claim or to promote green vague green promotions. Thus, this leads them to greenwashing risk –a relatively
sensitive threat for firms’ value.
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“Greenwashing is the misuse of the principles of environmental marketing and means that consumers cannot trust the content of advertisements” Kärnä et al., 2001.
It can injure a brand reputation and then enforces companies to carefully publicize their green efforts. Nike, Adidas, Puma, Coca-Cola, Starbucks, and McDonald’s are
the proponents of silent green advertising, keeping them away from greenwashing risk. Their brand is too valuable rather than simply offsetting the cost of being
accused by SIGs. Therefore, formulating appropriate green marketing strategy appears as a wiser idea in achieving corporate objectives, as well as tackling possible
reputational risks Louisot and Rayner, 2010 in the future. It is imperative to determine appropriate green marketing strategy that does
not mislead and confuse consumers. King 1985 in Peattie and Crane, 2005: 359 identifies four marketing failures -sales orientation, compartmentalism, finance
orientation, and conservatism, while Peattie and Crane 2005 indicate five greenwashing practices, such as green spinning, green selling, green harvesting,
enviropreneur marketing, and compliance marketing. This section will further discuss greenwashing which may answer question why strategy is necessary in executing
green marketing ideas.