Executive Summary
Companies that are marketing their products, services, and/or operations as green - or those that are considering doing so - have numerous complex issues to contend with. While competitive, economic, and social pressures may drive companies to join the green bandwagon, executives are advised to tread carefully.
After apparently having lost some consumer appeal earlier this decade, green marketing is popular once again. The resurgence has been fueled in large part by consumers' growing concerns over the environment and energy costs; the Internet and the many websites devoted to environmental issues; the media attention focused on all things green; the proliferation of social networking and environmental watch sites; and more environmentally aware and informed consumers in general.
A December 2007 survey by Mintel International Research Group indicated that the number of Americans who say they regularly buy green products (36%) nearly tripled over a 16 month period. Research from TerraChoice indicates that green advertising nearly tripled between 2006 and 2009 and that the number of products making environmental claims is increasing dramatically, with the majority of those claims being misleading. In addition, Mintel found that the number of new product launches claiming to be "environmentally friendly" rose nearly 200% in 2007 versus 2006.
Making environmental claims without having the proof to back them up is known as greenwashing. At present, terms such as "environmentally friendly," "natural," and even the term "green" itself lack clear, agreed upon definitions among governments, manufacturers, and consumers alike. The practice of eco-labeling has been identified as a potential remedy to help consumers make intelligent, informed buying decisions; however, it too is fraught with many challenges.
In the United States there are no federal laws regarding environmental claims. The US Federal Trade Commission (FTC) offers guidance in the form of its Green Guides, which are currently in the process of being updated. The FTC does have the authority to challenge false or unsubstantiated green marketing claims.
It is not always appropriate and/or profitable for a company to market itself and/or its products as green. Companies must undertake in-depth research to decide whether or not to include green messages in their overall communication strategy and to what degree. For example, one company may choose not to draw attention to its stellar environmental record, while another may choose to quietly provide the basic facts at its website; still another might choose to launch a new green product and spend millions of dollars promoting it. All green marketing requires segmentation, as consumers vary in terms of how "green" they are. Transparency and authenticity are among the most important factors for any company to include in its green marketing messages
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