Ecological/Physical Marketing Environmental Forces

  

Date Posted: 11/7/2012 4:30:41 AM

Posted By: sashoo  Membership Level: Silver  Total Points: 382

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Ecological/Physical Marketing Environmental Forces

Ecology is the study of living things within their environment context. In a marketing context it concerns the relationship between people and the physical environment. Environmentalists attempt to protect the physical environment from the costs associated with producing and marketing products. They are concerned with the environmental costs of consumption, not just the personal costs to the consumer. Five environmental issues are of particular concern. These are combating global warming, pollution control, conservation of energy and other scarce resources, use of environmentally friendly ingredients and components, and the use of recyclable and non-wasteful packaging.

• Global warming

Concerns about global warming and the problems associated with climate change have arisen as a result of a quadrupling of carbon dioxide emissions over the last 50 years. More extreme weather conditions, such as hurricanes, storms and flooding, which are reported to be associated with carbon dioxide-induced climate change, are already impacting industries such as insurance, agriculture and oil. BP, for example, took a billion-dollar battering from Hurricane Katrina in the USA. To avoid irreversible environmental consequences, it has been agreed internationally that two forms of preventive action are required:

1. Reduction of carbon dioxide emissions
2. A ban on the use of chlorofluorocarbons (CFCs)

The purpose is to prevent further depletion of the ozone layer, which lets through increased levels of ultraviolet radiation with potentially harmful health and environmental effects. Governmental response through the Kyoto international agreement and individual action taken by companies such as GE, BP and Bayer to reduce harmful emissions is required to achieve the objective.

• Pollution

The manufacture, use and disposal of products can have a harmful effect on the quality of the physical environment. The production of chemical that pollute the atmosphere, the use of nitrates as a fertilizer that pollutes rivers, and the disposal of by-products into the sea has caused considerable public

concern. In recent years the introduction of lead-free petrol catalytic converters, and the launch of hybrid cars such as the Toyota Prius and the Honda Civic, has reduced the level of harmful exhaust emissions.

Denmark has introduced a series of anti-pollution measures, including a charge on pesticides and a CFC tax. In the Netherlands higher on pesticides, fertilizers and carbon monoxide emissions are proposed. Not all the activity is simply cost raising, however. In Germany, one of the marketing benefits of its environment in green technology has been a thriving export business in pollution-control equipment.

• Energy and scarce resource conservation

The finite nature of the world’s resources has stimulated the drive towards their conservation. Energy conservation is reflected in the demand for energy-efficient housing and fuel-efficient cars for example. In Europe, Sweden has taken the lead in developing an energy policy based on renewable sources. The tax system penalizes the use of polluting energy sources such as coal and oil, while less polluting resources such as peat and wood-chip receive favorable tax treatment. In addition, it is planning to become the world’s first oil-free economy by 2020, not by building nuclear power stations but by utilizing renewable resources such as wind and wave power, geothermal energy and waste heat. The plan is a response to warnings that the world may be running out of oil, global climate change and rising petrol prices. The UK is also responding by committing to generate 10 per cent of its electricity from renewable sources.

An opportunity that is arising over the need to reduce reliance on oil is the development of bio-fuels. Fuels based on ethanol have the potential to replace petrol. Already the Saab 95 Bio Power and the Ford Focus can run on either petrol or ethanol. A problem is that ethanol-based fuel costs 20 pence a liter more than unleaded petrol. But as petrol rises in price and ethanol production costs fall this may change. If so, Europe has the capacity to provide around 40 per cent of the fuel it needs for transport from ethanol fermented from crops (e.g. corn and sugar beet) and biodegradable waste.

Another concern of environmentalists is the consumption of wood. Forest depletion by the deforestation activities of companies and the effects of acid rain damage the ecosystem. Consumers’ desire for soft and hardwood furniture and window frames is at odds with the need to preserve forests. Trees’ leaves absorb carbon dioxide and their roots help to stabilize slopes: a land slide in the Philippines that cost many lives was allegedly caused by illegal logging. A solution is the replanting of forests to maintain the long-term stick of trees.

• Environmentally friendly ingredients and components

Environmentalists favor the use of biodegradable and natural ingredients and components when practicable, and PETA (People for the Ethical Treatment of Animals) campaigns against cruelty to animals. Companies have responded to the challenge by launching products such as the Estee Lauder Origins skincare and cosmetics range of vegetable-based products containing no animal ingredients. Plastic products and components have been the target of criticism because of their non-biodegradability, but biodegradable polymers are now available. For example, Biopol was developed by ICI, which claims it is the first fully biodegradable commercial plastic. Its applications include disposable nappies, rubbish bags, and paper plates and cups that are coated with a thin plastic film.

Concern has also been expressed over the use genetically modified (GM) ingredients in food products since the health implications are uncertain. Pressure from consumer groups and the media have forced Monsanto, a pioneer in genetic modification, to stop further development, supermarkets to banish such products from their shelves, and countries such as Austria, France, Germany, Greece, Italy and Luxemburg to impose import bans.

• Recycling non-wasteful packaging

Germany took the lead in the recycling of packaging when it introduced the Verpackvo, a law that allows shoppers to return packaging to retailers and retailers to pass it back to suppliers. In response, suppliers promised to assume responsibility for the management of packaging waste. Over 400 companies have created a mechanism called the Dual System Deutschland (DSD). Consumers are asked to return glass bottles and waste paper to recycling bins and are also encouraged to separate other recyclable materials such as plastics, composite packaging and metals, and place them in yellow bags and bins supplied by the DSD. Collection takes place every month and is, together with separation of the refuse, paid for by the DSD and the cost is eventually absorbed by the packaging manufacturers. Recycling is also important in Sweden, where industry has established a special company to organize the collection and sorting of waste for recycling, and in Finland where over 35 per cent of packaging is recycled.

Companies can promote recycling by, for example, using recycled paper for burger containers rather than styrene, which is non-biodegradable. Not only is cutting out waste in packaging environmentally friendly, it also makes commercial sense. Thus companies have introduced concentrated detergents and refill packs, and removed the cardboard around some brands of toothpaste, for example. The savings can be substantial: In Germany, Lever GmbH saved 15 per cent of paper, carton and corrugated board; 30 per cent by introducing concentrated detergents; 20 per cent by using lightweight plastic bottles; and the introduction of refills for concentrated liquids reduced the weight of packaging materials by half. Henkel has introduced special 22-gram ‘light packs’, which are polyethylene bottles that save 270 tons of plastic a year.

Marketing managers need to be aware of the environmental consequences of their decisions and activities, and recognize the dangers to the reputations of their companies and brands of environmentally irresponsible actions. They should also consider communicating their environmentally conscious credentials. Samsung is a company that has done this.

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