AN INVESTIGATION ON GREEN MARKETING – CASE COMPARISON OF NOKIA AND SONY ERICSSON
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Declaration
Table of Contents
TOC \o “1-3″ \h \z \u CHAPTER 1 – INTRODUCTION
1.1 Background
1.2 Rationale
1.3 Aims and Objectives
1.4 Research Questions/Hypothesis
1.5 Significance of the Study
1.6 Scope and Limitation
1.7 Outline of the Study
CHAPTER 2 – LITERATURE REVIEW
2.1 Green Consumerism
2.2 Green Marketing
2.3 Green Marketing in Telecom Industry
CHAPTER 3 – METHODOLOGY
3.1 Research Methodology
3.1.1 Overview
3.1.2 Design
3.1.4 Sample and Participants
3.2 Data Collection
3.2.1 Survey
3.2.2 Interview
3.2.3 Ethical Consideration
3.2.4 Data Processing
Executive Summary
CHAPTER 1 – INTRODUCTION 1.1 Background
The world of business is being affected and influenced of different major changes in the external environment which affect the buying perspective and behavior of the customers. One of the most important factors to consider is the issues regarding the environment, particularly regarding the global warming or climate change. As of now, consumers are becoming continuously associated themselves with the social responsibility, particular about what they can do in order to protect the environment and prevent any dangerous impact of global warming or climate change to the world. This enables businesses and industries in the world to focus on one of the most challenging factors towards their marketing process, the emergence of green consumerism. Green consumers are considered as those individuals who identify themselves in accordance to their environmental ideologies and beliefs they believed in. According to Moisander & Pesonen (2002), they are those people who are ecologically oriented and largely marginalized and positioned themselves in the dominant discourse of green consumerism. Aside from that, because of the fact that green consumers are more tended to reject subjectivities, they claimed to be caring, environmentally and socially aware and they are demanding a say in the production, processing and resourcing of the products they regularly purchases.
Thus, it can be said that most of businesses today are focusing on integrating the aspect of social responsibility in their marketing. This is because of the fact that marketing offer goods and services for the society and makes a vital influence on the different choices that are made and available and the purchase process that ultimately determines the quality of life of the society. Therefore, marketing plays a very crucial role in the well-being of the society and it is important for different companies to have very serious social responsibilities (Samli 1992).
As a result, green marketing is being considered as one of the major development and changes in the modern world of business (Kassaye 2001). Thus, the demand for ecological products and sustainable business activities was driven by the increase in the awareness of the customers towards the environmental issues, together with the stricter regulations that are being introduced by the national governments, particularly in different industrially developed countries (Polonsky & Roserberger 1998). This can be observed on the success of green movement on the political arena of most of European countries (European Greens 2004). Because of that, the issue regarding green production and marketing caught the attention of different non-governmental groups, together with the media in spreading awareness about the different environmental issues connected to a given industry or company. Media are carefully monitoring the compliance of different firms towards laws and regulations about the environment, which increased the pressure for green marketing (Medleson & Polonsky 1995).
The said pressure is more intense in industries that cause greater damage or higher risk towards the environment including the electronic industries, particularly the mobile phone industries which use different raw materials, facilities and devices that can cause problems towards the environment. This paper focuses on the two of the most famous mobile phone companies in the world: Nokia and Sony Ericsson. It will focus on evaluating how these two large companies handle their green marketing, and how it is being integrated and applied in all aspects and systems of the company.
1.2 Rationale
The entire global business industry is facing different challenges from the external environment including the concern to the environment which influence the behavior and perspective of the customers in availing or buying particular product or service. As a result, it is important for different companies to focus on the said changes or development in customer behavior and focus on different marketing activities and strategies that will enable them to establish good relationship with the customers, which will lead to loyalty and long time connection. By focusing on the growing important of green consumerism and green marketing, it can help companies to come up with strategies which will enable them to create a brand that focus on social responsibility. In connection, it is important to consider the fact that social responsibility is becoming more and more important in the relationship between the customers and the companies, it’s not just about once a year activity, but becoming an integral part of organizational system in order to ensure companies’ market share. Furthermore, it could help companies to know the different aspects of the company that are needed to be associated or connected to the process of green marketing. The study will focus on the strategies being applied by 2 mobile phone brands and how it affects their relationship with the company.
1.3 Aims and Objectives
This study focused on the investigation of green marketing in in-depth manner by using and comparing cases of Nokia and Sony Ericsson. It pertained on the green marketing strategies, together with practices in the entire telecom industries. In addition, the study aimed to draw conclusions about which between Nokia and Sony Ericsson is more committed in green marketing and the reason behind it. With this, the specific objectives of the research are:
To determine how Nokia and Sony Ericsson reaches its consumers through its green marketing strategies
To examine how consumer requirements are integrated in marketing green products
To analyze how green marketing builds consumer awareness of environmental characteristics of the products
To compare the similarities and differences of green marketing mix of Nokia and Sony Ericsson
1.4 Research Questions/Hypothesis
Based on the objectives and aims of the study, this researched focused on answering connected questions which are:
· To what extent do Nokia and Sony Ericsson integrate the inputs of green consumers in their green marketing?
· How do Nokia and Sony Ericsson make its consumers aware of their green products?
· Are environmental improvements of products and services are aligned with the green consumer requirements?
· How do Nokia and Sony Ericsson reach its customers?
· How Nokia and Sony Ericsson do perceptibly shows the environmental characteristics of its product?
· How do Nokia and Sony Ericsson design green products? Do green packaging and labeling helps?
· Are sound green pricing strategies are inexistence?
· Is effective green placement achieved? and
· Do green promotion practices exist?
· Which is greener when it comes to marketing – Nokia or Sony Ericsson?
1.5 Significance of the Study
Climate change or global warming is being characterized by extreme scale and urgency. This is because of the fact that it has negative impact to the lives of each and every individual in the world. On the side of the business industry, regarding the supply side, it is vital for companies to drastically reduce its impact in manufacturing, distribution, raw materials, energy use and other aspects that are related to marketing process (Grant 2008). Therefore, the issue of green consumerism and green marketing is vital for the organization because it influence the process of manufacturing or creating the product due to the supply chain, at the same time on the process of selling the product to the market via branding and image.
Therefore, it is important to study the use and application of green marketing in two of the most popular mobile phone brands in the world. This will help to focus on the different strategies and other activities inside the organization which enables them to properly and successfully implement green marketing and connect with their green consumer. Above all, it can also help to analyze the different positive impact of green marketing in terms of financial and non-financial performance and achievements of companies, particularly in an industry that is directly connected or concerned with the environment including the electronic industry.
Therefore, green marketing will help companies to focus on the different stakeholders that are directly and indirectly connected with these companies. These include aspects include different activities and strategies that can be implemented in order to create green brand image.
1.6 Scope and Limitation
The study was conducted in order to identify the different aspects and strategies that are connected with green marketing and green consumerism. The research covered topics which include the process of green marketing including the process of manufacturing, and designing the brand. Data and information that was used in the study were from primary and secondary resources. The primary source was drawn from questionnaire and interview survey from the staffs and employees of the two companies. On the other hand, secondary information were gathered from online and offline resources which include books, journals, articles and other studies.
The limitation of this study focuses on the fact that information about green consumerism will be gathered from the companies and its employees, together with the annual reports.
1.7 Outline of the Study
The study is divided into 5 chapters. The first chapter presents the background of the study, objectives, research problem and it’s important. The second chapter presents literatures and published documents which concern and tackle issues that are related with green marketing. The research methodology used for the study is discussed in the chapter three, including the description of the participants, sampling technique and the research instruments used. In chapter four, the result of the method were presented, while chapter five summarises the findings of the research.
CHAPTER 2 – LITERATURE REVIEW 2.1 Green Consumerism
Strong (1996) contends that the ethically-aware consumer has become ethically aware and is joined by many other consumers who believe in the principles of fair trade. These well-informed consumers not only demand for fair traded products but are also challenging manufacturers and retailers to guarantee ethical claims they are making about their products. Hence, the campaign for greener, more environmentally friendly ways of living and consumerism is rapidly gaining momentum (Tse and Yim, 2002). In social marketing, green consumer behavior is considered as a form of ethically oriented consumer behavior that is being motivated not only by the personal needs of the consumer but as well as their concern for the welfare of the society (Osterhus 1997). Thus, green consumerism has customarily been conceptualized as a personal ethical orientation or even a set of pro-environmental personal values and attitudes that inform a particular form of socially conscious or socially responsible decision making. Thus, the socially conscious green consumers are typically viewed as goal-oriented individuals who take into account the public consequences of their private consumption in an attempt to bring about the social change (Moisander & Pesonen 2002).
Green consumer focuses on availing green brand. Green brand is one that offers a vial eco-advantage over the incumbents and which consequently appeals to those who are willing to making green a high priority. There are strong green brands targeting both retail consumers and also B2B customers (Grant 2008).
The term green consumer was first coined and used by environmental consultant John Elkington in 1986, while green consumerism was launched into the market place in September of 1988, together with the Green shopping Week and the publication of The Green Consumer Guide. The said event had considerable media impact, and was followed by another promotion in 1989 and other publications. The main goal of the said movement was to encourage and motivate consumers to be more aware of the different environmental impact of products and they bought, at the same time mobilize consumer action in order to push manufacturers and retailers to offer environmentally friendly alternatives The said campaign started a widespread feeling of public concern generated by a succession of environmental scares in the media, at the same time help to empower ordinary people to take action (Childs & Storry 1999).
Due to that consumers had become vigilant regarding the different issues that are connected to the environmental aspect of different organizations and companies in the world, particularly in developed countries. Green consumerism has its antecedents in a long tradition of consume boycotts and political consumerism. It encourages consumers to avail products that are considered environmentally acceptable rather than simply to refuse those which are not. The main idea focuses on the fact that business and firms will respond readily and creatively to positive market signals than to the negative sanctions (Childs & Storry 1999).
During the said time, it had affected performance of different companies, specifically The Body Shop and the Cooperative Bank increased their public profile and market share. However, within a few years green consumerism began to suffer a reaction from both consumers themselves and green activist. This is caused by the preliminary wave of enthusiasm for green issues declined as Western economies moved into depression and customary concerns – job security and economic chance – reasserted themselves. Together with this, the innovation of being green wore off. Issue attention and the permanent political focus on economic considerations are problems that the green movement has yet to conquer. Another significant reason is that markets have been flooded by products claimed to be environmentally friendly. This leads to doubts that accessible products are merely being re-packaged and that their green claims are specious. Even when consumers wish to buy green there is no readily comprehensible standardized information or labeling to facilitate product comparison. Perhaps the most essential criticisms have, however, emerged from the more thorough elements of the environmental movement. The very idea and opportunity of green consumerism itself has been challenged. While green consumerism might believably make markets less environmentally critical, it fails to defy the logic of buildup and the patterns of utilization inherent in the capitalist system. Above all, green consumerism does not completely attend to the demands of sustainable development (Connelly & Smith 2003).
2.2 Green Marketing
Green marketing can be defined in different ways and is presented in different ways by different firms. Aside from that, it also varies in practice between regions and between industries. Peattie (1995), Button (1989), Charter (1992), Davis (1993) & Klafter (1992) define green marketing as a holistic process which predicts, recognizes and assures the requirements of customers and society in an ecologically sustainable manner (cited in Chater & Polonsky 1992). Charter & Polonsky (1999) define green marketing as marketing or promotion of product based on its environmental performance or an improvement thereof (cited in Lee 2008). Green marketing has been a vital academic research topic for at least three decades; however, few studies have focused specifically on green branding (Hartmann, Ibáñez & Sainz 2005).
Strong (1996) contends that the ethically-aware consumer has become ethically aware and is joined by many other consumers who believe in the principles of fair trade. These well-informed consumers not only demand for fair traded products but are also challenging manufacturers and retailers to guarantee ethical claims they are making about their products. Hence, the campaign for greener, more environmentally friendly ways of living and consumerism is rapidly gaining momentum (Tse and Yim, 2002). Kilbourne and Beckmann (1998) contend that the growth of green marketing is in accordance with the emergence of topics related to individual’s motivation such as perceived consumer effectiveness and also cooperative behaviors and strategic alliances. Skepticism of consumers when it comes to green advertisement is a burden to companies because of the emergence of suspicions whether firms are able to produce genuine green products. Peattie (2001) states that this is the reason why identifying and reaching green consumer segments tend to be very difficult in practice.
Green marketing enables different companies to focuses on the different factors which influence the buying behavior of the customers. Peatti (2001) traces the evolution of green marketing which initially is known as ecological where all environmental activities were concern with helping in mitigating environmental problems through provisions of remedies. This is followed by environmental marketing which focuses on clean technology that involved designing of innovative new products. Sustainable is the next and the present marketing phenomenon. Green marketing is important because of the following reasons. First, firms perceive green marketing to be an opportunity which can be used to achieve its objectives. Second, firms believe they have a moral obligation to be more socially responsible. Third, firms are pressured by competition hence by changing environmental marketing activities. Fourth, costs of waste disposal and material usage reductions force firms to modify their behaviors (Mishra, 2007). As such, green marketing benefits firms in ensuring sustained long-term growth along with profitability, being cost efficient in the long run and supporting companies in marketing products and services in line with environmental requirements. Broadly, green marketing benefits firms in accessing new markets and acquiring competitive advantage (Narayana and Babu, 2008). Nevertheless, only those value-led firms could benefit in green marketing (Majlath, 2005).
On the other hand, there are also different studies and researchers that focus on the negative impact or disadvantage of green marketing. It was long been emphasized by Kangis (1992) that green marketing presents challenges because of the absence of clear understanding of the cause and effect relationships in matters affecting the environment as well as the overt and covert reasons for such issue. Because green marketing is sustainable marketing, obtaining a greener strategy will be critical on greening corporate strategies in brands, setting standards, networking resources and green marketing (Grant, 2008).
According to Peattie & Crane (2005) the decade of the late 1980s was marked as the first stage of green marketing, when the concept of green marketing was lately introduced and discussed in the industry. A predictable coming out of a green tide galvanized many marketers to apply different forms of marketing at the beginning of the said first stage (Vandermerwe & Oliff 1990 cited in Lee 2008). During that time, huge number of marketers expected to produce positive consumer response which would be translated into an increase in terms of goodwill, market shares or sales from their acts regarding the green marketing. On the other hand, in spite of the reports that environmental problems represent one of the uppermost public concerns, market growth for green products inadequately fell short of the expectations of the marketers (Wong & Turner 1996). Progressively, marketers began to realize that the concern of consumer for the environment and an attendant desire for green products did not translate into purchasing behavior (Schrum & McCarty 1995).
According to Mendleson & Polonsky (1995), Peattie & Crane (2005) & Wong & Turner (1996) stated that among all of the major hindrances, the main aspects which contribute to the backlash against green marketing was consumer cynicism about green products, green claims and the intention and practices of the companies. Due to that, Peattie & Crane (2005) have recognized 5 marketing practices which guided through the failure of green marketing during the said period, which include: green spinning, green selling, green harvesting, entrepreneur marketing and compliance marketing (see Appendix A).
· Green Spinning is the process of taking a immediate approach by using public relations in order to refute or dishonor the criticisms of the public against the practices of the company;
· Green Selling is the process of taking an opportunistic approach by adding some green claims to an existing product with the intention in order to boost sales.;
· Green Harvesting focuses on becoming enthusiastic regarding the environment only when greening could result in cost savings, for instance input inefficiencies in energy and material and package reduction;
· Entrepreneur Marketing is the process of developing innovative green products to the market without considering what the consumers actually want;
· Compliance Marketing is the process of using simple fulfillment with implemented or expected environmental legislation as a chance to endorse the green credentials of the company, without taking different initiatives to go beyond responding to different regulations (Lee 2008).
As opposed to common view on green marketing which mainly consists of promotion or advertising of products with environmental characteristics, green marketing covers a broad range of activities. Mishra (2007) relates that green marketing is a concept that is applied on product modification, changes to the production process, packaging changes and advertising modification. Towards the end of utilising limited resources and satisfying consumers’ wants, green marketing was plausible. Peattie (2001) asserts that the main aims of green marketing are to minimize the dependency on product groups responsible for environmental pollutions and to increase awareness of new product categories.
The marketing strategies for green marketing includes marketing audit, developing a marketing plan that outlines 4Ps strategies and implementing these marketing strategies (Narayana and Babu, 2008). Moreover, the marketing mix of green marketing is different from a typical 4Ps and is buttressed by three additional Ps as people, planet and profits.
Products, which can be made from recycled materials or from used goods, have to be developed depending on the needs of the consumers. Efficient products are developed with saving water, energy and money as well as reducing harmful environmental effects as the primary motives. The role of marketers in product management includes providing product designers with market-driven trends and consumer requirements for green product attributes. Some of these attributes are energy saving, organic, green chemicals and local sourcing among others (Narayana and Babu, 2008).
Bhat (1993) furthered this when he mentioned that green marketing programme starts with the green design since inputs, manufacturing processes, distribution, use and disposal methods are decided during the design stage. It is in this stage that comparison of green designs alternatives are achieved which can provide designers with guidance to select superior designs.
Green pricing is also becoming a necessity. It was argued that green products are inclined to be more expensive than conventional ones, and was carried out to ensure efficient productivity. Value-adding features are integrated to change its appearance, functionality and through customization, all of which contributes to prices (Narayana and Babu, 2008).
Green place, moreover, is about managing logistics for the purpose of cutting down on transportation emission, in effect, aiming to reduce carbon footprint (Narayana and Babu, 2008).
Finally, green promotion involves the tools of promotion such as advertising, marketing materials, signage, white papers, websites, videos and presentations (Narayana and Babu, 2008).
However, Mishra (2007) also noted that there are problems with green marketing. Firms which make use of green marketing must ensure that their activities are not misleading to consumers or industry, and conforms to the regulations or laws dealing with environmental marketing. As such, marketing claims must clearly state environmental benefits. Inaccuracy of consumer perceptions and negative future backlash of environmental decisions are other problems with green marketing (Crane, 2000).
2.3 Green Marketing in Telecom Industry
The telecom industry is in the early phase of defining what ‘going green’ means wherein the possibilities of greening ranges from handset recycling programs, reducing hazardous materials within the handset and using energy-efficient equipment to evangelizing the environmental benefits of telecommuting and teleconferencing (RCR Wireless News, 2008). According to an article of Wireless Asia (2008), very few of the telecom companies are creating biodegradable and recyclable products from sustainable resources although these companies initially comply with regulations to ban toxic substances like heavy metals and PVC in their products. Less than 5% of these telecoms have effective recycling and ethical disposal programs. The problem lies in the development of the kind of scale that makes entire green product lines economically viable enough.
The marketing stories of each company had been their marketing stories, embedded on green corporate practices. As more telecom companies consider the marketing angle, they are trying to ‘out-green’ each other. For example, the claim energy efficient gets stretched to the breaking point and the dangers of rendering the message will cause large cost ramifications when proven untrue. The meaningful impact then on telecom companies is evident on the firm’s competitive position (RCR Wireless News, 2008). Sony Ericsson is lauded for marketing proof-of-concept green products in 2008 whereas Nokia presented various green initiatives.
CHAPTER 3 – METHODOLOGY 3.1 Research Methodology 3.1.1 Overview
This study was conducted for the purpose of identifying the different strategies that are used for applying green marketing in telecom industry. This research also aimed to focus on the different processes and aspects that are being applied. This study used data and information gathered from the employees and staffs of two well-known companies in the telecom industries, and focus on the different strategies that are being applied in the entire system of the companies.
3.1.2 Design
A comparative approach was used, together with the descriptive research design in order to present current facts regarding green marketing principles and strategies of Nokia and Sony Ericsson. According to Creswell (1994), a descriptive research intends to present different facts which pertains on the nature and status of a situation, as it exists at the time of the study. Best (1970) also added that descriptive studies focuses on the relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt or tends that are developing. Thus, the comparative approach will focus on comparing and analyzing the differences and similarities of principles of green marketing in the two said companies.
Case study method was also applied. Robson (2002) defines case study as a “strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence.” Case study approach is considered as most appropriate to exclude occurrences of green marketing in electronics industry with its two primary players as Nokia and Sony Ericsson. One of the threats to reliability which is subject of participant error will be addressed by means of conducting survey at the closest time possible.
3.1.4 Sample and Participants
The population of the study is made of Marketing staffs in Nokia and Sony Ericsson in the UK. These types of respondents were utilized by the researcher considering that the staffs have the necessary information about the objectives of the study. A total of 10 pre-designed questionnaires were randomly distributed for the sample selection. The marketing staffs were chosen because they are knowledgeable in terms of marketing effort of their respective company. The random sampling technique was conducted where each member of a population has an equal opportunity to become a part of the sample.
3.2 Data Collection Primary and secondary data was collected. Primary data was gathered by survey and interview to, while secondary data was gathered by previous studies, reports, journal contents and statistics. In addition, annual reports, marketing reports, company statistics was also obtained by using the company website of the Nokia and Sony Ericsson, together with different articles that are tackling green marketing activities of these companies. Internet databases were also consulted which include Questia, Highbeam and Emerald. 3.2.1 Survey
The survey questionnaire was used as the main data-gathering instrument in this study. The survey focuses on the perceptions of the respondents regarding the implementation of green marketing in their respective organization or company. The questions were structured and developed in Likert format. The respondents rated each question or statement with accordance to his or her degree of agreement or disagreement. This will enable the respondents to answer the survey in easy and fast manner. To test the validity of the questionnaire, it was tested to five respondents. The said respondents and their answers were not part of the actual study process. They were asked for any aspects of the questionnaire that are needed to be improved. The researcher then excluded unrelated questions and changed unclear or complicated terminologies into simpler ones in order to ensure understanding.
3.2.2 Interview
Aside from the survey method, the study also applied the semi-structured interview method. This was done in order to come up with issues regarding the strategies, requirements as well as challenges that are being encountered of the respondents and the companies towards green marketing. With the use of semi-structured interview, respondents will be able to express their feelings, concerns and opinions.
3.2.3 Ethical Consideration
The study involved the use of human participants and the acquisition of some confidential company data. Therefore, ethical considerations had been identified and prioritized. The researcher ensured that these factors were safeguarded during the duration of the study. Thus, in order to obtain consent of the marketing staffs of the two companies, the researcher secured an approval from the managements by written letter of permission. Aside from that securing the permission of the participants was also given importance. The written letter explained the details of the research including its objectives, purposes and procedures. This help to ensure that the connection and trust between the researcher and respondents which lead to cooperation.
Respondents were also informed that they can quit the study anytime they want. Their privacy and the confidentiality of their data were also prioritized. Above all, the respondents were informed that all of the information gathered from them will be used for this study alone.
3.2.4 Data Processing
After gathering the completed questionnaires from the respondents, total responses for each item will be tabulated. To use the Likert-scale for interpretation, it is important to use weighted mean to represent each question. Weighted mean is the average where every quantity to be averages has a corresponding weight and represent the significance of each quantity to the average. To compute the mean, this formula will be used:
or
This will be computed by using SPSS. Once the computed mean for each survey item was computed, the values will be compared to the Likert scale (Underwood 2004):
Range
Interpretation
4.50 – 5.00
Strongly Agree
3.50 – 4.49
Agree
2.50 – 3.49
Uncertain
1.50 – 2.49
Disagree
0.00 – 1.49
Strongly Disagree
Green marketing practices and strategies of Nokia and Sony Ericsson were analyzed with the use of ANOVA. Comparisons of data were also obtained through ANOVA.
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APPENDICES
Appendix A: 5 Marketing Practices Which Guided Through The Failure Of Green Marketing
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