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Green Marketing - 4Ps PLUS Triple Bottom Line

Green marketing includes promotion, product, price, place as well as people, profit and planet.

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Green marketing is like putting on a new pair of glasses (or contacts). the world is slightly askant. Your eyes have to adjust. But as you settle into this new way of seeing, your vision improves, your eyes work a little easier...and you adjust.

Green marketing sharpens your vision and lets you work a little less. It is a tool that improves your depth of field, and brings life into focus a bit more clearly. With green vision, leaders in an organization (for profit or non-profit) join government and society in questioning corporate America's fixation on a one-dimensional bottom line.

But what IS "green marketing"? Specifically?

Traditional marketing is based on the 4Ps: Product, Price, Place and Promotion. Green marketing adds the triple bottom line*: People, Planet and Profits.

Part of marketing is running the numbers, and triple bottom line accounting expands the traditional analysis and communications reporting framework to take into account environmental and social performance in addition to financial performance.

Marketing Promotion - Communications

Green marketing redefines promotion -- incorporating more two-way (or multiple dimensions) communication.

Communication among the constituents of a business takes many forms:

  • Telling investors about the company's opportunities and performance.
  • Reminding employees about how their company plays an important role in their community.
  • Telling customers about additional goods and services that can help them with their lives and business.
  • Introducing prospects to how the company provides solutions to their problems.
  • Positioning the company among fellow industry and community businesses as infrastructure players.
  • Reporting on their corporate citizenship -- their performance and impact.
  • And listening to all these constituencies.
  • And responding appropriately to their priorities and concerns...

The tools to implement all this communicating include promotion, advertising, marketing materials, signage, white papers, websites, videos, presentations...and a hundred other variables.

Reporting with Transparency

A core commitment to corporate social responsibility implies a commitment to triple bottom line reporting.

Sustainability reporting is an outgrowth of financial reporting. It goes beyond finances to cover the social and environmental aspects of a company's performance.

Global Reporting Initiative

The Global Reporting Initiative’s (GRI) vision is that reporting on economic, environmental, and social performance by all organizations becomes as routine and comparable as financial reporting. GRI accomplishes this vision by developing, continually improving, and building capacity around the use of its Sustainability Reporting Framework.

An international network of thousands from business, civil society, labor, and professional institutions create the content of the Reporting Framework in a consensus-seeking process. Search their database for thousands of companies reporting their G3 performance.

Benefits of Green and Sustainability Marketing

Green marketing is about "green products" -- those that protect natural resources. Sustainability marketing brings a broader view -- one that adds human-society concepts such as social justice, local economic health, and employee health and well being.

Among the business benefits of adopting sustainability listed by the advocacy group Business for Social Responsibility are:

  • Improve financial performance and access to capital.
  • Enhance brand image and sales.
  • Attract and retain a quality workforce.
  • Improve decision-making on critical issues.
  • Manage risk more efficiently
  • Reduce long term costs.

Marketing: Product

Greener Product Development

Low energy use has been encouraged since the Energy Star program was launched during President Carter's administration! Today, energy use has expanded with distributed energy-grid products such as solar and wind power generation, take-back programs for electronic products that include toxic materials; and increasing energy, water and air conservation features. All these features are translated into benefits by the marketing department: health, lower operating costs, compliance with environmental laws, and happier customers.

Green chemistry is a growing focus of product development. Marketing's role in this product management role includes providing engineering with market-driven trends and customer requests for green product attributes such as energy savings, organic, low/no VOCs, green chemicals, local sourcing, etc.

GE is a leading green product and service developer, having launched a major corporate-wide program called Ecomagination. This program encourages internal green development of products, processes and services; and then capitalizes on these green, sustainable deliverables in their advertising and public relations..

Internal Performance for External Marketing Impact

Increasingly, green success stories and case studies that customers, prospects and other stakeholders value, come from the implementation by facility or property managers who develop, deliver, and record innovative solutions that address an organization's performance in relation to a triple bottom line of people, planet and profit.

WalMart is one example of a company that has made tremendous strides in greening their transportation, energy usage, facility design and adoption of some greener products such as organic clothing.

Facility and property managers increasingly evaluate their roles in conjunction with their organizations' stewardship, implementing solutions that reduce the "footprint" of buildings, landscapes and energy use on the environment...and the bottom line.

Increasing the level of commitment to their communities and people involved in conducting business is where the triple bottom line approach applies sustainability principles.

Key green/sustainable practices include water usage, energy consumption, waste management and materials selection. Today, managers who put implementation of a triple bottom line into practice are discovering rewards that include:

  • Client satisfaction resulting from mutual trust
  • Public image of good citizenship for the organization
  • Savings from less waste, less chemicals and less processing through greener selection and use of resources

Marketing - Price

Pricing is the holy grail of profitability. But green marketing looks at pricing beyond the traditional "sales price of the product". New strategies include pricing products with service contracts. Some products are leased instead of sold.

Other pricing programs install equipment with revenue generated out of savings -- these "Energy Savings Performance Contracts" are frequently employed by government agencies who can get funding approved for services easier than physical equipment or building projects. The Federal Energy Management Program is one example of this financing strategy.

Green pricing isn't about the dollars as much as it is about structuring the mutually beneficial exchange of results for rewards.

Sometimes rewards aren't money -- but credibility, references, a base from which to provide ongoing services. Creative pricing is a marketing function as much as a finance function.

Green cost accounting that takes into consideration the triple bottom line of people, planet and profit in a sustainable way that identifies unsustainable practices that are being subsidized at the expense of healthy employees, healthy communities and healthy productivity. Energy consumption, toxic substances, waste management, transportation and total value to the customer are just some of the attributes that go into green cost accounting and green economics.

Full cost accounting (FCA) or true cost accounting (TCA) generally refers to the process of collecting and presenting costs as well as advantages for traditional, green or sustainable alternatives.

A large number of standards now exist to address financial accounting of green and sustainable practices. Strategies include:

  • Ecological Footprint
  • Eco-labels such as LEED(R) and Energy Star
  • United Nations International Council for Local Environmental Initiatives approach to triple bottom line using the ecoBudget metric.

International Organization for Standardization(ISO) standards useful in Full Cost Accounting (FCA) or Total Cost Accounting (TCA) include

  • ISO 14000 series for environmental management
  • ISO 14064 for greenhouse gases
  • ISO 8000 for corporate social responsibility
  • ISO 9000 family for quality management.
  • ISO 19011 standard for audits

Marketing - Place

Logistics has exploded in volume since globalization of manufacturing and the Internet have changed the way business operates.

"Place" is not longer just a wholesale chain or a company owned retail outlet. Place includes the Internet, global supply chains, multiple niche markets, and you local community.

Green Place is about managing logistics to cut down on transportation emissions. Shipping the food on your dinner plate 2,000 miles just isn't sustainable for the planet. Somebody is subsidizing that logistics costs.

Distributed manufacturing is one "place" strategy that can improve a carbon footprint. Licensing technology and brand identity to distant partners can expand business without expanding transportation and logistics.

Making products available for one's local community is often overlooked as a company grows into a national- or global-scale organization. Rethinking one's local role in a thriving community is a green perspective.

* Triple Bottom Line was developed by John Elkington, co-founder of the business consultancy SustainAbility, in his 1998 book Cannibals with Forks: the Triple Bottom Line of 21st Century Business

The basic idea is that obligations to communities, employees, the environment, customers and suppliers — and other stakeholders — are translated into variables that can be calculated, measured and audited, just like profit/loss, return on capital or earnings per share.

Edited by Carolyn Allen
| green marketing | sustainable marketing | green business |


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