Deliverable 5.1 Green Marketing Strategy - Emspi.eu

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Deliverable 5.1 Green Marketing Strategy EMSPI: Energy Management Standardization in Printing Industry Energy Management Standardization in Printing Industry Page 1 of 24

Green Marketing Strategy 1. Introduction . 3 2. Being Green. 4 3. Green Marketing . 10 4. 3.1 The difference between Green Marketing and Traditional Marketing . 10 3.2 Advantages of Green Marketing . 11 3.3 Steps to a successful Green Marketing . 12 The Green Marketing Mix . 14 4.1 Product . 14 4.2 Price . 16 4.3 Place/Production . 17 4.4 Promotion . 18 5. Implementation of a Green Marketing Strategy . 19 6. References. 24 Energy Management Standardization in Printing Industry Page 2 of 24

1. Introduction Do good things and talk about them to your customers! Improved corporate reputation, enhanced customer connectivity/reliability and increased revenue, these are only a few of the potential effects going hand in hand with a profound green marketing strategy. That is why we will show you how to make use of the strategic value of the new energy management standard (EnMS) developed in the EMSPI project. Especially entrepreneurs in the printing industry have a lot of choices to make. The technology changes quickly and customer requirements even faster. And: there is always the cost argument around. Energy efficiency and environmental awareness impose an increasing impact on consumer preferences. But being “green” and “energy-efficient” alone isn’t enough anymore. Instead you really have to demonstrate your products added value to your customers. That’s the point when a broad and solid green marketing strategy comes in place. Green marketing is a concept that refers to the process of selling products and/or services based on their environmental benefits. With such a green marketing strategy you will be able to make clear why your products bear advantages compared to your competitors and show your consumers how they can benefit from that. In times of a progressing global warming and an increasing environmental awareness going alongside, promoting your products with sustainability and/or eco-friendliness can become a major advantage to you and your company in several ways. As a part of your green marketing activities you show that you are going along or even ahead of legal regulations and thereby promote the growths of your corporate reputation. Other way round, anticipating measures of greening your company might put you in advantage when it comes up to fulfil legal regulations. On top of that reducing the CO2 output and/or enhancing energy savings, often leads to the opportunity of availing yourself to subsidies or tax reliefs. As another advantage of your green marketing efforts you generate win-wins for cost savings and environmental benefits, because the “greening” of your company will not only provide a positive effect on the environment, but also on your own expenditures and revenues. Through the implementation of an EnMS for example, you will increase your company’s energy efficiency and thereby reduce your expenditures on energy. In the context of your Green Marketing campaign you should explain that a part of these savings is passed down to the consumer. So why don’t you choose to save the planet and directly make some money? At least this is what every entrepreneur should consider! Energy Management Standardization in Printing Industry Page 3 of 24

2. Being Green While there are some options to lower environmental impacts from print products like taking care of mineral-oil free inks, VOC (volatile organic compounds) and environmental friendly packaging the main levers to improve “greenness” is to save energy through the entire process, where there is the interesting side-effect of always saving cost at the same time. As to say: being green at first means saving energy consumption in production, but also in logistics and distribution. Looking at the printing process there is a huge saving potential compared to other branches. The average share of energy costs in turnover is about 3.1 % (see Fig.1), energy per m² heated surface is about 400kWh (see Fig.2) and electricity consumption per employee is about 26.000 kWh (see Fig.3): Share of energy costs in turnover (%) Wholesale 0,74 Food retailers 0,81 Car workshop showroom 0,85 Car workshop showroom paint shop Car workshop Offices Retail Nonfood 0,96 1,19 1,49 1,59 Metalworking 1,81 Carpentry 1,87 Average 2,21 Hairdressers 2,25 Butchery Printers Bakery Hotel business Gastronomy 2,73 3,10 3,37 5,10 5,30 Fig.1: Share of energy costs in turnover (%) Translated according to: (Mandl / Jandrokovic, Wien, 2010, p. 8) Energy Management Standardization in Printing Industry Page 4 of 24

kWh per m² heated surface Hotel business Car workshop 107 157 Retail trade Nonfood 186 Metalworking 234 Car workshop show room paint shop 259 Carpentry 264 Wholesale 286 Car workshop showroom 290 Offices 316 Average 342 Food retailers 349 Printers 401 Hairdressers 427 Gastronomy 455 Butchery 538 Bakery 858 Fig.2: kWh per m² heated surface Translated according to: (Mandl / Jandrokovic, Wien, 2010, p. 9) kWh electricity consumption per employee Offices 2.314 Car workshop 2.729 Hairdressers 2.949 Wholesale 3.251 Car workshop showroom paint shop 3.548 Car workshop showroom 4.689 Carpentry 5.097 Metalworking 6.792 Average 8.370 Bakery 8.566 Retail Nonfood 8.856 Food retailers Hotel business Butchery 10.196 12.667 13.389 Gastronomy Printers 14.464 26.041 Fig.3: kWh electricity consumption per employee Translated according to: (Mandl / Jandrokovic, Wien, 2010, p. 10.) Energy Management Standardization in Printing Industry Page 5 of 24

From experience in energy consulting it is well known that average savings with more or less simple measures to be taken can reach -5,5% on electricity and -18% on heating, which sums up to 100.000 kWh per year. This equals to save up to 12.000 Euro and -31t CO2 per year while investing some 30.000 Euros, i.e. the return of invest is quite short. Popular measures to save energy are listed in the following figure (Fig. 4) (Mandl /Jandrokovic, 2015): Popular measures to save energy (%) Lighting 53 Machinery 28 Information motivation of employees 34 space heating 33 Building envelope 33 Providing hot water 26 space cooling 23 Energy supply 20 Usage of compressed air 8 Logistics Drying technology 6 1 Others Not specified 12 1 Fig.4: Popular measures to save energy (%) Translated according to: (Mandl / Jandrokovic, Wien, 2010, p. 5.) More ideas of where to start thinking about energy and cost savings can be taken from the following figure (Fig. 5) that displays the average shares of energy consumption in a print shop: Energy Management Standardization in Printing Industry Page 6 of 24

Share of electricity consumption (%) Prepress; 4 Standby of machinery; 20 Offset printing; 37 Office material; 4 Cooling; 3 Lighting; 7 Digital printing; 5 Compressed air ; 7 Creasing, Cuting, Folding; 13 Fig. 5: Share of electricity consumption (%) Translated according to: (Radauer, p. 5.) For further inspiration we also advise you to use the Opportunities Catalogue developed in the EMSPI project under the umbrella of the EnMS. The Opportunities Catalogue is almost completely based on the Deliverable 4.2 “List of energy saving measures” of the project EEEI – European Energy Efficiency Improvement in the graphic media industry (2007-2009) and offers a comprehensive survey of possible measures to be taken, the estimated investment and the approximately payback time. Regarding the figures 1 to 5 made clear that there is a huge potential of saving energy and thereby advance the greening of your company. The question you now have to ask yourself is, are there any other options to benefit from being green besides saving energy? Facing the customer, there are good reasons for being green. According to the Eurobarometer survey “Attitudes of European Citizens Towards the Environment” (Fig. 6 & 7), there is a growing sensibility of customers for environmental friendly products. Energy Management Standardization in Printing Industry Page 7 of 24

Fig. 6: How important is protecting the environment to you personally? (Special Eurobarometer 416, EU 2014, p. 9) Looking at the figure above it becomes quite clear that being green can become a huge advantage for you and your company. According to this survey 95 % of the respondents stated that protecting the environment is very to fairly important for themselves. The figure (Fig.7) below shows that 77 % of the respondents think that companies are not doing enough to protect the environment. Fig. 7: In your opinion, is each of the following currently doing too much, doing about the right amount, or not doing enough to protect the environment? (Special Eurobarometer 416, EU 2014, p. 65) Energy Management Standardization in Printing Industry Page 8 of 24

Your goal as an entrepreneur should be to close the gap between the consumers wish to do something positive for the environment and their perception that companies aren’t doing enough for the environment. Reckoning the figures 6 and 7 doing so would create a huge potential in attracting new customers and in creating long lasting customer relationships. The “greening” of your company may proceed by either one or all of the following three approaches: the processes of value addition (company level), the implementation of management systems (company level) and the focus on “greening” your products (products level) (Prakash, 2002). The “greening” of the value addition process may result in the re-organization or elimination of process steps or the implementation of new technologies that provide an environmental benefit compared to existing technologies such as energy efficient press drives or compressors for example (Prakash, 2002). The second way of “greening” your company is the implementation of an energy management system (EnMS) such as the EnMs developed in the EMSPI project. The energy management system creates a foundation on which crucial measures for the improvement of your energy efficiency can be implemented. Therefore the EnMS not only focuses on one part of your company or your production processes, but on every relevant aspect. To measure and illustrate your positive impact on the environment you should additionally create and implement a set of key performance indicators. If you are searching for inspiration you should take a good look at the document “Selection of Indicators and Benchmarking of the European Printing Industry” created in the EMSPI project (Prakash, 2002). The third approach focuses on the product itself. You should provide your products with environmental features. For example you could reduce the amount of raw materials that are needed in the production process or you could reduce the amount of wastes that accrue during the production of the product. Besides the reduction of raw materials and wastes you could make sure that your product is recyclable or that your product is produce out of recycled materials (Prakash, 2002). Energy Management Standardization in Printing Industry Page 9 of 24

3. Green Marketing The roots of Green Marketing can be traced back into the 1970s when the idea of ‘ecological marketing’ emerged and the 1990s when, in the course of global warming, the concept was lifted on a global scale. Therefore Green Marketing can be defined as a “(.) holistic management process responsible for identifying, anticipating and satisfying the needs of customers and society, in a profitable and sustainable way.” (Peattie/Charter, 2003, S. 727) 3.1 The difference between Green Marketing and Traditional Marketing As you can see in Fig.8 Green Marketing significantly differs from Traditional Marketing. Fig. 8: Differences between traditional and green marketing (Chamorro/Banegil, 2005, p.13) But for Traditional Marketing as for Green Marketing the golden rule of a substantial identification and compliance with your marketing goals and strategies remains the same. A simple creation of a marketing department with the mandate to introduce a green marketing strategy step by step just isn’t enough. Environmental values have to characterize every single part of your organization, and not only the commercial aspects, because only then you can profit from the full array of the advantages going hand in hand with a profound green marketing strategy. (Chamorro et.al, 2005) Energy Management Standardization in Printing Industry Page 10 of 24

3.2 Advantages of Green Marketing The decision to promote your company and your products not only with quality, but sustainability, will reveal a large scale of potential advantages to you and your company. Steady compliance for regulations: Green Marketing shows that you are going along or even ahead of legal regulations and thereby promotes the growths of your company’s reputation. Other way round, anticipating measures of greening your company might put you in advantage when it comes up to fulfill legal regulations. Furthermore reducing the CO2 output and/or enhancing energy savings, often leads to the opportunity of availing yourself to subsidies or tax reliefs. Respond to customer preferences: The label “green” has already become a major effect on consumer’s preferences and it is set to become an even more important determination for a new generation of consumers to come (Generation Y). According to reliable surveys (see Fig.8 & 9), consumers expect companies to be proactive when it comes to being green. That’s because, according to these surveys, consumers believe that companies have a greater impact on environmental developments than individuals. The second interesting finding of these surveys was the fact that most consumers are willing to pay more for green products, especially when they do believe that these products bear some added value (ecofriendly, healthier, safer etc.) (Manget et al, 2009). Another advantage in being “green” is to avail yourself to Green Public Procurement (GPP). Because public authorities nowadays appreciate to procure products and services that adhere to principles of energy-efficiency and eco-friendliness throughout their whole life cycle rather than products that don’t do so. Fig. 9: Most Consumers Think It Is Important or Very Important for Companies To Be Green (Manget et al., 2009, p.10) Energy Management Standardization in Printing Industry Page 11 of 24

Fig.10: Despite the Economic Downturn, Consumers Care About Green Products (Manget et al., 2009, p.10) To generate win-wins for cost savings and environmental benefits: The “greening” of your company will not only provide a positive effect on the environment, but also on your own expenditures and revenues. Through the implementation of an EnMS for example, you will increase your company’s energy efficiency and thereby reduce your expenditures on energy. In the context of your Green Marketing campaign you should explain that a part of these savings is passed down to the consumer. So you can provide an energy efficient product for a reasonable cost. Human Resources Management: The positive effect of being considered as an energyefficient and eco-friendly company is not to be underestimated, when it comes to the recruiting of qualified employees. Especially in times of an ongoing demographic change and the associated labour shortage, being green is a crucial advantage for your company to recruit qualified workforce (Bonini/Oppenheim, 2008). Product policy: Green Marketing provides a competitive advantage in terms of product differentiation and thereby increases your company’s market share. On top of that Green Marketing puts you in a good position to raise the awareness of your product. 3.3 Steps to a successful Green Marketing When it comes to the realisation of Green Marketing activities, there are a few things you should take into consideration. Explain your product: A lot of customers are interested in green products, without being totally aware of what green products should provide, or what sort of positive impact they actually impose on the environment. That’s why you not only have to promote your products, Energy Management Standardization in Printing Industry Page 12 of 24

but also have to explain to the customers how they can impose a positive effect on the environment by purchasing your product (Bonini/Oppenheim, 2008). Be honest: Companies with the goal to be green should by all means target a policy of radical transparency and honesty towards their customers. Misleading your consumers will most likely lead to a rapid damage of your company’s reputation and credibility. Therefore it is very important that your statements are clear, revisable and do not leave any space for ambiguity or speculations. Test results or certification from an independent party are very important to verify credibility of your statements (Bonini/Oppenheim, 2008). Avoid Greenwashing: This advice strongly correlates with the advice above. Greenwashing describes the act of intentionally misleading consumers to create an environmentally responsible public image. Doing so or being caught doing so will definitely have a negative influence on your reputation. A recent example of a major case of greenwashing is the Volkswagen scandal. In their commercial campaign they advertised their diesel engines to be environmentally friendly, not mentioning that the emission test results were manipulated and in fact weren’t as good as stated. Being caught in September, Volkswagen since then has suffered a rapid lost of reputation and are facing several charges. Offer more: Green products are often rumoured to be more expensive than conventional ones. So be sensible: If your customer is receptive for green arguments, point out your products added value (e.g. energy efficient, eco-friendly, better quality etc.) (Bonini/ Oppenheim, 2008). Avoid Green Marketing Myopia: “Green Marketing has to satisfy two objectives: improved environmental quality and customer satisfaction” (Ottman et. al, 2006) Focussing on only one of these two objectives while totally forgetting about the other is called Green Marketing Myopia. Only focussing on the environmental aspects of your product while ignoring your customers demands for innovative features e.g., won’t get you anywhere near success. Doing so may even result in the failure of your marketing activities. So always keep in mind: Only if environmental benefits and customer satisfaction are going hand in hand your green marketing efforts have the chance to succeed. Energy Management Standardization in Printing Industry Page 13 of 24

4. The Green Marketing Mix When it comes to Green Marketing you can revert to the traditional marketing mix with its four marketing instruments, the so called 4 P’s (Product, Price, Place, Promotion). Today the four Ps can be complemented by other Ps such as People or Process, but focussing on the traditional approach covers the most important instruments and will serve you well. And by combining these four marketing instruments you create a profound tool to realise your marketing goals. Basically the Green Marketing Mix is the same as the traditional marketing mix, with the one difference that the Green Marketing Mix has to adhere to green principles throughout the whole process. This leads to the positive effect of an enhanced credibility and an increased brand identity, as well as a high degree of honesty and radical transparency with the involved stakeholders. 4.1 Product Fig. 11: Own Figure The first of the four P’s is the Product. By implementing the developed EnMS you will increase your company’s energy efficiency and decrease your CO2 emissions. Thereby you create an energy efficient and competitive product. Besides this you can bring all “green” parts of your product into play (e.g. green raw materials, green supplier, lower-impact packaging, lower-impact distribution etc). In doing so you guarantee to provide a product which is “green” on all stages and thereby enhance your credibility (Gittel et al., 2012) Regarding the product, three different levels of “green” can be distinguished (See Fig.12). The first level is the Basic Green Product, this level only focuses on characteristics that occur during the consumption and post-consumption stages. The second level is the Extended Green Product, this stage also includes the environmental impact of the manufacturing process. The third level is the so called Green Offer. You can refer to a product as Green Offer if an environmental awareness is incorporated in every department of your company (manufacturing department, human resources, sales e.g.) and if this level of awareness also apply to the Energy Management Standardization in Printing Industry Page 14 of 24

organizations your company interacts with (suppliers, distributors e.g.). From this point on it is not only about the environmental benefits of a product or its manufacturing but to create a shift in the attitude in your company and in the organizations your company is aligned with (Chamorro/Banegil, 2005). Fig. 12: Levels of green product (Chamorro/Banegil, 2005, p.14) Energy Management Standardization in Printing Industry Page 15 of 24

4.2 Price Fig.13: Own Figure The price is a key determinant in the customers willingness to buy green products. That’s why it is crucial to eradicate the image of green products being disproportionally more expensive than conventional ones. Green Marketing has to point out that savings in the production (especially energy savings) are passed down to the consumer and that green products bear extra values (e.g. energy efficient, eco-friendly, better quality, healthier etc.) compared to conventional ones (Gittel et al., 2012). Good Practice: Energy Management Standardization in Printing Industry Page 16 of 24

4.3 Place Fi.14: Own Figure The third P relates to the actual location where the product is manufactured and purchased as well as to the method of distribution. The location itself should be green or at least show a strong commitment to green principles. Not only the location but the distribution channel has to be organized according to green standards. Insofar green principles are identical with lean principles: Organize your workflow according to the standards of lean organization and you will save energy, time and personal resources. Optimize your distribution channels and you will save fuel costs, shipping charges and thus generate cost savings while decreasing CO2 emission (Gittel et al., 2012). Good Practice: Energy Management Standardization in Printing Industry Page 17 of 24

4.4 Promotion Fig.15: Own Figure The last of the four P’s comprises all sorts of communication to promote your product. The Promotion is ordinarily important, due to the fact, that this is the instrument with which you aim to “(.) reduce the consumer confusion and educate them (.)” (EU project ecomark) to understand the added value of your product. The four main instruments of promotion are: Advertising is a paid form of promotion. It includes all communication to highlight your product and aims to persuade consumers to be in need of your product. Advertising uses different media like television, radio, print, etc. Public relations comprise all kind of communication driven by the interest of increasing the awareness of your product. This means that you persuade multipliers, e.g. reporters or academics, to write or talk about you and your products. As a result your product doesn’t appear in the advertising section of the newspaper (television, radio etc.) but in the editorial section. This creates a higher degree of credibility. Personal selling promotes products through a one-on-one selling. The salesman/promoter convinces the consumer to purchase the product through his/her appearance and special knowledge about the product. Consumer promotion comprises all activities that try to directly convince the consumer to purchase the product through price incentives (coupons, donation that help the planet/people, etc.). Energy Management Standardization in Printing Industry Page 18 of 24

5. Implementation of a Green Marketing Strategy 1. Formation of a “Green Marketing Team” The main objective of the “Green Marketing Team” is to gradually develop, organize and execute the marketing plan. It is absolutely necessary to make sure that the management ensures its absolute commitment and support. Without this commitment your team won’t be able to create an actual improvement in your company. Your “Green Marketing Team” should be small, depending on the size of your company between two and several members. It is also advisable to gather your team from different fields of your company (e.g. production, maintenance, operation).This will enable a comprehensive and constructive working atmosphere. One of the first tasks of the “Green Marketing Team” is to create a solid mission statement. With this statement you briefly highlight your companies firm belief to your customers, that it is your mission to manufacture a competitive product, which at the same time imposes a positive impact on the environment. But with a mission statement you not only address your customers but also your colleagues and business partner. By explaining your commitment to quality and environmental standards you provide them with the necessary information and motivation to walk your talk. This is tremendously important, because you won’t get anywhere near excellence on your own (EU project ecomark). 2. Analysis of the current situation At the second stage it is very important to analyse the current situation of your company. Because without knowing where you are you can’t decide where you want to go. It is important to analyse the external factors (e.g. consumer analysis) as well as internal factors (e.g. sales analysis, product analysis) that may influence your choice of marketing strategy. Analysing your sales and customers are key figures in your decision for an appropriate strategy. Possible questions to be asked may be: What is your share of green products on sold products? Did the amount of sold green products increase or decrease compared to former trading years. What are the reasons for these possible variations in your sales figures? What sort of customers are out there? Which sort is our target group? All of these questions are vital in your decision making and should be investigated during your external and internal analysis (EU project ecomark). Additionally it is advisable to perform a SWOT analysis (Strength, Weaknesses, Opportunities, Threats). With this instrument you are able to assess external opportunities and threats as well as internal strengths and weaknesses. By visualizing these strength and weaknesses in the form of a matrix, you will, on the one hand, be able to identify a scale of actions to be taken to achieve your goals, and on the other hand, you will be aware of potential threats that endanger your course of action. In general such a SWOT analysis asks the following questions: Energy Management Standardization in Printing Industry Page 19 of 24

STRENGHTS What are our strengths? What are our operating experiences? What is our core competence? Possible examples: Cost reduction in production Energy savings Quality improvement OPPORTUNITIES What are our future prospects? What are we capable of? Which potential strategies can we use? Possible examples: Attracting new and “green” customers Increase your company’s reputation Recruiting skilled work force Competitive advantages Increasing employee satisfaction WEAKNESSES What are our weaknesses? What can be improved? Which barriers are there? Possible examples: No real expertise in Green Marketing Investments have to be made, financing could be a problem THREATS What makes us vulnerable? Which potential difficulties do exist? What do we have to expect? Possible examples: Green marketing activities have to be accurate (otherwise greenwashing) You have to follow the trend otherwise this will result in competitive disadvantage Upcoming regulation may put new technical and organizational requirements in place Fig. 16 Own Figure A possible result of such an analysis may be that you have the opportunity of cost savings and therefore an increased competitive advantage but right now are not able to finance the necessary actions. Anyway, on the basis of these analyses you will be able to make thorough decisions concerni

3.1 The difference between Green Marketing and Traditional Marketing As you can see in Fig.8 Green Marketing significantly differs from Traditional Marketing. Fig. 8: Differences between traditional and green marketing (Chamorro/Banegil, 2005, p.13) But for Traditional Marketing as for Green Marketing the golden rule of a substantial identifi-

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