1
Sumy State University (Ukraine)
Karaganda Economy University of Kazpotrebsoyuz (Kazakhstan)
O.V. Prokopenko, Yu.I. Ossik
GREEN MARKETING
Workbook
Karaganda 2016
2 UDC 339.1
BBC 65.290-2 P93
Recommended to be published by the Academic Council of Karaganda Economy University of Kazpotrebsoyuz
(Protocol #9 from May 26, 2015) A u t h o r s
O.V. Prokopenko, D.E.S., Professor, Dean of Economics and Management Faculty of Sumy State University (Ukraine), Professor of University of Economics and Humanities in Bielsko-Biała (Poland);
Yu.I. Ossik, C.T.S., professor of Russian Academy of Natural Sciences, Senior Researcher of Scientific and Research Institute of New Economy and System Analysis of Karaganda Economy University (Kazakhstan)
R e v i e w e r s
Ahmetzhanov B.A., Doctor of economic sciences, professor, head of Economics of enterprise» of Karaganda State Technical University
Borbasova Z.N., Doctor of economic sciences, professor, associate director of Scientific and Research Institute of New Economy and System Analysis of Karaganda Economy University
Bystryakov I.K., DES, professor, department of integrated assessment and natural resources management, Institute for Environmental Economics and Sustainable Development, NAS of Ukraine (Kyiv);
Harichkov S.K., DES, professor of Institute of Market Problems and Economic- Ecological Studies National Academy of Science of Ukraine (Odessa)
P93 Prokopenko O.V., Ossik Yu.I.
Green marketing: Workbook. — Karaganda: KarSU publ., 2016. — 111 p.
ISBN 978-9965-859-26-7
The given edition is a workbook to the teaching manual by Prokopenko O.V. and Ossik Yu.I. «Green marketing» (Karaganda, KSU Publishing House, 2015). In the teaching and practical aid they cover practical aspects of introduction of the green marketing concept in practice of activity of manufacturing enterprises and commercial facilities in close interrelation with themes of the lectures.
Recommended for teachers, undergraduate and post graduate students of economic majors at institutes of higher education as well as for students of business schools, heads of the enterprises, employees of marketing and environmental divisions, other experts whose activity deals with green marketing.
UDC 339.1 BBC 65.290-2 ISBN 978-9965-859-26-7 © Prokopenko O.V., Ossik Yu.I., 2016
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TABLE OF CONTENTS
Introduction ………...………
Preface. Preconditions of green orientation of Kazakhstan economy development …...……….
Workbook ………
Graphical and analytical exercises ……….
Tests ……….…….
Practical tasks ………..
Crossword and word search puzzles ………..…………
Check questions ………..…………
Appendixes ……….………...…………...
Appendix A. Segmentation of green products market of North America (on the whole and by regions) ………...…………
Appendix B. Creation of motivation of environmentally focused innovative activity and eco attributive consumption at various levels ………..….
Appendix C. Change of demand for eco-friendly goods when their prices are backed ………
Appendix D. Reasonable consumption (recommendations to shopaholics) …...
Appendix E. Deadly fashion: how we are influenced by what we wear ……...
Appendix F. The international environmental organizations, programs, commissions and documents ………
Appendix G. The international environmental organizations of Kazakhstan … Appendix H. Recommendations of the panel session «Sustainable Energy Strategy for Future Kazakhstan up to 2050» ………..………
Appendix I. ………
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5
11 11 32 36 65 70
72
72
73
76 77 81
87 96
104 108
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Introduction
The human being has been influencing the environment for a long time, but this influence never was as intensive as over the last century. Natural resources are now being used on so large scale and so rapidly that at the same time the natural reproduction of used surroundings is not ensured. As a result of it versatile centuries- old activity of the person has left deep traces on a current soil and plant cover, air and water, fauna.
Within many decades in Kazakhstan there has been formed nature management system mainly dealing with raw materials and extremely high anthropogenic loads on landscape. In spite of the fact that the idea of green management becomes widespread, nature protection measures are introduced unpardonably slowly.
Therefore a decided improvement of the situation is still to come, and it is characterized as before by natural systems degradation that causes biosphere destabilization, loss of its ability to support the environmental quality necessary for sustainable harmonious life activity of both nature and a society. In a number of regions of the RK situation is not just unfavourable, but disastrous.
In such situation a skilful organization of green marketing will promote spreading of new, ecologically balanced types of manufacturing and distribution of new environmental needs. With this aim in view, we in 2015 in Kazakhstan prepared the teaching manual «Green marketing» that was published in three languages (Kazakh, Russian and English). Its source was the book by O.V. Prokopenko
«Екологічний маркетинг» (Київ, видавництво «Знання», 2012. – 319 p.).
The given workbook is closely connected – as for structure, topics and references – with the above-mentioned manual, its logical completion and makes together with it a single scientific and educational set. The authors hope that the given set will be not only and not so much propagandist of theoretical and experimental practical groundworks in the green marketing area, and will serve as a guide to its wide introduction at certain enterprises and organizations in social and economic sphere of the Republic of Kazakhstan and other countries.
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Preface
(preconditions of green orientation of Kazakhstan economy development)
Green marketing originates from the socially-focused marketing which should take account of interests of a society as a whole. According to the stakeholder theory, when determining goals and strategy of an enterprise it is necessary to take into account interests of everybody who will be affected by its activity. This point of view has led to intensification of the trend towards «virescence» of enterprises. By having edited a little and supplemented K. Peattie’s definition, «green marketing» can be defined as company management process directed on identification, prediction and satisfaction of requirements of both clients and a society and at the same time ensuring the unity of company profitability and sustainable balanced development of the nature and a society.
The USA is believed to be the home of «green marketing» and it is traced back to the ‘70s to the environmental movement which at that time very few people took seriously. In less than half a century, according to the survey by Information Resources, half of Americans when buying products already pay attention at least to one of the characteristics of their ecological compatibility, whether it is ecological compatibility of a product proper, its packing, manufacturing enterprise or even a store where it is sold.
Today green marketing popularity is growing all over the world. This has to do with the fact that:
- people became more informed, they learnt more about ecology;
- consumers influence corporations and governments in the area of manufacturing;
- quality of green products has been improved, the branch has become more attractive and competitive (today there is no need to choose between a quality and an ecological product – it is possible to get both features in one product;
- eco-friendly products became more competitive in terms of price and reached the availability level.
Ecological and social impact of a company is defined by its three dimensions:
technology, influence on economy and managerial style.
The used technology can be non-resource-saving and is capable to cause environmental pollution, but these drawbacks can be reduced by modernization. The influence of a firm on economy is related to such issues as employment, acquisition of raw materials and clients’ expectations, which it may turn out to be difficult to satisfy. The economic forces can also influence ability of the company to become more environmentally compatible. The managerial style is the factor with which it is better to begin «virescence» of a company: it often happens that a firm is able to improve its nature-conservation image easily, without incurring additional costs and even (by reducing amount of waste) by saving resources. It is important for companies to avoid pipe end solutions when, for example, pollution emissions are filtered at final stages of manufacturing process instead of not producing them at all.
It is almost always more cheaply to control the process in such a way that there is no pollution, than later to spend money to reduce it.
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There are some sources of pressure aiming to reform regarding these issues.
1. Clientele. According to the aforementioned researches, about half of buyers of the developed countries are guided by some ecological criteria when making decision to purchase. It is a clear signal that it is necessary to take account of environmental issues.
2. Environment protection societies and groups. The activity of such groups as Greenpeace includes three directions: an information activity consisting in attraction of attention of the public to nature-conservation problems; direct action like protests;
creation of associations and advisory companies, in which lobbyists are invited to take part in discussions together with representatives of companies to reduce the environmental damage as much as possible.
3. Employees of companies. Employees of large firms exert more and more pressure on the management and/or proprietors so that they adhere to eco-friendly policy.
4. Legislation. Environmentally minded voters force to adopt corresponding legislative acts. In several countries (Germany, the Netherlands) Green Parties are powerful parliamentary groups.
5. Mass media. Wrecks of oil ships and other ecological disasters are breaking news. But even more obscure issues like extinction of species are covered in news programs of leading channels.
6. Ethical investments. Some banks do not invest money in environmentally unfriendly projects. Banks can use this commitment in their advertisements, thereby attracting «greener» clients.
In the conditions, established in Kazakhstan the tendencies defining ecological nature of economic management weakly manifest themselves. Attempts, undertaken in Kazakhstan for a long time to solve environmental problems by means of administrative and legal and economic methods of state regulation still have not brought a noticeable environmental condition improvement. For protection of the environment to become one of the leading purposes of current domestic marketing, it must entail profit growth. Only in this case the manufacturer and the entrepreneur will be interested in solution of environmental issues and will accept eco-friendly philosophy of making business.
On the whole the complex system of environmental marketing in relation to the enterprise should include the following elements.
1. Government and legal regulation.
2. Environmental monitoring – constant tracing of environmental condition, conformity to certain parameters and indexes (maximum permissible level and maximum allowable concentration), gathering of data on quantitative and qualitative characteristics of pollutants emitted at all stages of product life cycle. The results of such monitoring should be accessible not only to state control bodies, but to the consumer as well;
3. Environmental accounting - account of ecology costs, control over target use of funds allocated for ecology. Here it is also necessary to include «value of nature»
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concept in all economic calculations. This characteristic has well-developed criteria, easily formalized and can be estimated.
4. Quality control - quality management of manufactured items according to the international standards.
5. Marketing communications - complex of communications used to perform actions directed on sale promotion and giving the consumer the necessary information supporting and forming «green» image of the organization and its products.
6. Ecological education - complex of measures to integrate ecological knowledge into collective and individual consciousness of human resources of an enterprise, creation of ecological culture.
It may seem that «green marketing» is in the conflict with the traditional one as marketing thinking is directed on expansion of business of a firm and growth of consumption of its products, and «green marketing» is directed on restriction of growth and reduction in consumption. However the conflict is not always real.
Marketing is actually directed on satisfaction of clients and is not environment- unfriendly in itself though this feature is inherent in some products. If client’s needs become «greener», then marketing experts will take it into account and, in turn, will
«become green». Broader needs of clients (in a clean and cosy world), apparently, can be better satisfied by means of a truly social marketing approach. Thus, it is possible to assert that marketing experts (who have already got used to assign primary importance of activity of a firm to clients) are the people capable, best of all, to implement «green policy».
The implementation of «green marketing policy» begins with marketing audit.
But in this case a firm should not narrow its range of interests only to itself, clients and competition and to take a wider approach like the analysis of answers to the following questions.
1. Social factors - do demographic issues influence «green thinking»?
2. Cultural factors - is there a process of integration of «green values» in the system of cultural values?
3. Economic forces - will «virescence» of a company cost a pretty penny? Or will it allow us to save some money?
4. Physical factors of environment - do stocks of natural resources and raw materials grow scanty?
5. Technological factors - are there environmentally safe technologies?
6. The international factors - is it possible that companies from other countries, using environmentally safer technologies will become our competitors? Do we create environmental problems in other parts of the world, using some raw materials?
7. Communication and infrastructural factors - is it possible to use communication and transport networks in safer way from the environmental point of view?
8. Administrative and institutional factors - is it probable that government ecological monitoring bodies and other departments will exert pressure on a firm?
9. Legal and political factors - will «green legislation» influence our company?
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«Green clients» can be segmented by «green tint» criterion. «Green activists»
are members of environmental organizations or people supporting them. Those who think «green», look for «green products» and try to adhere to «green life style».
«Green clients» are those who have already changed their behavior in a certain way and having become «greener». At last, «conscious people» are those who assert that worry about environmental condition (for example, it is believed that 90% of the population of Great Britain belongs to this group).
Though social marketing is not a synonym of «green marketing», in public atmosphere existing nowadays they are closely connected with each other. Finally a real «green marketing» approach leads to that that the concept of social marketing gets into all areas of activity of a firm - selection of sources of raw materials and production decisions to pricing and sales.
Known Harward marketer Ted Levitt once said: «People do not want to buy a quarter-inch drill, they want a quarter-inch hole». The similar thought was expressed by one of the pioneers of energy efficiency, Amory Lovins: «People do not want to buy a cooler or fuel for heating; people want some cold beer and a hot shower». In other words, they are not so much interested in a product as in those advantages which it provides.
When promoting eco-friendly products many professional marketers consider
«saving of planet» as a sufficient argument for the buyer. And buyers, in the meantime, are interested in the same things: comfort, safety, aesthetics, availability, status and pleasure. But many marketers continue to sell a product proper, instead of that benefit it can bring. They explain in detail:
- why the world needs this product;
- advantages of this product proper;
- technical peculiarities of a product;
- what their product does not contain;
- why their product is better than the one of competitors;
- what will happen, if everyone buys their product instead of competitors’
products.
But eco-marketers pass over in silence how a product solves customer’s problems whether to have a clean house, carry a passenger from point «A» to point
«B» or satisfy one’s hunger. That is why the ecological strategy and green marketing can lose touch with real life.
It is quite easy to sell a quality eco-friendly product to those who already use energy efficient lamps, water meters and phosphate-free detergents. The product eco- status is already of special importance to them so many listed arguments will be really important and useful. But the ultimate priority of eco-marketer is to win an ordinary person over to one's side - and one needs the same marketing tools for this purpose, as when promoting any other products.
Kazakhstan so far only begins to follow «green» road of development as a result of which a sustainable effective model of economy should be created by 2050. It is planned to create «green» infrastructure, to optimize the use of resources and to raise efficiency of nature-conservation activity by 2020. The volume of investment
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necessary for transition to green economy will make on the order of 1% of the GDP annually that is equivalent to $3-4 bln a year. For comparison: South Korea already invests annually 2% of the GDP in «green» sector, and investments of China were of about 2% in 2015.
«Green» construction is the practice of erection and use of buildings, aimed to reduce consumption level of material and energy resources at simultaneous preservation or improvement of quality of constructions and comfort of their internal environment. At present in Kazakhstan «green» construction trend is in the making:
one prepares the ground for drafting bills, replenish scientific and information databases, lays the foundation of core governmental and nongovernmental organizations.
In October, 2013 the Kazakhstan Green Building Council (KazGBC) was officially started, one of the main bodies heading the process of introduction and spreading of the given concept. One of the first to aspire to receive «green»
certification by world standards LEED and BREEAM in the RK is a business center building Park View Office Tower located in Almaty that has already virtually completed a relative process. At the same time they have developed and are implementing the first Kazakhstan green projects, among which a cottage town Greenville, a new educational building of KBTU and straw houses Ergo Group in Almaty as well as a multifunctional complex Talan Towers and «Green quarter EXPO Village» in Astana.
The government actively supports the given direction within the frameworks of country development program «Energy Saving-2020» and the initiative of the President of the RK - «Green Bridge» partnership program. The given program was initiated by the Republic of Kazakhstan at the 66th session of the General Assembly of the UN and approved by all states at United Nations Conference on sustainable development as an inter-regional sustainable development initiative which is voluntary and open to participation by all partners. The program assumes close interaction of the countries of Central Asia to ensure sustainable development at support by key international institutes and a private sector. The Green Bridge Partnership Program is implemented in two directions: towards «green technologies»
and towards «green products» made by using these technologies and ecosystem services.
On July 1, 2014 a Kazakhstan brand of paints and varnishes Alina Paint launched a large-scale action to restore vegetation of the country with the aid of partial Kazakhstan residents which covered 18 cities of Kazakhstan: 1 KZT ($ 0.003) per each kilogram (2.20 pounds) of any production of Alina Paint brand is transfered to a special Fund of landscaping of Kazakhstan.
At the basis of Alina Paint philosophy is the idea of a magic and harmonious surrounding world alteration. The connection of environment topic and paints and varnishes of Alina Paint is simple - ecological compatibility of paints of Alina Paint, health safety is confirmed by the decision of SES of the Republic of Kazakhstan and meet «Uniform Sanitary Epidemiological and Hygienic Requirements for the Goods Subject to Sanitary and Epidemiological Supervision (Control) of the Customs
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Union. All actions of the enterprise: formulation of production of brands, design of packing, measures in which it participated is only small contribution to environmental health of Kazakhstan.
EcoNCO «Greenspace» (Temirtau) - example of a successful implementation of marketing action at an enterprise, operating under conditions of a small industrial city with extremely limited resources. Greenspace actively occupy itself with conduct of public examinations, environmental condition monitoring, environmental training of school students, and also creation of technologies to process industrial production waste. Nowadays «Greenspace» is ready to rollout a number of developments concerning production techniques: abrasive powders from converter dump slags;
mineral wool from flaming blast-furnace slags; agloperite from coal-dressing waste.
The work on creation of technology of metallurgical production waste processing comes to an end.
They search for new outlets of Kazakhstan eco-friendly products both within the country and abroad. This activity of «Greenspace» is supported by other environmental organizations of Kazakhstan, first of all, Karaganda Ecological Center having more powerful resource base, connections with foreign experts, including in the area of development and application of treatment technologies as well as wide contacts within the country. The information about «Greenspace» products is placed on a server of organizations «Ecoline» (Moscow) and the Social Ecological Union International.
In recent years in Kazakhstan various organizations begin to use «green»
technologies and «green» marketing in their activities. It gives hope that Kazakhstan business managers will learn and will more actively use eco-friendly components in their business, taking care of environment and population, thereby to contribute their mite to the care of our planet health. With this hope in view the given workbook is presented to students, instructors, employees of spheres of production and trade, all persons and organizations concerned. It successfully supplements and completes a teaching manual «Green marketing» by O.V. Prokopenko and Yu.I. Ossik, published in 2015 in the Republic of Kazakhstan. In the given literature they have considered a series of unconventional approaches to the solution of both global strategic and topical current issues of carrying out eco-friendly economical activity in modern conditions, and its value is in it. I would like to welcome this first «swallow» of educational literature on environmental marketing in our country and to express hope to see in the near future this discipline in higher school curricula of preparation of bachelors and masters in economics majors.
Z. N. Borbasova,
DES, Professor, deputy director of Scientific and research institute of New economy and system analysis of Karaganda Economy University (Kazakhstan)
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Workbook
Graphical and analytical exercises
1. To complete the names of concepts of development of economic management subjects missing in fig. 1, and to fill in omitted words in the names.
Fig. 1. Time dynamics of widespread concepts of development of economic management subjects
2. In fig. 2 to write the levels of environmental safety on a vertical axis; to mark a modern condition of environmental safety of Kazakhstan as a point on the curve.
Fig. 2 Dependence of environmental safety level of the country on a share of green goods in total volume of production and consumption
3. In fig. 3 to indicate by arrows functional relations between green marketing kinds.
The concept of commercial efforts
intensification
Marketing concept
…
... improvement concept
... marketing concept
…
1880 1900 1920 1940 1960 1980 2000 Year
Green goods, % of total production Environmental safety
level
100
12 Fig. 3. Green marketing system
4. To fill in the names of environmental marketing development directions missing in table 1. and explanations to them.
Table 1 Directions of environmental marketing development
Consumption costs Product environmental advantages
individual socially important
Lower than that of analogous conventional products
Table field 1. Initial position of environmental marketing:
protective competitive advantages
Table field 2. … :
Higher than that of analogous conventional products
Table field 3. Removal of competitive barriers:
Table field 4. … :
state stimulation of greening by taxes, environmental fees and fines etc.
5. In fig. 4 to fill in omitted names of the stages of environmental needs.
6. In column 1 of table 2 to fill in the names of types of environmental needs to which products shown in column 2 of the given table correspond.
Fig. 4. Stages of environmental needs evolution
Eco-marketing 3 Eco-marketing 2
Eco-marketing 5 Eco-marketing 1
Eco-marketing 4
1. Production and application of means of environment protection from processes disturbing it (particularly, pollution)
2. …
3. …
4….
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Table 2 The content of products corresponding to types of environmental needs, singled out
according to evolution stages Type of
environmental needs
Content of the product
1. … 1.1. Means to prevent eco destructive impact (treatment equipment, soil- protective technologies and so on).
1.2. Means to eliminate environmental disturbance consequences (means for deactivation of soils, technology of lands reclamation, etc.).
1.3. Means for protection of the person, technological and natural systems against harmful influence of eco-destruction (water filtration before use, conditioners, protective coverings and so on).
1.4. Means to increase human immunity or to enhance stability of ecosystem against negative influence of eco-destructive factors
2. … 2.1. Environmentally perfect elements of techological systems.
2.2. Works and services promoting ecological improvement of technological systems (research, R&D, consulting services, modernization works, etc.)
3. … 3.1. Products (including information service), allowing to replace "dirty" products and processes with “clean".
3.2. Products promoting saving of material and energy resources.
3.3. The technologies providing decrease of resource capacity of the goods.
3.4. Means favoring waste recycling.
4. … 4.1. Education and information service (ecological training, consulting etc.).
4.2. Means to support biodiversity and stability of ecosystems.
4.3. Means promoting increase of information contact of the person with natural systems (creation of national parks, green zones, ecoturism, etc.).
4.4. Means favoring spiritual and physical development of the individual
7. To write elements of the classification of factors of environmental needs development missing in fig. 5.
8. In table 3 to fill in names of groups of green products use results and economical content of effect components there where they omitted or not completed.
9. To fill in product life stages and basic components of inputs and output of production at stages missing in fig. 6.
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Fig. 5. Classification of factors of environmental needs development
Table 3 Results of green products use
Results of green products use Economical content of effect component 1. Decrease of energy
intensity
1.1. Decline in maintenance cost for energy consumption 1.2. Reduction of capital expenses for energy complex objects.
1.3. Improvement of monetary balance owing to reduction in energy carriers import.
1.4. Additional economic gains due to ...
2. Reduction ... 2.1. Decrease of costs for material resources.
2.2. Reduction of capital expenses for acquisition and processing of material resources.
2.3. … 2.4. … 3. Replacement of energy
carriers or structure of material resources
3.1. Decline in current expenses due to ...
3.2. Reduction of an economic damage owing to ...
3.3. Reduction of an economic damage due to ...
4. … 4.1. …
4.2. Decline in expenses due to saving of primary energy/material resources 5. Change ... in comparison
with analogues
5.1. Reduction of economic losses owing to ...
5.2. Reduction of economic losses owing to ...
6. Replacement of
environmentally dangerous kinds of production by ...
6.1. Reduction of an economic damage owing to ...
6.2. Reduction in costs for prevention of negative influence of unsafe environmental factors
Factors of environmental needs development
By nature and duration of the
influence
…
…
…
Macroec onomic
By the area of occurence and
influence
Atropogenic
…
…
International
…
… By the nature of
occurence and influence
Social
Economic
…
…
…
…
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Fig. 6. The basic components of inputs and production output at stages of product existence
10. To rank the strength of influence on the recipient shown in fig. 7.
Negative influence Positive influence
-5 -4 -3 -2 -1 0 1 2 3 4 5
Fig. 7. The scale of points characterizing the strength of influence on the recipient
11. To write in empty cells in table 4 groups of products singled out by the level of their ecological compatibility as well as marginal integral estimates of ecological compatibility of products, differentiating ecological compatibility levels.
Production of means of consumption
…
… Waste processing
Expenses: environment, energy, products, services and water.
Output: waste, eco-destruction
Expenses: ...
Output: ...
Expenses: waste, energy.
Output: eco-destruction decrease R
E C I R C U L A T I O N
Acquisition of resources
…
Production of means of production
Expenses: ...
Output: ...
Expenses:…
Output: ...
Expenses: natural environment, energy, raw products, water and labor.
Output: primary materials, semis, waste and eco-destruction
Expenses: ...
Output: ...
Strong influence Higher than average influence Average influence Small influence Influence traces Does not influnce Influence traces Small influence Average influence Higher than average influence Strong influence
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Table 4 Division of products into groups by their ecological compatibility level
Group of products Ecological compatibility level
… … ≤ Э ≤ +175
… -35 < Э < …
… … < Э ≤ -35
Environmentally ... products -175 ≤ Э ≤ …
12. To define in fig. 8 to what types of consumers according to ecological compatibility of their behavior do the utility functions shown by numbered curves correspond. To write names of the curves by the types of customers whose utility functions they show.
Fig. 8. Utility functions of ecological compatibility (Ue, $) at the normal premium (Np, $) for different types of customers
Table 5 Readiness of consumers to pay a premium for various types of green product Green product
type
A curve shgowing the readiness of consumers to pay a premium for ecological compatibility
…
1 2
3 Ue
Np
Number of consumers, persons
Price premium, %
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…
…
…
13. By the curves shown in column 2 of table 5 to define types of products singled out by eco-friendly advantages, willingness to pay a premium for them is shown by them. To write certain types of goods in column 1 of table 5.
14. To break motivation of consumption down into components according to the scheme offered in fig. 9.
Fig. 9. Components of consumption motivation
15. To fill in the column “Motivation type” in table 6.
Number of consumers, persons
Price premium, %
Number of con-sumers, persons
Price premium, %
Number of consumers, persons
Price premium, %
Motivation … … … …
= + + +
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Table 6 Types of motives of green goods consumption
Motivation type Consumption motives example
…
Quality Effectivity
Operating parameters
…
…
Unique properties (for example, the highest processing accuracy of a metal- cutting machine)
Life style (to consume only natural products)
Feeling of fear (for example if not to buy a drinking water filter then kidney stones may be formed)
Sense of guilt (for example, acquisition of the goods which are made by handicapped people)
…
…
Natural environment conservation (product ecological compatibility) Feeling of involvement ("buy the domestic")
…
16. To complete in table 7 separate groups of needs similarly to ones shown in this table.
Table 7 Classification of motives by Maslow according to the hierarchical model
Levels of needs Groups of needs
Primary requirements (needs)
Highest requirements (growth requirements)
1. The physiological requirements necessary for survival: food, water, sex and recreation.
2. … 3. …
4. Esteem needs: in personal achievements, recognition by people around.
5. …
17. To fill in fig. 10 what motives direct the need for food to different consumer choices.
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Fig. 10. Dependence of consumer choice on a motivational need orientation
18. In fig. 11 to fill in the blanks with eco attributes of goods.
Fig. 11. The basic diagram to distinguish eco attributes of the products
Need for food
The choice of production part of proceeds from the sale of which go to supporting the destitute or preservation of the environment
The choice of famous, prestigious, rather quality production (preferably with unique
features)
The choice of cleaner low-calorie natural production
The choice of production which price is rather low in comparison with volumes of
satisfaction of needs
«…» motive
«…» motive
«…» motive
«…» motive
Energy value Taste
…
…
Fat content
… Yoghurt
Color
…
Prestigiousness
…
Reliability …
Speed
Automobile
Harmlessness
Convenience Aesthetics
…
Reliability Packet
Eco attributes of products
20
19. To fill in empty squares of table 8.
Table 8 The basic types of motivation according to consumption costs and advantages of green
products (in decreasing order of their importance)
Consumption costs Product environmental advantages
individual socially important
Lower than those for analogues conventional products
…, … …, …
Higher than those for analogues conventional products
…, … …
20. To define in fig. 12, which of the curves (fig. 12a and fig. 12b) characterizes the change of absolute value of communication influence factor as time passes when it occurs during psychologically favorable and unfavourable moments.
Fig. 12. The general view of the change of absolute value of communication influence factor as time passes when it occurs during psychologically favorable and unfavourable (from the point of view of human psychology) moments
21. To fill in the classification of consumer choice types by motivational directions shown in fig. 13.
Fig. 13. The classification of consumer choice types by motivational directions
К
T a
К
b T
Consumer choice
Motivation oriented Not supported by
motivation
Rational Irrational
Based on emotions …
Emotional
Situational choice
…
21
22. To complete the chart of systematization of the most significant in respect of increase of environmental safety and cost efficiency of achievements in the current world market of green products made according to the report of the Roman club presented in fig. 14.
Fig. 14. Long-range directions of global market development of green products
23. To complete the diagram, shown in fig. 15.
Fig. 15. Directions of eco-friendly products market development in Kazakhstan Revolutionary changes in resources usage
2. Rational use of traditional and application of new materials:
2.1. In the industry.
2.2. ...
2.3. ...
2.4. ...
2.5. ...
2.6. Concerning packing 1. …:
1.1. Economy cars.
1.2. Houses that do not need power supply line from outside to provide for their operation.
1.3. ...
1.4. Increase of energy output in systems of generation and delivery of electrical energy.
1.5. ...
3. Increase of efficiency of application of
communication means and transport:
3.1. ...
3.2. High-speed trains, hyper automobiles
The market of eco-friendly products in Kazakhstan 1. Developing in
directions
1.1. …
2.1. Technologies of foodstuff production
2.5. ...
2. Formed in directions
1.2. Industrial waste processing
2.3. Computerization of production and sales 2.2. Development of new and improvement of existing technologies for the chemical industry
2.4. Use of nonconventional power sources
2.6. …
22
24. To fill in the blanks in the flow chart of algorithm of formation of eco attributive consumer behavior (fig. 16).
Fig. 16. The flow chart of algorithm of formation of eco attributive consumer behavior
25. To fill in the data about environmental labeling signs of the first group (applied to mark ecological compatibility of products on the whole, certain stages of their existence or their individual properties), presented in table 9.
Table 9 Environmental labeling signs of the first group
# Ecolabel kind The name of an ecolabel and a country where it is
applied
# Ecolabel kind The name of an
ecolabel and a country where it
is applied
1 … 7 …
The analysis of sufficiency of motivation of the eco attributive consumption
…
s the motivation level of the eco attributive
consumption sufficient?
… …
…
Support of an existing state of readiness to eco attributive
consumption
?
? No
No
Yes
Yes 6
5 4
3 2
1
7
23
2 … 8 …
3 … 9 …
4 … 10 …
5 … 11 …
6 … …
26. To fill in the data about environmental labeling signs of the second group (calling for preservation of the environment, in particular taking materials and waste for recycling), presented in table 10.
Table 10 Environmental labeling signs of the second group
# Ecolabel kind The name of an ecolabel and a country where it is
applied
# Ecolabel kind The name of an ecolabel and a country where it is
applied
1 … 5
2 … 6 …
24
3 … 7 …
4 … 8 …
27. To fill in the data about environmental labeling signs of the third group (warning about danger of things to the person and environment), presented in table 11.
Table 11 Environmental labeling signs of the third group
To show an ecolabel
Contents … … …
28. To fill in the stages of substantiation of the choice of optimal variant of formation of green goods market, missing in fig. 17.
Fig. 17. Stages of substantiation of the choice of optimal variant of green goods market formation
29. To fill in the flow chart of the algorithm of substantiation of the choice of optimal variant of green goods market formation, shown in fig. 18.
Situation analysis on the market
Development of an innovative project and its evaluation
…
Revealing of target groups of consumers and analysis of them
Estimating the degree of green goods conformity to interests of market subjects and optimal variants selection
…
25
Fig. 18. The flow chart of the algorithm of substantiation of the choice of optimal variant of green goods market formation
30. In the overlapping circles diagram of interests of various market subjects (fig. 19) to mark areas where eco-friendly products:
1) meet all but interests of a society;
2) do not meet interests of customers and a society;
3) meet only interests of manufacturers;
4) meet interests of manufacturers and customers;
5) meet market interests as much as possible.
Is the variant economically expedient?
… 10
Yes No
11
? Working out of measures
on prevention, ... risk … ?
Determining expediency of expenses on green goods advancement to the market
and their optimum size No 8
7
9
Ye s
?
…
Is conformity to the interests sufficient?
No 5
6
Ye s
?
Determining ecological compatibility degree of
the product Making corrections in
the development variant
… 1
3 No 2 … ?
Yes
?
26
Fig. 19. Green products of various degree of conformity to interests of market subjects
31. Fill in blank squares of the decision-making table on selection of acceptable variants of the enterprise development based on evaluation of conformity of a green product with interests of market subjects (table 12).
32. On the cyclogram of comparison of conformity degree of products with interests of market subject (fig. 20) to mark eco-friendly goods with a larger degree of conformity with interests of market subject.
Fig. 20. The cyclogram of comparison of conformity degree of products with interests of market subject
Totality of eco-friendly products meeting interests
of a society Totality of eco-friendly
products meeting interests of producers
Totality of eco-friendly products meeting interests
of consumers
27
Table 12 The decision-making table on selection of acceptable variants of the enterprise development
Estimate Conformity with interests of market
subjects
Probability of product perception by the
market
Probability of product nonperception by
the market
Level of expected aggregate expenditures
Level of expected total achievements
Risk level Decision
E = 4
… = 1
… …
…
To accept the variant 3.8 ≤ E <4 Almost full … 0 ≤ < 0.25
Minimal
… … 0.5 ≤ < 0.75 … Moderate Moderate
… …
…
Rather sufficient
… 0.5 ≤ < 0.75
… …
Critical
…
2 ≤ E < 2.6 … 0.15 ≤ < 0.25 … …
…
Unsatisfactory
… 0.85 ≤ < 1
Unacceptable variant
28
33. Fill in blank squares of table 13 by using the following symbols:
"+" - the method is quite applicable to estimate the risk caused by market subject actions;
"±" - applicable in part;
"-" - useless to estimate the risk caused by this market subject.
Table 13 Recommendations about application of methods of the quantitative analysis of those risks of green products manufacturer that may be caused by actions of other market subjects
Method of risk analysis
Subject of the process of green goods market formation Consu-
mer
Inves- tor
Intermi- diary
Supplier Developer Public and state institutes Mathematical-
statistical Analytical Financial stability
evaluation Decision tree use
Scenario method Expert Normative Sensitivity analysis
Analogy Simulation
modeling
34. Correct the errors on the identification scheme of risk area of producer interaction with green goods market subjects (fig. 21) based on calculation of reliability index of one’s interaction with subjects of eco-friendly products market.
Risk area No risk area
0.00 ≤ Н < 0.25 Inadmissible risk
0.25 ≤ Н < 0.50 Critical risk
0.50 ≤ Н < 0.75 Increased risk
0.75 ≤ Н < 1.00 Minimal risk
Н = 1.00 No risk
Fig. 21. The identification scheme of risk area of producer interaction with green goods market subjects
35. Mark on fig. 22 where the 3rd and 4th groups of consumers are situated, singled out by their attitude towards green products.
29
Fig. 22. The dependence of costs, directed on attraction of as many customers as possible on state of their purchasing readiness Сi:
i - reduction in expenses for attraction of consumers at which carrying out a maximal quantity of consumers will buy a green product, depending on state of their purchasing readiness
36. Fill in the matrix of economy development possibilities shown in fig. 23.
The level of motivated state of enterprise innovation development
Low High
The motivated state level of production greening HighLow
Fig. 23. The matrix of economy development possibilities
37. Fill in the blanks in the diagram of redistribution of means for benefit of manufacturers of eco-friendly products, presented in fig. 24.
Fig. 24. The diagram of redistribution of means for benefit of manufacturers of eco- friendly products:
Н - receipt of funds owing to the application of compulsory motivation tools; B - costs on application of incentive motivation tools
Producers ... products
Manufacturers ... products
Producers ... products
Manufacturers ... products
The fund of preservation of nature environment
of various levels Н
ВII Expenses, $
The 3rd group
The 4th group
30
38. Fill in the blanks in the diagram of redistribution of the fees and payments collected from nature environment polluters and users of resources shown in fig. 25.
Fig. 25. The diagram of redistribution of the fees and payments collected from nature environment polluters and users of resources
39. On the graph of change of revenues from environmental fees and payments at increase in environmentally focused tax pressure (fig. 26) to mark by point K the point of the optimum size of environmentally focused pressure from the point of view of increase in revenues from its application to state budget.
Fig. 26. The graph of change of revenues from environmental fees and payments at increase in environmentally focused tax pressure
40. To show in fig. 27, illustrating supply and demand in green products market, the change of equilibrium volume of the market when this product is VAT exempted.
To set off the volume of non-received VAT in a shaded square.
41. To show in fig. 27, illustrating supply and demand in green products market, the change of equilibrium volume of the market when their prices are subsidized. To set off the volume of granted subventions in a shaded square.
… Funds of preservation of nature …
environment of various levels
Environmentally focused tax pressure
Receipts from environmental payments and fees
31
Fig. 27. The equilibrium volume of green goods market:
Р - product price; Q - volumes of product sales
32
Tests
1. Green marketing concept is developing in direction of such concepts of conducting business as:
a) commercial efforts intensification;
b) socially-ethical marketing;
c) marketing of relations;
d) improvement of production.
2. A consumer protection movement is called:
a) consumerism;
b) environmentalism;
c) green consumerism;
d) consumer environmentalism.
3. The purpose of environmental marketing is:
a) to reveal and satisfy environmental needs;
b) to reveal and satisfy needs as well as greening of them;
c) to receive profit without causing harm to the environment.
4. What of the product kinds listed below are included in the second type of environmental needs:
a) means to increase human immunity or to enhance stability of ecosystem against negative influence of eco-destructive factors;
b) environmentally perfect elements of techological systems;
c) means favoring waste recycling;
d) means to support biodiversity and stability of ecosystems.
5. What are the reasons that traditional methods of market researches are not applied to reveal demand for essentially new eco-friendly products:
a) consumer requirements and needs for which satisfaction they are intended, were met in a different way;
b) existing methods of research do not allow revealing consumers’ attitude towards product environmental properties;
c) requirements, for which satisfaction they are intended, did not exist earlier.
6. Environmentally neutral products are those that:
a) do not cause harm to the environment.
b) do not have purely environmental properties;
c) consumed by those who do not pay attention to their environmental properties.
7. Certain products are called environmentally neutral because of the absence of:
a) environmental features;
