Organic food sales and consumption

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Traditional Marketing Vs. Green Marketing

The traditional marketing process involves a broad set of activities in a firm. Kotler et al. (2001) define the marketing process as the process of analysing marketing opportunities; selecting target markets; expand the marketing mix and managing all the marketing process. Therefore, the marketing processes covers issues ranging from strategic (what to do?) to tactical (how to do it?). However, the American Marketing Association (AMA) define marketing as the process of planning and executing the conception of the 4Ps, i.e., product, pricing, promotion, and place of goods and services to create exchanges that meet individual and organisational objectives (Zineldin and Philipson, 2007). The definition of “exchange” is the act of obtaining the desired product from someone by offering something in return. The exchange meets consumers’ needs and expectations. In turn, firms can make profits (Kotler, 1994). The 4 Ps should work together in a single marketing plan to meet the customer’s needs and enable the firm to make a reasonable profit.
Peattie (1995) defined green marketing, based on the definition given by the Chartered Institute of Marketing, as the holistic management process accountable for identifying, anticipating and meeting the customer requirements. Marketing should provide profits to businesses but in a sustainable way, harmless to society. Green marketing, as well as, environmentally friendly habits, e.g., recycling, are essential to save the world from pollution. Consumers, industrial buyers and suppliers have to make efforts to minimise the downside effects on the environment (Mishra and Sharma, 2010). Later, Peattie (2001) defined green marketing as marketing activities which attempt to reduce the negative social and environmental impact of existing products and production systems, and which promote products and services that are harmless for the environment. Moreover, green marketing needs to assist consumers in improving their decision making, which could include reductions in demand and limiting and reducing the waste and adverse environmental effects they cause. Indeed, lifestyle changes would result in great societal benefits that would occur if consumers only would switch from conventional to green brands (Wymer and Polonsky, 2015). Consumers, governments and competitive pressure can force companies to apply a green marketing approach (Abzari et al., 2013). As above, there are different ways how the stakeholders, both consumers and firms, may contribute to taking care of the environment. However, this study only focuses on how retailers apply green marketing mix in support of green food consumption. Since traditional marketing emphasises customers’ needs and does not consider social welfare and environmental issues, this issue has been addressed by the corporations, which has led to the appearance of the concept of green marketing (Abzari et al., 2003). In this context, green marketing is a part of the new marketing approaches which not only adjust or enhance traditional marketing thinking and practices but attempt to defy those practices and provide a considerably different perspective. Green marketing belongs to the group of approaches that seek to address the lack of fit between traditional marketing and the ecological and social realities (Tandon and Sethi, 2017). Green marketing shows an evolution of the concept over time, moving away from being a tool of traditional marketing to becoming a strategy affecting the whole company, from focusing on specific environmental problems to taking into account global sustainability issues (Dangelico and Vocalelli, 2017).

Green Marketing Strategy

Green marketing strategy takes the outline of the traditional marketing strategy. Following Slater and Olson (2001), marketing strategy face with decisions related to market segmentation and targeting, and the designing of a positioning strategy based on the marketing mix. The marketing strategy consists of a continuous diagram encompassing the sequence of segmentation, targeting, positioning and differentiation (Kotler and Armstrong, 2014). However, differentiation does not conform part of this study (see Fig. 1).
This schema takes the same structure of the original scheme of the green marketing strategy by Kotler and Armstrong (2014) and Kotler et al. (2001). Except that does not contain ‘differentiation’ after positioning. Rex and Baumann (2017) presented a similar scheme.

Segmentation and targeting

Market research and segmentation underlie the market targeting decision (Kotler, 1994). Segmentation and targeting are closely related concepts. Market segmentation is the process of arranging a market into groups of consumers with different needs, characteristics or behaviors. In the targeting process, the companies evaluate the segments and decide which segment or segments to address (Kotler et al., 2001). Market targeting implies a commitment to fulfil the customer groups different needs through the development of specific capabilities and resources investments (Kotler, 1994). The capabilities enable the firms to create a value proposition for the targeted segment utilising the elements of the marketing mix (Slater and Olson, 2001).
Understanding customers and fulfilling their needs is the basis of traditional marketing theory because customers have different needs, and by treating them all alike, it is seldom possible to satisfy all customers. Davari and Strutton (2014) concluded that green product marketers should segment their target audience as follows: consumers environmentally concerned and environmentally non-concerned. To position organic products in the market is essential to segment consumers, e.g., consumers environmentally aware (Tandon and Sethi, 2007).
Many studies have highlighted that traditional market segmentation, such as demographic segmentation based on age and socio-economic groups, is not appropriate for green marketing. This demographic segmentation approach has led to the reporting of many conflicting outcomes and to the conclusion that it is simplistic and not the most suitable (Dangelico and Vocalelli, 2017). Instead, there are other types of segmentation, e.g., by using attitudes, values, knowledge, levels of environmental purchase behaviour (Tandon and Sethi, 2017). Bernyte (2018) concludes that traditional marketers are trying to promote sustainable consumption. They are concentrating too much on rational and functional benefits, neglecting how purchases contribute to the identity of the customer. The sociological and psychological aspects of consumption such as attitudes and beliefs, values and principles, embrace concerns about the way on how people perceive their behaviour as consumers are willing to buy more from companies that share their values and beliefs (Bernyte, 2018).
Similarly, the findings of Shamdasani et al. (1993) seem to suggest that the adoption of environmentally-friendly consumption decisions largely drive-by personal factors (e.g., personality and attitudes). Green consumers, when compared to the non-green consumer, have more favourable attitudes toward the environment and socially integrated. Additionally, there are no demographic differences between ecologically-concerned consumers and non-ecologically-concerned consumers (Shamdasani et al., 1993).
Chitra (2007) proposed a segmentation model based on the level of consumption of organic products. This scholar identified four types of consumers: ‘aspirants’, are the consumers who are aware of environmental problems and their effects. The “aspirants” wish to consume organic products and feel that they have a higher price due to their superior value; ‘addicts’ are those who are loyal to green (organics) products. This type of consumers recommends eco-friendly products and wait for the availability of the same instead of buying the alternatives. In contrast, ‘adjusters’ do not feel much difference between green and non-organic products and are happy with any product that fulfils their needs. They only care about product availability, low price and quality. The ‘avoiders’ feel that they cannot contribute to avoiding damage to the environment. They believe that organic products do not deliver what they promise, i.e., quality and that they have a high price. The study of Chitra (2007) have found that few respondents are ‘avoiders’ and ‘adjusters’ of eco-friendly products, but the majority are ‘aspirants’. It conveys a positive signal to the marketers to further activate the attempts towards applying an eco-friendly marketing mix. Additionally, customer segment-specific strategic seek to explore the conversion of eco-friendly products ‘avoiders’ into ‘aspirants’ and ‘aspirants’ into ‘addicts’. There is a likelihood of more and more eco-friendly food products to pour into the market as the concern for eco-friendly food products is increasing (Chitra, 2007).
Besides that, Essoussi and Zahaf (2008) also classified green consumers based on purchase behaviour. They found only two main categories of green consumers: regular consumers and non- regular consumers. This latter category of consumers is composed of occasional and irregular consumers. Regular green consumers are more knowledgeable about organic products, and some are reluctant to buy organic food from grocery stores because they trust local markets most. Health and environment care motivate regular green consumers, opposite to non-regular green consumers.
Despite a large number of studies on segmenting the market based on the level of the greenness of consumers, only a few studies are dealing with targeting. However, it would be very relevant for companies aiming to integrate environmental sustainability into their marketing strategy, to define the market targeting. For example, they can decide whether to address a market niche of “deep” green consumers, to differentiate their product offering so to address consumers characterised by different levels of greenness (Dangelico and Vocalelli, 2017). Furthermore, environmentally and non-environmentally concerned consumers need to be target differently (Davari and Stutton, 2014). Moreover, Tandon and Sethi (2017) stated that once the segmentation ends, then target the ‘greener’ consumer with the appropriate advertising and communication medium. The same marketing strategies that would work well for the first group may prove of little value to the second (Davari and Strutton, 2014).
However, another approach to targeting is to try to penetrate the whole market, through the mass marketing of organic products (Dangelico and Vocalelli, 2017). In the same line, is suggested an overall repositioning of products through redirecting consumers towards environment-friendly products (Tandon and Sethi, 2017).

Positioning

Once a firm ends with the segmentation of the green consumer, the product needs to be targeted and positioned on the market to appeal to this group. The positioning is through careful design of the marketing mix: product, place, price and promotion (Rex and Baumann, 2007).
In addition to the product offered, conventional marketing literature emphasises the whole range of the marketing mix, for example, pricing decisions (price), distribution channels and assortments (place) and advertisement, publicity and sales promotion (promotion) (Kotler et al., 2001). Chapter 2.3 presents in detail these 4 Ps of the marketing mix, which is the core of this study.

Green Marketing Mix

On the one hand, the traditional marketing mix elements are the four key decision areas that marketers must manage to facilitate the exchange or transfer of goods, services, or ideas so that they may meet customer needs better than the competition. The marketing mix elements are often viewed as controllable variables because the firms can change them. According to American Marketing Association and Zineldin and Philipson (2007), the strength of the 4 Ps approach is that it represents a noteworthy and practical framework for marketing decision-making and has proved to be useful for case study analysis in business schools for many years. The traditional marketing “Kotlerism” with its 4 Ps (product, price, promotion, place) called the marketing mix is still dominating Scandinavia (Zineldin and Philipson, 2007). On the other hand, Chitra (2007) summarised and explained the 4Ps of the green marketing mix: the product to create and make should provide healthy consumption, support the establishing price as the value of this product, as well as, the promotion of eco-friendly approach in the utilization of resources and awareness of pollution, place as the availability of the products.
One key difference discriminates green and traditional marketing mixes, i.e., the development of values aimed at satisfying pro-environmental and societal needs is weighted more heavily in green marketing mixes (Chan et al., 2012).

Green Product

Green or organic products are produced using environmentally friendly methods that do not involve modern synthetic inputs such as pesticides and chemical fertilisers (Alsmadi, 2007; Tandon and Sethi, 2017; Rex and Baumann, 2007; Squires et al., 2001). Organic products do not contain genetically modified (GMO) organisms or chemical food additives such as hormones and antibiotics (Essoussi and Zafah, 2008).
On the one hand, Squires et al. (2013) study found that conventional food concerns and distrust engage more green consumers in purchasing and consuming organic foods. On the other hand, environmental concerns were the main reason for consumers to choose organic food, depending on the type of market. The latter one occurs in green developed markets, i.e., Denmark; the former one in green emergent markets with the deficient health system, i.e., New Zealand. Additionally, Essoussi and Zafah (2008) found that, compared to regular food, green or organic food are tastier, more nutritious, colourful, look fresh and not uniform, and lastly; it is not only produced locally but also not mass-produced. They are marketed using the shortest channel hence favouring local products over national/ international products, which helps to sustain local communities and local farmers.
The green product, as contended by some scholars (e.g., Davari and Strutton, 2014; Kordoshouli et al., 2015), plays the most important role among the four traditional green marketing mix elements. The other factors (i.e., price, promotion, and place) cannot overcome poor product design or product development. Furthermore, consumers traditionally pay more for products when they perceive that the offering delivers more value than conventional alternatives. The key, of course, is differentiation. Differentiating green values might emerge from performance improvements, superior designs, aesthetic appeals, new green features, functions, or environmental affinity (Mishra and Sharma, 2010).
Indeed, Swedish consumers evaluate the quality of the food before making buying decisions. They consider that organic products have higher quality in comparison with non-ecological food (Bosona and Gebresenbet, 2018). The first rule of green marketing is to aim attention on customers benefits because it is the primary reason why consumers purchase specific products in the first place. Do this right and encourage consumers to switch brands or even pay a premium price for the greenest alternative. Although if a product is not developed green in various aspects, it does not help because not pass the customer satisfaction criteria (Davari and Strutton, 2014).

Table of contents :

Abstract
Acknowledgements
1. Introduction
2. Theoretical Framework
2.1 Traditional Marketing Vs. Green Marketing
2.2 Green Marketing Strategy
2.2.1 Segmentation and targeting
2.2.2 Positioning
2.3 Green Marketing Mix
2.3.1 Green Product
2.3.2 Green Price
2.3.3 Green Promotion
2.3.4 Green Place
3. Research Methodology
3.1 Sampling Strategy
3.2 Data Collection Techniques
3.3 Qualitative Analytic Methods
4. Findings and Analysis
4.1 Segmentation and Targeting
4.2 Green Product
4.3 Green Price
4.4 Green Promotion
4.5 Green Place
4.6 Organic food sales and consumption
5. Conclusions
5.1 Answering the Research Questions
5.2 Theoretical Implications
5.3 Managerial Implications
5.4 Limitations
6. Future Research
Appendix No 1: Interview Guide
References

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