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D.Grundey 152 ISSN 1648-4460.<br />
Researching Customer Loyalty in Lithuania<br />
-TRANSFORMATIONS IN -<br />
BUSINESS & <strong>ECO</strong>NOMICS<br />
O Vilnius University, 2002-2009<br />
© Bmo University of Technology, 2002-2009<br />
O University of Latvia, 2002-2009<br />
<strong>ECO</strong>-<strong>MARKETING</strong> <strong>AND</strong> <strong>ECO</strong>-<strong>LABELLING</strong>: <strong>DOES</strong> <strong>IT</strong><br />
<strong>ENSURE</strong> CUSTOMER LOYALTY FOR <strong>ECO</strong>-PRODUCTS IN<br />
L<strong>IT</strong>HUANIA?<br />
Dainora Grundey<br />
Department of Business Economics and Management<br />
Kaunas Faculty of Humanities<br />
Vilnius University<br />
Muitinės g. 8, LT-44280 Kaimas<br />
Lithuania<br />
E-mail: dainora.Qrundev(d),vukhf.lt<br />
Dainora Grundey, PiiD, Full Professor at the Department of<br />
Business Economics and Management at Kaunas Faculty of<br />
Humanities, Vilnius University (VU KHF), Lithuania. She is the<br />
curator of MBA study programme in Marketing and Trade<br />
Management at VU KHF, Lithuania. Since 2002, she is the founder,<br />
curator and trustee for IGYS (http://igys.vukhf.lt) and, since 2005, she<br />
is the founder and chief co-ordinator of the INYRSS network<br />
(http://inyrss.vukhf.lt). Prof Grundey was Vice-Dean for Scientific<br />
Research & International Relations at VU KHF in the period of 2001-<br />
2008. She received her MA from Vilnius University in 1991, MBA<br />
from the Robert Gordon University, Scotland, in 1994; and her PhD<br />
degree from Vilnius University in Social Sciences (Management and<br />
Administration, 03 S) in 2001; she successfully passed Doctor<br />
Habilitation Procedure in 2007 to become a full professor since 2008.<br />
Prof Grundey is Founding Editor and currently Deputy Editor-in-<br />
Chief at the International Journal of Scholariy Papers<br />
"Transformations in Business & Economics"<br />
(www.transformations.khfvu.lt); she is also Founding Editor and<br />
cun-enfly Editor-in-Chief of/70;?7755 (http.V/ijortiss.vukhf It), Since<br />
2006, she serves on the Editorial Board of the International Journal<br />
on International Trade and Markets (www.inderscicncccom) and in<br />
at least other 8 journals in Poland, Romania, Ukraine and United<br />
Kingdom, She had research fellowships in Norway, Italy, the USA,<br />
France, Germany, Hungary, the Czech Republic, Scotland, Denmark<br />
and Poland, She is the author of over 230 scientific publications,<br />
including monographs, university books, articles and conference<br />
proceedings on marketing, sustainable consumption and sustainable<br />
development of institutions (namely universities), emotional and<br />
green marketing, marketing and consumption ethics, brand<br />
management issues, cross-cultural management and marketing,<br />
customer service and customer behaviour, logistics and supply chain<br />
management.
D.Grundey 153 ISSN 1648-4460<br />
Researching Customer Loyalty in Lithuania<br />
Received: April, 2007 ABSTRACT. The article deals with the issues of environmental (eco-)<br />
'L^'^^'^"'"' ^''^^ marketing and ecological labelling to ensure that consumers have access to<br />
2" Revision: July, 2008 ecological products and services and they might adjust their preferences<br />
Accepted: February, 2009 towards environmentally friendly business practices. For business worldwide,<br />
ecological marketing and Its applications in practice have become a<br />
competitive prerogative for modern business performance. A survey in<br />
Lithuania aimed at establishing, whether customers are loyal to ecological<br />
products and whether marketing campaigns and ecological labelling practices<br />
did affect their choice of eco-products.<br />
Introduction<br />
KEYWOHDS. eco-marketing, eco-labelling, eeo-products, government<br />
policy and regulation, customer loyalty, Lithuania.<br />
JEL cLissiTicatiowqU, Q56, M31, M37, M38, P2.<br />
Unfortunately, a majority of people believe that ecological (green) marketing refers<br />
solely to the promotion or advertising of products with environmental characteristics. Terms<br />
like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environntentally Friendly<br />
are some of the things .consumers most often associate with green marketing. While these<br />
terms are green marketing claims, in general green marketing is a much broader concept, one<br />
that can be applied to consumer goods, industrial goods and even services. For example,<br />
around the world there are resorts that are beginning to promote themselves as "ecotourist"<br />
facilities, i.e., facilities that "specialize" in experiencing nature or operating in a fashion that<br />
minimizes their environmental impact.<br />
Thus, green marketing incorporates a broad range of activities, including product<br />
modification, changes to the production process, packaging changes, as well as modifying<br />
advertising. Yet defining green marketing is not a simple task. Indeed the terminology used in<br />
this area has varied, it includes: Green Marketing, Environmental Marketing and<br />
Ecological Marketing. While green marketing came into prominence in the late 1980s and<br />
early 1990s, it was first discussed much eadicr. The American Marketing Association (AMA)<br />
held the first workshop on "Ecological Marketing" in 1975. The proceedings of this<br />
workshop resulted in one of the first books on green marketing entitled "Ecological<br />
Marketing". Since that time a number of other books on the topic have been published.<br />
The AMA workshop attempted to bring together academics, practitioners, and public<br />
policy makers to examine marketing's impact on the natural environment. At this workshop<br />
ecological marketing was defined as: the study of the positive and negative aspects of<br />
marketing activities on pollution, energy depletion and non-energy resource depletion.<br />
This early definition has three key components:<br />
1) it is a subset of the overall marketing activity;<br />
2) it examines both the positive and negative activities; and<br />
3) a narrow range of environmental issues arc examined.<br />
While this definition is a useful starting point, to be comprehensive green marketing<br />
needs lo be more broadly defined. Before providing an alternative definition it should be<br />
noted that no one definition or Icrtuinology has been universally accepted. This lack of<br />
consistency is a large part of the problem, for how can an issue be evaluated if all researchers<br />
have a diffcienl perception of what they arc researching. The following definition is much<br />
broader than those of other researchers and it encompasses all major components of other<br />
definitions, My definition is as follows: Green or Environmental Marketing consists of all<br />
activities designed to generate and facililale any exchanges intended to sali^fv human needs<br />
7((.-ij\'v;()(UM7Vo.v.v/,v;i('v;,v;-:sti-';-rnvn\f/rt \'„i « v„ i i\t.\ ->iiiio
D.Grundey 154 ISSN 1648 - 4460<br />
Researching Customer Loyalty In Lithuania<br />
or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental<br />
impact on the natural environment.<br />
This definition incorporates much of the traditional components of the marketing<br />
definition that is "All activities designed to generate and facilitate any exchanges intended to<br />
satisfy human needs or wants" (Stanton and Futrell, 1987). Therefore, it ensures that the<br />
interests of the organization and all its consumers are protected, as voluntary exchange will<br />
not take place unless both the buyer and seller mutually benefit (Brauers et al, 2007). The<br />
above definition also includes the protection of the natural environment, by attempting to<br />
minimize the detrimental impact this exchange has on the environment. This second point is<br />
important, for human consumption by its very nature is destructive to the natural environment<br />
in a certain territory (Burinskienė and Rudzkienė, 2009) with incurring costs of production<br />
and consumption of ecological products (Toming, 2007; Jucevičienė et al, 2007). (To be<br />
accurate products making green claims should state they are "less environmentally harmful'<br />
rather than "Environmentally Friendly"). Thus green marketing should look at minimizing<br />
environmental harm, not necessarily eliminating it.<br />
The article deals with the issues of environmental (eco-) marketing and ecological<br />
labelling to ensure that consumers have access to ecological products and services and they<br />
might adjust their preferences towards environmentally friendly business practices. The major<br />
issue is whether customer loyalty could be improved towards ecological products through<br />
adequate marketing actions and ecological labelling. For business worldwide, ecological<br />
marketing and its applications in practice have become a competitive prerogative for modem<br />
business performance.<br />
1. Antecedents of Eco-Theory for IVlarketing<br />
/./ Product as a Key Component of the Marketing-Mix<br />
As known, product policy is one of elements of marketing policy. Product decisions<br />
usually initiate the whole sequence of firm's decisions concerning also other components of<br />
marketing-mix, i.e. promotion (communication), price, and place (distribution). These are socalled<br />
4Ps. According to a basic marketing principle, a (new) product must respond to market<br />
needs. So, a buyer is most important. But in modem marketing, product is treated mainly<br />
as an instmment, one of the four, in a company's influence on a buyer in the market. Strictly<br />
speaking, markeUng considers a product very broadly - as a set of such tools as:<br />
(1) product per se containing both a physical good and/or a service,<br />
(2) packaging (if needed), and<br />
(3) labelling, i.e. mainly a trade mark and a brand, where (2) and (3) arc named a<br />
product's equipment.<br />
A marketing manager in a manufacturing firm has a selection of the following potential<br />
directions of product decisions:<br />
• to maintain an existing product in an unchanged form,<br />
. to modernize a product and its equipment,<br />
to launch a new product into the market, and<br />
to withdraw an existing product from the market.<br />
It happens rather seldom and mainly in small firms that a company produces and sells<br />
only one type (line) of a product. Usually there exists a certain production assortment in the<br />
enterprise, called a product-mix. In such a situation, decisions concerning the assortment<br />
structure belong to product decisions, too.<br />
TiL'XNSl-omATlON.'i IN mUNt-XS č'nCONOMia, Vol. 8, No 1 (16), 2009
D.Grundey 155 ISSN 1648-4460<br />
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Besearchmg Customer Loyalty ¡n Lithuania<br />
• ecodesign<br />
• ecolabel<br />
• consumer information<br />
green mariiet research<br />
Germany Switzerland UK Hungary countries<br />
Figure 1. Product-related activities and innovations in business economics<br />
Therefore, environment-friendly products/processes should be offered in the market.<br />
Technology, being a market product, is also responsible for the present condition of<br />
the natural environment. One can find numerous examples showing both negative and<br />
positive influence of (new) technology on the environment. On the one hand, the present<br />
state of pollution is partly a result of technological innovations introduced in the past<br />
decades. On the other hand, new technology is a tool for the environment protection and<br />
rescue, i.e., a liquidation of damages caused by the past technologies. Therefore,<br />
environment-friendly products/processes should be offered in the market {Figure 1). These<br />
two kinds of the impact will be developed below.<br />
1.2. Ecological Marketing<br />
A classical marketing, being an integrated set of four instruments (4Ps), is a<br />
managerial process in which a firm is an object influencing the market (Kotler, 2001). In<br />
other words, wc may treat marketing as a system of management of the market. An<br />
enterprise is, at the same time, the market participant. Now we should consider the firm as an<br />
element of the environment. This time, the natural enviroimient becomes a cmcial<br />
component of the firm's marketing surroundings.<br />
So, modem marketing must be environment-oriented. It should be understood as an<br />
clement of a system of the environment management.<br />
Such a marketing has received various names: new marketing, ecological marketing,<br />
eco-marketing and even green marketing (McDanicl & Rylandcr, 1993). However, a name is<br />
here minor; the essence is important. A concept of environment-friendly marketing fulfils the<br />
criteria of a Kotlcr's model of societal marketing.<br />
The societal marketing concept holds that the organization's task is to determine the<br />
needs, wants, and interests of target markets and to deliver the desired satisfactions more<br />
effectively and efficiently than competitors in a way that preserves or enhances the<br />
consumer's and the society's well-being. The concept calls upon marketers to balance three<br />
considerations in setting their marketing policies, namely, company profits, consumers want<br />
satisfaction, and public inlcrcst (Kotler, 2001, p.26). Nowadays, a state of the environment is<br />
obviously of public inlcrcst and has a big influence on the society's well-being.<br />
Caslcnow in his "New Marketing" describes a global Ircnd named: the natural<br />
environment, and its consequences for a future marketing (Caslcnow, 1993).<br />
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Researcliing Customer Loyalty In Lithuania<br />
Symptoms of this trend are as follows:<br />
a care of a clean air, soil and water tanks,<br />
a protection of the nature against the devastation,<br />
a rational turnover and use of natural resources; a stress on the significance of<br />
recycling,<br />
an aspiration for minimization of the use of natural raw materials; a growing interest<br />
in the use of production wastes in producing new products,<br />
a popularization of ecological orientation and of healthy style of life,<br />
an awareness of interdependencies within a chain: environment - hunger -<br />
overpopulation.<br />
The following consequences of this trend can appear for marketing:<br />
• a better knowledge on consumer priorities,<br />
. the natural environment as a criterion in processes of product decisions,<br />
• a firm's orientation towards the environment,<br />
a domination of ecological and energy-saving products,<br />
the natural environment as an integral part of all fields of the firm's activity,<br />
• an impact on assessment criteria of brand-name products.<br />
On the basis of this, an idea of a new (ecological) marketing is being developed (e.g.<br />
Bergen, 1990; Castenow, 1993; Graczyk, 1999). Shortly speaking, modem marketing is such<br />
a way of thinking which should take into consideration, among other things, that:<br />
• firstly, a post-consumption phase is equally important for a product user like a<br />
purchase phase,<br />
• secondly, the natural environment is a kind of public good,<br />
• thirdly, there exist close inter-relations between a marketing orientation and<br />
an environmental orientation.<br />
A model of an 'ecological' marketing-mix should, of course, contain all 4P's:<br />
1. A producer should offer ecological products which not only must not contaminate the<br />
environment but should protect it and even liquidate existing environmental damages,<br />
2. Prices for such products may be a httle higher,<br />
3. A distribution logistics is of crucial importance; here I mean mainly ecological<br />
packaging.<br />
4. A communication with the market should put stress on environmental aspects,<br />
for instance:<br />
• a possessed CP certificate or ISO 14000 may be publicized to improve a firm's<br />
image,<br />
• the fact that a company spends expenditures on the environment protection<br />
should be advertised,<br />
• sponsoring of the natural environment is also very important,<br />
• ecological products will probably require special sales promotions.<br />
The level of greening-strategic, quasi-strategic, or tactical- dictates exactly what<br />
activities should be under-taken {Table I). Strategic greening in one area may or may not be<br />
leveraged effectively in others. A firm could make substantial changes in production<br />
processes but opt not to leverage them by positioning itself as an environmental leader. So<br />
although strategic greening is not necessarily strategically integrated into all marketing<br />
activities, it is nevertheless strategic in the product area.<br />
Alternatively, tactical greening in promotions might involve minimal, if any, greening<br />
of other areas; rather, it might be used simply to exploit a short-term opportunity. A company<br />
might simply choose to sponsor a local environmental program without modifying its other<br />
activities. This may seem to be an "effective" strategy from a broader business perspective,<br />
but not necessarily from a green marketing perspective, especially if the firm is seeking to<br />
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Besearching Customer Loyalty in Lithuania<br />
achieve sustainable broader objectives. If consumers are skeptical of its motives, this<br />
opportunistic sponsorship could actually backfire. The publicity generated could even make<br />
consumers more critical of the firm's other, less eco-friendly activities.<br />
Table 1. Ecological/green marketing activities at the three levels (with some business<br />
Targeting Ads mentioning green<br />
features are run in greenfocused<br />
media.<br />
Green<br />
design<br />
Green<br />
positioning<br />
Green<br />
pricing<br />
Green<br />
logistics<br />
Marketing<br />
waste<br />
Green<br />
promotion<br />
Green<br />
alliance<br />
examples)<br />
Tactical greening Quasi-strategic greening Strategic greening<br />
A firm switches from one<br />
raw material supplier to<br />
another with more ecofriendly<br />
processes.<br />
e.g. a mining company runs a<br />
Public Relations (PR)<br />
campaign to highlight its<br />
green aspects and practices.<br />
Cost savingsdue to existing<br />
energy-efficiency features<br />
are highlighted for a product.<br />
A firm changes to a more<br />
concentrated detergent,<br />
which<br />
A firm improves the<br />
efficiency of its<br />
manufacturing process,<br />
which lowers its waste<br />
output.<br />
An oil company runs a PR<br />
campaign to highlight its<br />
green practices in order to<br />
counter an oil spill getting<br />
bad press coverage.<br />
A company funds a<br />
competition (one-off basis)<br />
run by an environmental<br />
group to heighten community<br />
awareness on storm water<br />
quality issues.<br />
A firm develops a green<br />
brand in addition to its other<br />
brands.<br />
Life-cycle analysis is<br />
incorporated into the ecodesign<br />
process to minimize<br />
eco-harm.<br />
e.g. BP (British Petroleum)<br />
AMOCO redesigns its logo<br />
to a sun-based emblem to<br />
reflect its view to a<br />
hydrogen/solar-based future<br />
for the energy industry.<br />
e.g. a water company shifts<br />
its pricing policy from a flat<br />
monthly rate to a per-unitof-water-used<br />
basis.<br />
Packaging minimization is<br />
incorporated as part of a<br />
firm's manufacturing review<br />
process.<br />
e.g. TELSTRA (a phone<br />
company) has internal<br />
processes so that old<br />
telephone directories (waste)<br />
are collected and turned into<br />
cat litter products by other<br />
companies.<br />
A company sets a policy that<br />
realistic product cco-benefits<br />
should always be mentioned<br />
in promotional materials.<br />
A firm launches a new<br />
Strategic Business Unit<br />
(SBU) aimed at the green<br />
market.<br />
e.g FUJI XEROX develops<br />
its Green Wrap paper to be<br />
more eco-friendly from the<br />
ground up.<br />
e.g. the BODY SHOP<br />
pursues environmental and<br />
social change improvements<br />
and encourages its<br />
consumers to do so as well.<br />
A company rents its<br />
products rather than selling;<br />
consumers now pay only for<br />
use of the products.<br />
A reverse logistics system is<br />
put into place by FUJI<br />
XEROX to reprocess and<br />
remanufacture photocopiers.<br />
e.g. A Queensland sugarcane<br />
facility is rebuilt to be<br />
cogeneration-based, using<br />
sugar-cane waste to power<br />
the operation.<br />
As part of its philosophy, the<br />
BODY SHOP co-promotes<br />
one or more social/eco<br />
campaigns each year with<br />
in-shop and promotional<br />
materials.<br />
e.g. SOUTHCORP ( a wine A company invites a<br />
producer) forms a iong-tenii representative of an<br />
alliance with the Australian environmental group to join<br />
Conservation Foundation to<br />
help combat land-salinity<br />
its board of directors.<br />
issues. 1<br />
The overriding implication is tliat the firm needs to ensure that green marketing<br />
activities arc integrated holistically, especially if ihcy are used in positioning or protnotional<br />
activities. That way it docs not overemphasize corporate actions, with unanticipated negative<br />
consequences. However, il is not necessary for the firm lo actively promote all green<br />
marketing activities. This may sccin to be ignoring opporlunilies from a strategic perspective,<br />
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D.Grundey 158 ISSN 1648-4460.<br />
Researching Customer Loyalty in Lithuania<br />
but careful evaluation of overall corporate activities might identify that such opportunities are<br />
illusory-not all of them support the same environmental focus-and may help avoid potential<br />
problems.<br />
Table 1 presents a number of examples to illustrate how tactical, quasi-strategic, and<br />
strategic green marketing activities might be under-taken in each of the functional marketing<br />
areas.<br />
Tactical actions typically involve limited change and limited coordinaUon across<br />
multiple functions. Quasi-strategic actions normally require more substantive changes in<br />
marketing activities, as well as broad-based coordination among several non-marketing<br />
activities.<br />
Strategic greening requires a holistic approach, with all actions of the firm<br />
coordinated to integrate environmental issues across all functional areas (Gmndey, 2008b).<br />
The need for a holistic approach cannot be overemphasized, considering the frequent<br />
problems associated with nonintegrated green marketing. Hefty spent vast sums developing<br />
and marketing "biodegradable" garbage bags (a quasi-strategic action), but although the<br />
claims were technically tme, on closer inspection it was soon discovered that landfdl<br />
conditions would not allow decomposition to occur. The result was an extensive public<br />
backlash against this product and other Hefty products. Several states actually sued Hefty for<br />
misleading advertising. The problem was not that Hefty had "lied," but that it had exaggerated<br />
its claims. It had not considered the ftill impact of engaging in a quasi-strategic activity.<br />
Environmental changes alone, it seems, are not sufficient without effective implementation.<br />
1.3. New 'Ecological' Consumer<br />
D. Castenow has observed the following evolution in a German consumers' approach<br />
to the natural environment in recent years (Castenow, 1993):<br />
• in the 1980s, a consumers' interest in ecological products, being launched into<br />
the German market, was rather moderate: an issue of environment-friendly products and<br />
packagings was important only for 41% of respondents. Now - for 74%);<br />
in mid-80s, 45% of reviewed German consumers seriously treated<br />
public reports conceming a harmfulness of products while now this kind of<br />
information is very important for 64%) of respondents.<br />
On the other hand, in recent years, various Parliamentary acts have been adopted<br />
for the environment protection in numerous HDCs. Thus, producers are being under an<br />
increasing pressure of a more and more restrictive ecological law. This, in turn, extracts a<br />
growing supply of environment-friendly products.<br />
So, an increasing demand and an increasing supply of ecological products meet each<br />
other in the market, and this is a healthy situation. However, a new, ecological buyer is a key<br />
actor on the stage (Grundcy, 2003). Therefore, a consumer education and protection is here so<br />
important. In Poland, unfortunately, the consumer movement is developed very little in<br />
comparison with Westem countries. There is practically only one such an organization, i.e.<br />
The Consumers' Federation, which tries to educate and protect Polish buyers.<br />
In the past, producers used to concentrate their marketing efforts mainly on a phase of<br />
a consumer's purchase. Firms tried to help him/her buy their products. Now, according to<br />
Kotler, a producer should also help the consumer use a purchased good and get rid of i'<br />
afterwards (Kotler, 1999, 2001). This principle fully applies to a manufacturcr/scUcr of<br />
industrial goods. Then he will achieve a market success.<br />
This is consistent exactly with the essence of a desired approach to the new, ecological<br />
consumer. The approach assumes that the producer takes responsibility in all the phases of tlic<br />
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Researching Customer Loyalty in Lithuania<br />
product life cycle (Grundey, 2008a). This is a principle of Extended Producer Responsibility<br />
(EPR) which, for the first time, was implemented in Sweden in 1990.<br />
Tabic 2. Number of eco-Iabcls that respondents spontaneously mention, 2002 (%)<br />
Germany Nor>vav Italy Spain<br />
1 label 48.5 56.1 3.5 18.1<br />
2 labels 29.4 16.8 0.1 4<br />
3 labels 5.4 3.0 0 1.3<br />
4 labels 0.4 0.7 0 0.2<br />
5 labels 0.2 0 0 0.1<br />
Mentioned no labels 16.2 23.4 96.4 76.3<br />
Source: adapted from National Institute for Consumer Research in Norway (2002).<br />
Table 3. Three most spontaneously mentioned environmentally related labels including social labels by<br />
country in absolute numbers, 2002<br />
Most<br />
mentioned<br />
Second<br />
most<br />
mentioned<br />
Third most<br />
mentioned<br />
Germany<br />
Norway<br />
Italy<br />
(1021)<br />
(1000)<br />
(1000)<br />
Blue Angel 578 The Nordic 700 Recycling<br />
Swan<br />
Triangle;<br />
mm<br />
Panda;<br />
Alberto<br />
Green Dot 553 Recycling 199 Energy<br />
(Gruner<br />
Punkt)<br />
symbol<br />
label<br />
Recycling 70 Green Got; 50<br />
Symbol<br />
mm<br />
Randa<br />
Debio;<br />
0<br />
48<br />
47<br />
14<br />
13<br />
Spain<br />
(1004)<br />
Green Dot 194<br />
9<br />
6 Blue Flag 39<br />
AENOR;<br />
DGQA<br />
National Institute for Consumer Research in Norway (2002) conducted an<br />
international survey to investigate how consumers react to environmentally related labelling<br />
of products and services. The respondents were asked to name any environmental labels they<br />
could pontancously think of Each country reported answers for a common group of labels,<br />
and then also in addition various national and regional symbols. Wc have included the<br />
recycling symbols in this overview, event though is it not an cco-labcls. As wc can see, there<br />
arc significant differences between the four countries (Norway, Germany, Italy and Spain),<br />
Tables 2 and 3.<br />
• The Blue Angel and The White Swan is well known among respectively Gcmian and<br />
Norwegian consumers.<br />
• The recycling symbols arc recognised by consumers in Gcmiany, Norway, Spain and<br />
to some degree Italy.<br />
• European consutncrs do not know the EU-flowcr, only 1% mention the flower.<br />
• German and Nonvcgian consumers mention a large number of ceo labels or similar<br />
environmental symbols, while the situation in Spain and Italy is quite different where<br />
more than '4 did not mention any labels at all.<br />
2. Product Management and Green Strategics<br />
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A green marketing approach in the product area promotes the integration of<br />
environmental issues into all aspects of the corporation's activities, from strategy formulation,<br />
planning, construction through production and into dealings with consumers. Czinkota and<br />
Ronkainen (1992) propose that "corporations will have to find soluUons to environmental<br />
challenges through marketing strategies, products, and services in order to remain<br />
compeUtive" (p. 39). These include (Czinkota and Ronkainen, 1992):<br />
(1) new technologies for handling waste, sewage and air pollution;<br />
(2) product standardization to ensure environmentally safe products;<br />
(3) providing "tmly" natural products; and,<br />
(4) products oriented toward resource conservation and greater occupant health.<br />
These solutions assure the company of a legitimate role in providing society's needs<br />
as well as the opportunity to achieve industry preeminence (Murray and Montanari, 1986).<br />
They also underscore potential opportunities for the development of products/services. For<br />
example, refurbished office equipment has entered the market with the backing of a powerful<br />
name (Xerox's Eco-series and Renaissance copiers). Although some would look at these<br />
changes as threats and/or added expense, visionaries within business firms are realizing that<br />
there also are real opportunities in environmental developments for those ready to recognize<br />
and capitalize on them.<br />
2.1 The Greening of Product Life Stages<br />
Green marketing forwards the notion that companies should be concerned with what<br />
happens to a product during and after its useful life.<br />
Companies may manifest this concem through experimentation with ways to reassess<br />
and redesign the product life stages. Life cycle reassessment focuses on environmental<br />
considerations in product development and design, including energy and material inputs and<br />
outputs in production, consumption, and disposal of products (Corporate Environmental<br />
Practices, 1994).<br />
We would then manage the life stages of a product in an environment friendly and<br />
eco-efficient manner. Eco-efficiency refers to the proper timing for the use or consumption of<br />
natural (and oftentimes scarce) resources so that nature is afforded an opportunity to renew<br />
itself. The life stages of products would include the description, presented in Table 4.<br />
Table 4. Product lifc-cycIe stages<br />
Stage 1: Development stage. Traditionally characterized as the acquisition of raw materials, component<br />
parts, and subassemblies. The alternative approach advocated here encourages manufacturers 1)<br />
to cheek the environmental programs of suppliers, 2) to require minimal packaging of inputs, and<br />
3) to consider sources of materials that could be easily replenished or that are recyclable.<br />
Stage 2: Production stage. Manufacturing companies are encouraged to reduce emissions, toxicity, and<br />
waste, and to conserve water and energy. Companies are also encouraged to seek and develop<br />
alternative uses for waste products (i.e., waste recovery process), to revise the manufacturing<br />
process(es) to minimize waste generation, to minimize energy use, and/or to attempt to find<br />
alternative sources of energy.<br />
Stage 3: ConsumptionAJsage stage. Minimization of packaging, conservation of energy, and minimization<br />
of waste from product maintenance and service arc strongly urged. Additionally, companies<br />
should promote energy conservation and should provide information on recyclability or reuse of<br />
the package or "dead" product.<br />
Stage 4: The final stage of a product is its disposal, Green marketing introduces the concepts of reuse and<br />
recyclability, in addition to the concept of waste reduction (ef, Coiporale Einironmcnial<br />
Praclices. 1994).<br />
Source: Corporate Environmental Practices, 1994.<br />
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2.2 Design for the Environment<br />
Researching Cusiomer Loyally in Lithuania<br />
Coddington (1993) asserts that Design for tlie Environment (DFE) has emerged as a<br />
philosophy of integrating environmental considerations into the design process of both<br />
product and packaging. There are two basic tenets: (1) the firm engaged in DFE must<br />
internalize environmental considerafions and constraints, and (2) the firm must evaluate<br />
environmental issues systemically, in conjunction with associated manufacturing, economic,<br />
regulatory, social, and polifical factors (Allenby, 1991). Additional considerations inherent in<br />
DFE as applied to product and package design are designing for disposal, designing for<br />
nondisposal (recycling), designing for pollufion prevenfion, and designing for resource<br />
conservation. DFE strongly encourages the development of ideas that would incorporate<br />
waste reduction into producfion processes, recycling of products and/or packaging, that would<br />
make products compostable, or that would help facilitate changes in the process of design<br />
while adding more benefits than costs to the organization.<br />
2.3 Total Quality Management (TQM) for the Environment<br />
Friedman (1992) advocates that Total Quality Management (TQM), an increasingly<br />
popular concept related to the management of both the product and the producfion processes,<br />
needs to integrate environmental management issues. Commitment to quality now refers not<br />
only to the traditional production concept, but to environmental quality as well. Currenfiy, our<br />
concern is with the total yield of the producfion and product markefing processes, including<br />
waste and pollufion.<br />
Recycling. Regulatory pressures may account for some of the most creative ideas that<br />
have been brought to market. For example, batteries of all kinds contain hazardous heavy<br />
metals such as silver, mercury, nickel, cadmium and lead that can threaten underground water<br />
supplies. The potential for increased regulatory pressures always faces these manufacturers,<br />
including legal requirements to reformulate products or setting up collection programs for the<br />
"dead" product. In 1990, Eveready reformulated their batteries to reduce mercury content,<br />
meeting regulatory standards two years ahead of schedule and stealing an edge on competitors<br />
through trade advertising (Ottman, 1994). In 1991 Sanyo introduced rechargeable batteries<br />
packed in a container that doubled as a mail-back pack for recycling. When consumers return<br />
the batteries, they receive a $3 coupon good on their next purchase. This acdon came as a<br />
result of focus groups in which they found that consumers consistently told the company that<br />
it should recycle, and that their efforts would be rewarded (Gmndey, 2003).<br />
Waste Reduction, Pollution Prevention. In addition to the concept of cco-cfficicncy<br />
mentioned previously, manufacUning for disassembly has also gained momentum as the<br />
recycling of materials and energy and resource conservation arc more plausible thanks to<br />
technological change. Additionally, since all natural and industrial processes generate waste,<br />
and waste becomes pollution when it exceeds the carrying capacity of the environment<br />
(Schmidhciny, 1992), finding ways to prevent pollution before it happens has become critical.<br />
To a large extent, companies arc realizing that pollution is a sign of inefficiency and added<br />
cost, and that waste represents raw materials not sold in final products. Schmidhciny (1992)<br />
contends that the combination of the above with mounting public expectations, increasing<br />
regulatory pressures, and the tightening of competitive conditions may account for the<br />
adoption of the logic of pollution prevention by a significant number of companies<br />
worldwide. For 3M, the Pollution Prevention Pays (3P) program, in place since 1975, is being<br />
hailed for having saved over $500 million by eliminating or reducing capital expenditures and<br />
operational expenses (Frausc & Colchour, 1994). Ofientimcs, an implication itihcrcnl in<br />
pollution reduction progratns is restructuring in the fomi of materials substitution. The search<br />
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for substitutes is acting as a trigger for innovative solutions (e.g., Volkswagen's switch to<br />
water-based paints for their automobiles and IBM's phase out of CFCs in electronic<br />
production. The zero pollution targets (i.e., no emission of pollutants into the ecosystem) set<br />
by many U.S. companies (e.g., Monsanto, General Dynamics) approximates the zero defects<br />
pledge brought about by total quality management. Additionally, regulatory actions like the<br />
45 product disposal bans enacted in 1991 by 12 states have persuaded manufacturers to design<br />
their products for remanufacture, recycling, and repair (Oilman, 1994). New designs that<br />
would allow for easier disassembly and recycling of parts, and minimization or elimination of<br />
non recyclable parts/materials have already entered the market.<br />
2.4 Strategic implications for modern businesses<br />
Implementing a philosophy of sustainability in the practice of marketing would<br />
require businesses to become more sensitive to the efficient use of all resources over a longer<br />
period. In particular, the loss of natural resources may significantly affect a company's<br />
product line and overall production process(es). This change in orientation, from short- to<br />
long-term, would be part of any requisite stmctural changes (e.g., changes in corporate culture<br />
and communication and information systems) (Gmndey and Zaharia, 2008). Perhaps the most<br />
persuasive argument is that waste represents costs to organizations, therefore waste reduction,<br />
reuse of materials, and recyclability are important cost savings activities in the long-run.<br />
Marketers should be encouraged to assess the cost of new laws and regulations, the cost of<br />
endless litigation, and the potential loss of competitive position(s) as integral and critical<br />
components of an ecological approach (Gmndey et al, 2004). Additionally, firms should<br />
thoroughly consider the implications of a potential loss of corporate and product credibility<br />
due to perceptions of inaction (i.e., totally bypassing any environmental initiative) or forced<br />
compliance (i.e., environmental actions are pursued only when mandated by regulations).<br />
Kleiner (1991) asserts that people who try to radically change corporations from<br />
within are often stymied. "Corporate culture and political pressures provide almost<br />
insurmountable resistance against any sudden and even enlightened change" (Frause &<br />
Colehour 1994, p. 110). Frause & Colehour (1994) advocate that perhaps the solution to this<br />
dilemma lies between "saving it all" (limits to growth environmenlalism) and "using it all"<br />
(unbridled capitalism). The issue then becomes on of educating managers along the lines of<br />
cost-benefit on the one hand, and along the lines of social responsibility or the role and<br />
obligafions that organizations have as active participants of the social system within which<br />
they operate.<br />
While a significant number of American consumers could be considered as potentially<br />
"green", marketers arc still cautious in approaching this segment. In 1991, a Wall Street<br />
JoumaL/NBC News survey reported that 46 percent of American consumers bought products<br />
based on the manufacturer's or product's environmental reputation within the last six months<br />
(Frankel, 1992). Likewise, Gallup surveys conclude that more than 75% of American<br />
consumers favour environmenlalism by buying decisions (Kleiner, 1991). More recently,<br />
however, the 1996 Green Gauge Report released by Roper Starch Woddwidc (US) showed<br />
that the percentage of Americans willing to pay more for environmental products has declined<br />
from 1%) in 1986 to 5%. As Oilman & Terry (1998) point out "marketing greener products<br />
will have to entail more than attaching a green label or featuring images of wildlife in media<br />
adverUsemcnts!" In developing value-added on ecological bases, organizational leaders would<br />
have to establish a level of environmental commitment that is most suitable and feasible given<br />
the conditions that the organization faces.<br />
Companies that have adopted some type of environmental accountability have found<br />
some benefits in the adoption of an ecological approach. Some of the activities that have been<br />
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implemented include: (1) building consumer demand for green products (e.g., Rubbermaid's<br />
litterless lunch box); (2) spending revenues to educate buyers (e.g., First Brands'<br />
informational brochures such as "The Good Environment Guide"); and, (3) building new<br />
infrastructure to facilitate recycling (e.g., Kraft-General Foods' recycled plastic for its salad<br />
dressing) and prevent pollution (e.g., 3M's Pollution Prevention Pays program; the first ecomall<br />
in Santa Monica). Being branded a green company can be potentially beneficial to<br />
business organizations. The green image generates a more positive public image which can, in<br />
turn, enhance sales, increase stock prices, and open access to public capital markets (Marshall<br />
& Mayer 1992). A green image may enhance the overall perception of product quality and<br />
when coupled with the environmental benefits inherent in a product and/or its use may<br />
provide the added value that consumers would favor (Ottman & Terry, 1998). However, note<br />
that even seemingly "simple" things have a significant effect on the marketing of certain<br />
products. For example, product managers need to be aware that several states, including<br />
California, New York and Rhode Island, are controlling the use of environmental terms (e.g.,<br />
"recyclable" and "recycled content") in product labels (Marshall & Mayer, 1992). Changes in<br />
regulations will influence marketing decisions and strategies that an organization may pursue.<br />
3. Ecolabels as a Tool for Competitive Environmental Seals of Approval<br />
Most extant environmental labelling programmes are of the 'seal of approval', or<br />
'eco-labeV type. These are certification marks awarded to those products in a particular<br />
category that have met certain predefined criteria. Several arguments have been made in<br />
favour of eco-labels as an aid to consumer purchasing decisions, of which the following seem<br />
the most persuasive (see, inter alia, Cohen, 1991, p. 259; Wynne, 1993, p. 107):<br />
• first, most consumers are apt to invest little time discovering the likely environmental<br />
impact of a product - even if accurate information is provided - so a single<br />
comparable measure might reach a wider audience;<br />
• second, those consumers who are willing to spend time discovering the expected<br />
environmental impact of a product may find themselves attempting to compare<br />
incommensurables such as 'water pollution' and 'recycleability', so such consumers<br />
might prefer to rely on experts to carry out this task for them;<br />
• third, marks certifying environmental information may be misinterpreted by<br />
consumers as being seals of approval, so an actual seal of approval certifying<br />
environmental superiority within a product category might be preferable.<br />
3.1 The Benefits of Ecolabels<br />
Aside from providing the consumer with accurate information concerning the relative<br />
environmental impact of a product, it has been suggested that eco-labels might accomplish a<br />
number of other goals, for instance (Grundey and Zaharia, 2008):<br />
(i) An cco-labcl might improve the sales or image of a labelled product. As an OECD<br />
report on cco-labclling points out: 'This goal is actually a necessity, for if the use<br />
of environmental labels docs not increase sales or improve the product's or<br />
company's public image, then the labeling programme is doomed to ñiilurc. As a<br />
voluntary market-based instrument, environmental labeling will only be effective<br />
if it is accepted and used by manufacturers as a marketing tool. And this will only<br />
occur if consumers accept the objectivity and goals of environmental labels'<br />
(OECD, 1991, p. 12).<br />
(ii) An ccolabelling programme might encourage manufacturers lo account for the<br />
environmental impact of their products. This may be accomplished in one of two<br />
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ways. First, by ensuring that the entire product life-cycle is taken into<br />
consideration in the eco-label criteria, firms supplying companies who are seeking<br />
an eco-label must provide evidence that their own environmental impacts conform<br />
to some standard (for example, by complying with ISO 14000 or by carrying out<br />
an Eco-audit). Second, firms producing products without eco-labels may wish to<br />
compete with firms whose products do bear an eco-label, so they too may wish to<br />
signal their environment-friendlier behaviour to the market by carrying out an Ecoaudit<br />
or complying with ISO 14000.<br />
(iii) Eco-labels might make consumers more aware of environmental issues (OECD,<br />
1991, p. 13).<br />
(iv) Eco-labels might help to protect the environment. As the OECD report notes, 'This<br />
is, after all, the ultimate benefit of labelling programmes' (ibid.).<br />
3.2 The Impact of Eco-labels<br />
According to proponents of eco-labels, the ostensive objective of any eco-labelling<br />
programme is to improve the environment, so, clearly, the key measure of its effectiveness<br />
should be the impact it has on the environment. However, for two reasons, this impact cannot<br />
be estimated directly. First, no single measure of environmental quality can exist. This is<br />
because 'the environment' is a subjective constmct: each individual has his or her own<br />
concept of what the environment is and what would constitute environmental improvement.<br />
Second, if a measure of environmental quality were devised (and, despite the subjective<br />
nature of the environment, many people have attempted to do this), there are so many other<br />
factors affecting the state of the environment (such as changes in the regulatory framework,<br />
autonomous changes in productive processes and autonomous changes in the demand for<br />
particular products) that a simple correlafion between the existence of an eco-label and an<br />
overall improvement in environmental quality would not tell us whether the eco-label had<br />
caused that improvement (Grybaitė and Tvaronavičienė, 2008).<br />
As an alternative, some analysts have suggested or implied that demand for ecolabelled<br />
products is itself a measure of the impact of an eco-label. If environmental quality is<br />
indeed a subjective construct involving many somedmes competing goals, then this clearly is<br />
not so. However, even if one were to use some standard measure of environmental quality (for<br />
example, a weighted combination of variables such as atmospheric concentration of sulphur<br />
dioxide, nitrogen oxides and volatile organic compounds (VOCs), plus measures of the purity<br />
of watercourses such as biological or chemical oxygen demand), the impact of each product<br />
on environmental quality would be contingent on so many factors that it would not be<br />
possible to know which product had the lowest impact (Grundcy, 2003). Indeed, in many<br />
cases, a non-eco-labelled product may exist which has a lower impact on the environment. So,<br />
whilst purchases of products which fulfil the eco-label criteria might result in less harm to the<br />
environment than the purchase of non-ecolabcllcd products, there is no guarantee that this<br />
would be the case.<br />
Moreover, the indirect impact of an cco-labclling programme (stifiing of investment,<br />
reduction in consumer choice) cannot be ignored. Since there is no way of measuring the<br />
impact of an eco-labcl on the environment, the claims made by various individuals and groups<br />
that certain cco-labcls have resulted in large environmental improvements should be taken<br />
with a pinch of sodium chloride. To illustrate this point, wc now consider several such claims.<br />
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5.5 Analysis of Eco-labels in Europe (and Rest of the World)<br />
Researching Customer Loyalty in Lithuania<br />
The objective of this paper is to discuss the advantages and limitations of different<br />
kinds of eco labels in Europe within the framework of ecological modernisation.<br />
Within an integrated product policy (IPP) environmental product informadon is one<br />
important tool (Rubik, 2003a). In the business to consumer dialogue, eco-labels are a central<br />
part of "transmitting environmental information" (Gmndey, 2003). Other consumer oriented<br />
information channels are test reports and test notes from consumer organisations and test<br />
institutions, quantitative product information from producers on the package or information<br />
through internet, personal sales talks and advertising.<br />
Eco-labels include various symbols, schemes, and institutional and legal<br />
arrangements. We can distinguish between mandatory and voluntary labels in the following<br />
way (Rubik, 2003b):<br />
• Mandatory labels like the EU energy label, relevant for household appliances and<br />
mandatory labels for chemical products.<br />
• ISO-type I eco labels, classical third-party labels like the EU-flower, the German Blue<br />
Angel and the Nordic White Swan.<br />
• ISO-type II eco labels, self-classification by industry or retailers.<br />
• ISO-type III eco labels, quanthative environmental product declarafions (EPD).<br />
• Other relevant labels, including social labels and organic<br />
labels.<br />
greendOt • other not relevant labels, including recycling symbols like<br />
Ô<br />
the green dot'.<br />
The mandatory labels arc based upon EU-directives and are valid<br />
for chemical substances and household appliances in Europe.<br />
3.3.1 ISO-type I labels<br />
The main advantage of ISO-type I labels probably is that they use simple symbols; it<br />
is easy to communicate the message to the consumers. In addition they gain credence by<br />
being scientifically based and organised through a third party control regime. Type I-labcls<br />
seem to work very well for consumables, providing information at the point of sales. Such<br />
labels will typically contain summed up informafion, where expert panels esfimate the relative<br />
importance of various impacts (pollufion, energy etc.), presenting the consumer with the result<br />
of a process, but with free public access to criteria. The average consumer just has to relate to<br />
the symbol. This simple presentation of rather complicated matters seems to have a potential<br />
for being met by high levels of trust from consumers.<br />
Typc-1-labcls' main shortcomings might be that they are national or regional, so far<br />
not a success on a European level. Further, they obviously work better for some types of<br />
products than for others, even with a number of national differences.<br />
Blue Angel" in Germany was the first voluntary ISO-type I label<br />
in the wodd, established in 1978. During the 90tics similar cco-labcls were<br />
' The Dual System operates in conjunction with tltc existing municipal solid waste management structure in Gcmiany.<br />
Consumer product manufacturers pay fees to DSD (Duales System Dculsclitand GmbH) to place its trademark "green dot" on<br />
their packages. This symbol is intended to represent a recycling guarantee, for DSD then collects and sorts the packages<br />
consutncrs have discarded and directs Ihcm to rccydcrs. As long as the ordinance's collecting, sorting, and refilling quotas<br />
arc met, retailers do not have lo "take back" primary packages and consumers do not have to pay high mandated deposits on<br />
non-rcnilablc containers. Packaging waste is collected curb-side in DSD bins or in municipal bins placed around<br />
neighbourhoods for glass and paper.<br />
• The world's first cco-labcling progratn, Uluc Angd, was created in 1977 to promote cnvlrontncntally sound products,<br />
rclali\c lo olhcrs in the same grotip categories, litis cco-labcl relics on infoniialion and \olunlary cooperation, as well as on<br />
(lie motivation and the willingness of each individual lo make a conlribvilion towards environmental protection. The criteria<br />
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established in nearly all EU and EFTA countries (Rubik and Scholl, 2002) (Figure 2).<br />
4500<br />
40(Ю<br />
3500<br />
Э0(Ю<br />
2500<br />
20OT<br />
tsoo<br />
1000<br />
500<br />
0<br />
Hurnber of Products fabelled<br />
with the "Blue Angel"<br />
Status: September 1999<br />
ra<br />
Ntffnber oT new Products<br />
n thie course of a year<br />
Expired contracts at the erxf of a year<br />
due to further dovelopmerit of criteria<br />
Updated number of labelled<br />
products on 31.12. of a year<br />
1¿. Ш<br />
1991 1992 1393 1994 1 995 1996 1997 1993 1999*<br />
Source: RAL, Unweltbundesamt; Status: September 1999 • status of 03.09 1999<br />
Figure 2. Number of products labelled with the "Blue Angel" in Germany, 1991-1999<br />
Most of the labels are nationally based and are run by national eco<br />
labelling bodies, with the exception of the White Swan^ established by the<br />
Nordic Council of Ministers and valid for all the Nordic countries (Norway,<br />
Sweden, Denmark, Finland and Iceland). The labels cover both consumables,<br />
durables and services, and the main focus is the environmental impact of the product, in a life<br />
cycle perspective. In most cases the classical eco-labels do not include foodstuffs. There are<br />
usually developed separate national labels for organic food. The criteria are developed in a<br />
multi-stakeholder perspective and the actual label is a positive, well-known symbol.<br />
The EU-flower'' covers goods and services within the European<br />
:'^'\ Economical Area and was established by EU directive in 1992. The EU-flower<br />
has so far not managed to function as an effective environmental product<br />
information scheme in Europe.<br />
for awarding the Blue Angel includes: the efficient use of fossil fuels, alternative products with less of an impact on the<br />
climate, reduction of greenhouse gas emission, and conservation of resources. Once approved, eco-labelcd products are<br />
reviewed every two or three years to reflect slale-of-the-art developments in ecological technology and product design.<br />
Germany's Blue Angel certification for computers is primarily concerned with waste avoidance and reuse potential.<br />
According to the web site, "Pursuance of these aims helps to prevent possible entries of pollutants into the environment,<br />
protect resources and save disposal site space." As a result, their Environmental Label is "awarded to those products which<br />
combine a potential longevity of the system and its components with a recyclable design and the opportunity to reuse and<br />
recycle used products or product components. In addition, the use of environmentally harmful substances shall be avoided<br />
wherever possible." The Basic Criteria apply to components of workstation computers, including workstations consisting of<br />
controller (console), keyboard and monitor. Most products that qualify appear to be of strictly European make and/or model.<br />
' In November 1989, the Nordic Council of Ministers adopted a measure to implement a voluntary, positive co-labeling<br />
scheme in the Nordic countries (Norway, Sweden, Finland, Iceland, and Denmark). The objective of this ecodabcling was to<br />
provide information to consumers to enable them to select products that are the least harmful to the environment. Nordic Colabeling<br />
follows the ISO 14024 standard: "Environmental labels and declarations - Guiding principles". The criteria for colabeling<br />
include requirements for the composition of the product, constmction, materials, chemicals, marking of parts, waste<br />
disposal, recycling, energy consumption, noise level, ergonomics, electromagnetic fields and safety of use. The criteria base<br />
been fixed taking into account the environmental load during the whole life cycle of the product and the principles of the<br />
scheme for recyclable products (DFR - Design for Recycling).<br />
* The EU eco-labeling program was launched throughout the European Community in 1993 to encourage the manufacture of<br />
less environmentally damaging products. The European Union's Eco-labcl, a flower with the EU's star symbol, is awarded to<br />
products that have passed a life cycle analysis. On 26 February 1999 the Commission adopted the criteria for Personal<br />
Computers. These criteria are valid as of 1 March 1999 until March 2002 and producers can apply for llic eco-labcl. The<br />
product group definition is a commercially available stationary computers consisting ofa monitor, system unit, and keyboard.<br />
The criteria focus on: a) energy consumption, b) life-time extension, c) take-back and recycling, d) user instructions.<br />
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1998 1999 2000 2001 2002 2003<br />
Source: complied by the author.<br />
Figure 3. European Eco-Label (the "Flower") statistics, 1998-2003<br />
It has been caleulated that eurrently in Europe we have the following statistics for the<br />
EU-flower eco-label {Figure 3):<br />
. 260 holders as of September 2005<br />
About 2 500 articles split in 23 product groups<br />
A large number of ISO-type II labels are found in the European market established and<br />
mn by the industry or retailers. These self-classifications are often one-dimensional, covering<br />
only certain aspects of the product, like recycled paper products, phosphate free detergents.<br />
ISO type III labels - Environmental Product Declaration (EPD) - are under development in<br />
Europe. Such quantitafive data will, however, be more relevant in a business-to-business<br />
communicafion.<br />
3.3.2 ISO-type II labels<br />
ISO-type II labels really are a type of adverfising. Main problems concerning such<br />
labels are that the message is often unclear, labels often one deal with just dimension (no<br />
chlorine), they are at best semi-scienfifically based, and they rely on self-classificafion. In the<br />
Nordic countries they tend to conflict with the Marketing Control Acts, prohibiting the use of<br />
phrases like "eco friendly" etc. Type II labels will generally have a problemafic relafion to<br />
questions of tmst, and - related to that - to generally non-existent control regimes.<br />
since tenns lil^c "eco", "biological" and similar<br />
designations have been protected by the EC Eco-<br />
Directive, consumers liave been finding food from<br />
organic fanning everywhere. The big supeniiarket<br />
chains in Germany have introduced product ranges like<br />
Füllhorn (Rewc). Grünes Land (Metro), Naturkind<br />
(Tcngclmann/Kaiscrs), Alnalura (dm), all of whicli<br />
definitely come from organic fanning. Other organic<br />
brands are called "Organic from ecological production",<br />
"HioUio" or "Bio Wcrlkost". Organic products from<br />
health food producers bear a green leaf witli the word<br />
"Bio".<br />
Source: complied by the author.<br />
Cooperation between organic fanning organisations and governmental<br />
institutions has created eco-labels which do not solely stand for organic<br />
fanning, but also confinn that these products come from a particular region or<br />
a particular state of Gcnnany. It's this regional delimitation that constitutes the<br />
specific bonus of these labels, since tlie transportation distances involved are<br />
also subject lo restriction. Examples include (from the Icfi) the Test Seal for<br />
ecologically produced food awarded by the Free State of Saxony, the<br />
registered symbol for ecological fanning in confonnily with the EC Eco-<br />
Dircctivc awarded by Thuringia's Ministry for Agriculture, Nature<br />
Conservation and the Environment, and the test seal for local ecological<br />
products awarded by the Bavarian State Ministry for Nutrition, Agriculture<br />
and Forestry.<br />
Figure 4. Examples of ISO-type II labels (examples from Germany)<br />
Potential environmental advantages of Type Il-labcls arc first that for the least<br />
.sophisticated producers or retailers (Figure 4), a Type 11-labcl might be a starting poiiU for a<br />
positive cliaiigo process, coiiccniraling on doing al least something. Second, for leading<br />
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environmental innovators, such labels might highlight their best products, employing<br />
technology that is ahead of competitors and beyond the labelling bodies.<br />
3.3.3 ISO-type III labels<br />
So-called ISO-type III labels provide numerical information, beyond the symbols.<br />
They are also known as Environmental Product Declarations (EPD). So far, they do not seem<br />
very relevant for consumers, who would be hard put to make sense of such quantitative data<br />
(how many tons of CO^ is it reasonable to emit during the production of a hundred tonnes of<br />
cement?). It has been described as an instmment mainly for business-to-business<br />
communication, but for small and medium enterprises the correct interpretation of the<br />
numerical sheets will probably be almost as difficult as for ordinary consumers.<br />
Development of Type III labels is a promising step for business, but for consumers, as<br />
well as for small retailers and producers, the information will have to be translated. For Type<br />
III labelling of bigger and more complex entities (like hotels, airiines and so on), EPDs will<br />
probably be perfect tools.<br />
Recycling label<br />
It means, that the packaging<br />
has been manufactured of<br />
recycled products (eg. waste<br />
paper). In this case the<br />
amount of recycled materials<br />
is 65%.<br />
Source: complied by the author.<br />
Recycling label<br />
This label informs about<br />
the recycling of waste<br />
oil.<br />
Since September 2001, monitored The Biokreis e.V. has set<br />
foods from ecological fanning have itself to foster cooperation<br />
been identified with the between producers,<br />
governmental Bio-Seal in consumers and processors<br />
Germany. The small hexagonal in line with ecological<br />
symbol acts as a standardising principles in a<br />
signpost for eco-producis. The Bio- conveniently sized region.<br />
Seal is awarded against the criteria The top priority is to<br />
laid down in the EC Eco-Directive, preserve rural agriculture<br />
which include a ban on irradiating based on ecological<br />
eco-foods, a ban on genetically fanning. The<br />
modified organisms, a prohibition<br />
on pesticides featuring chemicalsynthetic<br />
agents and on easily<br />
soluble mineral fertilisers.<br />
Requirements include diverse,<br />
extensive crop rotation, free-range<br />
species-friendly animal husbandry,<br />
organisation's other<br />
activities include<br />
certification of producers<br />
and processors,<br />
infomiation provision and<br />
educational initiatives.<br />
and feeding the animals with<br />
ecologically produced fodder,<br />
without any admixture of<br />
antibiotics<br />
enhancers.<br />
and performance<br />
Source: complied by the author.<br />
Recycling label<br />
This label stands for<br />
glass recycling.<br />
The ,.keep tidy"<br />
label.<br />
Figure 5. Examples of recycling labels world-wide<br />
Biopark is a<br />
registered and<br />
protected trademark<br />
for identifying<br />
ecologically<br />
produced food. The<br />
Biopark e.V. was<br />
founded by 16<br />
farmers in<br />
Mecklenburg-<br />
Western Pomerania<br />
in 1991, with the<br />
aim of jointly<br />
marketing<br />
ecological products<br />
with maximised<br />
health value and<br />
purity, and excellent<br />
taste quality under a<br />
single umbrella<br />
brand.<br />
Farmers operating<br />
or changing over<br />
to biologicaldynamic<br />
. and<br />
organic-biological<br />
methods got<br />
together in 1988<br />
to fonn the<br />
Okosiegcl (Eco-<br />
Seal) association.<br />
Figure 6. Examples of organic food labels in Germany<br />
Recycling label<br />
A warning label meaning that a<br />
particular item contains toxic<br />
substances (eg. paints or<br />
batteries) and should not be<br />
thrown out with household trash,<br />
but disposed of properly.<br />
n
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3.3.4 Other eco-labels and organic food labels<br />
There is a jungle of labels out there: There are a large number of recycling labels<br />
(Figure 5), often without any developed organisation to handle the waste. There are organic<br />
food labels (Figure 6), social and ethical labels (Figure 7), all with some environmental<br />
interest. In this context they are probably most interesting as examples of the kind of<br />
overload, often "do-good-overload" that modem consumers have to deal with. Most<br />
stakeholders call for a simpler system, with a limited number of labels for consumers to relate<br />
to.<br />
We can find labels on cosmetics, which state that a<br />
particular product was not tested on animals.<br />
However, there is no standard label, il is usually<br />
picture of a rabbit. Cosmetics that were not tested<br />
on animals can also carry the letters 'BWC [they<br />
stand for Beauty Without Cruelty], or the words<br />
Not tested on animals or Animal friendly.<br />
Source: complied by the author.<br />
"Dolphin-Safe tuna"<br />
This label means, that<br />
during tuna fishing, no<br />
dolphins or whales are<br />
harmed or seriously<br />
wounded, and that<br />
high seas driftnets<br />
were not used.<br />
This label means, that the<br />
turtle mortality rate caused<br />
by shrimp fishing is being<br />
kept at the lowest possible<br />
level. More information:<br />
In Search of a Policy<br />
Formula for Marine Turtle<br />
Conservation in the South<br />
East Asian and Indian Ocean<br />
Region Turtle Safe Shrimp<br />
Campaign<br />
Figure 7. Examples of social and ethical labels, adopted world-wide<br />
This label is often<br />
mistaken for an ecolabel.<br />
In fact, it has no<br />
ecological value, but is<br />
placed on goods, to<br />
attract the customer<br />
with a green label.<br />
3.3.5 Country-of-origin (COO) labelling in relation to ecological issues<br />
According to Italian companies, being informed of the origin of a machinery is always<br />
an asset. Equal consideration apply to retail consumers, but for industry, this information has<br />
a further considerable relevance to machineries' performances, general efficiency of industrial<br />
plants and safety on the workplace. The origin mark does not "protect" consumers, but it does<br />
"inform" on what they buy. Should a European company deem that it is worthy to produce in<br />
a third country, and trade products under its own label, both consumers and the market would<br />
benefit from a clearly visible origin marking, without substantial effects if the brand is known,<br />
as demonstrates the vast number of glamour trademarks associated with a "made in country<br />
X". The results of a survey carried out in Italy, France, Gemiany and United Kingdom<br />
provided solid confirmation to the assumption that consumers arc interested in origin<br />
marking.<br />
The statement "it provides more information and gives the opportunity to make<br />
conscious choices" was agreed by 78% in Italy, 85% in France, 86% in Germany, 84% in UK.<br />
The statement "it helps to fmd safe products", was agreed by 70% in Italy, 79% in France,<br />
66% in Germany, 78%o in UK. The statement "it helps to detect products imported from<br />
countries that enforce no laws against child labour and for environmental protection" was<br />
agreed by 70% in Italy, 78% in France, 80% in Germany, 79% in UK, Disagreed with the<br />
statement "// does not provide cniy .special benefit" 47% in Italy, 73% in France, 71% in<br />
Germany, 61% in UK. The more direct question "are you interested in knowing the country of<br />
origin of products imported from non-European Union countries ?" was given a positive<br />
answer by 72% in Italy, 87% in France, 83% Germany, 81% in UK,<br />
Tcdde 5 provides a comparison of origin labelling regulations in other countries<br />
compared to tlic provisions in the U.S. Farm Dill. In 2002, the EU required member states to<br />
label all beef at the retail level, including ground beef, with information on the country of<br />
birili, place of fattening and slaughter.<br />
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Canada, Mexico and Japan all have some version of COOL regulation though only<br />
Japan has rules as strict as those in the 2002 Farm Bill. One of the main arguments in favour<br />
of COOL, discussed above, has also been used to justify mandatory labelling of genetically<br />
modified (GM) food in Europe. That is, the consumer has a "right to know" what they are<br />
eating. The U.S. government has strongly opposed mandatory GM {genetically modified)<br />
labelling, and for good reason. In practice, GM labelling has not given EU consumers greater<br />
choice, because food processors in Europe have recombined ingredients away from GM food<br />
to avoid labelling. The same phenomenon has taken place in Japan. This pattem may well<br />
develop with COOL and therefore U.S. consumers will not be given a choice because<br />
imported labelled food will not be made readily available. Instead, the imported commodity<br />
will be processed, re-exported or sold into the restaurant or food service industry, to avoid<br />
COOL.<br />
Tabic 5. Comparison of Country-of-Origin Labelling (COOL) Requirements for Food<br />
US Farm Japan Australia & Canada Mexieo The EU<br />
Bill<br />
New Zealand<br />
Retail<br />
yes yes no Varies -<br />
no yes<br />
COOL* for<br />
Ontario and<br />
fresh<br />
produce?<br />
Quebec only<br />
Comments Florida has About 10 Proposal Provincial Grapes,<br />
had<br />
popular under<br />
decision avocados and<br />
mandatory products consideration<br />
mangoes<br />
COOL since covered<br />
have specific<br />
1980<br />
rules<br />
Retail<br />
yes yes no Yes to pre Yes to pre yes<br />
COOL* for<br />
packagedpackaged fresh meats?<br />
meat;<br />
meat;<br />
A^oto<br />
A'oto<br />
imported imported<br />
meat<br />
meat<br />
processed in processed in<br />
Canada Mexico<br />
Comments Exception for Full<br />
Proposal "Processed"<br />
Label must<br />
processed traceability under<br />
is determined<br />
indicate<br />
products within consideration by a rule of<br />
country of<br />
domestic<br />
51% value<br />
birth,<br />
beef industry<br />
added<br />
fattening and<br />
(including<br />
labour)<br />
slaughter<br />
Notes: COOL* - counlry-of-origin labelling.<br />
Source: compiled by the author from various USDA Foreign Agricultural Service attaché reports available at<br />
www.fas.usda.gov<br />
Numerous states have meanwhile got together in the Global Ecolabelling<br />
Network (GEN), founded in 1994. The aim of this interest group,<br />
> with a current membership comprising 26 cco-labcl organisations<br />
— • worldwide, is to foster mutual feedback in regard to national cco-labclling<br />
activities, and to develop the cco-labcl programmes of the individual nations<br />
involved to maximally sophisticated efficacy. The GEN currently includes<br />
members from Belgium, Brazil, Canada, China, Croatia, the Czech republic, Denmark,<br />
Germany, Greece, Hong Kong (Special Adminislrativc Region), Hungary, India, Israel, Japan,<br />
Korea, Luxembourg, New Zealand, Norway, Spain, Sweden (SIS), Sweden (SSNC), Sweden<br />
(TCO), Thailand, the United Kingdom, the USA and Zimbabwe.<br />
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4. Analysis of Mini Case Studies in Eco-Marketing and Eco-Labelling: Germany and<br />
Lithuania<br />
4.1 The Impact of the "Blue AngeV'for Paints - a Mini Case Study<br />
One of the first Blue Angel product categories developed was for acrylic and 'highsolid'<br />
paints (these are the kinds of paint used for woodwork and metalvvork). The product<br />
selection criteria for this category limited the proportion of volatile organic compounds<br />
(VOCs) to 10 percent for acrylic paints and 15 percent for high-solid paints. The first acrylic<br />
paint to display a Blue Angel was introduced by Glasiirit in 1982; in 1987 eco-labelled paints<br />
represented approximately 16 percent of the total market for solvent-based paints in (West)<br />
Germany (ENDS, 1989); and by 1995 this figure had risen to just under 25 percent (telephone<br />
interview with Jerry Hodge, director, ICI paints).<br />
In 1990, the German government claimed that the Blue Angel for paints had reduced<br />
VOC emissions by 40,000 tons (OECD, 1991, p. 30). However, the environmental benefits<br />
resulfing from this reducfion should be viewed in light of the following.<br />
First, any benefit (private or public) which has arisen from the shift towards low-VOC<br />
paints did not come without a cost. The paints which have a Blue Angel are more expensive to<br />
produce, which implies that scarce resources have been utilised in the producfion of these<br />
paints that might have been utilized more efficiently elsewhere.<br />
Second, an alternative set of eco-label criteria might have had a similar impact at a<br />
lower cost.<br />
Third, it is possible that low-VOC paints would have come onto the market even<br />
without the eco-label. (Such paints might, for example, have been adverfised simply as 'lowsolvent',<br />
with the puфorted health benefits, rather than the environmental benefits, given<br />
emphasis.)<br />
Fourth, according to a report on eco-labels carried out by Environmental Data<br />
Services (ENDS, 1989, p. 23), 'Acrylic paints which carry the Blue Angel do not perform as<br />
well as more traditional products.' Indeed, the report ascribes the poor sales of eco-labelled<br />
paint in the professional market to this poor performance, noting that 'what counts for the<br />
professional decorator are aspects of product quality such as ease of application, colour and<br />
durability, and "environment-friendliness" ranks low on this Hst of purchasing criteria.' Poor<br />
performance may also lead to a need for more coatings, hence more overall consumption to<br />
accomplish a given task. More use per task may undo any puфortcd environmental benefits<br />
measured on a product weight or volume basis.<br />
Fifth, since no cco-labcl was applied to emulsion paints (which arc by far the largest<br />
sector of the paint market), it is possible that some consumers bought cco-labclled acrylic<br />
paints for use on walls and ceilings because they thought that such paints would have a lower<br />
environmental impact. In fact, emulsion paints typically have much lower concentrations of<br />
VOCs than even the ceo-labcllcd acrylic paints, so such purchasing habits would have been<br />
perverse indeed (ENDS 202, November 1989, p. 26).<br />
Finally, it is possible that some of the demand for low-solvent paint was the result of<br />
concern over the direct health impacts (rafiicr than the environmental impacts) of solventbased<br />
paints. Clcady, any reduction in emissions of VOCs which resulted from the use of<br />
low-VOC paint purchased primarily for its perceived health benefits should not be counted as<br />
a consequence of the cco-labcl, but rather as a byproduct of health-conscious paint purchases.<br />
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4.2 The Impact of the "Blue Angel" for Recycled Paper - a Mini Case Study<br />
A Bhie Angel for recycled paper was introduced in 1981. Since then, the percentage of<br />
recycled material in paper sold on the German market has steadily increased (OECD, 1991, p.<br />
30). However, the size of the market for recycled paper has increased likewise in many other<br />
countries (where the fact that the paper is recycled is typically denoted by a triangle of arrows<br />
together with a statement regarding the percentage of recycled material used). In fact, by<br />
1989, demand for recycled tissue paper was greater in Finland (where market penetration was<br />
25% for kitchen towels and 23% for toilet tissue) and Austria (16% and 14%) than in<br />
Germany (7.2% and 10.2%) according to a survey commissioned by Fort Sterling (ENDS<br />
183, April 1989, p. 25). Moreover, a recent survey of shoppers in Britain, carried out by the<br />
government-funded National Consumer Council, found that 'claims on paper products were ...<br />
praised for their clarity ... Claims such as "100 percent recycled" were felt to be clear and<br />
unambiguous' (NCC, 1996, p. 47). Thus, it seems likely that the Blue Angel for recycled<br />
paper was primarily acting as an expensive substitute for this alternative means of providing<br />
information.<br />
4.3 Eco-Labelling in Lithuania - a Mini Case Study<br />
In 1995, the eco-labelling criteria were considered in Lithuania as a vital part of foodprocessing<br />
and labelling procedure. In 1996, according to the Order of the Ministry of<br />
Environment the new regulation of product environmental labelling was in power.<br />
This Order was amended in 2001, according to which the EU-Flower eco-label was<br />
taken as a basis for eco-labelling in Lithuania. The eco-label can be certified to all products,<br />
except drinks and medications.<br />
w<br />
8.1 Label for Ecological Farming in<br />
Lithuania<br />
Source: complied by the author.<br />
8.2 Label for Certified Ecoproduct<br />
in Lithuania<br />
8.3 National Eco-label for<br />
Lithuania<br />
Figure 8. Eco-labels in Lithuania, 2007<br />
8.4 Label for Ecological<br />
Farming in Lithuania<br />
(adopted EU standard)<br />
The graphical symbol for ecologically-friendly labelling in Lithuania is the "lily under<br />
the roof in green colours {Figure 8.3). The designer of this label is Tadas Kosciuška. The<br />
water lily was chosen to represent its unique sensitivity to the environmental pollution.<br />
Unfortunately, over the past 5 years, we had no opportunity of witnessing the application of<br />
the national eco-label for Lithuania "lily under the roof in practice.<br />
5. Customer Loyalty for Eco-products in Lithuania<br />
5.1 Preconditions for ecological farming in Lithuania<br />
The concept of organic farming and ecological agriculture reached Lithuania after the<br />
country had gained its independence, when co-operation with foreign countries became<br />
possible. At the time Lithuania's first organic agriculture organizations were launched, the<br />
organic movement in other European countries was already well advanced. Now the number<br />
of ecological fanns in Lithuania is constantly increasing {Table 6). In 1993 the first 9<br />
ecological farmers were certified. In 2000, 230 ecological farms with more than 4700 ha that<br />
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amounted to 0.13% of the total farming land, 8 processing and 11 trade enterprises were<br />
certified.<br />
Tabic 6. Development of bio-organic farming in Lithuania in 1993-2000<br />
Year 1993 1994 1995 1996 1997 1998 1999 2000<br />
Number of farms 9 14 36 65 106 144 171 230<br />
Area, ha 148 267 582 1118 1568 4006 3995 4709<br />
Source: data provided by "Ekoagra" 1993-2000.<br />
In 2002, 419 organic operators were certified: these were 393 farms with 8780 ha; 13<br />
processing companies; 5 wild production collection collectors; 7 companies supplying inputs<br />
to organic farms; and one company handling organic products (Jasinskas, 2008). And in 2003,<br />
700 farms were cerfified and certified area totalled to 23 289 ha. So, in comparison with the<br />
year 2002, the "leap" of the certified area is tremendous - it increased by 2.65 times<br />
(Jasinskas, 2008). In 2003, the amount of certified organic processing companies reached 18.<br />
The range of processed organic products has been expanding as well, encompassing certified<br />
food, grain and vegetables processing companies. In 2003, cerfificates were issued to 9<br />
gatherers of wild production, 6 companies supplying inputs manufacturing materials,<br />
permitted to be used on organic farms, and sfill 1 organic production handling company.<br />
In 2001, organic farms were established in every Lithuanian region, but most of them<br />
are in the regions with lower soil quality and worse natural conditions (Jucevičienė et al,<br />
2007). These areas traditionally had extensive agriculture due to nature conditions and,<br />
therefore, the convcrsafion to ecological farming is relatively easy.<br />
3.5<br />
3 •<br />
2.5 •<br />
1.5<br />
2 •<br />
1<br />
0.5<br />
0<br />
• Actual development 1 Anticipated development<br />
2000 2001 2002 2003 2004 2005<br />
Figure 9. Actual and anticipated growth of organic farms in Lithuania (% land area), 2000-2005<br />
The area of certified ecological fiinns land in 2003 was 23,289 ha, which is 0.75 % of<br />
the total area of agricultural land in Lithuania. This relative area of land under organic<br />
production is smaller than in the existing EU countries or even than in other Baltic slates.<br />
Fully organic farms on 2002 conslilulcd 36 % of the organic land area; the remainder is<br />
accounted for by farms in their conversation period. (The conversation period is legally<br />
defined by EC Reg 2092/91 and lasts 2 years. The process of conversation, defined as the<br />
transitional phase from a conventional to a "steady" organic system, usually takes longer)<br />
(Jasinskas, 2008). The average size of the organic farms iti Lithuania has increased every<br />
year: in 2002 the average size of the ecological farm was 22 ha, and in 2003 - 33 ha. This<br />
tendency shows how farmers are becoming more orientated toward organic production,<br />
although organic production is rarely pursued in the whole farm, but in just one part of it. In<br />
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Lithuania, as in most EU countries, organic farms are on average larger than conventional<br />
('non-organic') farms (the average size of with was 12 ha).<br />
As was shown in Table 6, the number of ecological farms is increasing by 20-30%<br />
annually. Lithuanian organic agriculture is considered the most dynamic sector in the<br />
country's agricultural industry. If the certification of land follows the same pattem, as<br />
forecasts in 2002 approved by the Lithuanian Government an "Action Plan for Development<br />
of Organic Agriculture", in 2006 this area will comprise 0.5% of the total agricultural land<br />
{Figure 9). This implies that it probably will not be a main direction in agriculture but an<br />
alternative for individual farmers. From other hand, the goal is to have 1% of the total<br />
agricultural land area turned into ecological farms before 2006.<br />
5.2 National survey results<br />
The EU countries have adopted the practice, the essence of which is, while planning<br />
for the further development of eco-farming, it is of paramount importance to take into account<br />
consumers' expectations: to adhere to strict quality regulations in eco-production; to perform<br />
regular 'good practice' inspecdons; to follow eco-certification standards and involve<br />
consumers into the process were appropriate (Toming, 2007; Jucevičienė et al, 2007;<br />
Gmndey, 2008a, 2008b). Studies in the EU (the Baltic States including), the USA and Canada<br />
demonstrate the following buying trends of eco-products: these products are purchased due to<br />
a) healthier lifestyle; b) better and natural taste of a product; c) fad; d) popularity of the<br />
phenomenon.<br />
As the precondition for eco-production, eco-farming is getdng momentum in<br />
Lithuania and becoming popular within each year either as a part of eco-farming activities or<br />
eco-tourism activities in the rural areas of the country. This survey sets to investigate the<br />
demand .side of eco-production and consumption. The survey was performed by the<br />
Interdisciplinary Research Group of the Centre of Socio-Cultural Research at Kaunas Faculty<br />
of Humanities, Vilnius University, Lithuania, in the period of 2007-2008.<br />
5.2.1 Sample<br />
In order to verify if Lithuanian consumers are aware of ecological branding and<br />
ecological products, the following sample pattem was adopted: 1054 respondents were<br />
surveyed, representing four major cities in the country, namely: a) Kaunas - 56% of all<br />
respondents; b) Vilnius - 24%, c) Klaipėda - 12%; and d) Šiauliai - 8% {Figure 10). The<br />
majority of them were within the age group of 28-45 (73% of the respondents), while the rest<br />
of surveyed people represented the age group of 18-27 (9%), and over 45 years of age (18%).<br />
As it is usually perceived that women are the shopping decision-makers in most cases, the<br />
results of the national survey on ecological products also verified this perception: 88% of all<br />
respondents were females.<br />
12%<br />
56%<br />
24%<br />
• Vilnius<br />
• Kaunas<br />
Q Klaipčda<br />
P Šiauliai<br />
Figure 10. Segmentation of respondents fn Lithuania hy residence (%), 2007<br />
Ti
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5.2.2 Perception of ecological products<br />
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Researching Customer Loyalty in Lithuania<br />
During the 2007 National survey in Lithuania, the respondents demonstrated<br />
knowledge and awareness about the category of products, labelled as ecological (71%). Most<br />
of the respondents outline that „an ecological product is the product, during the process of its<br />
growth and processing no artificial chemicals and fertilisers were used; ecological products<br />
are healthier than traditional ones; the ecological farming method doe snot cause any harm<br />
to the environment" (Lithuanian National Survey, 2007).<br />
As the survey findings demonstrate, the respondents associate ecological products<br />
with a) fruits (74%) and b) vegetables (96%), first.<br />
An unexpected resuh was that other agricultural products, such as milk and dairy<br />
products, meat and its products, bread and its varieties are not automatically perceived as<br />
ecological, even though are available on the market with clear eco-labelling.<br />
More than half of the respondents (67%) indicated that they are aware of the<br />
ecological labelling practice in the country and some of them (26%) are specifically looking<br />
for such eco-labelled products in the shopping centre. Amongst the surveyed people, only 6%<br />
(mainly in Vilnius and Kaunas cifies) are permanent eco-product buyers. Vilnius-dwellers<br />
specifically indicated that they have an opportunity of buying such eco-certified products in<br />
the Old Town market, which is becoming very popular not only during specific festivals and<br />
cultural heritage events, but on a daily basis.<br />
5.2.3 Shopping behaviour for ecological products<br />
When developing the questionnaire, the most important issue was, whether ecoproducts<br />
are accessible to the broad public to have their choice and saying. In effect, the<br />
majority of the Lithuanian respondents prefer a shopping centre or a supermarket for ecoproduct<br />
purchasing (45%). Other shopping options were as follows {Figure liy.<br />
a) open market (21 %);<br />
b) own produce (e.g. Lithuanians are still fond of having a small patch of garden<br />
either next to their private house or the so-called collective garden plot, where<br />
they culfivate some crops over the season) (12%);<br />
c) trade fairs (e.g. autumn and spring fairs, organised broadly in Vilnius and<br />
Kaunas) (11%);<br />
d) speciality shops (e.g., ecological food shops) (6%);<br />
c) elsewhere (e.g. travelling to countryside to purchase eco-products first hand or<br />
gather wild berries and mushrooms in the woods, as it is still quite popular) (5%).<br />
open markcl trade fairs speciality shops supcnnatkct/ clscwlicrc own produce<br />
shopping centre<br />
Figure II. ScRmcntalion of respondents In Lithuania by the point of purchase of eco-products (%), 2007<br />
Il has been identified that 18% of the respondents arc cco-brand loyal - they would<br />
seek Ihc same producer (e.g. ecological honey, cco-brcad or cco-potalocs), due to the<br />
acceptable taste, texture, quality and price ratio.<br />
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D.Grundey 176 ISSN 1648-4460<br />
Researching Customer Loyalty in Lithuania<br />
When asked to specify the groups of eco-products they at least purchased once in the<br />
past 6 months, the respondents in Lithuania produced such a spectrum of replies:<br />
a) eco-vegetables (86%);<br />
b)<br />
c)<br />
d)<br />
e)<br />
f)<br />
eco- fmits (77%);<br />
eco-honey (62%);<br />
eco-berries (45%);<br />
eco-bread and its varieties (33%);<br />
eco subproducts and proccessed foods (19%).<br />
5.2.4 Factors effecting consumers' loyalty towards ecological products<br />
The main factor which motivates Lithuanians to purchase eco-products is a deep<br />
concem about their health status. On the other hand, the respondents expressed their doubts<br />
on several occasions on the authenticity of eco-certification. They specified (16%) that mass<br />
media does make a considerate influence on their opinion about eco-products and their<br />
labelling. There were several occasions on the news, when COOL (country-of-origin<br />
labelling) was breached in Lithuania; foreign country products were labelled as grown or<br />
bread in Lithuania, instead of putting the country of origin - Poland, Latvia, Holland, Estonia<br />
or Russia. Therefore, due to cases of forged COOL, Lithuanian shopping centres and even<br />
open markets are loosing the trust of their valuable customers and their loyalty.<br />
Another factor loyalty, as indicated by the respondents is the price of an eco-product<br />
and its potential to compete with foreign substitutes. Approx. 53% of the respondents are<br />
likely to pay extra 1.5-2 Litas (~ 50 Euro cents) for eco-products as compared to ordinary<br />
products (with preservatives). Only 1.5%i of the respondents were ready to pay more than 2<br />
Litas for eco-products, which is within the allowance of their family/ individual budgets.<br />
The third factor, impacting the level of loyalty for eco-products, mentioned by the<br />
surveyed people, was the eco-marketing actions, namely advertising (Figure 12). Even<br />
though advertising, as indicated in Figure 12, plays the least role in building customers'<br />
loyalty in Lithuania towards eco-products, this issue should not be under-valued.<br />
advertising<br />
infonningandcducating the society<br />
lowcrpriccs forcco-products<br />
increase of persoiuil income<br />
20 40 60 80 100<br />
Figure 12. Factors, which are likely (o increase (he customers' loyalty towards cco-producls (%), 2007<br />
It is possible to assume that eco-products and cco-labclling lack sufficient<br />
adveriising, as this survey proves. The respondents pointed out that they observed eco-product<br />
adverting on TV (53%), in print (newspapers, journals, leaflets and promotion material) (up to<br />
18%), on Internet (3%) and 16% of respondents indicated that they did not come across any<br />
advertising, related to ecological production or consumption in the past 6 months.<br />
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D.Grundey 177 ISSN 1648 - 4460<br />
Conclusions<br />
Researching Customer Loyalty in Lithuania<br />
Implementing a philosophy of sustainability in the practice of marketing would<br />
require businesses to become more sensitive to the efficient use of all resources over a longer<br />
period. Marketers should be encouraged to assess the cost of new laws and regulafions, the<br />
cost of endless lifigafion, and the potential loss of competitive position(s) as integral and<br />
critical components of an ecological approach, which is broadly discussed and substantiated<br />
in this article.<br />
A broad scope of evidence brought to the reader from European and American<br />
countries prove that eco-marketing and eco-labelling is a natural process, which is not only<br />
broadly discussed by the scholars but also is broadly applied in the practice by businesses.<br />
The application of ecological standards in growing crops and raising animals, as well as the<br />
production process might be considerably costly and economically not viable, but consumers'<br />
preferences for safer and ecologically-produced substances arc growing, which leaves modem<br />
business aspiring for a more profitable future.<br />
The adoption of ISO standards in foodstuffs' producfion and farming pracfices is the<br />
code of good practice, which is world-wide acceptable in various business sectors, starting<br />
with food industry and finishing with services, such as hotel and tourism industry, etc. A mini<br />
case of Lithuania also indicates that the country has adopted the eco-labelling policy,<br />
following the EU directives and national inifiatives.<br />
Accoridng to the survey, performed in 2007-2008, the Lithuanian respondents have<br />
summarised that the most influential factors for their loyalty towards eco-products in the<br />
country are:<br />
1) increase of personal income;<br />
2) lower prices for eco-products anf eco-processed foods;<br />
3) informing and educating the society;<br />
4) more advertising.<br />
Lithuanian respondents, as opposed to consumers of the EU countries, the USA and<br />
Canada, did not mention that their purchasing decisions of eco-products could be influenced<br />
by fad, growing popularity and propaganda. The main de-motivators of buying eco-products<br />
in Lithuania are: a) high prices; b) low availability and c) doubts about the authenticity of ecocertification.<br />
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EKOLOGINIS <strong>MARKETING</strong>AS IR EKOLOGINIS ŽENKLINIMAS: AR TAI UŽTIKRINA KLIENTŲ<br />
LOJALUMĄ EKOLOGINIAMS PRODUKTAMS LIETUVOJE?<br />
SANTRAUKA<br />
Dainora Grundey<br />
Straipsnyje svarstomos ekologinio marketingo ir ekologinio ženklinimo problemos, pateikiant teorinius<br />
šios sąsajos aspektus bei iliustruojant tiriamąjį objektą gausiais praktiniais pavyzdžiais iš Vokietijos, Norvegijos,<br />
Kanados, JAV ir kitų pasaulio šalių.<br />
Ekologinis (dar kitaip vadinamas žaliasis, aplinkai draugiškas it kt.) marketingas bei ekologinis<br />
ženklinimas tampa šiuolaikinio verslo prerogatyva visame pasaulyje, o vartotojai palaipsniui suvokia ekologinių<br />
produktų naudą ir veiksmingumą.<br />
Atlikto tyrimo 2007-2008 metais Lietuvoje metu apklausti 1054 respondentai keturiuose Lietuvos<br />
miestuose - Vilniuje, Kaune, Klaipėdoje ir Šiauliuose. Šiame tyrime buvo siekiama išsiaiškinti kai kuriuos<br />
ekologiškų produktų pirkimo ir vartojimo veiksnius; nustatyti, ar pirkėjai kreipia dėmesį į žemės ūkio produktų<br />
šalies kilmės klausimą, ekologinį prekių ženklinimą bei perdirbtų žemės ūkio produktų sudėtį; išanalizuoti, kokią<br />
įtaką jų pirkimo sprendimams turi ekologiškų produktų reklama ir ar ji pakankama.<br />
Tyrėją taip pat domino klausimas, ar respondentai yra ištikimi pasirinktiems ekologiniams produktams,<br />
ar prekybos centrų ir prekyviečių vykdoma rėmimo veikla padeda ugdyti jų lojalumą ekologiniams žemės ūkio<br />
produktams.<br />
REIKŠMINIAI ŽODŽMI: ekologinis marketingas, ekologinis žymėjimas, ekologiniai produktai, vyriausybės<br />
politika ir reguliavimas, klientų lojalumas, Lietuva.<br />
Tll-tKmniMATIONS IN imiSESS & <strong>ECO</strong>NOMICS, Vol. 8, No 1 (16), 2009