green marketing malang.pdf

INTERNATIONAL JOURNAL of ACADEMIC RESEARCH

Vol. 4. No. 1. January, 2012

ANALYSIS OF GREEN MARKETING STRATEGY ON REAL ESTATE COMPANY TO ACHIEVE COMPETITIVE ADVANTAGE: A CASE STUDY OF IJEN NIRWANA RESIDENCE, MALANG, EAST JAVA Zainul Arifin

Business Administration Department, Faculty of Administrative Science, University of Brawijaya, Malang (INDONESIA) [email protected] ABSTRACT

This research aims were: (1) to describe the green marketing application of Real Estate Company based on green marketing grid and green marketing matrix, (2) to analyze the type of competitive advantage from implementation of environmental strategy on Real Estate Company. This research was conducted in Ijen Nirwana Residence Malang, the real estate product of Bakrieland Real Estate Company. The research type is a case study with a qualitative approach. The data was collected using an interview method and documentation. The research focus were: (1) mapping of green marketing grid; (2) condition of green market segments and the capability to apply green marketing strategy matrix, and (3) competitive advantage from implementation of environment. The results of the research show that 1). Green marketing grid of Ijen Nirwana Residence occupies at A1 category: Set an example with a pointing approach. 2) Green marketing matrix of Ijen Nirwana Residence gets lean green. 3) The type of competitive advantage of Ijen Nirwana Residence is eco branding . Key words: environmental, green marketing, strategy, competitive advantage 1. INTRODUCTION

Global warming has been a very interesting issue as it has some environmental implications. IPCC report (Intergovernmental Panel on Climate Change) stated that “On current trends, the report predicts an average increase in temperature across the century between 1.8˚C and 4.0˚C” [1]. A business world having a strong relation to the environment has held several international conferences attempting to realize environmental fairness such as Montreal Protocol (1987), a conference in Rio De Jeneiro (1992), Protocol Kyoto, and Great meeting in Copenhagen in 2009.The result of the conference is producing a regulation regarding the attempt to reduce carbon emission coming from business world activities. The Indonesian government has ratified it in Legislation (UU) No.17 in 2001. The Issue regarding the environment has a significant impact on a scientific paradigm and life attitude. In the business world, also on real estate business the marketing concept emerges which is concerned with environmental preservation known as green marketing is important strategy to be implemented. Therefore, the problems research were as follows: (1) what was the green marketing application of Real Estate Company based on green marketing grid and green marketing matrix, (2) what was the type of competitive advantage from implementation of environmental strategy on real estate company. 2. MATERIALS MATERIAL S AND METHODS 2.1. Study area This research was conducted in Ijen Nirwana Residence Malang, real estate products of Bakrieland Real Estate Company. The research type was a case study with a qualitative approach. The data was collected using an interview method and documentation. The research arrangements were: (1) mapping of green marketing grid based on Grant [1]; (2) conditions of green market segments and the capability to apply green marketing strategy based on Ginsberg and Bloom [2], and (3) competitive advantage from implementation of environmental strategy based on Orsato [3]. Pictures of Ijen Nirwana Residence were presented in Figure 1.

Fig. 1. Pictures 1. Pictures of Ijen Nirwana, Malang, East Java of Indonesia



2.2. The importance of Green Marketing for Company Green marketing is a concept which attempts to minimize the harmful impact of the environment [4]. Green marketing is essential because it successfully emerges a competitive strength affecting a business competition map in both current time and the future time. Based on the surveys done in 16 countries, the conclusion can be drawn which is, “It can be assumed that firms marketing goods with environmental characteristics will have a competitive advantage over firms marketing non-environmental responsible alternative”[4]. The competitive advantage obtained from the green marketing application can not be separated from green innovation capable of enhancing the environmental and business performance. Among the business efforts which focus the friendly environment is a property area/field which applies the green marketing application. Property progressively develops resulting from the increasing demands of residence. This implies that a property business must be concerned with an absorptive capacity to relate the application of green marketing application and the competitive advantages. This results from a reason that one of the components of absorptive capacities is the company’s capacity in anticipating the regulation as well as the incoming social trends. It means that the absorptive capacity owned will be the input toward the environmentally strategic formula which is pro-active. This is the attractive point to analyze it further regarding the application of green marketing and its relation to the achievement of competitive benefits based on the environment. The first idea of green marketing or commonly called environmental marketing in 1989 was in fact the previously improved concept called ecological marketing. Ecological marketing is defined as: The studies of the positive and negative aspects of marketing activities on pollution, energy depletion and no energy depletion” [4]. In addition, Polonsky [4] described 3 components in an ecological marketing which were as folows:

It is subset of the overall marketing activities. It examines both the positive and negative activities A narrow range of environmental issues are examines.

  

Application of green marketing should be concerned on several principles developed by Ottman et all [5]: I n the first place, consumer’s value position, the analysis of consumer’s value in this green marketing can be done by relating the green product and its usefulness such as efficiency, cost effectiveness, health and safety, performance, symbol and status and comfort. Secondly, the suitability, with the consumer’s knowledge, the green product should give solution toward the needs of the consumer. Finally, the credibility of the product was claim. 2.3. Variation of Green Marketing Strategy The Strategy of green marketing has several variations as follow: A. Green Marketing Grid Grant mapped the form of green marketing application into several types based on the previous research he conducted. In fact, there is no justification which one is the better type. This is because the best type comes from the accuracy of the type choice with the product character as well as the business type [1]. According to Grant [1], the existing line is the target of the green marketing application while the given column is the applied technique. There are three column of formulation marketing grid: (1) The green column, it was mentioned that the company starts to determine the friendlier environmental standard compared to its competitor, (2) The greener column, the company applies the green marketing by involving consumers or collaborating with them, and (3) The greenest column, the application of green marketing is addressed to influence the culture in using the products. Next, Grant gives 9 marketing grids:

1) Set an Example (A1). This is done by communicating the value of friendly environm ent to public which the company has adopted. 2) Credible Partners (A2). The target is to shape social brand identity which is usually done by influencing the consumer’s feeling intensively or by influencing the emotional state of the consumers. 3) Market A Benefit (A3). For those who are not really concerned with the environmental issue, it is very important for the company to focus more on the product functional use, This is the fact that a green product also has the side usefulness, like more efficient products, stronger ones, safer, healthier and better ones. 4) Develop The Market (B1). The company collaborates with the consumers to develop the market of green products. 5) Tribal Brands (B2). In this type, a group wanting to form certain brand is the targeted one. This group is typically a group that is strongly attached to identity, ideology of pleasure and life styles attached to this group. 6) Change Usage (B3). The company has the tremendous impact on the consumer’s life style as it can recommend its customers to do activities related strongly to reduce carbon emission. 7) New business Concepts (C1). This type highlights the creation of a new business concept. 8) Trojan Horse Ideas (C2). The application of this type is addressed to the group of society having its own identity to allow its dignity well realized. 9) Challenge Consuming (C3). This approach is usually done for the consumer group classified into a dark green one who are highly concerned with the environmental issues and are affected by the purchasing decision as well as the use of the products.



B. Green Marketing Strategy Matrix

In a green marketing strategy matrix developed by Ginsberg and Bloom, they are more likely to reflect on the strategy by measuring the condition of green market segments and the capability to find out how far the strategy of green marketing is possibly applied in accordance with the condition being encountered. According to Ginsberg and Bloom [2], the implementation of that strategy is sometimes not able to increase sales, enlarge markets as well as enhance the market prospect. The following is the explanation of each strategy based on the previous chart: [2] 1) Lean Green, the company attempts to keep having good reputation in front of the public. It, however, does not focus itself on publications or market its friendly environment initiative. 2) Defensive Green, the company applies its strategy of green marketing as a reaction for what it’s been done to its competitors which aims to enhance its brand image. 3) Shaded Green, the effort to create friendly environment is realized from the whole system, a long term investment as well as a process of friendly environment which allow the presence of strong commitment both financially and non-financially. 4) Extreme Green, this is about the issue of fully integrated environment in the business and a life-cycle product process. The practices applied are the use of Quality Environmental Management and Manufacturing as well as life-cycle pricing. C. The Competitive Advantages from Implementation of Environmental strategy

The environmental policy cannot be separated from the fundamental aspects which usually attach to a business. According to Reinhardt in Orsato [3], the intended aspect comprises an industrial structure in which the company operates, the company’s position in an industry, types of market served and the company’s capacity. In addition, the competitive advantages obtained from the implementation of the environmental strategy such as a low cost or differentiation is the description of a generic strategy developed by Porter. Based on that, Orsato developed a framework of generic competitive environmental strategy. According to Orsato [3] which consists of 2) Strategy 1 (Eco-Efficiency). In this strategy, the company makes the cost reduction and makes the environmental impact resulting from its operational process. The company is likely to assess it independently by asking the other party to audit its owned system. 3) Strategy 2 (Beyond Compliance Leadership). This strategy mainly discusses about the company which publishes its effort regarding its friendly environment in its organizational process to achieve a good corporate image. This good image has its own power to influence the consumer buying behavior. 4) Strategy 3 (Eco-Branding). This company differentiates itself based on its attribute of friendly environment for its products. This differentiation can be emerged by presenting a unique and valuable thing for its buyers as well as offering a lower cost. 5) Strategy 4 (Environmental Cost Leadership). This strategy is addressed for the company having a competitive market condition focused on cost. The company considers unnecessary to perform an aggressive marketing regarding its friendly environment. This is related to the consumer’s attention focusing on a competitive cost. 3. RESULTS AND DISCUSSION 3.1. Green Marketing Strategy of Ijen Nirwana Real Estate Company The efforts to be environmentally friendly in Ijen Nirwana Residence as A Real Estate Company have been implemented in the proportion of green areas which make up 60% compared to its commercial land/area. Moreover, another program is also applied which is called bakrieland goes green in which Ijen Nirwana Residence is under the management of Bakrieland Development Corporation. 3.2. Green Marketing Grid of Ijen Nirwana Residence Based on the type of green marketing strategy mapped by Grant [1] known as a green marketing grid, the strategy used by Ijen Nirwana Residence is categorized into A1: Set an example. According to figure 1, we can see that a green table is the position done by Ijen Nirwana Residence. The reason of this decision categorized Ijen Nirwana Residence cannot be separated from it achievement gained. The outcome is more likely to be commercial outcomes that is the focus of column A than that in column B and cultural outcomes belonging to column C. This aims that the consumers feel to preserve the environment by buying the products offered by Ijen Nirwana Residence. Also, Ijen Nirwana Residence tends to be more focused on it s commitment toward the environment having been published by determining 60% of its area for its green ones. As a result, it can be concluded that from the three existing lines, Ijen Nirwana Residence has a tendency to be in the first line which is public company & markets with the classification in set column: set an example. Ijen Nirwana Residence has a tendency to be in “pointing” approach. This is known from the essence of communication which can be indicated from its product or its specific actions related to its environmental save programs. The analysis Result was described as in Table 1 below.



Table 1. Green Marketing of Ijn Nirwana Residence in the position grids of Grant [1]

1. Public Company & market

2. Social Brands & Belonging 3. Personal Product & Habits

A. Green Set an example (Farming Vs Pointing) Green Marketing Grid of Ijen Nirwana Residence (this study) Credible partners (Eco-labels vs Cause Related)

B. Greener Develop the market (Educate Vs Evangelist)

C. Greenest New business concepts (Social Production Vs Property)

Tribal brands (Exclusive Vs Inclusive)

Trojan horse ideas (Tradition Vs New Cool)

Market a benefit (Less Vs More)

Change usage (Switch Vs Cut)

Challenge consuming (Treasure Vs Share)

Set new Standard Community

Share responsibility collaborate

Support innovation culture reshaped

3.3. Green Marketing Strategy Matrix of Ijen Nirwana Residence In a green marketing strategy matrix that was developed by Ginsberg and Bloom [2], they are more likely to reflect on the strategy by measuring the condition of green market segments and the capability to find out how far the strategy of green marketing is possibly applied in accordance with the condition being encountered. According to Ginsberg and Bloom [2], the implementation of that strategy is sometimes not able to increase sales, enlarge markets as well as enhance the market prospect. The following is the result of Green Marketing Strategy of Ijen Nirwana Residence:

Fig. 2. The Green Marketing Strategy of Ijen Nirwana Residence in the position matrix of Ginsberg and Bloom [2]

The following was the description of green marketing strategy matrix of Ijen Nirwana: The term of 60% refers to a green area. In addition the provision of 60% for this green area, Ijen Nirwana Residence is categorized into matrix Lean Green. Usually, a company having this category will reduce the cost more accurately and make efficiency toward the environment. However, this does not apply to Ijen Nirwana residence as the green operation is not yet applied. In this case, Ijen Nirwana Residence is more concentrated on focusing on a premium cost which is usually done by a company having a high green level of differentiation. Consequently, the decision of Ijen Nirwana ’s position into a green matrix is not an easy one, but it still has a tendency to be in lean Green level with several considerations. The size of green market segment. The size of green market segment faced by Ijen Nirwana Residence is relatively low that can be seen from the survey done by the company to its 80% of its consumers who do not place the aspect of friendly environment or green product attributes as the first consideration when buying houses in Ijen Nirwana Residence.



1) The size of the differentiation toward the environment. The size of the differentiation which Ijen Nirwana Residence has is in a low category. This is based on the opinion that its competitors can imitatewhat Ijen Nirwana Residence has done. The conclusion is based on the interviews to the company stating that what has been done by this company can possible be imitated by others developers which also depends on the technology and the cost. Moreover, the green areas owned by the company is lack of emphasis on the differentiation and the direct usefulness felt by the consumers according to the principles of green marketing which is the position of consumer’s value. 3.4. Competitive Advantage of Ijen Nirwana Residence According to Orsato [3], the intended aspect comprises an industrial structure in which the company operates, the company’s position in an industry, types of market served and the company’s capacity. To achieve the competitive advantage, Ijen Nirwana Residence has done some efforts to do friendly environment steps with some considerations: (a) 60% land use is entirely for green areas, (b) the Implementation of green architecture is targeted for the design and the material selection, c) the support for a friendly environmental landscape is realized by using paving as the main roads, absorptive wells, artificial lakes, city forest and sporadic forest. In short, it can be summarized that the competitive advantages based on the environment declared by Orsato and the dimension of innovation applied by Ijen Nirwana Residence are classified into the third quadrant which is ecobranding (Figure 4). This is based on the type of competitive focus referring to products.

Fig. 3. Competitive Advantage of Ijen Nirwana Residence in the position Generic Competitive Environmental Strategic of Orsato [3] 4. CONCLUSION

Based on the previous description, it can be conclused that the application of green marketing in Ijen Nirwana Residence can be explained through green marketing grid where it occupies A1: Set an Example. This is based on the orientation of strategic application owned, the tendency toward commercial outcomes which tries to communicate the environmental commitment being applied. Based on the size of green market segment encountered by Ijen Nirwana Residence, it has a low category. In addition, based on the differentiation size categorized into low, this residence in green marketing matrix is classified into lean green. The achievement of competitive advantage in Ijen Nirwana Residence is supported by product innovative dimension. As a result, the achieved competitive advantage is eco-branding. This means that Ijen Nirwana Residence applies the competitive advantage in the differentiation type and is a product-oriented. REFERENECES

1. Grant, John. 2007. Green Marketing Manifesto. West Sussex: John Wiley & Sons Ltd. 2. Ginsberg, Jill Meredith and Bloom N Paul. 2004. Choosing The Right Green Marketing Stretegy : MIT Sloan Management Review, 45(1): 79-84. 3. Orsato J. Renatoz. 2006. Competitive Environmental Strategy: When Does It Pay To Be Green? : California Management Review , 48(2): 127-143. 4. Polonsky, Michael Jay. 1994. An Introduction to Green Marketing, Electronic Green Journal . 1(2). 5. Ottman A Jacquelyn et al. 2006. Green Marketing Myopia: Environment (Science and Policy for Sustainable Development). 48. (5): 24-36.

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green marketing malang.pdf

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