Cost Benefit Analysis in Environmental

Friendly Marketing

Loukas Bellonias

Dipl.Wirtsch.Ing.

Contents

Abstract 3

Marketing and Environmental-Friendly Marketing 4

Cost Benefit Theory 8

Application of a Benefit Cost Analysis 12

References 16

Internet Resources 18

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Abstract

In this article we first define and describe the concept and main points of

environmental friendly marketing. We present the six important steps that must

be followed to have a successful marketing strategy. We make a short

introduction into cost benefit analysis, present the basic points of the cost benefit

analysis theory and define the various types of benefits and costs.

As a conclusion, an example in the sector of "passive" houses

(Niedrigenergiehäusern) is presented, in order to evaluate the options that a

consumer has to choose from, when facing the residence dilemma.

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Marketing and EnvironmentalFriendly Marketing

The objective goal of every company, which originates from its profiting nature,

is to maximize its profits by using strategies of conventional marketing. In this

process there are always some negative side-effects that are related with the

society and the environment. The environmental problems that modern way of

living has caused have led to the concept of a new marketing strategy. A strategy

that considers the consequences that are caused to the nature and thus also

further to the society.

Environmental-friendly Marketing takes the whole product

life cycle into consideration and aims to achieve the minimum ecological impacts.

Its goal is to satisfy the needs of the customer and at the same time to minimize

the needs in energy and in raw-materials. (Belz, 2002)1

Environmental-friendly marketing, contrarily to conventional marketing, is not so

simple to be applied, due to the constraints and the guidelines that must be

followed. According to Belz (2002)2, there are six key steps that must be followed

in order to fulfill the concept of environmental-friendly marketing.

The fist step is the

analysis of the social and economical problems

that

arise during the production phase of a product. During this phase, the negative

effects that are threatening the environment must be detected. A method

developed, known as Life Cycle Analysis (LCA) can assist us. LCA is a method,

which helps us to identify all the negative results that are caused to the

environment during the whole production phase of a product, from its creation

until its disposal.

Second step is the

analysis of the customer demands

. To fulfill the customer

demands is a determining factor for the success of a service or product in the

market. To better understand the consumers that are potential customers for

1 Belz, F.-M. : Nachhaltigkeits-Marketing. Ein entscheidungsorientierter Ansatz.

2 Belz, F.-M. : Nachhaltigkeits-Marketing. Ein entscheidungsorientierter Ansatz.

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