What’s Green Marketing?
Green marketing is the promotion of environmentally friendly services and products. It’s becoming more popular as more people become concerned with environmental issues and decide that they wish to spend their cash in a means that’s kinder to the planet. Find an agency to help with social media for your business to keep growing online.
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Green marketing can involve lots of different things, like creating an eco-friendly item, using eco-friendly packaging, adopting sustainable business practices, or focusing advertising efforts on messages which communicate a product’s green advantages.
This form of advertising can be expensive, but it can also be rewarding as a result of increasing demand. By way of instance, products produced locally in North America have a tendency to be more expensive than those made abroad using cheap labor, but they have a much smaller carbon footprint because they do not have to fly across the planet to get here. For many consumers and business owners, the ecological advantage outweighs the price difference.
Consumers who prefer to buy green products although they may be more expensive fall to the’LOHAS’ category. LOHAS stands for Lifestyles of Health and Sustainability. According to Wikipedia:
“LOHAS describes an integrated, rapidly growing market for products and services which appeal to consumers whose awareness of social and environmental responsibility influences their purchase decisions.”
Green Marketing Methods
Beyond creating an environmentally friendly solution, company owners may do anything else as part of the green marketing efforts. The following can all be a part of a green marketing plan:
- Using eco-friendly inks and paper for printing marketing materials
- Skipping the printed materials entirely and option for digital marketing
- Using a recycling program and responsible waste disposal practices
- Using eco-friendly product packaging
- Using efficient packaging and shipping methods
- Using eco-friendly energy sources
- Taking measures to cancel environmental impact
Some marketers attempt to capitalize on the increasing number of green consumers simply by taking a green marketing approach to products which may not otherwise be considered green. They attempt to position their products as a much better alternative for the environment when they are really not. A good example of this is when a firm uses the colour green in their packaging, or the phrase green somewhere in their messaging, even when there is not anything especially eco-friendly about their merchandise, nor it is not more eco friendly than competing products. Greenwashing is not just misleading, but it can also be detrimental to a firm’s reputation.
If consumers wish to make sure they are really purchasing a green item, they ought to search for official certificates listed on the product packaging.
What is Gross Profit?
The gross profit of an organization is the total sales of the company minus the complete cost of the merchandise sold. The total sales are the products sold by the company. The complete cost of the merchandise sold is the sum of all of the variable costs involved in earnings.
Just what are Goods Sold and the Cost of Goods Sold?
When calculating the overall sales figure the company must complete all goods sold within the chosen financial period of time. This total can’t include the sale of fixed assets such as a building or equipment. A clothing store, as an instance, will give the complete amount of money made from the sale of its inventory of clothes as the overall sales figure.
To compute the costs of goods sold figure, the shop must complete all costs involved with selling the clothes to clients. These are variable costs only and are ones which may fluctuate with the amount of sales. This will include such costs as:
- Benefits of sales staff
- The cost of the clothes sold
- Any commissions due to sales personnel for meeting targets
- Utilities for your shop
- Shipping of clothes sold if bought online
- charge card prices on customer purchases.
Fixed costs like rent, office equipment, salary of non-sales personnel, insurance, bank costs and advertisements aren’t included in calculating the cost of goods sold figure.
Using the Gross Profit Figure
For a store to compare only the gross profit figure from one period to another is a dangerous way of judging how the shop is performing. The gross profit figure may remain the same or even increase while the gross profit margin might be on the reduction and point to trouble ahead for the shop. The shop will use the gross profit figure to create the gross profit margin, which is a much better indicator of the efficacy of the shop over any time period selected. When composing a gross profit figure that the shop does so with respect to a currency value.
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Gross Profit = (Total Revenue — Total Costs of Goods Sold)
The gross profit margin however is a percentage figure and the shop calculates this using the formula:
Gross Profit Margin = (Gross Profit / Total Revenues) x 100
The shop may use the gross profit margin to compare with the market average to find out if it’s performing well on the market. If the gross profit margin is below expectations or on the reduction, the shop should inspect the gross profit figure and determine what costs need fixing or some other ones which may need cutting.
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