Marketing Green Products EffectivelyAs a rapidly growing number of businesses acknowledge that they are members of the wider community and embrace a position of social responsibility, environmental issues are increasingly being integrated into corporate culture. This realisation can stem from increased consumer interest in environmental affairs, relevant legislation or even just a sense of moral obligation towards the local or global community in which a business operates. From a marketing perspective, socially responsible behaviours add an extra dimension to brand values that, if correctly communicated to customers, can both raise brand awareness and even drive sales. With global concerns about energy use and the environment at an all-time high, the demand for green products and services is on the rise and there is a clear opportunity for businesses to place sustainability and environmental responsibility at the forefront of marketing campaigns. However, to expect a product to sell on its 'green' qualifications alone, is short-sighted and can ultimately have disappointing results. Traditional marketing wisdom dictates that to give a product consumer appeal, it must provide an attractive answer to the question of "what's in it for me?". While marketing green products follows the same principle, successfully marketing a green product to a wider audience requires a different approach. Besides positioning the product's environmentally responsible functions as a reflection of the more practical benefits as a response to the "what's in it for me?" question, consumers today are also concerned about what happens at the end of a product lifecycle. Environmentally sound, convenient and affordable ways of product disposal such as recycling and take back schemes can be perceived as a product benefit. Marketers also need to bear in mind that consumers' increased environmental awareness means a company's green credentials may influence purchasing decisions so clearly communicating a company's green commitment is a key ingredient to successfully marketing green products. Let us look at the practical benefits often linked with green products such as performance, cost effectiveness, health and safety and status 1 . Performance Many preconceptions about the poor quality of environmentally responsible products are based on outdated information about earlier generations of green products which were sometimes inferior to non-green ones. Today, however, many green products are designed to perform better than conventional ones. An example is today's energy efficient, front loading washing machines that clean clothes better and more gently due to its centrifugal wash cycle as compared to conventional top loading washers that tend to wear clothes down faster. So, it is important to communicate to customers that they can now have a more comprehensive portfolio of benefits than they might think. Cost effectiveness Although some green products command a price premium, many also offer inherent cost benefits through the cost savings a consumer can achieve over a product's lifecycle. For instance, according to the Carbon Trust an average new energy efficient personal computer (PC) can cost no more than an inefficient counterpart but has lower operational and maintenance costs. In fact, with PCs consuming close to 50 per cent of the energy of all office equipment 2 , energy efficient desktops are more cost effective to businesses as they significantly reduce ongoing maintenance costs. Health and safety An increasing number of global concerns over exposure to toxic chemicals, hormones or even disease have led to a boom in the market for organic, environmentally sound products. Focusing on how a product minimises or even eliminates these risks can often achieve broader appeal among newly health-conscious consumers and non-traditional demographics such as pregnant women or the elderly. For example, flat panel monitors emit less radiation, do not flicker as much as traditional monitors and tend to be brighter with less glare, making them easier on and less harmful to the eyes of the user. Another example is the organic food and drinks market. Organic food and drink sales have been steadily increasing in light of the public's concern over genetically modified foods, toxicity in foods such as mercury in fish, mad cow disease and Mintel predicts that by 2010, organic food and drink sales will grow by 72 per cent to £2 billion. Status While 'green chic' status can be an excellent driving force in the sale of environmentally sound products, it can be hard to achieve. Perhaps one of the best ways is to try and attach an aspirational value to a green product, through endorsement from early adopters, opinion leaders or even high-profile celebrities. This is one approach that worked for the Toyota Prius, the gas-electric hybrid vehicle. However, although the Prius gained initial recognition through celebrity endorsement, there was also a push behind the fact that the Prius is recognised as a car just 'fun' to drive and is a practical automobile choice. Recycling and take-back schemes As the spotlight on environmental issues continues to increase and both businesses and consumers are urged to do their bit for the environment, providing recycling and take-back services can appeal to consumers. Due to concerns of the environmental footprint left behind by computers, computer peripherals and other electronic goods at the end of their lifecycles, recycling schemes offered by businesses are viewed favourably. Today, many computer and electronics manufacturers have implemented recycling schemes and some also offer a take-back option. Commitment to the environment Marketers cannot afford to rely on products to push green messages. The brand itself needs to have a corporate social responsibility policy in place where environmentally friendly practices play a role in the actual running of the business. For example, it is important to ensure that your suppliers also adopt green methods and that as far as possible, environmentally-friendly processes such as keeping inventory to a minimum so that the environmental impact of warehousing is kept to a minimum are deployed throughout the company. This will enable better customer trust in not only your product but your brand as well. As environmental awareness becomes increasingly embedded in popular culture, the number of customers demanding that environmental performance be a part of any successful product or service will continue to rise. Given a brand they trust, which provides quantifiable benefits, and armed with the extra knowledge that it happens also to be green, a large and growing number of consumers will grab the eco-friendly option. It is the role of the marketing team to ensure that the link between green initiatives and existing brand strengths is effectively promoted. 1 Environment, "Avoid Green Marketing Myopia", Jacquelyn A Ottman, Edwin R Stafford and Cathy L. Hartman, June 2006 2 The Carbon Trust, "Office Equipment - Energy Saving Fact Sheet", October 2006 Keeping it Clean Marketing and marketing related activities consume a vast amount of ink and paper. There are four ways business cards, stationery and brochures affect the environment:
The Forests Themselves Paper production has a major environmental impact on forests when paper fibre is produced from trees cut from virgin forest without replanting. You can choose printers that only use paper from European forests where more trees are planted than felled. Printer Inks The most common inks are petroleum-based. Using these can create large quantities of volatile organic compounds (VOC). Vegetable dye inks are more sustainable. They're cleaner and brighter and more rub resistant than petroleum-based inks. They produce much less of the volatile organic compounds. And they're the same cost as petroleum based inks. Dampening Solutions Many printers use a dampening solution with high levels of a solvent called isopropyl alcohol (IPA). IPA contributes to Volatile Organic Compound emissions. Again there is an environmentally friendly alternative. The printer needs to use a waterless printing process. That means a dampening solution isn't required and therefore no IPA is released. Chlorine Chlorine is used to bleach paper to make it white. The side-effect is that carcinogenic organic compounds are produced that are toxic to life. And of course there are plenty of chlorine-free papers that can be used instead. Why Doesn't Everyone Use Sustainable Printing? The problem of course is that historically printing presses have been a major capital investment. That means the printer is not going to scrap or sell the press until they've had their money's worth out of it. Any other way is commercial suicide. That means unless you search out environmentally friendly printers you're constrained by the machinery and printing process of the printer you've chosen. What Can You Do For Marketing Sustainability? There are a number of routes to sustainability success. These include the following:
Some of these routes are good cost reduction processes and benefit both agency and client. You can see this from a discussion of just two of these routes. Using PDF For Brochures Using PDF format for brochures allows a client to immediately change their brochure to reflect what they've discussed with their prospect. It can be sent to the prospect as soon as it's completed and drives the whole buying process much more quickly. An obvious orientation to the prospect gives the relationship more impact. The prospect can see that the agency understands their situation. It also means that it's easier for the prospect to send the brochure around their organisation for discussion. There are other ways to get even more buy in with a PDF brochure but I'll leave that to your imagination. And the net result is a massive saving in printing costs and much more flexibility in use. e-Billing Is Better In November 2006 British Telecom moved to e-billing for its customers. 160,000 customers decided to get rid of paper bills. That meant:
Other institutions, such as The Halifax, have also moved to e-statements. And of course Internet banks such as Egg and Smile already had the e-statements in place for their customers. Agencies can join in the e-billing revolution by creating invoices and orders electronically, thus cutting out print, ink and paper costs. In summary it takes investigation to discover different ways of operating that mean that marketing is made more sustainable. As always, the bottom line remains important. And it's only by ensuring that the benefits of moving to a sustainable way of marketing are highlighted and shown to agency and will they be taken client staff up with any enthusiasm. About the author It's Down to UsIn a lively debate held at the House of Commons, Brand Forensics expert Jonathan Gabay helped to persuade an audience of over 200 people from service and industry, that marketing, rather than tax impositions alone will help encourage the British public to rethink their attitudes towards global warming. Sponsored by Liberal MP Lembit Opic, the event was held in conjunction with the Chartered Institute of Marketing. The debate was against Emma Duncan, Deputy Editor of The Economist magazine and John Ross, Director of Economics and Business Policy, Mayors Office, GLA. Much to the discomfort of the representative from the Mayor's office, Gabay tackled sensitive issues such as the congestion charge - head-on saying: "The Mayor wants to tax anyone who doesn't actually relish the idea of being squeezed in London's toothpaste tube - aka the Underground. Congestion charging may actually turn out to achieve little more than displace pollution from the City into the suburbs - turning leafy London into congealed arteries of grimy parking bays and squalor." After then dealing with specific issues of using marketing communications to address international taxation and climate change, Gabay reassured the audience that there remained one alternative energy source with the heroic common sense to champion the fight against global warming. Market demand can compel industry to produce cleaner products, (such as unleaded petrol and modified aerosols that have lowered emissions of CFC gasses). Market demand can ensure that ingenuity is applied to promote a variety of alternative energy sources - including wind, solar and wave - rather than end up depleting one natural resource for another such as oil for crop-based fuel. Market demand can encourage tourism to invest in cleaning up resorts so making people happier to take more of their holidays at home rather than feel compelled to fly abroad. Marketers can develop recent suggestions to encourage rich frequent flyers to buy carbon allowance credits from those who don't travel. Maybe we could call the scheme "Landmiles for Airmiles". Carbon credit "Landmiles" would be sold to frequent flyers, creating a valuable currency for the less well-off. Gabay then highlighted some simple principles which marketers could keep in mind when dealing any global warming campaign:
Gabay concluded with an inspiring rabbinical quote from Salenter: "I wanted to change the world - but it was too large of a task for one person - so I tried to change my community. That was also too hard, so I tried to change my family. That was also too hard, so I decided to change myself. And though it was very hard, once I changed myself, I discovered my family changed, the community changed, and the entire world changed." Summing up, Gabay said that "by working together, scientists, technologists, industry and marketers - who will communicate messages effectively - can leave a legacy that will brand everyone as heroes." To find out more visit http://www.brandforensics.co.uk Climate Change and the implications for brand evaluation The beginning of brand valuation Brand valuation has become an integral part of the brand management and strategy landscape. No longer are businesses acquired simply for their tangible assets. Instead, significant premiums are paid for a company's intangible assets, such as its brands, copyrights, patents and customer loyalty, which in the modern age have inherent commercial value in their own right. Climate change moves centre stage We now live in an age when climate change is unquestionably the most serious threat facing humanity and the real implications and effects of our carbon-intensive lifestyles are now being recognised. We are, in the words of leading environmental campaigner and commentator George Monbiot, living in 'the brief historical interlude between ecological constraint and ecological catastrophe'. You don't have to be a committed 'green' to recognise that climate change will have huge consequences for future patterns of brand consumption. And how we perceive brands for the truly 'sustainable' value they deliver will be very different going forward. In its own way, the recent Stern Report was a landmark event. Previously regarded as a specialist topic for meteorologists, environmentalists, niche political parties and CSR professionals, climate change has become a mainstream issue receiving massive media exposure across all major channels, as well as high-level political attention. Placing sustainability at the heart of the brand 'Green' has moved from niche money-costing point of principle to mainstream money-making marketing advantage. But while 60% of consumers now believe industry/companies are at fault for causing environmental damage or climate change (Henley World 2006 survey), only 10 percent saw impact on the environment as the key factor when deciding which product or service to buy. Environmental concerns may currently be part of a number of purchasing decision criteria, but people do believe that by shopping ethically they are making a difference. Seeing ourselves as consumers first and environmentalists second may well change before too long. Climate change doesn't just involve the 'usual suspects' For commercial organisations, climate change is not just an issue for those sectors or companies that are traditionally linked with the issue, such as oil and gas. Increasingly, climate change will potentially impact businesses in three key ways: regulatory risk (where for example a company may be subject to emissions regulation and buildings compliance); physical risk (such as the impact on property and insurance costs); and business risk (including the impact of climate change exposure to brand value and reputation). Research undertaken for the Carbon Trust in 2005 indicated that the impact of climate change would potentially vary according to the particular sector. If brand value is at risk from climate change, there would seem to be an opportunity for real differentiation against competitors that goes well beyond the 'cosmetic'. Brand 'leaders' are already starting to emerge The CEO of GE, America's biggest corporation, has effectively staked his company's future on its ability to "define the cutting edge in cleaner power and environmental technology." Under its 'Ecomagination' strapline, GE has promised by 2010 to double its research spending on cleaner technologies to $1.5 billion annually and double its sales of environment-friendly products to $20 billion annually. Meanwhile, GE will also reduce its emission of greenhouse gases by one percent by 2012. GE's actions carry a lot of weight. Not only is it the largest company in the US with a market capitalisation of $381 billion, it is also the most widely-held stock in the world. Its CEO, Jeffery Immelt, represents arguably a new breed that emphasises a company's obligations to a range of stakeholders and interests including the global environment. Consumer and business agendas are converging Within the marketing and business community, the kind of brand evaluation framework first used with Rank Hovis McDougal still has an important role to play. But what of the ordinary consumer? How are they supposed to arrive at an informed and meaningful brand 'value' judgement in a carbon-constrained future? Pressure from within the commercial sector for more accountability and openness is evident in the rise in non-financial reporting schemes which are allowing more transparency and monitoring of production - a prerequisite for ethical production. Together, these two parallel movements are beginning to create the conditions for a major revision in eco-friendly patterns of consumption. What we are consequently seeing is a convergence between environmental and commercial agendas. The green revolution is partly defensive. In an era of corporate scandals symbolised by the Enron debacle, CEOs understand that their brands are precious equity. To maintain trust in a brand, it isn't enough anymore to make good products. Consumers trust companies that are responsible citizens; they mistrust companies that appear selfish or wasteful. Even the global energy companies, once symbols of corporate arrogance, have begun to change. In conclusion The development of a robust valuation framework has been an important milestone in the evolution of corporate branding and its acceptance across the wider business and financial community as a formal discipline that is capable of creating tangible and even exponential, commercial value. If brand value is at risk from climate change, there is an opportunity for brands to really differentiate themselves. But this will mean adopting a much more forward-looking mindset that takes account of the risks, the issues and the longer-term opportunities, whilst also recognising the response times that may be involved. Balancing this with the seemingly incessant short-term demands of shareholders will be an interesting challenge, to say the least. About the author Mark Vadgama is senior strategy consultant at Rufus Leonard. The Buzzword of the Moment A quick glance at any newspaper or magazine and you realise that going green is right at the top of the public agenda and never before have audiences been more ethically aware. But with the public now driving the green agenda, companies are under pressure to ensure they are in tune with their customers. The key challenges for any business are to avoid suggestions of tokenism and to build trust - 'walking the walk' and 'talking the talk' are critical. Going for the fad, to gain internal or customer support, will not fool anybody and will only come back to damage both brand and reputation. Trust must be preserved at all costs as highlighted by the UK's recent first Customer Trust Index which found that three in five people will not buy a product from a company they do not trust, no matter how attractive the price, product or service. It is in this atmosphere that everyone from financial institutions to political parties are now highlighting sustainability within their marketing message. But this is not just about adapting to changing consumer attitudes - it is a real business issue. It has been proven that the assimilation of ethics with business impacts profits, share value and customer loyalty and is critical to success and competitive advantage. So in today's environment, businesses cannot afford to ignore the sustainability marketing message. Our own research, at Spencer du Bois, found that many professions and companies have an ethic at the core; and if these can be tapped into then they become a genuine strength for the business and its marketing message. For example ask any engineer and they will tell you that engineering is as much about how to 'make a genuine difference' or 'finding solutions to global problems' as it is about building bridges. And still there are many companies who are doing it right but telling it all wrong. The result is that their marketing lacks credibility. Look at Honda's Formula One 'green world' sponsorship on the ultimate gas guzzling, carbon puker that sits on four wheels. It completely obscured their work in energy efficiency and environmental impact. Or HSBC's 'buy a product in our New Year sale and we'll plant a tree', completely trivialising their history in forestation and making it look like a cheap and highly ineffective sales gimmick. So contrary to what the 'marketing pixies' will tell you, this is not just a case of jumping on the green bandwagon. Or even a simple case of inserting a few lovely pictures of trees in marketing collateral or switching to a green colour palate. Managing communications around sustainability is complicated and needs to be treated professionally. There are three golden rules: think about 'integration', 'transparency', and 'diversity'.
So when it comes to integrating sustainability within marketing it is becoming increasingly obvious that the times they have changed. Today's audience is clued up. A shiny yet superficial marketing campaign will no longer cut it. What the public is really demanding is that companies who make ethical commitments do so with integrity and a very real sense of responsibility to change. Under the skin of green marketing - the inconvenient truth Scratch the surface of most brands that are jumping on the green bandwagon, and it becomes apparent that underneath the PR gloss and the corporate statements of intent, they are miles away from truly embracing the ethical credentials they purport to follow. There's a dangerous precedent being set by companies who are already promoting their easy green wins and repackaging themselves to look more ethical, simply to ride the crest of publicity. But the real triumphs - not just for brands, but for the real reason we're all doing it, the planet itself - come far away from the glare of publicity. The devil, as they say, is in the detail. Some brands will find it very difficult to completely re-engineer their businesses to create ethical or environmentally aware products. Some sectors - mining, petroleum, household products, to name but a few - will have to work harder than most to ensure that their businesses are sustainable and ethical. There is no doubt that a brand's ethical credentials are increasingly part of consumers' decision mix. Vigilante consumers - a more powerful force thanks to the power of chatrooms, blogs and anti-brand sites - will ensure that those playing lip service to greening themselves will be exposed and ridiculed. Making the decision to become sustainable isn't the preserve of the marketing department. If it's really going to work, the whole company, from top to bottom, left to right, has to re-engineer itself to learn how to do business differently. Putting 'green' goggles on should be like donning X-ray specs. The visible, PR-able initiatives should be the very last thing that companies address. But there is a growing pressure for even the most unethical brands to sign up to at least one standard: that the marketing materials they produce - which only exist to encourage people to buy more of their brand - have a zero impact on the environment, to avoid a frankly unacceptable double whammy. At the very least, the marketing communications materials - the brochures, direct mail, point of sale material, shelf wobblers and other associated collaterals that exist simply to get people to consumer more - should have zero impact on the environment. To make a product eco-friendly, then undo the good work with eco-unfriendly marketing is increasingly a massive own goal. Last year, it is estimated that over 78,000 tonnes of direct mail ended up in landfill. We are burying 2,559.8 acres of paper a year - which adds up to a massive 1,326,000 trees ending up as landfill. And paper, depending on its type, can take anything from five months to 100 years to decompose. For some marketers, using recycled materials is the first step in a long and complex chain of custody. But it's the tip of the iceberg. A new battleground Realistically, the next few years will probably see a wrangle between the marketing and finance departments. For years, marketing departments have been outsourcing print to more cost effective locations around the world, saving money even when long-distance freight costs are factored in. Difficult decisions are now having to be made about how much those companies are prepared to re-invest (in more expensive processes and practices) in truly going green where it matters. Best practice often doesn't come cheap, and the most innovative brands will have to invest in research and more costly alternatives to their traditional print if they are to meet their own - and external - environmental standards. Where to begin The following points are not a definitive guide to making the marketing function zero-impact, but should create some talking points for marketing directors wanting to improve their environmental credentials.
Tom Gorman is Director of print management company the TDG Group. The future's bright - the future's grey The Chartered Institute of Marketing's White Paper on the subject of agesism in the marketing profession will make uncomfortable reading for those who believe that discrimination in our profession is a thing of the past. Awareness of discrimination on the basis of age has lagged behind that of other discriminatory behaviour. Moreover, it would appear that few of us care about the issue - 'Google' the three 'isms' and you will have 65.3 million hits for racism, 9.7 for sexism, but a paltry 1.2 million for ageism. Yet the effects of ageism can be pernicious and every bit as devastating as other types of negative behaviour. In our profession, it means that marketers are forced to follow a rigid career path. They need to have reached brand manager level by their mid-twenties, and must make marketing director by the time they are forty. Those who don't will be doomed to languish in a stagnant career, or compelled to leave their job to become 'consultants' because there's no where else for them to go. Even the relatively young can feel the sting of discrimination. Graduate recruitment schemes, for example, are very firmly closed to anyone past their mid-twenties. Similarly many younger marketers are passed over for promotion simply because they are deemed 'too young' - employers advertising for 'mature' or 'experienced' marketers are clearly not prepared to welcome job applications from younger people. New laws introduced in October last year go somewhere to protect marketing professionals at all stages of their career. But many employers remain unaware of the impact this legislation will have on their business and its practices. Others are wilfully ignoring the legislation, or actively seeking ways around the new rules. Prejudice about older employees is rife in the marketing profession, and it will be a long time before these deep routed opinions are challenged. It is widely believed that the young have a monopoly on dynamism and creativity, while the more seasoned employees have allowed cynicism and to snuff out any creative spark. Similarly, with more and more marketing spend moving into the online environment, there is clearly a need to recruit people who are comfortable in this cyber-world, and it is often assumed that it is only the young, (who have grown up with technology), who will be sufficiently adept. As the pace of change accelerates, traditional career experience and skills developed over time have lost some of their value. An individual's skill sets may now need to be refreshed numerous times over a normal working life. It is again assumed that it is only the young, who are less set in their ways, who will be able to adapt quickly to new circumstances. There is however much that marketers can do to avoid the career scrap heap. At The Chartered Institute of Marketing's Moor Hall conference centre, we rarely see people over the age of forty on our numerous training courses. This may be because companies are reluctant to invest in developing the skills of older workers. But it might also be because a 'been there, done that' generation of marketing professionals is not prepared to keep their skills and knowledge up to date. Yet there is nothing better than a brand new qualification to prove that you are keeping abreast of current thinking. As the baby boomer generation ages, the average age of our consumers is increasing. It will therefore be essential for marketing departments to reflect this shift and take notice of those who speak the language of these customers. By 2010, it is estimated that 40% of the UK workforce will be over 45. Employers can't afford to ignore the number of people who fall into this fast-growing group, and by brushing up their skills, marketers can ensure that they stay in the spotlight rather than fading into the shadows. Green Maketing - Getting it right
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