Welcome to Green Marketing Corner. This exclusive feature of EcoMall provides tips, information and strategies from Jacquelyn Ottman, consultant and author of Green Marketing: Opportunity for Innovation on how to market to today's environmentally conscious consumers. To ask Jacquelyn Ottman a question, you can E-mail her at info@greenmarketing.com.
Will the Consumer Pay a Premium for Green?
Ask most marketers the answer to this question: "Will consumers pay a penny more for a green product?" They will most likely respond with an unequivocal "No!" They may have had experience with an otherwise well-intended new green product that flopped when consumers failed to pay the requisite premium.
But for those of us moving ahead in a business (present or future), it's important to ask more probing questions such as: "Does the green product offer meaningful benefits to the consumer beyond appeals to altruism?" Keep in mind that most consumers do not understand a lot about environmental issues, much less the preferable solutions. Moreover, they are skeptical of industry's environmental claims and suspect retailers of price gouging.
Does the green product have a familiar brand name, and does it come from a trusted manufacturer? Remember that consumers minimize risk at the check-out counter by purchasing brands they know. Smallness can be a plus for many products. (There really is a Ben, there really is a Jerry and there really is a Tom from Maine.) But to grow one's business beyond the green niche, it takes a lot of marketing clout to break through the clutter and establish one's brand against the "big boys".
IMAGERY AND CREDIBILITY Is the product wrapped to the hilt in green imagery -- you know, daisies, babies, and appeals to saving the planet? Then expect consumers to suspect the product's ability to perform, an unfortunate legacy from early green products such as all-natural laundry powders that didn't clean clothes and water-saving shower heads that sputtered. Such products of the 70's languished on health food store shelves, gathering dust.
And just how much of a premium are we talking about? A slight premium might be acceptable to some, but keep in mind that despite a booming stock market, most American households barely squeak by on $30,000 a year.
The marketplace proves my point. When the marketing fundamentals are in place, consumers will gladly pay a premium for green. Take greener products with a perceived health benefit like organically grown foods growing at 25 percent a year. Or products promising affordable indulgence such as those beautifully merchandised by Terra Verde, an emporium in New York City's Soho district that sells luxuriously soft organic cotton sheets, and towels, aromatic candles, and natural body oils. Or Rayovac's Renewal brand reusable alkaline batteries which promise heavy battery users to save $150 on a $100 CD player. And how about Maytag's new Neptune Washer-created in response to energy legislation. Its ingeniously designed horizontal access tub cleans clothes better, cleans more clothes per wash, and saves an estimated $100 per year on water and energy bills, and even looks good in the washroom. Even at a hefty 50 percent premium, retailers can't keep enough in stock.
UNBURY THE TREASURE Ten years in this business tells me a simple truth -- 99 out of 100 green product developments yield buried treasure: a new "thing" that performs better, saves money, or is safer to use. Daisies are nice, but these are the direct, tangible consumer benefits that should be placed front and center in advertising and marketing. These are the reasons why consumers shop for products in the first place, not to save the planet.
When price or performance match, consumers will pick the products and brands that will help them feel as if they're doing their bit. But rarely are things so equal. Smart marketers with well-crafted green products find that the inherent efficiencies, safety and other benefits that stem from environmental quality pay off in superior performing products with distinct appeal to a discernible segment of the market. So, focus on the primary benefits consumers seek from products in the first place and support those benefits with simple, honest expressions of environmentalism, and reap the premiums you deserve. Case closed.
Originally published in InBusiness Magazine. Copyright © 1999 by J. Ottman Consulting, Inc.
More articles about this topic can be found at www.GreenMarketing.com.
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Let Us Hear From You... E-mail Jacquelyn Ottman the questions that you want answers for. Her E-mail is info@greenmarketing.com. She will respond to those questions with the greatest relevance to product marketers and entrepreneurs in future updates of Green Marketing Corner.
About Jacquelyn Ottman: Jacquelyn Ottman is the president and founder of J. Ottman Consulting, Inc., based in New York City. She is also the author of Green Marketing: Opportunity for Innovation, 2nd Edition. For the past 10 years her organization has helped businesses create competitive advantage by developing and marketing environmentally responsible products and services. Clients include 3M, Eastman Kodak, IBM, Interface, and the U.S. Environmental Protection Agency.
Ottman created the Getting to Zerosm Process, the first innovation process specifically designed to generate concepts for new environmentally sustainable products and services. A much sought-after speaker, Ottman has addressed industry conferences and professional gatherings in the United States, Europe, South America, and Asia. She has been quoted in Advertising Age, Business Week, Fortune, and the New York Times, and the Wall Street Journal.
Prior to founding her firm, she worked in research, account management, and new product concept development at leading New York advertising agencies, where she managed Procter & Gamble, Ralston-Purina, and other blue-chip accounts. Ottman is a member of the American Marketing Association, O2, the Product Development and Management Association, and the World Future Society.
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