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.
It's Not Just the Environment, Stupid
The annals of green marketing are chock full of examples of new products whose environmental credentials were greeted with tons of fanfare, but eventually failed to attract the lasting attention of consumers: IBM's PS/2, Deja Shoe, Heinz Cleaning Vinegar, are just a few.
Electronics industry giant Philips Electronics (headquartered in Eindhoven, The Netherlands) is one of Europe's leading proponents of green marketing and green design. The company has a lesson for green marketers, large and small that can increase the success rate for all green products: Consumers are prepared to give up their prejudice that green products cost more (or don't work as well, or whatever), at the moment other benefits are linked to environmental soundness and vice versa. In other words, it's not just the environment, stupid–green products need to be bundled with other benefits, too.
A pioneer in environmental design, Philips has run a corporate-wide EcoVision program since 1998. Launched with the blessing of the CEO at the time, Cor Boonstra, the program requires that each Business Group design or redesign one "Green Flagship" product per year. A few energy-efficient products resulting from this initiative are the Kala and DECT telephones, a 32 inch TV set, and a video cassette recorder among others.
To support the program, the company has conducted much proprietary research with consumers, the results of which were released recently. It verifies what many of us in the green world have long believed: Most consumers will not purchase products on the basis of environmental benefits alone; environmental benefits are best utilized as support for the primary benefits that consumers seek from the products they buy.
Not Willing to Change Lifestyle
Philips' research among the broad swath of consumers found a great deal of sympathy (50 percent positive, 25 percent neutral) for green issues, combined with outright fear (60 percent positive, 10 percent neutral). And almost half (45 percent) appear to be quite sympathetic to green marketing efforts, requiring additional information about the environmental benefits of the products they buy. Nevertheless, a much lower percentage are willing to change their lifestyles (20 percent) or pay more (25 percent). What stands in the way?
Barriers to green purchasing such as changing one's lifestyle or paying a premium appear to be connected to factors also indicated by the research: Many consumers don't trust government policies, or may not be comfortable buying from larger companies. This can be augmented with findings from other research showing skepticism about industry's green claims, and suspicion of price gouging, combined with historical perceptions about the relative poor performance or aesthetics of green products.
Perhaps the most exciting element of the Philips research–and a key driver behind the company's program–is the stated willingness to buy green products when bundled with other benefits. Philips researchers found that linking such environmental attributes as energy reduction, materials reduction, and toxic substance reduction with various material (lower cost), immaterial (convenience), and emotional (quality of life, feel good) benefits desired by consumers, raises consumer purchase interest to 60 percent or above–a figure that includes consumers who may be negatively predisposed to the environment.
Implications for Action
Marketers looking to successfully introduce new products can benefit from this research by: Positioning new products broadly in the marketplace (or risk appealing to the small, green niche of the most willing consumers); Building meaningful consumer benefits into the design specifications up front, and Reinforcing product benefits with evidence of corporate environmental performance.
In Philips' case, this is achieved via a thorough, multipronged effort consisting of such elements as visible leadership from top management, certification in ISO14001 (the international environmental quality standard) a "Greening Your Business" brochure, a detailed website (www.Philips.com), and sponsorship of environmental research and teaching chairs at universities, environmental events, and nature conservation groups.
These efforts are paying off. A preliminary analysis of performance of the six "Green Flagship" products developed thus far suggests they bring the company at least three percent higher margins and a boost in market share on average of two percentage points.
Copyright © J. Ottman Consulting, Inc. 2000. All Rights Reserved
Originally published in InBusiness Magazine September/October 2000
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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