The Rules of "Green" Marketing

If you think your customer isn't concerned about environmental issues, or won't pay a premium for products that are more eco-responsible, think again. You may just find an opportunity to enhance your product's performance and strengthen your customer's loyalty—and command a higher price.

Like all new products, green products have had their share of whoppers: remember General Motors' EV1 electric car? Hefty's photodegradable trash bags? Earthlight compact fluorescent light bulbs? All these were doomed to the "green graveyard" for refusing to address one of the key rules of green marketing success: balance environmental issues with primary customer needs.

Happily, for every product that's failed there are many others that incorporated the lessons of good green marketing and achieved success. What did the losers fail to do? What did the winners do differently? Here's how you can incorporate those lessons to uncover a potent new source of opportunity for your own business.

The Rules of Green Marketing

The first rule of green marketing is the first of rule of marketing: Focus on customer benefits—i.e., the primary reason consumers buy certain products in the first place. Keep in mind that environmental benefits are important to consumers, but they are not the primary reason for all but "deep green" consumers' preferring one product over another; so treat them as good, value-added secondary benefits.
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Next, keep in mind that for green marketing to work, it is important that customers...

* Be aware of and concerned about the environmental issues that your product addresses. (Polls suggest that consumers are segmented around issues of personal health and wellness, resource conservation, and wildlife protection.)

* Feel that by using your product they will make a difference, as one consumer or in concert with all other consumers. This is called "empowerment."

* Believe your claims. This is true not only for businesses in general, it's especially true for green businesses, where claims are often intangible and a history of misleading claims has left a negative legacy for legitimate companies.

* Feel your product will work as well as non-green alternatives. This reflects lingering misperceptions from the days when natural laundry detergents left clothes dingy, and fluorescent light bulbs sputtered.

* Can afford any premiums. Some can't afford premiums for any kind of product, green or not. Of course, the more you offer, the more consumers may be willing to pay.

Shedding Light on Lifecycle Benefits

Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL) bulb was as clumsy as the funny-looking bulb that didn't fit most lamps. To boot, its "EarthLight" name confused consumers. (I thought it was some type of plant light.) And at $15 each versus 75 cents for incandescent bulbs, Earth Light couldn't climb out of its deep green niche.

With the help of some much-needed consumer research, the company brilliantly re-launched the product as "Marathon," underscoring its new "super long life" positioning.

Furthermore, it took on an incandescent-looking shape that appealed to the convenience-oriented mainstream, while the promise of saving $26 in energy costs over its five-year lifetime extended its appeal to thrifty consumers.

Finally, with the U.S. EPA's Energy Star label to add credibility as well as new sensitivity to rising utility costs and electricity shortages, sales climbed 12 percent in an otherwise flat market.

Roads to the Future

With its limited driving range and the need for constant recharging, GM's EV-1 electric car couldn't stand a chance in mainstream markets. It even had a futuristic high-tech look that turned off consumers. Toyota, however, took a different road.

Its Prius hybrid sedan, introduced in 2001, not only fit in from a design standpoint but also met customer needs for extended driving and fuel efficiency by marrying an internal combustion engine with an electric one. This pioneering technology offers the multiple benefits of a quieter ride and faster acceleration—which featured in advertising, as did the prospect of inclusion in high-occupancy lanes, the convenience of fewer fill-ups, and the enjoyment of using the latest technology.

We all read news reports about how Toyota is hardly keeping pace with demand and how buyers are enduring long waits, not to mention paying thousands of dollars above the sticker price, to get their hands on one. After losing a billion dollars on its EV-1, GM and other U.S. automaker are now scrambling to catch up.

As enticing as hybrid technology appears, the longer-term solutions to consumer needs for better fuel savings and fewer traffic tie-ups and parking nightmares (not to mention more open space and reduction of greenhouse gases) will only be met by making changes to the larger transportation system. Car-sharing services meet many of these needs.

Think of them as a "time-sharing" system for cars. Consumers who drive less than 7,500 miles a year and don't need a car for work can save thousands of dollars annually by joining one of the many services springing up across the country, including ZipCar (East Coast), Flex Car (Washington State), and Hour Car (Twin Cities). Underscoring their ability to provide transportation with a "lighter footprint," members can choose from a variety of cars and vans according to their needs for a given occasion; some services even offer electric vehicles for shorter hauls.

Meanwhile, neighborhood electric vehicles (NEVs) like Daimler-Chrysler's GEM Car, fit a Darwinian-type niche in the marketplace for limited range driving needs such as those in planned communities and on college campuses. They also make perfect feeder cars, connecting commuters with other modes of transit. (Is this the market positioning that GM missed with its EV-1?)

Winning at Green Marketing

In sum, when played by "the rules," green marketing can lead to product improvements that can enhance marketability, improve overall performance, and become a potent new source of innovation. To prevent your greener products from winding up in the green graveyard, focus communications efforts on the primary benefits that your environmentally inspired technologies can support. Avoid the clichéd "babies, planets and daisies" that will conjure up the negative perceptions of the green products of yesteryear.

From an organizational standpoint, integrate environmental considerations into all aspects of marketing—new product development and communications and all points in between. This requires the support of cross-functional teams with marketers at the helm. The holistic nature of green also suggests that besides suppliers and retailers new stakeholders be enlisted, including educators, members of the community, regulators, and NGOs.

Finally, consider green as an ideal goal achieved though continuous improvement. Ask: In what ways can customers reduce environmental impacts during use? What is the next radical evolution of our product? In what ways might we offer a service rather than, or in addition to, a product?
 

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Jacquelyn A. Ottman is president of J. Ottman Consulting, Inc., a New York City-based marketing and new products firm that advises on strategies for green marketing. She is the author of Green Marketing: Opportunity for Innovation, now in second edition. Contact her via www.greenmarketing.com  (info@greenmarketing.com ).