Green marketing

Buying green? A complex issue.

The design of the marketing strategy of green products has to be founded on the principle that:
– the environmental aspects of a product are important for people in their role as a citizen,
– but are only of a secondary importance for people in their role as a consumer (at the moment of purchase)

See tab Buying behavior for the Double Filter Model , and the theory of Jacquelyn Ottman on the personal benefit and the environmental benefit.

As a consequence, the consumer appears in reality (at the point of sales) less positive about environmental issues than the producer (designer) hopes.
The marketing strategy for commodity products must be different from the marketing strategy for quality products:
– for commodity products, the consumer will only chose for the environmental solution, when the price is not much higher (maximum 5% to 10%)
– for quality products, the green aspects of a product may become part of the image of a product (see webpage value, the concept)

Commodity products.

For commodity products (water, electricity, food ingredients, but also electronic appliances like video recorders and services like travel by plane), where price is the predominant selection criterion for the market segment, the environmental aspects might become the competitive edge.
Green Mountain Energy Company in the USA is one of the first companies in the world that realises (since 1997) that there is an enormous potential for ‘green’ electricity in a free and open energy market for consumers, because it is hard to differentiate such a product ( all electricity is equal). Their marketing studies in the USA show that 50% of the households are interested in green electricity, as it is in Europe. Their approach is pure marketing driven in the modern way, appealing to the ‘feel good’ factor. which is quite important in our current society. They combine the ‘environmental benefit’ with the ‘personal benefit’ (“what’s in it for me?”) of their product. See their website www.greenmountain.com for the way the market their products.

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Quality products.

For quality products, the situation is more complex.
It appeared in the experiments of the Double Filter Model that the fact that a product is green, suddenly can become the decisive factor in the final choice. This is the case when two (completely) different solutions for the same functionality are perceived as equal in terms of value for money. In such cases, the situation is comparable with the situation for commodity products.

In fact, when people are selecting quality products (within their budget) at the internet, they often end up with 3 or 4 alternatives. In such cases, sustainability may become the determining issue for the final choice.

For products in the high quality range, the issue of sustainability can be made part of the product brand image (example: Swedish cars in comparison with American cars). The ‘feel good’ factor is extremely important for these ‘high end’ markets. It generates “repeat buyers”.

However, be aware that jour buyers have negative doubts on the functional quality of a green product. Many people believe that making a product green goes hand in hand with: (1) either a higher price, or, (2) when the price is the same, a lower quality. Examples are everywhere: an electric car has a lower driving range; a green vacuum cleaner has less electrical power, so less suction power; etcetera.
The conclusion is that the quality of a green product must be emphasized at the point of sale (Visser et al 2015), to counteract the negative connotation of the green brand. In the shop, people buy the best quality for money, at home they value green.

Enhancing other aspects of quality

A successful strategy of marketing of products with a good environmental performance is enhancement of the perceived value of that product as such (adding perceived value to a green design), not only by stressing the green aspects, but by enhancing the other aspects of value.
The first step is to realise that “quality” has many aspects. For products see the “8 dimensions of quality” of Garvin (in his book Managing Quality, 1988).
The second step is to define the right marketing strategy. Gale has developed a system to “create quality & service that customers can see, and brings a competitive advantage” (in his book Managing Customer Value, 1994). These aspects are also dealt with under value creation
Example: electrical cars – e.g. Tesla, Volkswagen – are sold because of of high technology (personal benefit) rather than their environmental benefit.

Eco-costs Group classification

Like energy labels for cars, washing machines, and refrigerators within the EU, ‘eco-costs labels’ may be applied in some specific markets like packaging and products for the building industry. The following classes are recommended (see e.g. the website of Pickler), with the standard colors of Fig. 4.6a:
A < 0.1, B 0.1-0.2, C 0.2-0.4, D 0.4-0.8. E 0.8-1.2, F 1.2 - 2.0 , G > 2 euro per kg

Green EVR classification

Green classification (with letters and colors) in shops work quite well, as we know in Europe for refrigerators and washing machines for the use phase. However, this type of classification works only within a product group. Similar labelling can be done with eco-costs, as mentioned in the adjacent column of this webpage.
However, for classification of a broad range (size, quality and functionality) of products and services , the EVR is the only way to solve the demand for classification. A universal color scheme is proposed in Fig 4.6c.igure 4.6a. Universal EVR labelling color scheme.

Figure 4.6a Green classification of common materials in packaging and the building industry in classes of eco-costs per kilogram

Figure 4.6b Green classification of common materials in the building industry in classes of eco-costs per m2

Figure 4.6c Green classification of all materials in classes of the Eco-costs/Value Ratio

reference

Visser, Gattol, Van der Helm. Communicating Sustainable Shoes to Mainstream Consumers: The Impact of Advertisement Design on Buying Intention. Sustainability 2015, 7, 8420-8436; doi:10.3390/su7078420

David A. Garvin. Competing on the eight dimensions of quality. Harvard Business Review. November-December 1987

Bradley T. Gale; Managing Customer value, Free Press, New York, 1994

Further literature: see under tab reference 1.3, 2.0, 5.7, and 6.10