Green Marketing

June 2010

Team Assignment
You are the Marketing VP for a firm (your choice) that is committed to Sustainable Development, has implemented many Sustainable Initiatives, does Sustainability Reporting, etc. Your CEO has asked you to come to Executive Team meeting with two sets of recommendations as part of a Green Marketing Plan: Which Market Segments should your firm target? What are the Marketing Messages for the targeted segments? After the break, each team will have 15 minutes to prepare and then 15 minutes to present their recommendations.
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SOURCES
An Introduction To Green Marketing by Polonsky, Michael Jay, University of Newcastle, Australia, 1994 Videos:
The Effects of Green Marketing (4 minutes) Six Sins of Green Washing (6 minutes)

Its Not Easy Being GreenOr, Is It? by Rockbridge Associates, US, 2008
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Green or Environmental Marketing

Consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment. [Polonsky 1994b, 2] Incorporates a broad range of activities, including:
product modification/innovation changes to the production process, packaging changes, as well as modifying advertising.
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Green or Environmental Marketing

Looks at how marketing activities utilize limited natural resources, while satisfying consumers wants, both of individuals and industry, as well as achieving the selling organization's objectives.

WHY GREEN MARKETING?

1. Organizations perceive environmental marketing to be an

opportunity that can be used to achieve its objectives [Keller 1987, Shearer 1990]; 2. Organizations believe they have a moral obligation to be more socially responsible [Davis 1992,Freeman and Liedtka 1991, Keller 1987, McIntosh 1990, Shearer 1990]; 3. Governmental bodies are forcing firms to become more responsible [NAAG 1990]; 4. Competitors' environmental activities pressure firms to change their environmental marketing activities [NAAG 1990]; and 5. Cost factors associated with waste disposal, or reductions in energy and material usage forces firms to modify their behavior [Azzone and Manzini 1994].

OPPORTUNITIES
A 1994 study in Australia found that 84.6% of the sample believed all individuals had a responsibility to care for the environment. A further 80% of this sample indicated that they had modified their behavior, including their purchasing behavior, due to environmental reasons [EPA-NSW 1994]. As demands change, many firms see these changes as an opportunity to be exploited.

US Federal Trade Commission

Firms using green marketing must ensure that their activities are not misleading to consumers or industry, and do not breach any of the regulations or laws dealing with environmental marketing. Green marketing claims must;
Clearly state environmental benefits; Explain environmental characteristics; Explain how benefits are achieved; Ensure comparative differences are justified; Ensure negative factors are taken into consideration; and Only use meaningful terms and pictures.

Videos
The Effects of Green Marketing: Consumer Trends Drive Profit (4:13 minutes)
www.youtube.com/watch?v=xj1TqhJLaQI&feature=related

Six Sins of Green Washing (6 minutes)

www.youtube.com/watch?v=Fnh1Y06DGCs&feature=related

Its Not Easy Being Green Or, Is It?

Presented by:
Charles L. Colby Joe Bates Joe Taliuaga Rockbridge Associates, Inc. 17th Annual Frontiers in Service Conference October 3, 2008
For more information, contact: Joe Bates, VP 703-757-5213 ext. 14 jbates@rockresearch.com
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A Little About Us

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Rockbridge Overview
Full Service Market Research Consultancy
Founded in 1992, based in Washington, DC area

Our Practice Areas

Product Optimization & Concept Testing Customer Satisfaction and Retention Positioning and Communications Research Market Segmentation Website Usability
Corporate Partner

Rockbridge specializes in services, technology and media sectors

Proud Member of

Center for Excellence in Service

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Background & Methodology

Rockbridges National Technology Readiness Survey (NTRS) has gathered consumers opinions and usage of technology since 1999 The study is co-sponsored by the Center for Excellence in Service, R. H. Smith School of Business, University of Maryland Methodology:
Representative survey of U.S. adults (18+ years) 1025 consumers surveyed in Fall 2007 500 by telephone (random-digit-dialing) 525 by a representative web panel Results weighted by demographics and by type of internet/phone access

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Why Does Green Matter?

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Americans Believe in Environmental Stewardship

I want to protect the environment for the benefit of future generations The Earth belongs to humanity to do with as it pleases

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 15

Will The Green Trend Last?

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Chances Are Good

California has been leading the way in enacting green laws:
Mandated recycling of TVs and monitors Requiring retailers to take back plastic bags Almost outlawed incandescent light bulbs

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Green Sentiment Runs High

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Is There An Environment Problem?

% Who Agree With Statement

85% 69%

The evidence of global warming is real

More needs to be done to curb air and water pollution in our country

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 19

Can Something Be Done?

Consumers believe collective action will work And regulation will not hurt

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 20

Can Technology Help?

There is strong faith in technology Green tech helps the economy The internet gives us a medium to work together while more efficient products and services help the wallet

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 21

What is the Potential for Green Products and Services?

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Service Technology Empowers Consumers to Be Green

Recycle/refurbish old computer 58% % Who Have Done % Maximum Potential Incidence 51% 58% 46% 52% 42% 52% 33% 53% 31% 44% 21% 34%
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73%

Replace paper financial statements with electronic Access online pub instead of print version Replace paper utility statement with electronic Switch to electricity based on clean/renewable resources

Opportunities for financial services, utilities, IT firms, publishers

Telecommute

Power company controlled air conditioner

Source: National Technology Readiness Study, Rockbridge Associates, December 2007

There is an Emerging Market for Green Products

Many include making homes and transportation greener Energy saving % Who Have Own 69%
lighting Programmable thermostat High efficiency heating High efficiency cooling Home water purification system High MPG vehicle 10% 41% 10% 39% 20% 43% 37% 64% 33% 60% 29% 52%

% Maximum Potential Incidence

45% 66%

80%

Weather station

Eco-Friendly Home

Many Energy-Related Products and Services Have Potential for Long Range Growth
A third of consumers are interested (or already own) an alternative fuel vehicle and solar heating systems
Hybrid fuel vehicle
4%

% Who Own % Maximum

35%

Potential is Unrealized

Solar home heating Natural gas/ electric vehicle Solar water heater Trash compactor Bio-powered vehicle Remote home system control Green financial investments

3%

34%
8%

34%
3%

32%
7%

29%
4%

27%
3%

23%
4%

17%

Where is the Services Opportunity?

We estimate $104 Billion annual market for green products Opportunities:
Green mortgages Green home equity loan Green vehicle financing Partnerships with energy companies Securities backed by these investments

Fidelitys strategy in this area?

Many Are Turning to the Web for Help

% Who Have Done It In Past 12 Months
Got gas mileage info
27% 24% 23% 21% 18% 17% 17% 16% 8% 5% 4%

Opportunities for online content to help consumers find green solutions and network with other greenminded consumers

Researched public transit options Looked up green tips for home Visited site of environmental org Researched candidates' enviro views Got recycling info Visited co website for green views Obtained appliance energy ratings Environment forums Donated to political campaign Researched car pools

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 27

Segmenting the Green Market

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Key Questions
Who is driving the green movement? What is the role of innovativeness (if any) in driving the movement?

?
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A Green Segmentation of the Market

1 out of 10 adults Green Tech Leaders are influencers
They also embrace technology and believe in its ability to solve problems

Another 2 out of 10 Green Tech Followers are deeply committed to green issues and view technology as playing a role
10% 18%
Green Tech Leaders Green Tech Followers Tech Savvy Green Sympathizers Enviro-Friendly Skeptics Nave Consumers

7% 22%

12% 31%
Source: National Technology Readiness Study, Rockbridge Associates, December 2007

Anti-Greens

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Psychographic Profile of 6 Segments

Commitment to Green Green Tech Leaders Influence Absence of Skepticism Love of Tech

High High Medium

High Low Low

High High Medium

High Medium High

Green Tech Followers

Tech-Savvy Sympathizers Enviro-Friendly Skeptics Nave Consumers Anti-Greens

High
Medium Low

Low
Low Low

Skeptical
Medium Skeptical

Low
Low Medium

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Commitment: I Encourage Friends / Family to Be Environmentally Friendly

% Who Agree With Statement
Green Tech Leaders

98% 89% 50% 88% 41% 6%

Green Tech Followers Tech Savvy Green Sympathizers Enviro-Friendly Skeptics

Nave Consumers

Anti-Greens

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 32

Influence: Others Come to Me For Advice on Being Green

% Who Agree With Statement
Green Tech Leaders

50% 26% 9% 22% 2% 0%

Green Tech Followers Tech Savvy Green Sympathizers Enviro-Friendly Skeptics

Nave Consumers

Anti-Greens

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 33

Influence: The Use of Social Media

% Who Agree With Statement
Green Tech Leaders

50% 17% 35% 21% 20% 53%

Green Tech Leaders influence others through social media

Green Tech Followers Tech Savvy Green Sympathizers Enviro-Friendly Skeptics

Nave Consumers

Anti-Greens also use social media, and may influence others on their views

Anti-Greens

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Skepticism: There Is Nothing Anyone Can Do To Prevent Global Warming

% Who Agree With Statement
Green Tech Leaders

7% 2% 25% 46% 17% 63%

Green Tech Followers Tech Savvy Green Sympathizers Enviro-Friendly Skeptics

Nave Consumers

Anti-Greens

Source: National Technology Readiness Study, Rockbridge Associates, December 2007 35

Love of Tech: Other People Come to Me for Advice on New Technology

% Who Agree With Statement
Green Tech Leaders

96% 21% 58% 31% 1% 28%

Green Tech Followers Tech Savvy Green Sympathizers Enviro-Friendly Skeptics

Nave Consumers

Anti-Greens

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Profile of Green Segments

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Green Tech Leaders 10% of Market

How They Think

Who They Are

Important to be green Early Adopters Technology can save us Green gadgets are cool Like trying new green tech Do research and influence others on green products Like doing business with green companies Green is good for the wallet

Younger More likely to have kids Tech professions Higher incidence of

work PC use home networks high-speed home Internet access Internet on the go

Higher web presence and subscriptions to online music and video

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Green Tech Followers 18% of Market

How They Think

Who They Are

Adamant about protecting the environment People must reduce their impact on the environment Green gadgets are fun Like trying new green technologies Research green products Like dealing with green cos. Green is good for the wallet

Older Female Higher home ownership rates Lower incidence of cell-only households Spend fewer hours online Lower web presence
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Other Relevant Green Segments

Tech-Savvy Green Enviro-Friendly Sympathizers (31%) Skeptics (12%) Care about the environment Adamant about being green Early adopters of Technophobic technology Technology may worsen our NOT green activists or problems, not sure what to do boosters, but sympathetic Want proven technologies to Like doing business with help the environment green companies Research green products Green is good for the wallet Like dealing with green cos. Skew younger, male, heavy Green is good for the wallet users of technology Skew older, less techy
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Segments Where Green is Less Relevant

Nave Consumers (22%) Anti-Greens (7%) Hold socially acceptable Not committed to opinions, but no urge to act environmental issues More concerned with Dont care about green getting by on a day to day technologies or products basis than being green More concerned with getting Many are technophobic by on a day to day basis Low interest/awareness of Environmental activists are green tech or products irresponsible; the Earth belongs to humanity Will avoid using green technologies until they are Oppose regulation proven Skew younger Skew female, less techy
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Deploying a Green Services Marketing Strategy

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Will Green Marketing Help a Company?

Yes! but they have to be sincere!
% Who Agree With Statement
68% 72%

I like to do business with companies that are environmentally responsible

I resent companies that say they care about the environment but don't mean it

Source: National Technology Readiness Study, Rockbridge Associates, December 2007

Example: Online Financial Statements

85% 78% 70% 60% 63% 65%

Use Now Potential

45% 40% 35% 31%

56% 56%

Green Tech Leaders

Green Tech Followers

Tech-Savvy Green Sympathizers

Enviro-Friendly Skeptics

Nave Consumers

Anti-Greens

Example: Green Investments

32%

33%

Own Now Potential

15% 13% 12% 9% 6% 2% 0% 5% 2% 3%

Green Tech Leaders

Green Tech Followers

Tech-Savvy Green Sympathizers

EnviroFriendly Skeptics

Nave Consumers

Anti-Greens

To Sum It Up

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To Sum It Up
Consumers care about the environment, even if some are only joining the bandwagon to be PC

Embracing technology and being green are not mutually exclusive ideologies
When marketing green products and services, focus on the following messages:
Your company cares about the environment (and you have to back this up with actions that show it) If we all work together, we can have an impact Your product is environmentally conscious Buying your product will not only help the environment, it is good for the consumers wallets

Target Green Tech Leaders with your message

They will evangelize on your behalf Social media is key

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Questions?

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