Green
marketing is going mainstream. From grocery stores to car companies to
sporting goods manufactures, Madison Avenue is trying to turn Main
Street into eco-loving consumers. Some companies like are succeeding,
while others like are receiving sharp criticism of their “green”
methods.
In this paper, we will explore the
rise of green marketing over the past decade and how companies are
using social conscience to tap into consumers spending habits. We will
learn:
- What green marketing is;
- When green marketing started to get popular with consumers and companies;
- Why are some companies going green;
- What are some of the positive developments that have come out of green marketing;
- How
consumers and the Federal Trade Commission becoming skeptical of
“green” companies and what the future of marketing green companies and
products looks like.
What is green marketing?
According to the American Marketing Association (AMA),
green marketing is the marketing of products that are presumed to be
environmentally safe, good for the environment or are more sustainable [1].
Green marketing incorporates product modification, changes to the
production process, packing changes, as well as modifying advertising
to reflect the environment qualities of the product. Defining green
marketing is not an easy task, because there are several meanings of
what consumers and businesses think is green. For example, green
marketing may fall under the umbrella of varying social, environmental
and sustainable efforts.
Are consumers really buying it?
Although the first workshop titled “Ecological Marketing” was held by
the AMA in 1975, green marketing didn't’t come into prominence until
the 1990s [1].
Green marketing isn't yet on the forefront of most consumers minds
mainly because many don't understand how truly green or eco-friendly
most "green" products are; however tighter regulations and more
understanding in the past few years has improved consumers awareness in
light of growing global concerns about climate change. This concern has
led more companies to advertise a commitment to reduce their climate
impacts, and the effect this is having on their products and services.
According to the survey, “Green Consumer Values Survey” conducted by
the Yale Center for Consumer Insights at the Yale School of Management
and the Center for Business and the Environment at Yale, 60 percent of
consumers say environmentally-friendly products are more desirable, but
only 24 percent can name a green product by brand name[2].
Also, consumers are not always consistent about which environmental
improvements to products will have the most impact versus which ones
will make them want to buy. This information proves that consumers
understanding of green products has a long way to go.
Perhaps the biggest factor in green marketing is the knowledge that the
economy is the top issue for U.S. consumers and the environment is No.
3 behind energy; according to the 2008 ImagePower Green Brands survey conducted by several U.S. agencies [3].
So for right now, consumers are willing to talk the talk, but not
necessarily walk the walk when it comes to the environment: A TNS
survey found just 26 percent of American are “actively seeking
environvonmentally- friendly products [4].”
Most respondents prefer to take baby steps towards environmental
efforts, like changing a light bulb rather than their entire
lifestyles.
Who does it well?
There are several companies that have tried its hand at marketing
“green” to consumers, some more successful than others. According to
the market research firm, Outlaw, its 2008 Favorite Green Brands Index, the companies Whole Foods, Trader Joe’s, Toyota, Honda, and Google received top ratings[5]. These brands also made the list of the 2008 ImagePower Green Brands survey shown below[3]:
Top 10 greenest brands
1. Whole Foods
2. Burt’s Bees
3. Trader Joe’s
4. Tom’s of Maine
5. Toyota
6. Seventh Generation
7. General Electric
8. Honda
9. Whirlpool
10. Aveda
Profiles in green
Toyota
One example of a company embracing green marketing is Toyota. The main
reason the car maker has made the list of one of the top greenest brand
is simple: the Toyota Prius. The hybrid car introduced in 2000 remains
one of Toyota’s top sellers and the epitome of a “green” car in
consumers’ minds. Although the Prius was not the first hybrid
introduced into the car market, Toyota has a 75 percent share of the
hybrid segment, according to Ad Age magazine [6]. This is due to several smart marketing decisions made by the company.
First, Toyota built its marketing share over time, targeting three
groups of consumers all at once: early adapters of the technology,
“deep green” consumers who were wowed by the 55 mpg and low emissions
and industry insiders with its unique design, quiet interior and gas
sipping tank.
Jacquelyn Ottman, author of “Green Marketing: Opportunity for
Innovation” says that the Prius doubled as a moving billboard for the
new hybrid technology. “Such deft design and marketing” she said,
“underscores why ‘makes a statement about me’ is the No. 1 reason Prius
owners buy their cars according to CNW Marketing Research [7].”
In fact many consumers buy the Prius due this “conspicuous
conservation” — letting other people know that they care about the
environment through their choice of vehicle [8].
Driving a hybrid Honda Civic doesn't’t give this same effect for the
buyers, because the standard gas-only Civic looks the same as the
hybrid version where as the Prius looks like nothing else on the road.
It is instantly recognizable – perhaps this is why the Toyota Prius is
one of the most successful “green” products worldwide selling more than
one million since its inception. The company plans to sell one million
more hybrids by the early 2010 [9].
 One
way Toyota is planning on achieving its sales goal is the launch of its
“Why Not” campaign. The campaign incorporates TV spots, print and
online ads intended to reflect the strength of Toyota’s reputation as a
maker of hybrid gas/ electric vehicles extending their environmental
message from the Prius to its larger brand [10]. In the TV ad,
a Prius is shown to be created from natural elements with the use of
time-lapse photography. The car slowly succumbs to natural forces and
its elements returning to the soil. The voiceover says: “Can a car
company grow in harmony with the environment? Why not?”
A micro-site has been developed to showcase its advertising campaign message: www.toyota.com/whynot.
It includes sections that boast Toyota’s innovations in building the
“ultimate eco-car,” greening the workplace and a video on hybrid
technology. Toyota also talks about community efforts and shows its
eco-driven advertising centered on its “Why Not” message. The company
has become a sponsor of the television program Nature on PBS [10].
Whole Foods
Whole Foods is on the top of list of the greenest brands because
sustainability, organic foods and green action are at the core of Whole
Foods brand identity. The Environment Protection Agency (EPA)
recognized the company in 2004 and 2005 with the Green Power Leadership
Award for making green power purchasing a company-wide practice.
Currently, Whole Foods Markets is purchasing or generating 100 percent
of its total national power load from green power sources, according
the EPA [11].
One look at their website, www.wholefoodsmarket.com
gives readers a sense of what Whole Foods wants to project as their
company mission: “Whole Foods, Whole People, Whole Planet.” The site
includes links to a variety green initiatives
including its Whole Foods Foundation, that provides grants to
microfinance institutions in Latin America, Africa and Asia to help
plant seeds of prosperity through micro lending programs to help
contribute to the eradication of global poverty; its green action
program that aims to offset 100 percent of energy use with wind energy
credits and green building and its section on sustainability section.
To market its brand to consumers and grow into bigger and more
profitable company, Whole Foods Markets has partnered with Farm Aid to
sponsor its 2008 festival and pop star Sheryl Crow and the Natural
Resources Defense Council to design a holiday shopping bag made from 80
percent post-consumer recycled plastic bottles for its stores [12]. Marketing online to environmental consumers consists of its new YouTube spot called “Whole Earth Generation”
(click here to view) which teaches users how to save money by using bio
fuel. The video encourages users to present their own videos on
protecting the environment [13].
General Electric
A company that made the list at No. 7 on the ImagePower Green Brands
survey is General Electric or GE. This century-old manufacturing
company may not have started as a “green” company, (topping many
environmentalist most-hated lists for legally dumping 1.3 million
pounds of polychlorinated biphenyls into the Hudson River for decades,
among other sins) but they are trying to change their image, while
still serving their bottom line [14].
GE’s big push for the “green” marketing share came in 2005 when new CEO
Jeffrey Immelt pushed the “Ecomagination” multimillion-dollar campaign
into the public conscience [15].
The aim of Ecomagination is to take this energy-heavy industry and
streamline it for the future. Immelt held a press conference in 2005
and pledged to double revenue from green machines from $10 billion in
2004 to $20 billion in 2010 and double spending on green-related
research to $1.5 billion a year by 2010 [16].
GE said it would focus on even more solar and wind power, as well as
other environmental technologies such as diesel-electric locomotives,
lower emissions aircrafts, efficient light and water purification [14].
GE touted its new green-friendly campaign across every avenue of its
marketing arm. TV, online and print ads were rolled out in great
numbers [17].  The micro site, http://ge.ecomagination.com/site was created to showcase GE’s commitments. One of the ads included a dancing elephant in the jungle to “Singin’ in the Rain”
with the tagline: “technology that’s in step with nature” and a
beautiful model working in a coal mine with the message: “Harnessing
the power of coal is looking more beautiful everyday.” Viewers loved GE
new campaign. In a poll consumers surveyed for Ad Track, USA TODAY's
weekly poll on ad likability and effectiveness GE ads came out on top.
“The GE ads were the most-liked by consumers of all campaigns tested by
Ad Track this year,” said a 2005 USA Today article. “Of those familiar
with the GE ads, 49 percent gave them the top rating, saying they like
the ads ‘a lot.’ The score is more than double the Ad Track average of
21 percent,” said the newspaper [17].
Can you measure results?
Feedback like that from USA TODAY’s Ad Track is good, but do these
corporations see any actual revenue from their green efforts? In May
2008, GE claimed that its sales have doubled form environmentally
friendly products to $12 billion in the span of two years and that they
company is on track to meet its target of $20 billion in green sales by
the year 2010. The sales figure includes its wind turbines, water
purification systems and energy-efficient appliances [18].
The company is also cashing in on emerging markets need to go green. In
China, GE appears to making some headway. The country is the largest
emitter of greenhouse gases and is slowly adopting some of
Ecomagination products to curb this pollution. According to a 2007
Fortune article, GE’s CEO of GE China predicted at they are looking at
15 percent growth in the foreseeable future selling its jet engines and
wine turbines. To get the word out about its company, GE was a recent
global sponsor of the Olympic Games in Beijing [19].
Other than counting the number of Prius sold or wind turbines produced,
it’s hard to tell if a company’s green marketing campaign is working or
if the economy is simply shifting to more cost and social-conscience
products. The American Association of Advertising says there are no
hard numbers to prove that company’s green campaigns are working – just
anecdotal evidence that customers are starting to care about green.
Despite these stories, companies and non-profits need to see
results. The Pew Center on Global Climate Changes stopped advertising a
couple years ago because it could not get measurements on its ads [20]. Like any other campaign, it’s all about the bottom line.
What makes a good green product?
So what does it take to make a good product that results in money and
is green? First of all, says Ottman, target your product to the
mainstream consumer, not a deep green one. Everyone is an
environmentalist at heart, so tout the green qualities as a secondary
reason to buy your product.
Don’t market your product as simply a good sustainable green product,
it need to be a quality purchase with a good design. For example,
Ottman uses Nike’s Considered line, Method’s teardrop-shaped
dishwashing soap and Apple’s iPhone as good design at work [7].  
It
also helps if your product has the endorsement of a trusted name.
Products with an Energy Star logo, USDA Organic or Forest Stewardship
Council will help your green product credibility [7].
Most of all, know your customer. If you want to sell and manufacturer a
certain type of green product, your customers need to know why they
should buy it. Is there any issue that your product solves or
addresses? What is the need in the marketplace for it? Consumer will
not pay a premium or pay at all if they don’t know why they should.
Messages like "energy-efficiency saves money" or "solar power is
convenient frame" your environment statements as desired consumer value
[8].
According the Environmental Leader website, products succeed when
marketers adopt the three Cs: consumer value positioning, calibration
of consumer knowledge and credibility of product claims [21].
Critics
Despite the great work and corporate responsibility these companies are
projecting to the marketplace, many environmentalists, customers and
even the government is skeptical of their green efforts. According to a
study by Market Research Group Ipsos Reid, 70 percent of Americans
consider the green designation basically a “marketing ploy.”
The term “greenwashing”
is used to describe the practice of some companies to misled consumers
into thinking they are receiving environmental benefits of a product or
service [22].
Greenwashing isn’t a household term right now with the general public,
but with watchdog groups, blog postings and environmental awareness on
the rise, companies need to be authentic in its green pursues and
marketing behavior or they risk a huge backlash.
For example, those companies, like British Petroleum (BP) that tout
their social and ethic responsibilities by advertising their use of bio
fuels need to be aware that you can’t open a newspaper these days
without learning that production of bio fuels are a huge factor in
rising food costs and increased hunger in third world nations. The
president of the World Food program, Robert Zoellick came out this year
and said rising food prices are contributing riots in Haiti and
starvation in Africa. In the past two years, the price of corn in the
United States has more than doubled, driven partly by demand for
alternative fuels such as ethanol [23]. Whole Foods also promotes the use of bio fuels on its website [12].
Furthermore, companies like Toyota and GE, who are often praise by
consumers for its green reputations, have been often criticized. Toyota
for siding with Detroit in opposition to tougher new gas-mileage laws,
along with building the Tundra which gets 14 mpg and GE for emitting
more pollution than a small country with its locomotives and power
plants.
The government regulates
The Federal Trade Commission and the Environmental Protection Agency
have gotten in on the act of regulating deceptive green advertising
claims [24].
The commission has brought 37 cases involving environmental marketing
claims between 1990 and 2000, but none after the Green Guide’
guidelines since 2000, mainly because the FTC feels that companies need
to absorb the Guide’s “teachings” said FTC commissioner J. Thomas
Rosch. The other reason is that other alternatives to the FTC exist
including self regulation and private enforcement. The National
Advertising Division (NAD) of the Council of Better Business Bureaus,
the investigative arm of the U.S. Advertising industry’s self
regulatory process says that it has reported 30 decisions against
environmental marketing claims. Compliance with the NAD is not
mandatory, but they report that they have high compliance rates [25].
The FTC’s newest version of the Green Guide, released this fall, has
several tips for advertisers to ensure their claims don’t misled
consumers.
- Evaluate the potential environmental benefits of products and operations. In other words, accurately describe the environmental benefits of your product, packaging and manufacturing.
- Seek certification from third parties.
Obtaining a certification from a reputable third-party like the
Greenhouse Gas Registry or Green Seal spares the company from
establishing their own standards.
- Substantiate and document any environmental claims.
Advertisers need to obtain and keep the technical data they need to
substantiate any environmental claims, especially in California where
they have adopted such requirements. Doing so can save a company from
embarrassing or negative coverage that counteracts companies claims in
the press or court.
- Make precise claims.
The broader the claims, the harder it is for companies to substantiate,
so it best to make them as specific as possible. For example, saying
your product is carbon neutral is very hard to substantiate. Try a more
specific claim that your consumers can quantify.
- Ensure
that representations concerning the environmental impacts and benefits
of the company’s products and operating practices are consistent. Make
sure that every area of your marketing campaign (blogs, ads, product
placements, sponsorships etc.) is in compliance with the rules of the
Green Guide. Carefully review all avenues of marketing for red flags.
Basically the FTC will take the same approach to evaluating green claims as any other marketing claim/trade practice [24].
What is the future of green marketing?
More and more companies see green marketing as a growth industry. In
the S&P 100 index of large firms, more than 40 companies issue a
“corporate sustainability” report, giving the details of their
company’s environmental and social performance [15].
Of course, the reason behind creating these reports or even entire
sustainability departments, like the ones at WalMart or Protector and
Gamble, is to serve the company’s bottom line.
The recent changes in environmental regulations keep getting stricter,
forcing companies to adapt their products and services. Immelt and GE
have admitted as much. “In its essence (Ecomagination),” Immelt told
Forbes magazine in 2005, “it’s a way to sell more products and services
[14].”
They are all about cashing in on cleaning up the planet. New
regulations in Europe, California, Texas, etc. have set new
requirements on renewable energy and environmental guidelines. The
state of New York aims to generate 25 percent of the state’s energy
from renewable by 2013. More than 160 mayors have pledged to curb
greenhouse gases in accordance with the Kyoto Protocol. And the
government’s environmental laws are likely to get stricter with the
next administration. That’s why GE and others see eco-friendly products
as a growth business, especially overseas [15].
But while it is great that many company’s recognize the changing
landscape of the world’s environment and challenges that come with
that, many are not equipped to find an effective way to address the
issue. A recent survey by the Economist Intelligence Unit found that
environmental risk management by companies is done in an ad hoc
fashion, they don’t know who/ what department should be responsible for
it [26].
The survey also found that many executives are feeling pressure from
their stakeholders and regulators to institute green practices.
So institute they will – not only because the stakeholder, government
and consumers are calling for more green companies, but because it’s an
opportunity earn a profit and take companies in a new direction. And in
this time of economic strife, it’s good to go green.
In the future consumers should be on the lookout for more
eco-conscience marketing campaigns and green products that touch on
both the eco-lover hearts and cost conscience customer’s wallets.
Sources:
1. Wikipedia
http://en.wikipedia.org/wiki/Green_marketing
2. MarketWatch, Yale Conference to Examine What Consumers Value in “Green” Business (Sept. 26, 2008)
http://www.marketwatch.com/news/story/yale-conference-examine-consumers-value/story.aspx?guid=%7B5DB96547-FE46-41DE-88D8-50D3227BAA23%7D&dist=hppr
3. BrandWeek, Survey: Environment No. 3 Issue for U.S. Consumers (June 3, 2008)
http://www.brandweek.com/bw/news/recent_display.jsp?vnu_content_id=1003811333
4. AdWeek, Deflating a Myth, (May 12, 2008)
http://www.adweek.com/aw/content_display/news/strategy/e3i5e732e045deaaba3ef1cd271cfd0d102
5. Environmental Leaders, Whole Foods, Trader Joe’s, Toyota Tapped By ‘Trendsetters’ As Greenest Brands (July 31, 2008)
http://www.environmentalleader.com/2008/07/31/whole-foods-trader-joes-toyota-tapped-by-trendsetters-as-greenest-brands/
6. Advertising Age, Toyota Turns a Niche Into Anti-Waste Zealotry, June 8, 2007
http://adage.com/eco-marketing/article?article_id=117131
7. Advertising Age, Jacquelyn Ottman; Marketers, Follow That Prius (May 28, 2008)
http://www.greenmarketing.com/files/articles/Jacquelyn%20Ottman-Marketers%20Follow%20That%20Prius.pdf
8. Sustainable Life Media, The 5 Smile Rules of Green Marketing
http://www.sustainablelifemedia.com/content/feature/brands/06112007
9. Toyota.com
http://www.toyota.com/about/news/product/2008/05/15-1-prius.html
10. Media Post Publications, Toyota’s New Corporate Campaign Asks ‘Why Not?’
http://www.mediapost.com/publications/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=70467
11. EPA, Partner Profile- Whole Foods Market
www.epa.gov/greenpower/partners/partners/wholefoodsmarket.htm
12. Whole Foods, www.wholefoods.com
13. San Francisco Chronicle, Companies tout their social consciences online (August 17, 2008)
http://sanfranciscochronicle.info/cgi-bin/article.cgi?f=/c/a/2008/08/17/BU961253IE.DTL
14. Forbes.com, GE Turns Green, (Aug. 15, 2005)
http://www.forbes.com/forbes/2005/0815/080.html
15. Time Magazine, GE’s Green Awakening (July 7, 2005)
http://www.time.com/time/magazine/article/0,9171,1079496,00.html?imw=Y
16. MSNBC, Green Electric? GE unveils eco-strategy (May 10, 2005)
http://www.msnbc.msn.com/id/7791657/
17. USAToday, Being Eco-friendly can pay economically, (Aug. 14, 2005)
www.usatoday.com/money/advertising/adtrack/2005-08-14-ge_x.htm
18. Environmental Leader, GE Green Sales Double, (May 24, 2007)
www.environmentalleader.com/2007/05/24/ge-green-sales-double/
19. CNN.Money.com, China buys GE’s ‘green’ push (Oct. 25, 2007)
http://money.cnn.com/2007/10/24/magazines/fortune/ge_china.fortune/index.htm
20. New York Times, Now Looking Green is Looking Good (December 28, 2006)
http://www.nytimes.com/2006/12/28/business/media/28adco.html
21. Environmental Leader, Successful Green Marketing Focuses on Consumer Needs (June 20, 2007)
http://www.environmentalleader.com/2007/06/20/successful-green-marketing-focuses-on-consumer-needs/
22. The Free Dictionary,
http://209.161.37.11/dictionary/greenwashing
23. National Public Radio, April 12, 2008
http://www.npr.org/templates/story/story.php?storyId=89583839
24. Federal Trade Commission, www.ftc.gov
25. MediaPost, New 'Green' Ad Claim Regulations Coming Next Year, Oct. 20, 2008
http://www.mediapost.com/publications/?fa=Articles.showArticleHomePage&art_aid=93003
26. BrandWeek, Survey: No One’s in Charge of Green Practices (June 17, 2008)
http://www.brandweek.com/bw/content_display/esearch/e3i9d8ccb98f5cb5751e3535a2d95815692
|
