Green Marketing

June 2010*

Team AssignmentYou 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.*

SOURCESAn 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 MarketingConsists 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/innovationchanges to the production process, packaging changes, as well as modifying advertising.*

Green or Environmental MarketingLooks 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.

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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]; and5. Cost factors associated with waste disposal, or reductions in energy and material usage forces firms to modify their behavior [Azzone and Manzini 1994].

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OPPORTUNITIESA 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 CommissionFirms 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; andOnly use meaningful terms and pictures.

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VideosThe 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

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* Its Not Easy Being GreenOr, Is It?

Presented by:Charles L. ColbyJoe BatesJoe TaliuagaRockbridge Associates, Inc.

17th Annual Frontiers in Service ConferenceOctober 3, 2008For more information, contact:Joe Bates, VP703-757-5213 ext. 14jbates@rockresearch.com

*A Little About Us

*Rockbridge OverviewFull Service Market Research Consultancy Founded in 1992, based in Washington, DC area

Our Practice AreasProduct Optimization & Concept TestingCustomer Satisfaction and Retention Positioning and Communications ResearchMarket SegmentationWebsite Usability

Rockbridge specializes in services, technologyand mediasectorsProud Member ofCorporate PartnerCenter for Excellence in Service

*Rockbridges National Technology Readiness Survey (NTRS) has gathered consumers opinions and usage of technology since 1999The 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 2007500 by telephone (random-digit-dialing)525 by a representative web panelResults weighted by demographics and by type of internet/phone accessBackground & Methodology

*Why Does Green Matter?

*Source: National Technology Readiness Study, Rockbridge Associates, December 2007I want to protect the environment for the benefit of future generationsThe Earth belongs to humanity to do with as it pleasesAmericans Believe in Environmental Stewardship

Chart1

0.56

0.27

0.14

0.02

0.01

Sheet1

Strongly Agree56%

Somewhat Agree27%

Neutral14%

Somewhat Disagree2%

Strongly Disagree1%

Chart1

0.05

0.1

0.17

0.23

0.46

Strongly Disagree46%

Sheet1

Strongly Agree5%

Somewhat Agree10%

Neutral17%

Somewhat Disagree23%

Strongly Disagree46%

*Will The Green Trend Last?

*Chances Are GoodCalifornia 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

*Green Sentiment Runs High

*Is There An Environment Problem?Source: National Technology Readiness Study, Rockbridge Associates, December 2007

*Can Something Be Done?Consumers believe collective action will workAnd regulation will not hurtSource: National Technology Readiness Study, Rockbridge Associates, December 2007

Chart1

0.23

0.25

0.77

There is nothing anyone can do to prevent global warming

% Who Agree With Statement

Sheet1

There is nothing anyone can do to prevent global warmingLaws and regulations to help the environment will hurt the economySociety can solve big problems with the environment

There is nothing anyone can do to prevent global warming23%25%77%

*Can Technology Help?There is strong faith in technologyGreen tech helps the economyThe internet gives us a medium to work togetherwhile more efficient products and services help the walletSource: National Technology Readiness Study, Rockbridge Associates, December 2007

Chart1

0.53

0.62

0.67

0.7

% Who Agree With Statement

Sheet1

Technology holds the answer to solving big environmental problemsGreen technologies are good for the economy and create jobsInternet gives people a way to work together to save the environmentProducts and services that conserve energy pay for themselves

0.530.620.670.7

*What is the Potential for Green Products and Services?

*Service Technology EmpowersConsumers to Be GreenSource: National Technology Readiness Study, Rockbridge Associates, December 2007% Who Have Done% Maximum Potential IncidenceOpportunities for financial services, utilities, IT firms, publishers

There is an Emerging Market for Green Products% Who Have Own% Maximum Potential IncidenceMany include making homes and transportation greener

Many Energy-Related Products and Services Have Potential for Long Range Growth% Who Own% MaximumA third of consumers are interested (or already own) an alternative fuel vehicle and solar heating systemsPotential is Unrealized

Where is the Services Opportunity?We estimate $104 Billion annual market for green productsOpportunities:Green mortgagesGreen home equity loanGreen vehicle financingPartnerships with energy companiesSecurities backed by these investmentsFidelitys strategy in this area?

*Many Are Turning to the Web for HelpSource: National Technology Readiness Study, Rockbridge Associates, December 2007% Who Have Done It In Past 12 MonthsOpportunities for online content to help consumers find green solutions and network with other green-minded consumers

*Segmenting the Green Market

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

*A Green Segmentation of the Market1 out of 10 adults Green Tech Leaders are influencersThey 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

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

*Psychographic Profile of 6 Segments

Commitment to GreenInfluenceAbsence of SkepticismLove of TechGreen Tech LeadersHighHighHighHighGreen Tech FollowersHighLowHighMediumTech-Savvy SympathizersMediumLowMediumHighEnviro-Friendly SkepticsHighLowSkepticalLowNave ConsumersMediumLowMediumLowAnti-GreensLowLowSkepticalMedium

*Commitment: I Encourage Friends / Family to Be Environmentally FriendlySource: National Technology Readiness Study, Rockbridge Associates, December 2007

*Influence: Others Come to Me For Adviceon Being GreenSource: National Technology Readiness Study, Rockbridge Associates, December 2007

*Green Tech Leaders influence others through social mediaAnti-Greens also use social media, and may influence others on their viewsInfluence: The Use of Social Media

*Skepticism: There Is Nothing Anyone Can DoTo Prevent Global WarmingSource: National Technology Readiness Study, Rockbridge Associates, December 2007

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

*Profile of Green Segments

*Green Tech Leaders 10% of MarketHow They ThinkWho They AreImportant to be greenEarly AdoptersTechnology can save usGreen gadgets are coolLike trying new green techDo research and influence others on green productsLike doing business with green companiesGreen is good for the wallet

YoungerMore likely to have kidsTech professionsHigher incidence ofwork PC usehome networkshigh-speed home Internetaccess Internet on the goHigher web presence and subscriptions to online music and video

*Green Tech Followers 18% of MarketHow They ThinkWho They AreAdamant about protecting the environmentPeople must reduce their impact on the environmentGreen gadgets are funLike trying new green technologiesResearch green productsLike dealing with green cos.Green is good for the wallet

OlderFemaleHigher home ownership ratesLower incidence of cell-only householdsSpend fewer hours onlineLower web presence

*Other Relevant Green SegmentsTech-Savvy Green Sympathizers (31%)Care about the environmentEarly adopters of technologyNOT green activists or boosters, but sympatheticLike doing business with green companiesGreen is good for the walletSkew younger, male, heavy users of technology

Enviro-Friendly Skeptics (12%)Adamant about being greenTechnophobicTechnology may worsen our problems, not sure what to doWant proven technologies to help the environmentResearch green productsLike dealing with green cos.Green is good for the walletSkew older, less techy

*Segments Where Green is Less RelevantNave Consumers (22%)Hold socially acceptable opinions, but no urge to actMore concerned with getting by on a day to day basis than being greenMany are technophobicLow interest/awareness of green tech or productsWill avoid using green technologies until they are provenSkew female, less techy

Anti-Greens (7%)Not committed to environmental issuesDont care about green technologies or productsMore concerned with getting by on a day to day basisEnvironmental activists are irresponsible; the Earth belongs to humanityOppose regulationSkew younger

*Deploying a GreenServices Marketing Strategy

Will Green Marketing Help a Company?Yes! but they have to be sincere!Source: National Technology Readiness Study, Rockbridge Associates, December 2007

Example: Online Financial Statements

Example: Green Investments

*To Sum It Up

*To Sum It UpConsumers 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 impactYour product is environmentally consciousBuying your product will not only help the environment, it is good for the consumers wallets

Target Green Tech Leaders with your messageThey will evangelize on your behalfSocial media is key

*Questions?

***Protect the environment trend increases with age and with education.Men - 77 Women - 89HS or less - 78 College degree or some college - 85 At least some grad school - 91****Covered Electronic DevicesThe following video display devices containing a screen greater than four inches, measured diagonally, are considered to be Covered Electronic Devices under the Act:Cathode ray tube-containing devices (CRT devices) Cathode ray tubes (CRTs) Computer monitors containing cathode ray tubes Laptop computers with liquid crystal display (LCD) screens LCD-containing desktop monitors Televisions containing cathode ray tubes Televisions containing LCD screens Plasma televisionsCovered Electronic Waste Recycling FeeBeginning January 1, 2005, Covered Electronic Devices sold in California are subject to recycling fees in the following amounts:Six dollars ($6) for each Covered Electronic Device with a screen size of less than 15 inches, measured diagonally. Eight dollars ($8) for each Covered Electronic Device with a screen size greater than or equal to 15 inches but less than 35 inches, measured diagonally. Ten dollars ($10) for each Covered Electronic Device with a screen size greater than or equal to 35 inches, measured diagonally.

****About 30% of the population are greenovators out of this, 9% are Greenovator Leaders and 21% are Greenovator Followers. Both groups are highly committed to the environment and combating problems with global warming, etc., but they also believe that technology is a solution to the problem. They use and have an interest in green technologies, believe in networking on green issues with information technology, and believe that green tech has more positive side effects (saving money, helping economy) than negative side effects. The Greenovator Leaders influence others on green issues and technology issues in general; they also are more likely to think green tech is fun and cool. Other segments:Tech-savvy Green Sympathizers (31%) like technology but not as committed to being green or green techEnviro-Friendly Skeptics (11%) care about the environment and like green tech, but arent sure much can be doneNave Consumers (21%) care about the environment, but consider themselves uninformed and not very high-techAnti-Greens (7%) high level of doubt that we have environmental problems or need to act********