Green marketing is a way to use the environmental benefits of a product or service to promote sales. Many consumers will choose products that do not damage the environment over less environmentally friendly products, even if they cost more. With green marketing, advertisers focus on environmental benefits to sell products such as biodegradable diapers, energy-efficient light bulbs, and environmentally safe detergents.

People buy billions of dollars worth of goods and services every year—many which harm the environment in how they are harvested, made, or used. Environmentalists support green marketing to encourage people to use environmentally preferable alternatives, and to offer incentives to manufacturers that develop more environmentally beneficial products.

The concept of green marketing has been around at least since the first Earth Day in 1970. But the idea did not catch on until the 1980s, when rising public interest in the environment led to a demand for more green products and services. Manufacturers responded to public interest by labeling hundreds of new products "environmentally friendly"—making claims that products were biodegradable, compostable, energy efficient, or the like.

In spite of its growing popularity, the green marketing movement faced serious setbacks in the late 1980s because many industries made false claims about their products and services. For instance, the environmental organization CorpWatch, which issues annually a list of the top ten "greenwashing" companies, included BP Amoco for advertising its "Plug in the Sun" program, in which the company installed solar panels in two hundred gas stations, while continuing to aggressively lobby to drill for oil in the Arctic National Wildlife Refuge.

Without environmental labeling standards, consumers could not tell which products and services were truly beneficial. Consumers ended up paying extra for misrepresented products. The media came up with the term

"greenwashing" to describe cases where organizations misrepresented themselves as environmentally responsible.

In 1992, the Federal Trade Commission (FTC) stepped in to prevent further deception. The FTC created guidelines for the use of environmental marketing claims such as "recyclable," "biodegradable," "compostable," and the like. The FTC and the U.S. Environmental Protection Agency defined "environmentally preferable products" as products and services that have a lesser or reduced effect on human health and the environment when compared to other products and services that serve the same purpose. The label "environmentally preferable" considers how raw materials are acquired, produced, manufactured, packaged, distributed, reused, operated, maintained, or how the product or service is disposed.

Today, special labels help the public identify legitimate environmentally preferable products and services. Several environmental groups evaluate and certify products and services that meet FTC standards—or their own tougher standards. One popular product that has received certification is shade-grown coffee, an alternative to coffee beans that are grown on deforested land in the tropics.

During the late 1990s, green marketing received a large boost when President Bill Clinton issued executive orders directing federal offices to purchase recycled and environmentally preferable products. Some industries adopted similar policies.

Examples of environmentally-beneficial products and services:

Paper containing post-consumer wastepaper Cereals sold without excess packaging Shade-grown coffee beans Cleaning supplies that do not harm humans or environment Wood harvested from sustainable forests Energy-efficient lightbulbs

Energy-efficient cars Energy from renewable sources of energy such as windmills and solar

power

Read more: Green Marketing - environmental, human, power, sources, use, health, oil http://www.pollutionissues.com/Fo-Hi/Green-Marketing.html#ixzz1Ls3qULc8

Marketing Green 

Green Product Paradox: When Too Much Good Is Bad for the   Environment October 4, 2010

A common mantra in green marketing is that if you want the masses to buy your product, focus your messaging on more traditional attributes such as price, quality or service.  A product’s “greenness” is likely secondary for many mainstream consumers. For green marketers then, the holy grail may be to offer a product that is competitive on dimensions both traditional and eco-friendly.  This would result in the greatest number of products sold and greatest impact on the environment.

But, things are not always that simple.  Consider the scenario when an innovative green product spurs new demand across an entire product category, rather than just replaces the existing generation of products in market. Is the individual product still green if the aggregate impact of the category is greater than what it replaced? 

Take, for example, household lighting.  Most of us are aware that switching from incandescent to fluorescent light bulbs can result in a dramatic reduction in energy use.  But, overall adoption has been relatively modest in comparison to the potential market, likely due to the premium price commanded for the bulbs. 

Today, an even newer generation of lighting technology is on the commercial horizon.  Solid state lighting, described as a “souped up” version of the light emitting diodes (LEDs) that are commonly used today to illuminate electronic displays on alarm clocks and audio equipment, promises to provide lighting at a fraction of the energy used by today’s bulbs.  (“Not Such a Bright Idea”, The Economist, August 26, 2010)  Mass adoption of such technology could have

significant implications for the environment given that 6.5% of the world’s energy is used for illumination.

In many ways, we should celebrate such technology fixes given their benefits to the environment.  For marketers, solid state lighting clearly has the potential to be one of those “holy grail products”. Yet, green products such as solid state lighting also present a paradox in that their adoption in mass might actually be detrimental to the environment. How could this be the case?  Well, according to J Y Tsao and colleagues at the Sandia National Laboratory, cheaper lighting that sips energy will likely increase overall demand and uses for light, and with it, overall energy consumption.  (J Y Tsao, et. al., “Solid-State Lighting: An Energy-Economics Perspective”, Journal of Physics D: Applied Physics, August 19, 2010)

The rationale? Today, Tsao et. al., contends that consumers underconsume indoor light – with current fixtures providing 1/10th of the illumination as ambient outdoor light on cloudy days and 1/60th of ambient outdoor light on sunny ones.  Tsao rationalizes that there is plenty of room to consume more – including in new ways that have yet to be thought of.

As evidence, Tsao et. al., models historical lighting use and adoption rates for new technologies – from gas lanterns to fluorescent bulbs – and extrapolates forward demand based on the amount of light produced (measured in lumens) and cost per lumen.

Historic trends clearly indicate that consumer demand greatly increased when cost dropped and other attributes – such as faster turn on/off and greater cleanliness – expanded lighting uses.  Extrapolating into the future, Tsao et. al., predicts that with solid state lighting, demand has the potential to increase10x by 2030 and with it, perhaps a 2x increase in energy use.  How paradoxical. 

It is important to note that the green product paradox is not isolated to LED lighting.  Increased demand for electric cars, for example, could result in a similar dilemma if the added electricity load needed to power the vehicles is generated using higher polluting coal.

As such, the green product paradox presents quite the challenge for a marketer.  For individual companies, such products can be both profitable and (at least appear) socially responsible.   It is only by looking at the forest from the trees – and perhaps a little into the future – does it become apparent that, in aggregate, such products may, paradoxically, have a negative impact.

A sustainable brand might try itself to mitigate any impact that its products may have.  But, this will only have broad impact if it ultimately compels competitors to follow suit.  Given this, marketers should recognize that a solution to the paradox may not lie within an individual company’s grasp.  Alternatively, it may take an industry consortium to make the necessary product changes or evolve consumer expectations.  Or, it may take collaboration across industries to have lasting impact.  In both examples cited above, a shift to lower-polluting sources for energy generation would mitigate an increase in demand for both products.

Overall, the green product paradox presents a difficult challenge for green marketers.  Doing good for the planet may not always be as a simple as motivating purchase of greener goods.  In some cases, it just might be too much of a good thing.

Green Brand Leadership: a Fish   Story August 16, 2010

The customer is always right – so goes the mantra of every sales rep from time immemorial. But, as we know, what customers want may not be best for the planet. For some brands, this presents a dilemma: how do you satisfy consumer needs while remaining eco-responsible?

The dilemma can be quite daunting for a brand, especially if the eco-impact is caused by lifestyle choices consumers are long accustomed to. This challenge is only compounded when consumers are not yet aware that their very actions are having a detrimental effect – as no brand wants to be the bearer of bad news. Or, perhaps more challenging still, brands may find that the very behaviors and rituals that help define a brand itself turn out to perpetuate the very actions that are having a negative impact.

Whose responsibility is it to promote more sustainable consumer behaviors?

Many brands would say, it is the role of governments to regulate – and if they don’t, a corporate entity is not accountable for their failure to act. Others would say that it should be left to the discerning buyer. Should a brand itself take the lead? Some may argue yes. It is a demonstration of brand leadership, they say.

But, being out ahead of one’s customers may serve brands well only when their customers expect them to do so. Staking out a leadership position appeals to customers that want to know that they are doing good through the choices that they make.

Others may argue no. Brands sell products, not morality they might say. Worse, eco-responsible messaging may be antithetical to the experience a brand is trying to create. It is hard to enjoy pleasures guilt-free if one is constantly reminded of the impact that one is having on the planet.

But, regardless of where one nets out on this issue, one thing is clear: today, brands are increasingly left with little choice but to act – or react – whether or not their actions directly influence customer purchase decisions. Advocacy groups as well as individuals are leveraging the power of the media (and social media) to broadcast and amplify their voices to sway popular opinion.

Whether viewed as an opportunity to demonstrate leadership or take a defensive stance, it is likely that more and more brands will have to make such choices.

One example of such tension between brands and eco-decisions recently appeared in the New York Times Magazine article by Paul Greenberg, “Tuna’s End: The Fate of the Bluefin, the Oceans and Us.” (June 27, 2010), As Greenberg writes, Nobu, the internationally acclaimed sushi restaurant chain, faces a decision today over the selection of seafood that it serves.

The Atlantic Bluefin Tuna – a prized fish for sushi and sashimi – is now endangered. Continued commercial fishing may push it to extinction. Further, the timing of the BP oil spill in the Gulf likely exacerbated the situation by polluting one of two known breeding grounds in the Atlantic for these fish right as mating season was to begin.

Today, Greenpeace is pressuring Nobu – in large measure because it is a category leader – to no longer serve Bluefin to its patrons. Nobu has resisted. Nobu co-owner Richie Notar noted, “The Japanese have relied on tuna and other bounties of the sea as part of their culture and history for centuries. We are absolutely appreciative of your goals and efforts within your cause, but it goes far beyond just saying that we can just taken what all of a sudden has been declared an “endangered” species off the menu. It has to do with custom, heritage and behavior.”

Arguably, Nobu’s brand identity emanates from a careful balance of adherence to the tradition and ritual of sushi – its creation, its presentation, its consumption – and hip appeal: swanky ambiance, innovative food creations and celebrity ownership. Out of balance, the brand does not deliver on the experience consumers have come to expect.

With this balance in mind, Nobu has tried to stake out a middle ground by updating its menu with the following message: “Bluefin tuna is an environmentally threatened species. Please ask your server for an alternative”

Such a simple message informs patrons of the issue and then let’s each consumer make their own choice. Additionally, such phrasing invites a dialogue between the patron and server regarding food substitutes, though it is unclear as to how many patrons would be inclined to do so.

What Nobu has missed, however, is an opportunity to leverage this situation to evolve its brand appeal – keeping the balance between tradition and hip appeal while elevating each to the next level.

Nobu could find an alternative to Bluefin tuna and not jeopardize the brand, but arguably reinforce consumer perception of Nobu as hip and trendy. Greenberg asserts that what Nobu needs is a new substitute for tuna. As part of his research, he went searching for a Bluefin

substitute and may have found one in a fish known as kahala. Arguably, Nobu is missing an opportunity to be one of the first to introduce kahala across its menus, reinforcing its trendy image.

Ironically, by introducing such a substitute, Nobu would not be breaking with tradition, but rather, returning to it, as Bluefin was not widely popular in sushi until just 30 years ago. It was nowhere to be found in sushi before 170 years ago.

Thus, shifting away from Bluefin and offering consumers a tasty substitute could actually enhance Nobu’s reputation for seeding new trends while maintaining close adherence to the tradition of sushi.

In this case, what is good for the brand may actually be good for the planet.

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Shopping for Green   Online March 4, 2008

An Interview with thepurplebook Founder Hillary Mendelsohn

With the exception of a few select product categories, growing consumer interest in green has not yet translated into substantive changes in purchase behavior by mainstream consumers.  Like many nascent categories, green faces many barriers to widespread adoption. 

In many ways, product adoption in the green space is a classic chicken and an egg problem: uncertain demand leads manufactures to limit the number of products they launch.  Limited products and product choice, in turn, curtails demand.  However, this only tells half the story as there are many reasons why demand is limited. 

Even with those receptive to a green message, marketers are challenged by low familiarity with green products.  This, in turn, hampers consumers from effectively navigating the category as well as making informed purchase decisions.   

Where do consumers turn for credible information today?  Product companies?  Not necessarily, as consumers are increasingly skeptical about green marketing claims.  Fellow consumers?  Uncertain, as their peers are likely to have equally limited experience with green products.  

Can consumers rely on standards?   Perhaps.  Standards have been adopted in certain categories and many more are on the way.  Yet, rollout of new standards takes time; familiarity with what existing ones mean (i.e., how green is green?) is still limited.    

Instead, consumers today may turn to credible third party sources for guidance.  One such source is the recently launched thepurplebook green, a complete guide to green shopping online.  With an extended following already, thepurplebook series enters the green market with significant brand awareness…and credibility as a reliable source for online shopping information.  Indeed, just weeks after launch, thepurplebook green is planning a second printing.

Recently, I had the opportunity to speak with thepurplebook Founder Hillary Mendelsohn.  We discussed growing consumer interest in the environment, the role that purchases play for consumers to express their convictions on green and the role that thepurplebook green plays in facilitating green purchases.  Here is what she had to say: 

MG: Does consumer concern for the environment translate into increased purchase of green products? 

HM: Purchasing power holds two powerful acts for the consumer.  First, purchasing green allows the consumer to feel better about his/her choices and particularly for personal care products, food and household items there are positive health-oriented reasons  to make such purchases.   

Second, other than voting, this is the consumer’s strongest voice to the corporations at large.  Purchasing green holds corporate America more accountable for creating green options, and ultimately having greener practices internally. 

For both of these reasons, the ‘voice’ that purchasing green gives the consumer has and will continue to increase the sales volume of green products. 

MG: What types of green products do consumers purchase?   

HM: Consumers are purchasing based on their lifestyles.  Young families are focused on greener/healthier cleaning, food and personal care items.  Older consumers are building or

remodeling green.  The overall theme is that people are beginning to care about shopping more responsibly and are looking for ways to make better choices.   

It is the job of thepurplebook green and those of us that care about this concern to point them in the right direction. 

MG: Are consumers purchasing green products or brown products that are now greener? 

HM: The answer is both.  But the victory lies in the fact that they are making the effort to make better choices.  We must educate, create standards and make sure products do not lack in quality, style or cost too much.  If we can show consumers that they do not have to compromise on quality, taste or price, we can have everyone purchasing green. 

MG: What was the origin of the book?  Did it evolve out of a passion for green or a business opportunity similar to your other books or a little of both? 

HM: I knew very little about being green prior to starting this book.  I was happily writing online shopping guides when one evening, a friend invited me to see a screening of An Inconvenient Truth.  I sat in the darkened theater thinking about how I had contributed to this huge problem, and the legacy my children will inherit.   

Then I thought, if I were to become part of the solution instead, what would that look like?  Being an online shopping expert, I went to the web to see what I could find as far as earth-friendly fare was concerned.  It was slim pickings and hard to find anything at all. 

I thought, if I apply my skill set and focus exclusively on green product, I will educate myself, and create a book that might help make being green easier for others.  That said, I am a business professional, and what I have discovered, is that green makes sense and makes money – they are not mutually exclusive.   

I do hope this book is wildly successful, as that will mean people are adopting change and I have done my part. 

MG: Who is your target audience?  What beliefs do they hold about the environment?  What are their demographics?  Are they consistent with their behavior? 

HM: The beauty of this book is that it is meant for the eco-neophyte as well as the eco-savvy.  There is education and information for those who want to learn more and great resources for those who already know why they are making  better choices but can’t find the product.  There isn’t a demographic, but rather those wanting a greener lifestyle.   

The idea isn’t to exclude anyone, but to include everyone open to making greener choices whether it is their first or someone who lives dedicated to the greenest lifestyle possible.  This is doable for everyone.  The more we encourage choice and change, the more people will adopt greener lifestyle habits. 

Consistency lies within the consumer having good experiences with green products.  Once they have found good products, they do stick with them. 

MG: How should merchants approach you for inclusion in the book?  What is the criteria for inclusion? 

HM: Any merchants who wish to be considered for inclusion in thepurplebook Green, can log on to www.thepurplebook.com and submit their site for inclusion.   

Our criteria includes the following:  You must be able to complete the transaction online using a secure server, the site must be reasonable to navigate, customer service policies must be clearly stated and fair and a phone number is required for all sites. 

MG: How do you determine how green a company is?  Do you use a ratings system?  

HM: We have familiarized ourselves with all of the certifications currently used and have tried to glean a working knowledge of what is and isn’t green.   If we have questions, we contact the site and we do our very best to deliver consistent, quality information to our consumers. 

If we question it, or a site is not completely green but has a substantial green offering, we let the consumer know that too.  We are all trying to just to do better than we were yesterday, and need to keep that in mind and not judge too harshly. 

This is a relatively new area and we all have much to learn.  No one knows it all – yet.  All of the sites listed in the book are exceptional or they would not be there; however, we do make a special acknowledgement for those sites that also package and ship green.

Green May Be Ho-Hum for the Holidays, But It’s Here to   Stay December 12, 2007

So far, this holiday season has seen a rather muted push on green by retailers, both in terms of the products they sell and the messages they communicate to consumers.  Marshal Cohen, Chief Industry Analyst at NPD Group, recently suggested that such lack of enthusiasm by retailers reflects waning interest in green.  Cohen stated: “It’s basically a card that a lot of people played while it was hot and trendy…and it got overplayed.”  

Indeed, early signs suggest that retailers left their Birkenstocks home for the holidays.  While most retailers are taking steps to green their operations and supply chains, few have taken steps to green the shopping experience.  Reuters recently reported that retailers such as Target, Wal-Mart and J.C. Penney recognized green as a trend but does not have plans to promote green merchandise this holiday season  (Barneys is apparently a notable exception).  A spokesman for J.C Penney added: “It’s something that is growing in importance with the customer…[but it’s in] its early days.”  

But, could it be the case that after so much hype early in the year, the green trend has faded just as it was getting off the ground? 

Marketing Green believes just the opposite: as a trend, green is just getting started.  Quite simply, the apparent lack of enthusiasm shown by retailers this holiday season reflects the fact that we are still early on the adoption curve.  Here’s why: 

Green products popular today are not necessary gift ready.  Green products that have been adopted by the mass market – including compact florescent light bulbs and hybrid cars – may not make the best stocking stuffers.  Moreover, unlike organic foods, clothes made from organic cotton have not been adopted by the mass market yet.  As such, it is not surprising that we do not see a sudden surge in demand for these items this season. 

Consumers may not equate green with spreading holiday cheer.  When it comes to giving a gift that is overtly green, consumers may worry that they may be perceived by friends and family as the Grinch.   While social norms are changing, being green today is still in many regards a personal virtue rather than societal expectation.  As such, gift-givers may fear that giving a green gift may be perceived by recipients as politicizing the holidays.   

Retailers fear being accused of greenwashing.  Today, few standards are in place to determine how green is green.  Without them, retailers are left to their own devices to determine what is eco-friendly – and, as a result, are left exposed to criticism by outsiders who may think otherwise.  As such, many retailers today are focused more on greening their internal initiatives than greening specific products. 

While interest in green may wax and wane, marketers must remember that we are still in an early adoption cycle for green.  Regardless of how successful this season is for green, as a trend, green is here to stay.  In fact, there are five global influencers that will ensure that as a trend it grows, spreads and matures.  

Changing physical environment.  While the melting of the ice caps may still be an abstract concept for most, consumers are beginning to experience erratic weather patterns that are likely – though not certainly – being caused and/or exacerbated by global warming.   Indeed, Oxfam recently reported that weather-related natural disasters have increased four-fold over the past two decades while geologic-related ones (eg, earthquakes, volcanoes, etc) have remained steady.   Such visible signs will likely increase and intensify with time, providing a constant reminder that something in our world is not in balance.   

Increasingly concerned consumers:  In the US today, consumers have a high awareness of climate change as an environmental concern, but arguably relatively low awareness of the severity of its impact – especially on the poor who are least responsible for its cause but most vulnerable to its adverse affects.  As Hans Verolme, Director of Global Climate Change Programmes for World Wildlife Fund stated, “There’s no escaping the facts: global warming will bring hunger, floods and water shortages.”

Marketers should be prepared that such a realization may cause a sea change in how American consumers view the brands that they purchase.   Americans may be voracious consumers, but they do not like to do so at other people’s expense.  As a consumer issue, therefore, climate change mitigation may be similar to enforcing fair labor laws or worker safety practices  – it is just what you do or risk a backlash from consumers. 

Leadership by business: Some may find it surprising that many global corporations are strong proponents of action on climate change.  Indeed, 150 leading companies – including US multinationals Coca-Cola, GE, Nike, Johnson & Johnson and Sun Microsystems – have already signed a communique on climate change and presented at the UN conference this month in Bali that calls for legally binding targets for carbon emissions. 

So why would global companies lead the charge?  Corporations know that mandates on carbon emissions are inevitable.  The sooner government acts to set acceptable carbon emission levels, the faster business can respond and plan for the future – by modifying capital investment decisions or commercializing new products, for example.  

Moreover, once global emission caps are put into place, standards will be developed within each product category that determine how green is green.  Without standards today, companies decide for themselves to what level they should green their products.  In this situation, the burden is on the consumer to decide how competitive products stack up while leaving well-intentioned companies vulnerable to greenwashing accusations by critics that disagree with their claims. 

Where standards have emerged though, green products have taken off.  One great example is the creation of the Leadership in Energy and Environmental Design (LEED) certification that set standards for green buildings.  The result: 20% growth in green buildings in 2005, followed by 30% growth in 2006.    

Watchdog role of Non-Governmental Organizations (NGOs):  In many ways, NGOs serve as watchdogs for industry on environmental issues.  Today, such organizations enjoy increasing clout, fueled by increased membership and financial backing over the past few years.  More than ever, NGOs are flexing their muscle by challenging corporate activities that they deem as destructive to the environment or deceptive to consumers.   

Interestingly, even companies that are viewed as leaders on green do not get a pass by NGOs when activities are deemed inconsistent with their competitive positioning on green.  For example, despite (or as a result of) earmarking a combined $70 billion toward green investments and loans, both Bank of America and Citigroup were recently the target of a grassroots campaign by Rainforest Action Network to the fact that these banks also fund coal-fired plants, a primary contributor to global warming.    

Today, consumers can also serve as watchdogs as well by rating corporate green activities through sites such as Greenwashing Index, Do the Right Thing and Climate Counts.    

Involvement by governments: Today, there is growing global support for action on global warming.  Signs of this momentum are perhaps nowhere more prevalent than in the US and Australia – two countries that have long been holdouts for global action.  Over the past couple of weeks, there has been a sea change in Australia, as Kevin Rudd, the newly-elected Prime Minister, signed the Kyoto accord as one of his first acts of government.  Moreover, the US Senate Committee on Environment and Public Works voted last week for an ambitious 70% reduction in carbon emissions by 2050.   

So, marketers should take note.  Early signs are that green may not bring holiday cheer to retailers. Nonetheless, green marketers should remain steadfast.  Though consumer focus on green may fluctuate, green as a trend is here to stay.  Five key influencers will not only ensure that is the case but accelerate its growth over time.   

Greening   Consumption November 14, 2007

An Interview with Michel Gelobter, Founder and EVP of Cooler

Long-time environmental activist Paul Hawkins once described “green consumerism” as an oxymoron.  Indeed, “green consumption” makes Wikipedia’s “List of Genuine Oxymora”.   The reason: consumption by its very nature has an impact on the environment – to some degree or another – and therefore, is hard to call truly green.

 

Yet, short of reducing consumption, many consumers, manufacturers and retailers are focusing on greener consumption – a term which implies shifting to products and services that have a lower environmental impact, though in many cases, not specifying by how much.

 

Today, there are positive signs that demand for greener products is increasing sharply.  In fact, the Natural Marketing Institute reports that the $200+ billion Lifestyles of Health and Sustainability (LOHAS) market is expected to double by 2010 and quadruple by 2015.  

There are many online retailers and content sites that offer green products directly or simply help consumers navigate the market.  They include three primary categories:

Green online retailers: Many online retailers have emerged that are dedicated to serving the green market including Buy Green, Earth Friendly Goods, Eco Choices, EcoWise, Gaiam, Green Feet, Green Home, Green Shop (UK), Green Shopper, Green Shopping (UK), Green Store, Indigenous, Natural Collection (UK), Nigel’s Eco Store (UK), Rogue Natural Living, Shop Green (PriceGrabber), The Green Office and VivaTerra among others.

General online retailers. Several general merchandisers and portals have embedded a green section into their existing offering, including Amazon and MSN among others.

Green directories: Finally, other online sites have positioned themselves as green directories, product search engines and shopping guides.  Sites include EcoBusinessLink, EcoMall, EcoSeek, Evolvist, Evolve Shopping, Green Deals Daily, Great Green Goods (blog), Green People, Green Providers Directory (UK), Green Shopping Guide (UK), Guide Me Green (UK), Haute*Nature (blog) National Green Pages, Pristine Planet, and TheFindGreen among others.  Perhaps the most comprehensive guide to online eco-friendly shopping is published by thepurplebook. 

Yet, despite this growth rate, LOHAS spending is still a drop in the budget when it comes to US consumer buying power – estimated at more that $10 trillion in 2007.  As such, the greater challenge is to shift spending on mainstream products to greener ones and do so in a way that also provides the incentive for mainstream manufacturers to reduce the carbon footprint of their products over time.

There are many ways to motivate the purchase of greener products across the purchase funnel.  Here are a few examples:

Make existing products greener.  Product companies have the opportunity to green their products – including sourcing, use and disposal.  Greening a product in the first place, of course, is the best way to reduce its environmental footprint.  Companies are motivated to do so for a variety of reasons including increased consumer demand, pressure from partners across the supply chain and risk to the brand simply by being complacent.

One of the best examples is Wal-Mart.  For example, it has identified $10 billion in potential savings simply by decreasing product packaging.  It has also required its suppliers to reduce the environmental impact of the products that it sells (eg, more concentrated laundry detergent formulas reduce the use of energy for transportation) while expanding the market for others (eg, by selling fluorescent bulbs at lower cost under its own private label). 

Due perhaps, in part, to Wal-Mart’s pressure and lead, Procter & Gamble has responded with a commitment to sell $20 billion worth of greener products over the next five years.  It has also joined the Supply Chain Leadership Coalition, an industry organization that pressures suppliers to publish information on carbon emissions, to help it reduce the impact of its suppliers as well.

 

Motivate greener choices.  Product companies and retailers can influence behavior by interjecting green as a considered attribute in the purchase decision.  There are several ways to do so including the use of eco-labels, ratings, promotional benefits or green rewards tied to a loyalty program.  Eco-labels and ratings impact consumer purchase decisions by providing relevant environmental information at the point of sale – and indirectly motivate greener product design and manufacturing decisions by making green a differentiating attribute. 

 

Today, eco-labels are actively being used or under consideration by manufacturers, (eg, HP, Dell), retailer (eg, Wal-Mart, Home Depot) and government regulators.   Moreover, several organizations have taken the lead in developing or aggregating green rating systems including Green Seal, Consumer Report’s Green Choices, the US EPA’s Energy Star and independent Better World Shopper.  Moreover, sites like Alonovo allow users to filter products based on their own green values.

 

Promotional benefits and rewards can also influence consumer purchase behavior.  Marketing Green explores both of these levers in two previous blog entries. (“Green Labels as Drivers of Consumption and Loyalty Programs”, March 19, 2007; “Testing Green Promotional Benefits to Drive Acquisition ”, September 16, 2007).

 

Offset environment impact.  Today, more and more companies and consumers are turning to carbon offsets (and renewable energy credits or RECs) to mitigate the environmental impact of products manufactured or purchased.  While the offset mechanism may vary – from purchasing allowances on a carbon exchange to investing in renewable energy projects – the effect is similar: offsets reduce the carbon impact of consumption by effectively removing the equivalent amount from the environment elsewhere. 

 

While carbon offsets are not without controversy, they can be a powerful way to mitigate the impact of consumption.  There are several ways that carbon offsets are purchased today:

 

First, carbon offsets can be voluntary.  Retailers can provide options to do so – as most airline sites do today, for example – or consumers can purchase them directly from many brokers including Atmosfair (Germany) Better World Club, Carbon Fund, Carbon Leaf (UK), Carbon Zero (Canada), Climate Care, Climate Counter, Climate Friendly, ClimatMundi, CO2 Balance, My Climate, Native Energy, Offset Carbon Company (UK), Offsetters (Canada), Solar Electric Light Fund, Sustainable Travel International, Target Neutral (UK), Terrapass, The Carbon Neutral Company, TreeBanking, and Uniglobe Travel among others. 

Typically, retailers play no more than a passive role in facilitating carbon offset purchases by providing the mechanism to do so on their site.  In many cases, it is no more than an additional option available during the check-out process.  The case of Virgin Atlantic is different, however; in response to low voluntary purchases, Virgin is now actively selling carbon offsets to customers while in-flight.  Sunvil Holidays (UK) goes one step further by putting the burden on the consumer to opt-out of - rather than opt-in to - purchasing a carbon offset by embedding it directly into the cost of its vacation packages. 

Second, carbon offsets can be structured into the transaction itself – treated as a promotional expense, embedded in the purchase price or covered as part of the transaction fee.  Companies as diverse as insurance giant Allstate, UK’s Silver Jet and Fiji Water are making their products carbon natural (or even carbon negative) as a way to differentiate their offering.  In this case the product company is absorbing the cost directly or raising its price to cover the added expense. (Interestingly, Allstate is offering to offset the carbon emissions from the automobiles that it insures).

 

Alternatively, credit card transaction fees can be used to offset carbon emissions as well.  Recently, issuers including Barclays, GE, MetaBank, Triodos Bank and Wells Fargo have launched green cards while Bank of America and upstart Brighter Planet have announced their intentions to do so.  These cards divert a portion of their fees to mitigate the impact of the products purchased through a donation to a non-profit organization or direct purchase of carbon offsets. 

 

Such card programs have advantages and disadvantages.  Given their reach, credit cards can green a significant amount of consumer spending simply by providing the incentive to consumers to make their purchases on a card with green benefits.  Yet, to do so, cardholders must trade in personal benefits earned from traditional reward programs (eg, airline miles) for ones that provide more societal benefits.

 

Alternatively, a promising, new retail model has emerged that divert a portion of revenues earned through affiliate marketing programs to pay to offset the carbon from products

purchased.  In doing so, sites such as Cooler and Earth Moment enable consumers to purchase products from traditional retailers while offsetting the carbon impact of these purchase in the process.  Such a model is compelling to consumers as, from their perspective, the cost of the carbon offset is absorbed by the retailer and they can green their purchases while using their existing credit cards. 

 

While numerous companies are involved in carbon offsetting, Cooler has clearly been one of the most innovative players in the space.  Distributing 8 million products from 400 retailers, Cooler provides consumers with the largest selection of products that can be purchased with an embedded carbon offset.

 

Recently, I had the opportunity of sitting down with Michel Gelobter, Founder and Executive Vice-President at Cooler.  We discussed the recent launch of his company, its B2B and B2C offerings and the challenges that we all face in greening consumption.  Here are his words:

Marketing Green:  By offsetting the carbon impact of products purchased, Climate Cooler has the potential to change the game in the online retail space.  What was the impetus for starting the company? 

Cooler:  We wanted to find ways to create the momentum in the consumer space for taking action on climate change.  That exploration led to what has now become Cooler.  Cooler is distinguished by being the first site where you can purchase practically anything you can buy on the Internet – except for maybe a plane ticket – in a way that eliminates the global warming impact through the point of sale.   

Our mission as a company is to connect every purchase with a solution for global warming.  We do that with three offerings.  The first is that we use the country’s only product and service carbon calculator that was developed jointly by Carnegie Mellon and Berkeley.   

MG: Does it calculate the entire impact of the product, that is, how it is manufactured, used and disposed of? 

C: It is just to the point of sale: how it is manufactured and transported.  But, the innovative piece is that it adds the retail component which ranges usually from 20-30% of a product’s carbon footprint. 

MG: How about shipping? 

C: Yeah, it includes that too.  But [the environmental impact] tends to be much lower which can be a surprise to our customer base. 

The second piece of this offering is our basket of carbon offsets or pollution prevention and renewable investments that have been unanimously approved by the world’s best environmental organizations.  And finally, we set out to create a basis on which consumers could take action in a way that was trusted and transparent.  And that is what Cooler is about.   

We also give people a way to track their impact and start thinking about carbon budgeting.  We already have the My Impact page which tells [consumers] what they are emitting.  After all, 40% of the average American’s carbon footprint is in consumption of goods and services.  

MG: So do you view part of the value that you bring is educating consumers on their true environmental impact? 

C: In the consumer space, absolutely.   

The bigger piece of the business is really the B2B offering.  Companies started coming to us and saying: “How can I put your works into my gears so when people come to my website – or bricks and mortar store – they can get a carbon neutral product.”

Our B2B offering is called Cooler Compete which is basically a way for companies to know, offset and reduce the global warming impact of the products that they sell.  And the difference is that those companies are going to make a choice about who pays for [the offset].  We think that most of our business customers are going to absorb the costs of carbon neutrality. 

MG: What services are you providing in the B2B space? 

C: First, we are providing the [carbon emission] calculation.  Our calculator is really revolutionary.  We are using a method that is, on average, more accurate [than existing calculators].  It is based on an approach called economic input/output analysis, whereby we calculate the footprint of a product directly through the economy.  Instead of looking at a shoe and saying “where did that leather come from?”, we say “how much of the leather industry did this company use?”.   

Peer-reviewed studies show that this method is, on average, more [inclusive] from an environmental perspective because it includes more of the carbon footprint than [other] analysis. 

The second service is really a reduction service, that is, a list of the top contributors to your carbon impact.  That is usually enough to motivate companies to bench mark against those numbers and reduce their impact.  

Finally, companies buy offsets with us.  We don’t actually make any profit from our offsets – we pass the costs directly through.  But our basket of offsets is very high quality.  

MG: You are ambitious in trying to serve two different audiences with very distinct offerings. 

C: Yes, but the website in some sense can be seen as a technology showcase.  The web site gives [companies] the sense like “Oh, this is what it could look like.”  So that is why the website is really critical.   

MG: In your B2C work, who is the typical customer that you are targeting? 

C: We are partnering with environmental organizations so our early go-to-market strategy is [targeting] the members of our partner organizations.  Now we are trying to move from the environmental group members to more of the LOHAS crowd.  Over time, we will target a broader and broader swath of the American public as more people become conscious of this issue. 

MG: How important is viral to your marketing strategy?

C: Viral would be great.  Right now, we are honing our technology platform to make that more potent.  For example, when you tell a friend, we are able to report back to you how much your friends offset.  We can also have people compete to see who is more carbon neutral.   

MG: How does the B2C business model work?  Is it an affiliate model? 

C: It is.  On average, if we refer someone [to an online retailer that subsequently makes a purchase], we get 6% [of the total sale].  The cost of the [carbon] offset ranges from 0.7 to 1.5% and we keep the rest for the business. 

MG: Are there plans to offset carbon emissions from the use and disposal of the products that you sell? CC: We do not have any plans to address that now. MG: How receptive are consumers today to carbon offsets? 

C:  I think we are easily 10 to 20 years out from having a stable, trustworthy, well-defined commodity market for offsets.  One of the reasons we partnered with the environmental groups is to give consumers assurances that at any moment in time, the best decisions are being made.  

MG: Do you think offsets take on more meaning when the US market moves from a voluntary to a mandated cap and trade system? 

C: No. I think personally that people need to take action now.  Our offsets are additional so they are already above and beyond everything done today.  We follow three criteria that are summarized as follows: real, additional and positive. 

“Real” means that we are taking carbon out of the atmosphere when you buy something.  We are not just meeting the next increment of energy demand with cleaner energy.  We’re actually capturing or reducing an emission somewhere else in the world, hopefully in the United States.   

“Additional” means that this would not have happened where it not for your purchase.   And “positive” means doing more for the world than just helping the climate.  It means helping to create jobs or generate more environmental protection or biodiversity. 

It is going to be a long time before governments are actually cutting emissions by 80%; by 2050, unfortunately.  Until that time and maybe well beyond it, we want to be the place where consumers can know that by acting their doing their part above and beyond what government is doing.  

MG: It is conceivable that your success could provide incentive for others to enter the market and that one day, offsets will simply be a threshold to compete? 

C: Of course, we would love it as a company and a social event if this became a must have.  And we are going to do our best to make sure that happens.  That is one of the reasons why we started the company. 

MG: Will this actually help solve global warming? 

C: I absolutely think it’s a huge part of the solution.  We can not be paralyzed by the fact that shopping and consumption is part of the problem.  We have to go in and fix it.  People have been trading goods for money for a long time and the system’s broken.  And climate change is actually a huge archetype for a wide range of ways to reknit the fabric of shopping with the fabric of community and earth care.

Green Brand   Disconnect October 26, 2007

This week’s cover story in BusinessWeek featured the experience of Auden Schendler, corporate director of environmental affairs at the Aspen Skiing Company (ASC), as he tried to convince his senior management that going green was worth the investment (“Little Green Lies,” October 29, 2007).

 

             

From an outsider’s perspective, one might think that ASC would be highly receptive to eco-friendly investment opportunities, as the company has incorporated green as a core brand pillar and a central theme in its marketing communications.  Yet, as Schendler points out, things are not always at they appear; apparently, ASC is not as green as its brand might suggest.

In one example, Schendler points out that in the past, senior management has resisted even modest investments in proven technologies – such as compact florescent light bulbs (CFLs) in hotel rooms – that yield measurable cost savings and a positive ROI.  The rationale: CFLs are not aligned with the brand experience ASC wants for its customers.  As one hotel manager said, “Fluorescent light would suggest a waiting-room ambience, jeopardizing the establishment’s five-star rating.” 

Such a world view, however, does not seem to acknowledge evolving social norms and consumer expectations regarding green.   According to a recent JD Powers Hotel Guest Satisfaction Survey, 75% of hotel guests are willing to participate in environmental programs.  In the luxury hotel category, an even higher percentage of guests are willing to participate: 87% of Baby Boomers, 95% of Gen Xers and 79% Gen Yers.  Based on this

consumer data it seems that ASC may be underestimating their guests’ interest in and expectations for green as part of their hotel experience. 

As such, it seems that ASC’s decision not to invest in CFLs may be at odds with current consumer sentiment.  In fact, CFLs have already gone mainstream.  Today, many luxury hotels already use CFLs for lighting.  Their light quality has improved tremendously.  And, retailers are selling them aggressively, despite the fact that incandescent light bulbs are more profitable for them.  In fact, Wal-Mart has sold over 100MM of these bulbs this year alone.  

Moreover, not investing in CFLs seems contrary to ASC’s own brand positioning and communications in the market.  In fact, just weeks before the BusinessWeek article ran, ASC launched a new advertising campaign that, according to the Salt Lake Tribune, used “high-profile skiers and snowboarders to tout the resort operator’s environmental record and urging others to take action, too.”   This campaign is supported by a lightly branded microsite called Save Snow which educates visitors about what ASC is doing and what others can do to reduce climate impact.   

Ironically, the campaign also includes plans to send 40,000 CFLs to its customers.   

 

So, marketers should take note.  Consumers are increasingly willing to participate in environmental programs at hotels, and especially at luxury ones.  

Hotels should not be afraid to invest in green initaitives including CFLs.  Not only can such programs provide attractive ROIs, but, for companies such as ASC, they can ensure that the consumer experience aligns with their brand positioning in the market.  For ASC, the decision not to purchase CFLs is, at best, inconsistent with its brand.  At worst, the company risks that its marketing efforts are perceived as green washing. .

Search Is Paramount in the Emerging Green   Category August 7, 2007

Paid search continues to grow and is now considered by most marketers to be a core component of their online marketing tool kits.  This continued growth is not surprising,

however, as it is hard to beat search as a marketing channel for both its efficiency and effectiveness. 

There are several reasons for search’s continued dominance.  Search allows marketers to 1) engage consumers as they actively seek information in market, 2) connect consumers with relevant content based on self-identified interests, 3) pay only when consumers click on a sponsored link, 4) scale spend in the channel (to a point) and 5) enhance the productivity of other channels.  For example, building awareness with a 60-second spot will likely result in more searches being conducted by consumers that turn to the web to find out more information or link to the advertiser’s site. 

To green marketers, search also represents a powerful component of the overall media mix. In fact, Marketing Green believes that search is even more critical for marketers of green products than for more established products because green is an emerging category that has high consumer interest but is difficult to navigate due to the lack of familiarity and standards.   

Moreover, green search will continue to increase as awareness and interest grows and consumers increasingly turn to the Internet for answers.  Here are few reasons why, as well as recommendations for green marketers on how to maximize the impact of the search channel: 

Consumers have a growing interest in green, but limited familiarity.  Many consumers are curious about the emerging green category but have relatively low understanding of the category or how to navigate it.  As such, consumers are more likely to research product choices before making purchase decisions and turn to online search when they do so. 

For marketers, this means establishing broad presence in paid search across both the general as well as green vertical search engines in order to intercept consumers when they actively seek category-, product- or brand-specific information. 

Consumers today conduct that vast majority of green searches through general search engines such as Google and Yahoo and will likely to continue to do so in the near term. The popularity of green vertical search engines – including Green Maven, Greener, GreenGamma, LiveGreenOrDie, GreenLinkCentral, EcoEarth, EcoSeeker and Earthle among others – is growing nonetheless based on the perception that green vertical search engines return more relevant results than general search.

In addition, green filters are emerging that allow consumers to search with greater precision either as an overlay to existing search engines or as a way to narrow the results based on a set of business rules regarding green.  Palore is one example which enables consumers to identify green merchants when using Google’s search engine.  Below is Palore functionality loaded into Google Maps.  Note the symbols included under each listing – including the carrot which denotes that the restaurant offers organic foods.

 

In addition, online sites are emerging help locate products and retailers offline.  Evolvist locates products and retailers by geography. 

Alternatively, Alonovo filters products and retailers based on their relative corporate social responsibility and “greenness”.

Products and brands are proliferating.  Green products are being launched every day across almost every product category.  Product “greenness” is relative, however, which results in a spectrum of products, features, benefits and trade-offs that consumers must weigh before making purchase decisions.   

As product proliferate, so too will our vocabulary that describes them.   

Marketers should, therefore, take advantage of this by greatly expanding and testing the number of keyword and keyword combinations purchased.  Moreover, these lists should align with marketing campaigns and their objectives across the purchase funnel.  For example, an awareness campaign should include both branded, category and product-specific keywords.  Marketers should refresh this list frequently as the entire category is still very much in flux.

Consumers are hungry for relevant content.  Lacking familiarity with green products, consumers turn to credible information sources to learn about products, compare features and validate choices. 

Marketers should respond by providing relevant content on landing pages that link from both paid – and natural – search. This is important for several reasons.  First, consumers are more likely to engage in the content if it is relevant to their search.   

Moreover, content that pays off corresponding keywords searched translates into a better, more relevant consumer experience.  This is important with current algorithm-based search

engines, as well as with emerging community-powered and/or customized search engines such as Eurekster Swicki, Rollyo and Yahoo Search Builder.   

In a world where consumers put considerable trust in the opinions of their peers, community-powered search engines will likely become more popular as search results are informed by the collective experience of the community.

 

This is especially important in an emerging category such as green.  With green products emerging rapidly, relatively low consumer familiarity and few standards, consumers will likely turn to peers to help make informed purchase decisions; community-powered search engines will likely play an important role in facilitating this process in the near future.

Competing on Green Accelerates Pace of   Change June 6, 2007

In today’s hypercompetitive markets, companies in categories such as computers and retail struggle to establish and maintain a competitive advantage.  Given that consumer expectations are evolving, many of these companies are turning to green to differentiate their offerings by being greener than their competitors.  As the basis of competition shifts to the green space, companies seem to be continually upping the ante by trying to outdo each other for being the greenest company in the category.

Interestingly, green competitiveness is having an unintended consequence: green competitive pressure is accelerating the rate of change within these categories.  Industry

leaders such as Wal-Mart and Tesco, and Dell and HP – already engaged in intense battles for consumer hearts, minds and share of wallet – are playing tit for tat when it comes to green.

Today, for example, Dell announced that that it plans to become the “greenest technology company on Earth”.   CEO Michael Dell went further stating that Dell would “take the lead in setting an environmental standard for [the] industry…and intend[ed] to maintain that leadership”.

Through such an announcement, Dell is demonstrating more than just responsible corporate citizenship.  With HP recently regaining it leadership position in a market where PCs are increasingly viewed as a commodity, Dell is trying to shift a basis of competition to green.  As this message will likely resonate with its core consumer, HP – already no slouch on green issues (it once invited Greenpeace to its annual shareholders meeting) – will have little choice but to follow suite.  While it is unclear whether it will match Dell’s challenge head-on, HP is certain to raise its commitment to green through announcements during the coming weeks.

The lesson for marketers is clear: as the basis for competition shifts to green, it is likely that companies will vie for leadership on the issue, accelerating change in the category.  Savvy green marketers will either take advantage of being a first mover on green or ready their company to be a fast follower when a competitor inevitably does.

Brewing Direct Mail   Backlash May 8, 2007

This past week HSBC launched its “There’s No Small Change” campaign offering Green Kits full of eco-products and offers to new customers that sign up for a checking account and HSBC’s automatic bill payment option.  Such an offer is a win-win-win: customers receive a high value offer, HSBC acquires new customers that have built-in switching costs via the automatic payment options and the environment is healthier due to reduced paper consumption.

One of the reasons why such an offer may resonate with consumers is the growing acceptance that paper-based communications are not environmentally sound.  Such changing sentiment could foreshadow a backlash by consumers and advocacy groups that may force marketers to rein in all paper-based marketing efforts, including the $56 billion US direct mail industry.

Today, direct marketers rely on DM as a core channel to send targeted information to customers (from an in-house database or purchased from an external list).  What happens then if consumer backlash against the mounds of direct mail received each day results in a national “Do Not Mail” list, eliminating the ability of marketers to send solicitations without permission?  Sound fantastical?  Well, here are a few thoughts to consider:

First, the “Do Not Call” campaign was one of the most successful campaigns in history, resulting in 62 million consumers signing up in the first year alone.  As of September 2006, more than 132 million people were registered on the list.

Second, a “Do Not Mail” registry is gaining traction.  According to the Direct Marketing Association, “Do Not Mail” legislation has been introduced in more than 14 states so far this

year that would create state-based registries.  Nine of these initiatives are still active (of which 5 are in Northeastern states where there is also real concern about limited landfill space): 

States Status

CT,HI, MI, MO, NJ, NY, RI, VT, WA

Active/In Committee

AK, CO, MD, MT, TX Postponed/Withdrawn

Inevitably, such a registry (or the threat of one) will cause marketers to rethink paper-based channels, increasing their reliance on electronic communications (eg, websites, email, e-statements, e-catalogs, desktop widgets).  It is also likely to decrease the footprint of any remaining direct mail efforts (eg, use of post-consumer recycled paper, reduced frequency and size of package).  

Smart green marketers should interpret pending legislation as a call-to-arms and take proactive steps to reduce their addiction to paper-based channels before they have to go cold turkey..

Hybrids Shift into the Mass   Market April 29, 2007

Part II of an Interview with Bruce Ertmann, Corporate Manager of Consumer Generated Media, Toyota  

Shifting a company’s customer base from early adopters to mass market consumers is one of the key challenges facing green marketers.  Few green companies have been able to expand their niche beyond a core set of customers.  One of the primary reasons is that consumers tend to not like paying price premiums for green products.  Another reason is simply that consumers have not traditionally prioritized “green” as a deciding attribute when making purchase decisions. 

Yet, certain green brands like the Toyota Prius seem to be crossing this “chasm” into the mass market.  Though still in the early stages of their adoption, hybrids have already generated broad appeal with mainstream consumers.  Moreover, the stereotype of hybrid owners as treehuggers is far from the truth: in fact, they are high income, mainstream consumers.   

The results from a recent consumer survey by Topline Strategy Group (“Why People Really Buy Hybrids”, 2007) concur.  Topline found that 73% of Prius owners surveyed acted like mass market consumers (ie, they had a financial incentive to purchase the vehicle such as lower sticker price or operating costs than other choices considered) versus 23% of early adopters who paid a premium over alternative choices to purchase the hybrid.  Moreover, for marketers, Prius owners are an attractive target audience: 71% have household incomes over $100,000, with 28% at $200,000 or more.  

While it is uncertain whether this research is statistically significant (n=118), it is at least directionally representative of what Toyota itself is observing in the market.  Recently, I had

the opportunity to speak with Bruce Ertmann, Corporate Manager of Consumer Generated Media at Toyota.  We spoke of Toyota’s success in the hybrid market, its target audience and the shift to the mass market consumer.  Here are his words: 

MG: What kind of consumers purchase Prius vehicles? 

BE: When we first launched the Prius, people joked about all of the tree huggers who bought the car.  Yes, we had those diehard owners, passionate people.  But, it truly has become a mainstream vehicle.   

For the longest time, we were undersupplied with the Prius.  [Toyota’s] US president went to bat for us this past summer and was able to get additional production in Japan.  Production came on late last year [followed by a] big sales push in December which most manufacturers have.   

And then in January our Prius sales dropped off significantly.  At the same time, we had all of this new inventory coming into the dealership.  So instead of a six month waiting, list we had inventory at our dealerships – which is frankly normal.  We began to see some of the traditional media ask whether the bloom was off the rose for the Prius and hybrid technology in general. 

But, in February we had a strong sales month.  Just this past weekend, we sold 2,000 Prius vehicles nationwide – a record for us.  So, [March] will be a record sales month. The vehicle continues to be hot and the hybrid technology still seems to be a winner with consumers. 

MG: Are you seeing the same customer shift across all your vehicles? 

BE: Yes, definitely.  We are seeing this with the Camry, our top selling car.  That vehicle as a hybrid version has become very hot.  The demographic is such that the more mainstream Camry buyers interested in a hybrid version found the premium to be tolerable.  

Right now, our belief is that integrating hybrid technology into more of our vehicles is the smart thing to do.   

MG:  How have you evolved your marketing as your audience shifts?  

BE: We have changed our marketing approach to push it towards a more mainstream audience.  We pulled all of our Prius advertising for a while.  While was kind of unique in of itself – and perhaps green-oriented you might say – because we did not have enough vehicles to supply demand.  But we have changed that now.  

We do some different things besides straight advertising.   We have a hybrid synergy tour, for instance, that launched last month.  It really is an educational effort on our part. It is almost like a moving auto show on a semi-truck that exhibits our hybrid technology and how we are trying to integrate it into other vehicles that we are bringing to market.    

We show [consumers] how the technology works.  People like the idea of the regenerative nature, where you are actually recharging the battery when you put on the brakes.  At the same time, there are others who want us to develop a Prius that you can plug-in to the electric grid to recharge the battery.   

From a pricing standpoint, we are trying to offer more in that vehicle for the money.  For instance, we are coming out with different versions of the Prius, a sports version.  We put

leather in the car last year and added more features.  People wanted a little bit of a luxury feel to the vehicle which may seem counter to the type of people that we may think buy that vehicle.    

MG: Overall, how would you characterize your target audience?  

BE: We are seeing a broader customer demographic base that we have in the past based on our research.   

People feel it is a smart decision on their part to drive a vehicle with hybrid technology.  They do not think that they are bragging or showing off or becoming a tree hugger.