Strategic marketing for greener products

Environmental and energy concerns are playing a major role in marketing strategies for home appliances in many countries these days.

Driven by environmental regulations, new technologies and consumer pressure, many home appliance manufacturers are focusing on particular eco-aspects of their products, such as increasing the amount of recycled or recyclable materials and reducing the appliance's energy consumption.

Many reliable indicators show that consumer concern about the environment has steadily increased over the past two decades, particularly in developed countries.

The U.S. Natural Marketing Institute's 2003 survey shows that nearly one-third of American consumers, or about 68 million adults, consider environmental issues when making a purchase, a 7 percent increase from a year earlier.

The survey also said 96 percent of consumers show a strong interest in eco-friendly product specifications, including energy-efficient appliances and renewal power (74 percent) and organic foods (53 percent).

American marketing consultants Jackquelyn Ottman and Virgin Terry say in a paper published by J. Ottman Consulting, Inc. on its website www.greenmarketing.com that consumers' increased environmental concern did not, however, necessarily translate into increased green purchases.

Nevertheless, the two senior consultants acknowledged that the demand for greener products undoubtedly existed. The most pertinent question now is how a company can take advantage of the demand.

In their Strategic Marketing of Greener Products, Ottman and Terry suggest five factors that a company should consider in marketing environmentally friendly products:

1. Differentiating products and services in environmentally oriented ways that command brand loyalty. Philips with its energy efficient lighting and American Hammerhill with its recycled office paper, for example, have captured a significant market share among governments and corporations with green procurement and purchasing programs, thanks to their differentiated products.

2. Creating alliances to reduce costs and risks of entering new eco-innovation enterprises. Automakers General Motors, Ford, Chrysler and the U.S. government, for example, have formed an alliance to develop advanced battery technology for electric vehicles.

3. Reinforcing a company's environmental position through cause-related marketing. Canon, for instance, has used an environmental theme for years to reinforce the company's position as an environmental market leader. In the U.S., the company began with the Clean the Earth Campaign in 1990, which donated US$1 to the National Wildlife Federation and the Nature Conservancy for each used Canon toner cartridge returned to the company. The success of the program inspired to deepen and enhance their cause-related marketing effects.

4. Capturing revenue streams through innovative strategies that extend the life of products, such as Xerox's series of refurbished copiers, the "Eco series".

5. Highlighting the direct benefits of greener products, as reducing the environmental impact of a product improves its overall performance and quality in ways that are important not just to the most dedicated and loyal green consumers, but to all consumers. "For example, superconcentrated laundry detergents not only save energy and packaging but also save space, money and effort (they are easy to carry)," they said.

In addition, Ottoman and Terry outlined three key points as to why these added values should not be overlooked in marketing:

1. Consumers primarily buy products to meet direct needs, not to "save the planet".

2. Consumers purchase products out of self-interest. For example, the top environmental concern is linked to health issues. Additionally, the chance to save money is always appealing, as is the potential for self-actualization.

3. Business risk of marginalizing products by wrapping them in a "green cloak".

Environmental marketing presents important opportunities for industries, but taking advantage of them requires creativity, foresight and a commitment to the environment.