Green Marketing

June 2010

Team Assignment
You are the Marketing VP for a firm (your choice) that is committed to Sustainable Development, has implemented many Sustainable Initiatives, does Sustainability Reporting, etc. Your CEO has asked you to come to Executive Team meeting with two sets of recommendations as part of a Green Marketing Plan: Which Market Segments should your firm target? What are the Marketing Messages for the targeted segments? After the break, each team will have 15 minutes to prepare and then 15 minutes to present their recommendations.

SOURCES
An Introduction To Green Marketing by Polonsky, Michael Jay, University of Newcastle, Australia, 1994 Videos: The Effects of Green Marketing (4 minutes) Six Sins of Green Washing (6 minutes) Its Not Easy Being GreenOr, Is It? by Rockbridge Associates, US, 2008

Green or Environmental Marketing

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

Green or Environmental Marketing

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

WHY GREEN MARKETING?

1. Organizations perceive environmental marketing to be an opportunity that can be used to achieve its objectives

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

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

US Federal Trade Commission

Firms using green marketing must ensure that their activities are not misleading to consumers or industry, and do not breach any of the regulations or laws dealing with environmental marketing. Green marketing claims must;

Clearly state environmental benefits; Explain environmental characteristics; Explain how benefits are achieved; Ensure comparative differences are justified; Ensure negative factors are taken into consideration; and Only use meaningful terms and pictures.

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

Six Sins of Green Washing (6 minutes) www.youtube.com/watch?v=Fnh1Y06DGCs&feature=related

Its Not Easy Being Green Or, Is It?

Charles L. Colby Joe Bates Joe Taliuaga Rockbridge Associates, Inc.

Presented by:

For more information, contact: Joe Bates, VP 703-757-5213 ext. 14 jbates@rockresearch.com

17th Annual Frontiers in Service Conference October 3, 2008

A Little About Us

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

Our Practice Areas

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

Rockbridge specializes in services, technology and media sectors

Center for Excellence in Service

Background & Methodology

Rockbridges National Technology Readiness Survey (NTRS) has gathered consumers opinions and usage of technology since 1999 The study is co-sponsored by the Center for Excellence in Service, R. H. Smith School of Business, University of Maryland Methodology:

Representative survey of U.S. adults (18+ years) 1025 consumers surveyed in Fall 2007 500 by telephone (random-digit-dialing) 525 by a representative web panel Results weighted by demographics and by type of internet/phone access

Why Does Green Matter?

Americans Believe in Environmental Stewardship

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

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

Will The Green Trend Last?

Click to edit Master text styles Second level Third level Fourth level Fifth level

Chances Are Good

California has been leading the way in enacting green laws:

Click to edit Master text styles Second level Mandated recycling of TVs and monitors Third level Fourth level Requiring retailers to take back plastic bags Fifth level Almost outlawed incandescent light bulbs

Green Sentiment Runs High

Is There An Environment Problem?

% W Agree W Statement ho ith

85% 69%

The evidence of global warming is real

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

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

Can Something Be Done?

Consumers believe collective action will work And regulation will not hurt

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

Can Technology Help?

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

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

What is the Potential for Green Products and Services?

Service Technology Empowers Consumers to Be Green

Recycle/refurbish old computer Replace paper financial statements with electronic Access online pub instead of print version Replace paper utility statement with electronic Switch to electricity based on clean/renewable resources Telecommute Power company controlled air conditioner 21% 34% 33%
% Who Have Done % Maximum Potential Incidence

58% 73%

51% 58% 46% 52% 42%

Opportunities for financial services, utilities, 52% IT firms, publishers

53%

31% 44%

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

There is an Emerging Market for Green Products

Many include making homes and transportation greener
% Who Have Own % Maximum Potential Incidence

Many Energy-Related Products and Services Have Potential for Long Range Growth
A third of consumers are interested (or already own) an alternative fuel vehicle and solar heating systems
Hybrid fuel vehicle Solar home heating Natural gas/ electric vehicle Solar water heater Trash compactor Bio-powered vehicle Remote home system control Green financial investments
4% 3% 4% 3% 7% 4% 3% 8%

% Who Own % Maximum

35% 34% 34% 32% 29% 27%

ential is ealized

23% 17%

Where is the Services Opportunity?

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

Many Are Turning to the Web for Help

% Who Have Done It In Past 12 Months
G gas m ot ileage info

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

R esearched public transit options Looked up green tips for hom e V isited site of env ironm ental org R esearched candidates' enviro view s G recycling info ot V isited co w ebsite for green view s O btained appliance energy ratings E ironm forum nv ent s D onated to political cam paign R esearched car pools
5% 4% 8%

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

Segmenting the Green Market

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

A Green Segmentation of the Market

1 out of 10 adults Green Tech Leaders are influencers

They also embrace technology and believe in its ability to solve problems

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

7% 22%

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

Anti-Greens

Psychographic Profile of 6 Segments

Commitment to Green Green Tech Leaders Green Tech Followers Tech-Savvy Sympathizers Enviro-Friendly Skeptics Nave Consumers Anti-Greens Influence Absence of Skepticism Love of Tech

High High Medium High Medium Low

High Low Low Low Low Low

High High Medium Skeptical Medium Skeptical

High Medium High Low Low Medium

Commitment: I Encourage Friends / Family to Be Environmentally Friendly

%W A ho gree W Statem ith ent
G reen Tech Leaders

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

G reen Tech Followers Tech Savvy G reen Sym path izers Enviro-Friendly Skeptics

Nave C sum on ers

A ti-G n reens

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

Influence: Others Come to Me For Advice on Being Green

%W A ho gree W Statem ith ent
G reen Tech Leaders

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

G reen Tech Followers Tech Savvy G reen Sym pathizers Enviro-Friendly Skeptics

Nave Con sum ers

A ti-G n reens

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

Influence: The Use of Social Media

%W A ho gree W Statem ith ent
G reen Tech Leaders

Green Tech Leaders influence others through 50% social media

G reen Tech Followers Tech Savvy G reen Sym path izers Enviro-Friendly Skeptics

17% 35% 21% 20%

Nave Con sum ers

Anti-Greens also use social media, and may influence others on their views
53%

A ti-G n reens

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

%W A ho gree W Statem ith ent
G reen Tech Leaders

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

G reen Tech Followers Tech Savvy G reen Sym path izers Enviro-Friendly Skeptics

N ave C onsum ers

A nti-G reen s

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

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

% Who Agree With Statement
Green Tech Leaders

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

Green Tech Followers Tech Savvy Green Sympathizers Enviro-Friendly Skeptics

Nave Consumers

Anti-Greens

Profile of Green Segments

Green Tech Leaders 10% of Market

How They Think

Who They Are

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

Younger More likely to have kids Tech professions Higher incidence of

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

Higher web presence and subscriptions to online music and video

Green Tech Followers 18% of Market

How They Think

Who They Are

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

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

Other Relevant Green Segments

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

Segments Where Green is Less Relevant

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

Deploying a Green Services Marketing Strategy

Will Green Marketing Help a Company?

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

I like to do business with companies that are environmentally responsible

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

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

Example: Online Financial Statements

8% 5 7% 8 7% 0 6% 0 6% 3 6% 5

U eN w s o P te tia o n l

4 4% 0 3% 1 3% 5

G e Tc re n e h La e e d rs

G e Tc re n e h F llo e o w rs

T c -S vvy eh a G e re n S m a ize y p th rs

E viro rie d n -F n ly S e tic kp s

N ve a Cnu e os m

Example: Green Investments

32%

33%

Own Now Potential

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

Green Tech Leaders

Green Tech Followers

Tech-Savvy Green Sympathizers

EnviroFriendly Skeptics

Nave Consumers

Anti-Greens

To Sum It Up

To Sum It Up
Consumers care about the environment, even if some are only joining the bandwagon to be PC Embracing technology and being green are not mutually exclusive ideologies When marketing green products and services, focus on the following messages:

Your company cares about the environment (and you have to back this up with actions that show it) If we all work together, we can have an impact Your product is environmentally conscious Buying your product will not only help the environment, it is good for the consumers wallets

Target Green Tech Leaders with your message

They will evangelize on your behalf Social media is key

Questions?