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What is Green Marketing?

“Green marketing” promotes the environmental benefits of products, or a company’s sustainability initiatives. It is continuing to grow in popularity—in large part due to the fact that customers are increasingly integrating their environmental values into their purchasing decisions. More and more customers want to support companies that incorporate sustainability efforts into their product and service offerings.

Effective marketing provides the information customers want—and need—to make informed purchasing decisions, in a message that communicates the benefits of the product or service to the customer. If sustainability is important to customers, green marketing can be highly effective. However, green marketing isn’t a smart choice for every company. If customers aren’t interested in products’ green benefits, or a company’s sustainability initiatives, a green marketing message isn’t going to drive brand loyalty or purchasing decisions, so it shouldn’t play a role in the marketing messages. However, if sustainability is important to a company’s culture, it should be embraced—but not necessarily marketed.

Who is doing Green Marketing?

Companies large and small are realizing the benefits of going green, and integrating that into their marketing messages. According to a 2009 January/February study by the American Marketing Association, more than half of corporate marketers believe that their organizations will increase their involvement in environmental sustainability over the next two to three years, and 43% say their companies will increase marketing of these programs. As further proof of the growing popularity of green marketing, Datamonitor Product Launch Analytics shows 458 product launches so far in 2009 of package-goods products that claim to be sustainable, environmentally friendly, or “eco-friendly.” If that pace holds all year, it will triple the number of green launches last year, which in turn was more than double the number in 2007.

Effectiveness

Successful marketing is customer-centric, so if sustainability and eco-friendly products are important to customers, green marketing may be effective. Green is becoming more and more mainstream—becoming more important to increasing numbers of people. An excellent example of a large company embracing green marketing is Scott, a $2 billion global value brand that reaches one in three U.S. households—a very mainstream customer base. Scott is launching a new line of toilet paper, paper towels, napkins, and wipes made from 40%–50% recycled content. The decision was based on research conducted on Scott’s value-minded customers: the research found that 86% are interested and 41% are very interested in products with recycled content.

Companies can determine if environmental concerns are important to customers by simply asking them. Set up interviews, post a survey on the corporate Web site, or send emails requesting customers’ feedback. At the very least, customers will appreciate the interest in their opinion, and a great new opportunity to meet customer needs may be uncovered.

Credibility

Companies have been touting the green benefits of their products and initiatives for quite some time. Following the initial wave of green marketing messages, consumers became turned off by green marketing due to a number of claims that were fraudulent or misleading, and due to the saturation of green marketing. However, Nielson’s concept-testing service BASES found that now, more than 80% of consumers in all categories—including 89% of those most inclined to buy green but also 80% of those unconcerned about green claims—found green claims completely or somewhat believable. Only 9%–16% of consumers said they believe green products aren’t as green as claimed.

Before launching a green marketing campaign, companies should be able to substantiate the environmental claims they plan to make. Though the FTC does not set definitive standards for the use of specific environmental claims, its policy states that “any party making an express or implied claim that presents an objective assertion about the environmental attribute of a product, package, or service must, at the time the claim is made, possess and rely upon a reasonable basis substantiating the claim.”

Companies also need to ensure claims aren’t too broad. According to the FTC’s green guide, an environmental marketing claim should make clear whether the environmental attribute or benefit being asserted refers to the product, the product’s packaging, or a service; or to a portion or component of the product, the product’s packaging, or service. Companies should be careful to tailor their claims so as not to overstate the environmental benefit or attribute.

Price and Performance Concerns

A larger problem than credibility may be consumers’ concern about price and performance. A vast majority of consumers said they believe green products cost more and don’t perform as well as others. Companies undertaking green marketing campaigns need to take steps to address skepticism about price and quality. Provide education about the benefits of the product to combat the misconception that the product won’t work as well as the non-green alternative. If there is a price premium, educate consumers about why they should pay that price premium. The more a product offers, the more consumers will be willing to pay.

Green Marketing Basics

For green marketing to be effective, consider the following:

  • Balance environmental issues with primary customer needs. If customers aren’t going to use environmental issues to gauge products and companies, and if environmental initiatives are not going to drive a purchasing decision or brand loyalty, green marketing isn’t going to be an effective use of the marketing budget.
  • The green marketing claims must be credible. Companies need to provide a level of detail about the claims that make them meaningful, and be able to substantiate those claims. Customers need to believe the claims for green marketing to be effective.
  • Green marketing must empower the customers. The green marketing message must make customers feel that by using the product or service they will make a difference.
  • Overcome customers’ concerns about price and product performance. Educate customers about the benefits the product or service provides, and provide testimonials, case studies, or research reinforcing the performance and value claims.

Green marketing can be an effective and useful tool, but it must align with customers’ needs. If environmental concerns aren’t important to customers, green marketing will not be effective. However, if customers do place high importance on green products and sustainability issues, green marketing can be a powerful way to positively position the company and its products and services.

For more information about green marketing, or to find out if it makes sense for your company, contact AVS Group. Learn more about our strategic marketing services here

 

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