Choosing the right green marketing strategy: green marketing has not fulfilled its initial promise, but companies can take a more effective approach if they realize that a one-size-fits-all strategy does not exist.

Publication: MIT Sloan Management Review

Publication Date: 22-SEP-04

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2004 Sloan Management Review

Green marketing has not lived up to the hopes and dreams of many managers and activists. Although public opinion polls consistently show that consumers would prefer to choose a green product over one that is less friendly to the environment when all other things are equal, those "other things" are rarely equal in the minds of consumers.

[ILLUSTRATION OMITTED]

For example, when consumers are forced to make trade-offs between product attributes or helping the environment, the environment almost never wins. Most consumers simply will not sacrifice their needs or desires just to be green, as the case of the Ford Think, a two-seater electric car, demonstrates. Ford Motor Co. initially expected this car to be a big hit, but late in 2002 the company announced it was scrapping the vehicle. The Think, which required six hours of recharging after being driven for only 50 miles, would have required drastic changes in driving behavior by its owners. The lesson is that regardless of their environmental benefits, electric-powered cars will remain a niche product at best until manufacturers can radically improve battery life and cost. (1) (This also explains why car manufacturers are now pinning their hopes on gas- and electric-powered hybrids.)

Hopes for green products have also been hurt by the perception that such products are of lower quality or don't really deliver on their environmental promises. In a 2002 Roper survey, 41% of consumers said they did not buy green products because they worried about the diminished quality of eco-friendly versions. (2) And both Procter & Gamble Co. and Wal-Mart Stores Inc. have been criticized for selling a brand of paper towels labeled as green in which the inner tube was made of recycled paper but the towels themselves were made of chlorine-bleached unrecycled paper and came packaged in plastic. (3)

And yet the news isn't all bad--far from it. For example, a growing number of people are willing to pay a premium for organic foods because, whether it is actually true or not, they believe organic food to be healthier, tastier and safer. (4) Likewise, some consumers have been willing to pay an up-front premium for energy-efficient, water-conserving washer and dryer units (although the price premium has diminished recently). Such consumers realize that they will actually save money on energy and water bills over the long term. Organic foods and energy-efficient appliances thus appeal to consumers' self-interest while at the same time promoting environmental benefits--a dual message that electric cars cannot deliver. (5)

How, then, should companies handle the dilemmas associated with green marketing? (6) They must always keep in mind that consumers are unlikely to compromise on traditional product attributes, such as convenience, availability, price, quality and performance. In other words, green products must match up on those attributes against nongreen products in order to earn consideration from the vast majority of consumers. It's even more important to realize, however, that there is no single green marketing strategy that is right for every company. The strategies that should work best under different market and competitive conditions range from the relatively passive and silent "lean green" approach to the more aggressive and visible "extreme green" approach--with "defensive green" and "shaded green" in between. Managers who understand these strategies and the underlying reasoning behind them will be better prepared to help their companies benefit from an environmentally friendly approach to marketing.

Green Consumer Segments

While buying green may not appeal to everyone, there are substantial numbers of consumers who are potentially receptive to a green appeal. According to the Roper survey mentioned above, 58% of U.S. consumers try to save electricity at home, 46% recycle newspapers, 45% return bottles or cans and 23% buy products made from, or packaged in, recycled materials. So it is clear that some consumers already demonstrate sporadic green sentiments in their habits and purchasing behavior. Understanding the target consumer will help marketers to know whether "greenness" is an appropriate selling attribute and how it should be incorporated into the marketing mix.

To respond to...

Read the full article for free courtesy of your local library.