Jacquelyn Ottman: How to Stay in the Black While Going Green

Marketers' Product Focus Can Overlook Important Customer Needs

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Philips launched EarthLight, an energy-efficient compact fluorescent light bulb, in 1994. The bulb had a clumsy shape that was incompatible with most conventional lamps, a confusing package and a price tag of $15 compared to 75 cents for incandescent bulbs. Sales languished. Although it was well intended, the environmental positioning of the EarthLight appealed to only the greenest of consumers.
Jacquelyn Ottman
Jacquelyn Ottman

To be successful, green marketing must satisfy two objectives: improved environmental quality and customer satisfaction. Misjudging either or overemphasizing the former at the expense of the latter -- as Philips did with the EarthLight -- can be called "green marketing myopia." In 1960, Theodore Levitt introduced the concept of "marketing myopia" in a famous Harvard Business Review article that business students still study today. In it, he characterized the common pitfall of companies' tunnel focus on "managing products" rather than "meeting customers' needs."

Mr. Levitt warned that a corporate preoccupation on products rather than consumer needs was doomed to failure because consumers select products and new innovations that offer benefits they want. To wit, many green products have failed because of marketers' myopic focus on their products' "greenness" over the broader expectations and desires of consumers or other market players, like regulators and activists. Mainstream consumers want to know, "If I use 'green' products, what's in it for me?"

Fridge earns honors, loses sales
Here's another example. In 1994, Whirlpool launched the "Energy Wise" refrigerator, the first cooler free of ozone-depleting chlorofluorocarbon (CFC) chemicals and more efficient than the U.S. Department of Energy's highest standard by 30%. For its innovation, Whirlpool won the "Golden Carrot," a $30 million award package of consumer rebates from the Super-Efficient Refrigerator Program, a coalition of local utilities and the Department of Energy. Not surprisingly, in hindsight, sales suffered because the CFC-free benefit and energy savings did not offset the $100 to $150 price premium in markets outside the rebate program, and the refrigerators didn't offer any additional features or new styles that consumers desired.

Green marketing myopia also strikes when products fail to provide credible environmental benefits. Introduced in 1989, copy on packages for Mobil's Hefty photodegradable trash bags explained that the bags would photodegrade when "activated by exposure to the elements" like sun and rain. But because most garbage is buried in landfills, allowing limited exposure to the elements, the claim enraged environmentalists. Seven state attorneys general sued Mobil on charges of deceptive advertising and consumer fraud, and the company withdrew the product from the market.

So how do marketers avoid the pitfalls of green marketing myopia? Successful green marketers follow three important principles that can be called "The Three Cs": consumer-value positioning; calibration of consumer knowledge; and credibility of product claims:

1. Consumer-Value Positioning
To position products as a value to consumers, design environmental products to perform as well as, or better than, alternatives. Promote and deliver the consumer-desired value of environmental products, and target relevant consumer market segments. Broaden mainstream appeal by bundling (or adding) consumer-desired value into environmental products (such as fixed pricing for subscribers of renewable energy).

2. Calibrate Consumer Knowledge
Educate consumers with marketing messages that connect environmental product attributes with desired consumer value. Examples include: "Pesticide-free produce is healthier," "Energy efficiency saves money" or "Solar power is convenient." Frame environmental product attributes as "solutions" for consumer needs, for example, "rechargeable batteries offer longer performance." Sherwin Williams' "Harmony" paints are a good example because they are low-odor and free of silica and volatile organic compounds, appealing to consumers wanting to improve indoor air quality as fumes from paints, carpets and furniture are now linked to headaches; eye, nose and throat irritation; dizziness; and fatigue.

Create engaging and educational internet sites about environmental products' desired value. For example, Tide Coldwater's interactive website allows visitors to calculate their likely annual money savings based on their laundry habits, utility source (gas or electricity) and ZIP code.

3. Credibility of Product Claims
Make sure that environmental product and consumer claims are specific, meaningful and qualified. Compare to similar alternatives or likely usage scenarios. For example, Toyota recognized the ambiguity of the term "green" and dismissed a slogan for Prius, "Drive Green, Breathe Blue," in favor of "Less gas in. Less gasses out."

Underscore credibility with product endorsements or eco-certifications, like Energy Star, from trustworthy third parties, and educate consumers about the meaning behind those endorsements and eco-certifications.

Encourage positive word of mouth via consumers' social networks and online sources with compelling, interesting or entertaining information about environmental products. Increasingly, consumers have grown skeptical of commercial messages, and they're turning to friends and peers for advice. The internet has opened significant opportunities for tapping consumers' social and communication networks to diffuse credible "word-of-mouse" (buzz facilitated by the internet) about green products.

Philips used these strategies with the EarthLight when reintroducing the bulb in 2000. Using the name "Marathon" to emphasize the bulb's five-year life, the bulb had a new design offering the look and versatility of incandescent bulbs. Communications promised an estimated $26 in cost savings over the life of the bulbs, and an Energy Star seal stamped on the package front trumpeted credibility. This new value proposition triggered sales growth of 12% in a flat market.

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This article is excerpted from "Avoiding Green Marketing Myopia: Ways to Improve Consumer Appeal for Environmentally Preferable Products," by Jacquelyn Ottman, Edwin R. Stafford, Ph.D., associate professor of marketing at Utah State University, and Cathy A. Hartman, Ph.D., professor of marketing at Utah State University, originally published in Environment magazine, June 2006. Click here to read the original article in its entirety.
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