By: Darrin C. Duber-Smith Issue: Energy & The Environment Section: Collaborator Profile
The Green Imperative
As we have only begun to understand the dramatic impact that the human species is having on the environment, the concept of sustainability has emerged, an idea championed by many consumers and a business model that has crept into the practices of an increasing number of organizations. If you have not yet heard of this term, you have certainly heard of its closely related cousins: The words “green”, “natural”, “organic”,“socially responsible” and other terminology describe a way of doing business that addresses the natural environment, and all of us in it, as a fundamental part of the strategic planning process.
Sustainability Defined
Economists, business professionals and academics have all defined sustainability in a variety of ways. Yet, there is general agreement that it involves not only producing and promoting environmentally sensitive and healthful products, but also the management of pricing and distribution functions. Think of it in terms of a continuum where there are “degrees of sustainability”.
No organization has ever attained 100% sustainable status, but there are several endeavoring to do so, and technologies leading to zero emissions and zero waste may soon be feasible. No organization has ever attained 100% sustainable status, but there are several endeavoring to do so, and technologies leading to zero emissions and zero waste may soon be feasible. Sustainability reshapes the manner in which we create products, manage our distribution/supply channels, price products, and position products for promotional communications. Indeed, in order to be sustainable, organizations must meet customer needs and marketing objectives as well as ensure that the entire process is compatible with eco-systems (including human health and wellness) and does not have an adverse effect on them.
Challenging? Yes. Impossible? No.
Green marketing tactics are no longer effective unless the company has the policies and procedures to back up the marketing messages.
One manner of looking at this important business model and marketing strategy revolves around two primary concepts: front end sustainability and back end sustainability. If processes are to meet sustainability objectives, measures must be taken regarding:
Front End - Reducing, managing and eventually eliminating pollution throughout the product development process.
Back End - Re-designing systems so that resources are recovered to be re-used, reconditioned, and/or recycled so that terminal disposal into a landfill or other creative methods is avoided.
Application of this concept involves an A-Z environmentally and socially friendly approach that follows the product from its inception all the way to the end-user. Think of anything that does not add value to the process as waste. Waste is bad. It costs money. It hurts the environment. Excess packaging is waste. Excess energy is waste. Producing toxic products is waste. And, as for government fines and legal outlays for lapses in environmental stewardship…you guessed it…waste. Also, remember that the consumer seeks a bundle of features and benefits, what we call a “product”, and not the side effects that go with it. Environmental pollution, toxic materials, etc. are not at all what they ask for.
Green Marketing’s Model of Sustainability
The day of choosing from a “green buffet” are fast coming to a close. Competitors, the growing environmental and social awareness of consumers, rapidly increasing government regulations, the growing influence of socially or environmentally oriented NGO’s, the media in all of its splendor, and influential supply chain partners, increasingly demand that organizations perform environmental and social audits and develop comprehensive plans for continuous improvement in a number of areas.
Sustainability efforts should be woven into every aspect of an organization for optimal competitive advantage. Shallow efforts at positioning products and entire organizations fall on increasingly deaf ears and, more importantly, open the organization up to the growing backlash against “greenwashing”, a species of puffery that is rapidly gaining scrutiny among the stakeholder groups mentioned above.
In the name of complete transparency, the best way to utilize a green marketing strategy is for the sustainability audit and plan to be available on a company’s website and updated annually with measurable objectives for improvement in the following areas:
The nature of raw materials and composition of products offered
The nature, consumption and recapture of energy
The use of water
Impact on land and biodiversity
Reduction and recovery of emissions, effluents, and waste
Distribution issues such as packaging and transportation
Cause related involvement
Human resources and vendor partner policies
Commitments to any or all of these areas can be easily assimilated into a product’s brand identity and crafted into a message that incorporates a concern for people and the environment.
The Green Imperative
There are a number of compelling reasons to become “greener” and adopt a business model with sustainability as a key centerpiece. The Green Imperative© provides business executives who endeavor to be more in tune with the eco-system, a commitment that often leads to increased return on investment for stakeholders and a competitive advantage in the marketplace, with plenty of ammunition in support of a strategic focus in that direction.
Target Marketing:
A sustainable marketing strategy, with products that are properly positioned, will address the growing target market (well over 50% of the U.S. population) for goods that are green, natural, etc.
Sustainability of Resources:
Insuring the availability of resources to continue to make and sell goods is another imperative that suppliers and manufacturers must embrace. Cutting down all of the trees does not help the shareholders of paper companies, let alone everyone else.
Lowered Costs/Increased Efficiency:
There are countless ways to save money and increase efficiency so that marketers can enhance the bottom line and stave off the narrowing of margins that occurs in every industry as it reaches the maturity stage of its life cycle.
Product Differentiation and Competitive Advantage:
Every marketer knows that in the hyper-competitive world of ingredients and products, notably in personal care/cosmetics, it is crucial to maintain advantages over competitive and substitute offerings.
Competitive and Supply Chain Pressures:
When competitive organizations and their products adopt sustainable business models and green positioning, it often pressures other companies to follow suit, especially in the case of market leaders. Wal-Mart and its recent environmental and social initiatives illustrate how powerful supply chain members can force companies around the world to adopt more favorable social and environmental policies.
Regulation and Risk:
Regulations at all levels of government are on the rapid rise, so organizations need to not only remain in compliance but also proactive with regard to impending legislation. This practice reduces shareholder risk.
Other Stakeholder Demands:
Activist shareholders, NGO’s, the financial sector, and the media all work independently and sometimes in concert to ensure that companies are cognizant of their impact on people and the environment.
Brand Reputation:
Any marketer worth his/her salt knows that a brand’s reputation is of paramount importance, and being sustainable enhances that reputation among the majority of consumers.
Global Market Forces:
Global concerns about climate change, looming energy problems, and a recent growing backlash against globalization among many others factors, all point toward the necessity of addressing sustainability issues.
Customer Loyalty:
A brand’s attitude toward sustainability is just one of the many variables that factor into the decision-making processes of the majority of consumers.
Employee Morale:
A wide body of research points to the fact that adopting a more sustainable business model actually enhances employee morale.
The Ethical Imperative:
This concept is simple.
It is not ethical to degrade the environment and the people in it in the name of commerce. Embracing sustainability is simply the right thing to do.
All are compelling reasons to get with a program.
Green Marketing Strategy
Only after we have addressed the “what” and the “why” of sustainable business, can we discuss the communication of what an organization is doing.
The sustainability plan should be transformed into a brand identity and corresponding image that blends the brand’s key benefits with an assurance that you are monitoring and improving your social and environmental “footprint”.
Cause Related Marketing: The initial attempts at incorporating sustainability into policy and marketing strategy involved partnerships between not-for-profit, cause related organizations and well-meaning for-profit enterprises. Simply put, a company would ideally align with a cause that resonates with its target market and other stakeholders. This is why so many companies that market products to a female dominated audience focus on health efforts that are important to women, such as breast cancer. These efforts are no longer enough, but are still expected by many stakeholders.
The Green Buffet: Formerly seen as “hey it’s a start”, these efforts to pick and choose the easiest and most obvious from the various greening options with no attempt at improvement, transparency, or a commitment to continuous improvement. This shallow communications effort leaves an organization open to backlash and is no longer appropriate for any target market due to increasing scrutiny. Please don’t over use images of nature. This has also become hackneyed.
Green as a Secondary Benefit: Often called “the tie-breaker”, this is a strategy that encourages the consumer to see a brand that meets or exceeds all of his/her expectations and also enjoys the benefit of being a “greener” option will win among the majority of consumers. Clorox has recently adopted this strategy with its GreenWorks line of household cleaning products. This is the predominant strategy currently used since it is often used for consumers that do not place environmental concerns among their key determinants in making purchase decisions.
It is not ethical to degrade the environment and the people in it in the name of commerce. Embracing sustainability is simply the right thing to do.
Green as a Primary Benefit: Companies operating in the natural and organic products marketplace, an industry now in the hundreds of billions, have been using this strategy for years. The product may not be quite as effective as a more mainstream option, but for consumers that consider health and the environment to be key factors in their decision making process. Communications using terms like natural, organic, and fair trade are common and have proven very effective. These communications are for those consumers more concerned with the nature of the ingredients than they are the entire business model.
Sustainability as Part of Mission: This is the new frontier and therefore affords the most opportunity for visionary organizations to embrace the Green Imperative™ and the benefits that will help reduce costs and expand the market for their products. It involves the entire audit and plan, absolute transparency, and a commitment to people and the environment as part of the top-line vision. No process or product can be immune from this effort to maximize efficiency and appeal to the global shift in overall values towards organizations, the products they make, and the effect business practices have on its stakeholders, society and the environment.
Since 2000, Darrin C. Duber-Smith, MS, MBA, has been president of Green Marketing, Inc., a Colorado-based strategic planning firm offering marketing planning, marketing plan implementation, and other consulting services to companies in all stages of growth. He has almost 20 years of specialized expertise in the natural and sustainable products industry and has been a Visiting Assistant Professor of Marketing at the Metropolitan State College School of Business in Denver, CO, since 2003 and an adjunct professor at the Leeds School of Business at the University of Colorado-Boulder since 2006. He can be reached at [email protected].