Green Marketing Archives - Don Roy, Ph.D.

The Myth of the Green Millennials

A widely held belief about Millennials is that they are inclined to care about environmental issues and are more likely to engage in green behaviors than other generational groups. This characteristic has not been lost on companies that see market potential in targeting Millennials with green products. This generathtion is different, or so we have been led to believe. They care about the environment and feel a sense of duty to preserve it after the years of neglect by their parents’ generation.

Research by an expert on Millennials suggests that the view of a greener generation may be a myth. Jean Twenge, a San Diego State University psychology professor, conducted a longitudinal study that found concerns about the environment among Millennials have decreased over time. Moreover, Twenge’s research found that Millennials were not as inclined to engage in green behaviors like cutting back on energy consumption and participating in environmental clean up as generational counterpart Generation X. These findings are counter to the notion that environmentalism is a priority for Millennials.

This post is not intended to debate whether Twenge is right or wrong. Her research has been criticized before because it tends to put Millennials in a less than favorable light. The takeaway here is to be willing to challenge assumptions about your customers, competitors, internal capabilities… in other words, all areas that impact your business. Just as Twenge has evidence of diminished emphasis on the environment among Millennials, other research can be produced that suggests environmentalism is indeed important to this generation. Which side do you believe? Both and neither at the same time!

Are there long-held assumptions or generalizations that influence decision making in your organization? It may be time to challenge them, testing their generalizability to today’s turbulent business environment. Marketing strategy may be grounded in outdated beliefs about customers or the external environment. Put assumptions to the test to determine their veracity. Otherwise, you may be making marketing decisions that are based on outdated or incorrect facts.

eCampus News – “Study: Young People not so ‘Green’ After All”

Consumers Want to be Green, But…

Several studies I have read in the last two years point to a greater emphasis in environmental concern among consumers. More people are expressing that they are concerned about how their consumption affects the environment and that they have expectations that companies will engage in sustainable practices to minimize their environmental impact. The latest study, conducted by NBCUniversal as part of its Green is Universal initiative, indicates a majority of American adults have strong inclinations toward being green consumers.

Among the study’s findings:
• 68% of persons surveyed said they would be willing to pay more for green products from trusted brands (up 8 percentage points from 2009)
• 90% agreed that companies have a responsibility to protect the environment
• 77% have a more favorable impression of companies that promote environmental causes
• 62% said they are making an effort to buy goods from environmentally responsible companies

These statistics and findings from other studies point to a new age of consumption, one that is influenced heavily by the values people hold about being stewards of the environment. However, the findings shared here must be tempered with the understanding that none of these measures reflect actual buying behavior. Yes, many consumers want to go green, but there are two limitations holding them back:

1. Marketers need to get serious about being green producers – Many claims made about companies and brands being green today are motivated more by an attempt to project an image of social responsibility than sustainability being integral to the business model. It is challenging for most companies to develop policies, practices, and processes that promote environmental stewardship. The evolution may take time, but if consumers put their money where their opinions are, being positioned as a green brand could pay off.

2. Consumers need to have green choices at fair value – One of the obstacles to greater consumption of green products is price. Prices for many items touted as green are higher than alternatives. As we wrestle with higher prices for gas, food, and other necessities, it will continue to be a dilemma of whether to do the right thing for the environment or for our wallet.

Consumer sentiment toward environmentalism is encouraging, particularly among young adults. Marketers should ratchet up their commitment to promoting environmental stewardship, not merely promoting their greenness. Only then will companies realize the benefits of sustainable business practices.

Marketing Daily – “68%: Green Products Worth Paying More For”

Is The Green Consumer Fading?

Green consumerism and sustainability are practices that many observers believe are not the latest fad. The U.S. recession, a more truly global economy, and a highly connected world have been contributors to the spread of Green. However, results of a recent Harris Poll provide evidence that attitudes toward environmentally responsible consumption appear to have lost momentum in becoming a priority for Americans. Among the findings that point to a fade in Green attitudes:

• 36% of those surveyed said they were concerned about the planet we are leaving behind for future generations compared with 43% in 2009.
• 36% said they personally care about the current and future state of the environment, down from 34% last year.
• 29% said they are environmentally conscious, down 1% from 2099.

Fewer adults holding Green attitudes contradicts the notion that the “me” generation of the indulgent consumer is evolving into a “we” generation that weighs the impact of consumption decisions on future generations. At the same time, it would be premature to signal an end of the Green consumer. Several economic indicators point to the effects of the recession easing. It is possible that some consumers are reverting back to previous attitudes and behaviors as their personal situations improve. We can look at reactions to gasoline prices and observe similar patterns. When gas prices have risen to their highest levels, more consumers cut back on driving, more interest exists for fuel efficient vehicles, and electric and hybrid vehicles are in vogue. As prices recede, attitudes and behavior return for the most part.

Momentum for the Green movement has slowed, but not disappeared. In the same survey, more adults labeled themselves as “a conservationist” (20%, up 3 points) “green” (18%, up 5 points), and “environmentalist” (16%, up 3 points). Results of the survey suggest that a segment exists of adults committed to promoting environmentally friendly consumption. The challenge is to spread the adoption of this mindset. Evidence exists that younger consumers are more likely to hold green attitudes. The question is whether we can bide our time and allow Green consumerism to gradually take root, or should green education initiatives become a higher priority for businesses, advocacy groups, and governments?

Marketing Charts – “Fewer Americans Go Green”

Motives for Going Green: Status and Savings

The green movement, coupled with the current recession, are considered by many observers of consumer behavior to mark a permanent, significant shift in how and why we buy and use products. Have we realigned our values to reflect new priorities that promotes the greater good over our personal well being? Sounds good, but we may not be there yet!

According to a study by Communispace Corporation, consumer motives for green behavior are driven more by status and frugality than altruism. For some people, their efforts to recycle become a badge of honor, something they can talk about in conversations to score points among their friends. For other people, green efforts may be more about saving money (e.g., reusing sandwich bags, drying paper towels and reusing).

Do the results of the Communispace study mean that we should look down on those people who are engaging in green behaviors for non-altruistic reasons? Not at all! These candid insights open possibilities for involving more consumers in the green movement. Just as we buy cars, shoes, and everything else we consume for a variety of reasons, encouraging green consumption should take a multi-pronged approach. It is not all about making a difference; many people find it difficult to believe their efforts alone can make a difference. So what do they do? Nothing. Green marketing campaigns should consider how to appeal to different values consumers hold beyond saving the world. If the bottom line is getting more people to engage in more environmentally responsible consumption, it should not matter that multiple routes are used to get to the destination.

Media Post Marketing Green – “Frugality and Social Status Trump Altruism”

Teens Prefer Saving Green over Going Green

Younger consumers between the ages of 13-29 are generally more concerned about environmental issues than the population as a whole. But, do their concerns translate into a willingness to buy green products that often cost more than less green alternatives? According to a study done by Generate Insight, 76% of millenials believe companies and brands should get involved in the green movement.

These high expectations do not always translate into purchase intention, however. Given a scenario of buying a soda from a company that gives 5% of sales to environmental causes or from a competing company that does not support such causes but is less expensive, 71% of teen consumers said they would buy the less expensive soda. The numbers shift markedly among 18-21 and 22-29 consumers; approximately two-thirds in each of those age groups indicated a preference for the soda marketed by the environmentally conscious company.

The priority placed on protecting the environment by millenials is laudable. What are the barriers preventing their beliefs and attitudes to influence their behavior? Economics is one barrier. The price premium often associated with green products can make them a tougher sell to a market that has less total income than older age groups. A related barrier is that consumers often do not understand why green products carry a higher selling price. This lack of education about the cost of producing green products should be addressed by marketers. In addition to messages about how they are trying to make a difference through producing green products, a secondary aim should be to inform the marketplace about the higher costs of producing green products. Such an effort may not increase purchase intent for green products by itself, but at least it may reduce perceptions that companies are trying to reap excess profits from the green movement.

Link: Center for Media Research – “Green Perceptions and Packaging”

Consumers Still Interested in Green

As economic conditions worsened over the past year, one trend that appeared likely to slow was consumers’ interest in green products. The pullback was expected because green products often carry a higher price tag than less-green options. The expectation was that consumers would revert back to purchasing lower priced alternatives, even if they were not as environmentally friendly as other products on the market.

According to the BBMG Conscious Consumer Report, a weak economy has not eliminated green sentiment among consumers. One interesting finding was 67% of persons surveyed said it was important to purchase products with social or environmental benefits, even in these difficult economic times. Furthermore, 51% indicated they would pay more for such products. Consumers surveyed also expressed an inclination to tell others about companies’ social responsibility practices, both bad and good. A majority of consumers (71%) indicated they were more likely to tell others about a company’s practices of which they disapproved. Also, 48% of respondents said they would encourage others to not purchase products from a company because of that company’s social responsibility practices.

Findings from the BBMG Conscious Consumer Report should serve as a call to marketers to examine the current state of their green practices. Any notion that consumers would chuck environmental concern because of a recession is dispelled based on this study’s findings. The bottom line is that a large percentage of consumers care about the impact businesses have on the environment as well the impact of their own consumption. Are there ways to exhibit social responsibility that are not currently being undertaken? Are there social responsibility practices that should be communicated to customers and the public? A fine line exists between impacting a target market with green marketing strategies and self-congratulatory communications. But, the stakes are too high, both for the environment and for customer relationships, to not be proactive in the area of social responsibility.

Link: Center for Media Research – “Consumers Want Proof It’s Green”

Hybrids Moving from Making Environmental Sense to Economic Sense

In case you don’t own a car or have been in hibernation the past several months, you may be surprised at the price of a gallon of gasoline these days. The average price in the U.S. was $3.67 as of last Friday according to AAA. Talk of a gas tax holiday by presidential candidates would do absolutely nothing about the fact that expensive gasoline seems to be here to stay. There is simply too much demand, both in the U.S. and abroad, as well as unfriendly oil producing countries such as Iran, Russia, and Venezuela that have little motivation to ease our pain at the pump.

Hybrid vehicles have been touted as one possible solution to both help the environment and spend less on gas. The combination gas and electric engine have miles per gallon capabilities that are more than 30% better than gas-only engines. That statistic would suggest that people should race down to the local car lot and buy a hybrid. Not so fast! Hybrid models come at a price premium anywhere from several hundred to a few thousand dollars over a gas engine version. This price differential has been a deterrent from hybrids gaining widespread adoption as the gas savings often would take too long too offset the higher price of a hybrid vehicle. Until car manufacturers aggressively work to narrow the price difference between gas and hybrid vehicles, adoption of hybrid vehicles will not realize its potential.

The long payback period is shortening thanks to soaring gas prices. Now, some hybrids have payback periods of 2-4 years. This shortening of the breakeven point means that hybrid owners are more likely to realize savings. Of course, this assumes gas prices remain high. While it would be nice to see prices retreat below $3.00 a gallon, there will be little reason to lower prices as long as demand does not decline substantially. This means that buying a hybrid vehicle might no longer be the wise environmental choice, but it could be the wise economical choice, too!

Link: USA Today “Hybrids Recoup Higher Cost in Less Time”