Making green mainstream in a recession economy
Can marketers revitalize green consumerism by implementing new product pricing strategies?
Monday, June 13, 2011 - 15:19
A CLEAN DEAL: Green marketers can offer products at different price points to close the 'green gap.' (Photo: seaotter22/Flickr)
The recession hasn't helped most green product sales. Price, after all, is the number one reason more consumers aren't going green. Amid economic instability, should green marketers serve niche consumers willing to pay more for sustainability, or the larger group of penny-pinchers avoiding green purely for financial reasons? The answer, of course, is both.
The "sustainability tax," or extra cost associated with green products, is undoubtedly controversial. Yet as green products move from niche to mainstream, the diverse benefits offered by various green product lines is calling for equally diverse prices. Considering the pervasiveness of green, marketing strategies must soon resemble those of all other product categories: different marketing strategies for luxury green products and discount green products.
The untapped potential for green products is staggering. Ogilvy Earth's recent study, "Mainstream Green: Moving Sustainability from Niche to Normal," found that 82 percent of Americans intend to be green but only 16 percent actually act on their beliefs. That 66 percent that fails to translate interest into action is known as "the green gap." Price, according to the study, is the number one reason why those consumers are not going green. Positioning green products as "premium" often deters this group and reinforces their beliefs that green must cost more.
The economic downturn has only expanded this "green gap." Sales of green product lines within conventional companies dropped dramatically during the recession. The Clorox Green Works line, for example, saw sales drop by $40 million between 2008 and 2011. Green lines from Arm and Hammer, Windex, Palmolive and the like began struggling during the recession as well.
Meanwhile, niche companies that solely produce eco-friendly supplies actually saw sales increase. The green cleaning supplies company Seventh Generation, for instance, maintained strong sales throughout the recession. This trend shows that die-hard green consumers stick to their niche brands regardless of economic fluxes, but the financial crisis was enough to deter new adapters of green products.
This dedication is reassuring news for niche green marketers. Yet what about that enormous underserved market — the 66 percent of people who wish to buy green but fail to act because of price? To capitalize on this gap, marketers cannot rope these consumers into existing niche green markets. They must serve that 66 percent in fundamentally different ways as a fundamentally different market.
Beyond the premium image
Step away from green products for a moment. When companies in any other industry sell some luxury products and some discount products, both are marketed using entirely different messages. Companies also use product line pricing to offer products at different price points so that brands appeal to a broader group of consumers. For any product category, there will always be people who want to pay more than they have to and people who try to pay less than they have to. As obvious as all this sounds, most green marketers lump all sustainable products into one category with one distinct appeal. This worked when green was niche, but this is no longer the case.
There is a large, avid group of green supporters willing to pay premium prices for purity and superior quality. There is also an even larger group of Americans that would willingly support green consumerism if only it cost them less. Both these markets must be served separately and differently, just as with all other brands offering different price points.
Many aspects of the green movement can resonate with thrifty shoppers, especially considering that green philosophy is about conservation and practicality. If products boast of saving resources, it is only natural that some of these "simpler" products should also save money. There are certainly some green products already pushing this concept or offering competitive prices. Products that save electricity, for example, gain needed versatility by successfully emphasizing their cost benefits. Still, most brands don't have traction beyond their "premium" reputation. Companies could change this by integrating several price points into existing product lines or creating additional, lower-priced lines with entirely new messages.
Thrift is a middle-class value, and there must be more green product lines that reflect this practicality. Without such a transformation, the green movement will have no chance as a mainstream standard in an economy where 44 percent of people identify themselves as middle class and 31 percent of people identify themselves as lower middle class, according to the most recent GFK Roper Need to Know Report.
From niche to standard
Despite the current have-not economy, studies indicate that interest in green is stronger than ever. The widespread push for sustainability is a clear mandate for a new set of standards marketers must integrate across multiple price points and product categories. The companies who do apply these standards across all of their products will be recognized as trustworthy brands with meaning, not simply "green brands."
Green, then, cannot only be associated with "premium" quality. Green must be the new standard quality, with both luxury and discount products adapting these standards for maximum market share and maximum cultural impact.
You might also like: