Darrin Duber-Smith, President05.02.11
Green. Socially Responsible. Environmentally-Friendly. Sustainable. These terms all mean the same thing. Even the casual observer is no stranger to the fact that these concepts have become integral parts of organizational operations and marketing strategies.
Sustainability, the most current and all-encompassing term, is best defined as meeting corporate objectives and consumer needs in a way that demonstrates continuous improvement toward minimizing negative impacts on people and the planet. Thus, businesses have redirected strategies toward health and the environment.
The ‘Why’ of Sustainability
This is all well and good, but recent research published in the January/February edition of Nutraceuticals World sheds light on the failure of organizations to communicate sustainability initiatives effectively. According to the Hartman Group, even though 15% more consumers are aware of the term “sustainability” versus three years ago (a total of 69% are now aware of the term), only 21% percent can readily identify a sustainable product and an even more disturbing 12% can name companies as sustainable.
Obviously what we have here is a failure to communicate, which begs the question: Why would organizations engage in resource-consuming sustainability initiatives if they do not plan on communicating them effectively? First we will address the drivers behind sustainability initiatives and then move on to how such a program can be initiated.
Sustainability plans are developed and implemented for the following reasons, which fall under an umbrella category known as the “Green Imperative”:
Target Marketing: A sustainable marketing strategy, with products that are properly positioned, will address the growing target market for goods that are green, natural, etc. (well over 50% of the population).
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 the lifecycle.
Product Differentiation and Competitive Advantage: Every marketer knows that in this hyper-competitive business environment it is crucial to maintain demonstrable 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 be proactive with regard to impending legislation. This practice reduces shareholder risk.
Other Stakeholder Demands: Activist shareholders, NGOs, 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 stakeholders.
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, and stakeholders are sensitive to this.
A careful examination of the reasons for building a sustainability model into your business and marketing strategy reveals that all can lead to the magic words, “Return on Investment.”
The ‘How’ of Sustainability
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 to avoid terminal disposal into a landfill.
Application of this concept involves an A-to-Z environmentally and socially friendly approach, which follows the product from its inception all the way to the end-user.
The days of choosing from a “green buffet” are fast coming to a close. Competitors, a growing consumer environmental and social awareness, rapidly increasing government regulations, the often-coercive influence of socially or environmentally oriented NGOs, 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 several areas.
Sustainability efforts should be woven into every aspect of the organization to optimize its competitive advantage. Shallow efforts at positioning products, let alone entire organizations, fall on increasingly deaf ears and, more importantly, open the organization up to the growing backlash against “green washing”—a species of puffery that is rapidly gaining scrutiny among stakeholder groups.
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 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 key in avoiding “green washing”—and the backlash that inevitably comes with overstating your social and environmental commitment—is authenticity. In addition to complete transparency with regard to your annually updated sustainability plan, all marketing communications must be truthful and non-misleading. Exaggerated claims, half-hearted attempts at environmental stewardship and social responsibility, as well as outright falsehoods will only expose your company to risk. In no way can you achieve a sustainable competitive advantage through engaging in such behavior in this age of information availability and viral communication. Simply changing your logo and brand name for the purposes of exploiting the sustainability trend without a credible commitment and plan can result in major scrutiny and irreparable harm to your brand’s reputation.
Sustainability Strategies
Sustainability is a business model FIRST and a marketing strategy SECOND. The sustainability plan should be integrated into the brand’s identity and corresponding image in a way that blends the brand’s key benefits with an assurance that you are monitoring and improving your social and environmental “footprint.”
Why then do so few consumers know which organizations and brands are doing what to address this important social trend? The answer lies in a failure to embrace sustainability as part of the organizational identity, and therefore communications are fragmented and do not effectively define a brand or organization’s image. The result is most often a lack of brand awareness and a failure to recognize products and organizations positioned as more environmentally attuned than competitors.
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 by themselves, but are still expected by most 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 this 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 strategy, which 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 employed since it is often used for consumers who do not place environmental concerns among their key determinants in making purchase decisions
Green as a Primary Benefit: Companies operating in the natural and organic products marketplace have been using this strategy for years. The product may not be quite as effective as a more mainstream option, so it is more suited for consumers who 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 well-intended 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 toward organizations, the products they make and the effect business practices have on stakeholders, society and the environment.
A failure to embrace multiple initiatives simultaneously with measurable objectives will expose the product and perhaps organization as a whole to much unwanted scrutiny. Pizza Hut learned this lesson the hard way when the company introduced “The Natural.” The inevitable market response was, “Well, what does that make your other pizzas? Unnatural?” Did simply changing BP’s name and logo to a more environmentally-friendly looking image really help the organization in the long run? These are not well thought out initiatives.
The process of sustainability auditing, planning and implementation is an ongoing effort—a journey and not a destination. Begin with an audit, set measurable goals for continuous annual improvement and then endeavor to communicate your efforts to stakeholders via website, annual reports and institutional advertising.
About the author: Since 2000, Darrin Duber-Smith, MS, MBA, has been president of Green Marketing, Inc., a Colorado-based strategic planning firm offering marketing and sustainability planning, marketing plan implementation and other consulting services to companies in all stages of growth. He has more than 25 years of specialized expertise in the marketing and management profession, including extensive experience in working with natural, organic and green/sustainable products and services. He is a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market concept and leader of the first U.S. industry task force that helped frame an industry definition of natural (c. 2004). He has published more than 60 articles in trade publications and has presented at scores of executive-level events during the past 15 years. Mr. Duber-Smith is also visiting professor of marketing at the Metropolitan State College School of Business in Denver, CO, and affiliate marketing professor at the Leeds School of Business at the University of Colorado-Boulder. Mr. Duber-Smith was the recipient of the Wall Street Journal’s In-Education Distinguished Professor Award for 2009. He can be reached at dubersmith@greenmarketing.net.
Sustainability, the most current and all-encompassing term, is best defined as meeting corporate objectives and consumer needs in a way that demonstrates continuous improvement toward minimizing negative impacts on people and the planet. Thus, businesses have redirected strategies toward health and the environment.
The ‘Why’ of Sustainability
This is all well and good, but recent research published in the January/February edition of Nutraceuticals World sheds light on the failure of organizations to communicate sustainability initiatives effectively. According to the Hartman Group, even though 15% more consumers are aware of the term “sustainability” versus three years ago (a total of 69% are now aware of the term), only 21% percent can readily identify a sustainable product and an even more disturbing 12% can name companies as sustainable.
Obviously what we have here is a failure to communicate, which begs the question: Why would organizations engage in resource-consuming sustainability initiatives if they do not plan on communicating them effectively? First we will address the drivers behind sustainability initiatives and then move on to how such a program can be initiated.
Sustainability plans are developed and implemented for the following reasons, which fall under an umbrella category known as the “Green Imperative”:
Target Marketing: A sustainable marketing strategy, with products that are properly positioned, will address the growing target market for goods that are green, natural, etc. (well over 50% of the population).
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 the lifecycle.
Product Differentiation and Competitive Advantage: Every marketer knows that in this hyper-competitive business environment it is crucial to maintain demonstrable 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 be proactive with regard to impending legislation. This practice reduces shareholder risk.
Other Stakeholder Demands: Activist shareholders, NGOs, 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 stakeholders.
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, and stakeholders are sensitive to this.
A careful examination of the reasons for building a sustainability model into your business and marketing strategy reveals that all can lead to the magic words, “Return on Investment.”
The ‘How’ of Sustainability
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 to avoid terminal disposal into a landfill.
Application of this concept involves an A-to-Z environmentally and socially friendly approach, which follows the product from its inception all the way to the end-user.
The days of choosing from a “green buffet” are fast coming to a close. Competitors, a growing consumer environmental and social awareness, rapidly increasing government regulations, the often-coercive influence of socially or environmentally oriented NGOs, 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 several areas.
Sustainability efforts should be woven into every aspect of the organization to optimize its competitive advantage. Shallow efforts at positioning products, let alone entire organizations, fall on increasingly deaf ears and, more importantly, open the organization up to the growing backlash against “green washing”—a species of puffery that is rapidly gaining scrutiny among stakeholder groups.
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 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 key in avoiding “green washing”—and the backlash that inevitably comes with overstating your social and environmental commitment—is authenticity. In addition to complete transparency with regard to your annually updated sustainability plan, all marketing communications must be truthful and non-misleading. Exaggerated claims, half-hearted attempts at environmental stewardship and social responsibility, as well as outright falsehoods will only expose your company to risk. In no way can you achieve a sustainable competitive advantage through engaging in such behavior in this age of information availability and viral communication. Simply changing your logo and brand name for the purposes of exploiting the sustainability trend without a credible commitment and plan can result in major scrutiny and irreparable harm to your brand’s reputation.
Sustainability Strategies
Sustainability is a business model FIRST and a marketing strategy SECOND. The sustainability plan should be integrated into the brand’s identity and corresponding image in a way that blends the brand’s key benefits with an assurance that you are monitoring and improving your social and environmental “footprint.”
Why then do so few consumers know which organizations and brands are doing what to address this important social trend? The answer lies in a failure to embrace sustainability as part of the organizational identity, and therefore communications are fragmented and do not effectively define a brand or organization’s image. The result is most often a lack of brand awareness and a failure to recognize products and organizations positioned as more environmentally attuned than competitors.
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 by themselves, but are still expected by most 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 this 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 strategy, which 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 employed since it is often used for consumers who do not place environmental concerns among their key determinants in making purchase decisions
Green as a Primary Benefit: Companies operating in the natural and organic products marketplace have been using this strategy for years. The product may not be quite as effective as a more mainstream option, so it is more suited for consumers who 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 well-intended 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 toward organizations, the products they make and the effect business practices have on stakeholders, society and the environment.
A failure to embrace multiple initiatives simultaneously with measurable objectives will expose the product and perhaps organization as a whole to much unwanted scrutiny. Pizza Hut learned this lesson the hard way when the company introduced “The Natural.” The inevitable market response was, “Well, what does that make your other pizzas? Unnatural?” Did simply changing BP’s name and logo to a more environmentally-friendly looking image really help the organization in the long run? These are not well thought out initiatives.
The process of sustainability auditing, planning and implementation is an ongoing effort—a journey and not a destination. Begin with an audit, set measurable goals for continuous annual improvement and then endeavor to communicate your efforts to stakeholders via website, annual reports and institutional advertising.
About the author: Since 2000, Darrin Duber-Smith, MS, MBA, has been president of Green Marketing, Inc., a Colorado-based strategic planning firm offering marketing and sustainability planning, marketing plan implementation and other consulting services to companies in all stages of growth. He has more than 25 years of specialized expertise in the marketing and management profession, including extensive experience in working with natural, organic and green/sustainable products and services. He is a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market concept and leader of the first U.S. industry task force that helped frame an industry definition of natural (c. 2004). He has published more than 60 articles in trade publications and has presented at scores of executive-level events during the past 15 years. Mr. Duber-Smith is also visiting professor of marketing at the Metropolitan State College School of Business in Denver, CO, and affiliate marketing professor at the Leeds School of Business at the University of Colorado-Boulder. Mr. Duber-Smith was the recipient of the Wall Street Journal’s In-Education Distinguished Professor Award for 2009. He can be reached at dubersmith@greenmarketing.net.
