Green Marketing Gets Even Murkier: The State of Green Business 2010

GreenBiz logo2 In another trend report leading up to the release of The State of Green Business, Joel Makower takes a look at green marketing in 2010. Despite several polls and surveys that revealed a willingness and interest of shoppers to "go green", the recession has confused things. Consumers are making green purchases but they're being extremely picky about those purchases and green marketing is essential in creating differentiators for green products so that consumers can identify them.

Posted Feb. 4, 2010
By Joel Makower, GreenBiz.com

It stands to reason that during a recession — with high
unemployment, job insecurity and a dramatic upswing in foreclosures and
bankruptcies — shoppers would stick to basics: tried-and-true,
affordable products. If so, that would be bad news for most green
products, with their unfamiliar brands and often premium prices.

But you wouldn't know that from reading the polls. A succession of market research surveys during 2009 seemed gushingly optimistic
about consumers' willingness to embrace green shopping. Example: Four
out of five people said they were still buying green products and
services, even in the midst of the recession, according to a study by
Opinion Research Corp. Another found that shoppers from São Paolo to Shanghai were ready to shell out more cash for eco-friendly products, even as the recession ate into their buying power. Indeed, a handful of surveys even claimed that consumers were willing to pay more for green products.

What in the name of Al Gore is going on?

It's a complicated question, to be sure. Consumers, say the experts,
are continuing to make green choices, but they're being pickier than
ever about doing so. As a result, green marketing, always a challenging
proposition, has become all the more challenging.

One thing seems clear: Premium pricing for green is a non-starter for
most shoppers. That's expected when people are pinching pennies, euros
and yen. And consumers' willingness to make green choices seems more
likely when there's a personal benefit in addition to a planetary one.
As such, there's a growing appetite for products that can cut utility
bills, like energy-efficient appliances and light bulbs.

Even still, there remains a great chasm of ignorance — "radical
transparency" notwithstanding — that's keeping consumers dazed and
confused when they shop, and more than likely is tamping down interest
in green purchases.

For example, one study found
that while most consumers view "energy efficiency," "smart energy" and
"energy conservation" as positive concepts, few fully understand what
those and other energy-related terms actually mean. Another survey
found more Americans buying energy-efficient light bulbs, but the
majority remain in the dark about the federally mandated phaseout of
incandescent bulbs that starts in two years.

And then there's the Snackwells Effect,
named after the Nabisco cookies that are marketed as diet foods, being
lower in fat or sugar than regular cookies. Studies found that people
offset those low-cal benefits simply by eating more of the cookies —
after all, they're "healthier," right? Similarly, studies have found
that people lose 5 percent to 12 percent of the expected energy savings
from efficient light bulbs because they leave them on longer, and 10
percent to 30 percent of the savings of efficient furnaces because they
raise the thermostat. After all, they're more efficient, right?

All of this has made green marketing far more perplexing than most
marketers bargained for, requiring more complex and nuanced messages
and value propositions. In reality, the proposition is probably rather
simple: Consumers want products that aren't just greener, but better
— that offer some kind of personal benefit, whether they're cheaper to
buy or own, have enhanced features or higher performance, are more
convenient, less wasteful, healthier for their families, or simply cool.

That message was driven home by analysts at GfK Roper, which for years
has conducted regular "Green Gauge" consumer surveys. "What's
interesting is that when you look at and compare some of the attitudes
and behaviors in the U.S. to other developed markets, the U.S. is
actually more like a developing market in terms of the way they think
and behave green," Tim Kenyon, GfK Roper senior market analyst, told GreenBiz.com.
"In a developing economy, there's much more of a personal self-interest
involved in making green purchasing choices, and less emphasis on the
greater good," similar to what Roper was seeing in the U.S.

American consumers, it seems, may have more in common with their
counterparts in Chad, Chile and China than one might ever have imagined.

Joel Makower

For 20 years, Joel Makower (www.makower.com)
has been a well-respected voice on business, the environment, and the
bottom line. He is executive editor of the acclaimed website
GreenBiz.com and its sister sites, conferences, and research, all
produced by Greener World Media, of which he is co-founder and
chairman; he also serves as a senior strategies for GreenOrder, a
sustainability management consultancy. Joel is author of more than a
dozen book; his newest, Strategies for the Green Economy, has just been
published by McGraw-Hill. He also writes “Two Steps Forward” (www.readjoel.com),
a popular blog on green business, clean technology, and green
marketing. The Associated Press has called him “The guru of green
business practices.”

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