Sustainable Marketing (2019)

Sustainable Marketing

Sustainable Marketing

Sustainable Marketing is about influencing customer behavior to create both profit and positive societal change. It is about what you market and the way in which you market. This blog explains various sustainable development goals and marketing tactics.  

 

BUSINESS IN THE COMMUNITY

Marketers are both the supervillains and superheroes of sustainability. As supervillains they spend their time encouraging people to buy more, promoting unsustainable consumption.

 

As the WWF puts it, ‘Marketers are blamed for a multitude of sins: encouraging ever greater consumption of alcohol, fatty foods, empty calories, water, and biological resources; using too much packaging;

sustainable lifestyles

limiting the useful life of products so that people are forced to replace them earlier than necessary; producing greenhouse gases. The list seems never-ending.

 

On the other hand, as superheroes, ‘the real power lies in the hands of the marketer – the creative folks who have the power to design and promote cleaner products and technologies and help consumers evolve to more sustainable lifestyles.’

 

The way that people buy and consume products has an impact on the planet and society. So as superheroes, marketers can use their power to inspire and orient positive changes in consumer behavior in several ways.

 

First, they work to identify, anticipate, and satisfy customer requirements profitably by identifying opportunities for more sustainable products.

 

Second, they market their products in a responsible way that does not promote over-consumption or misinformation through greenwashing. Third, they communicate information about the product and how best to use and dispose of it so we can make more educated decisions.

 

Challenges?

Challenges

Green and choice fatigue. Customers are being bombarded with so many different kinds of sustainability messages and products that they often do not know which are real and which aren’t. The growing prominence of eco-labels is helping, but also adding to the confusion.

 

Increased risk either way. There is a risk of not moving into green marketing but also a risk when a company does.

 

Sometimes the media is more inclined to question and attack relatively good companies attempting to move forward on sustainability, rather than highlighting the poor environmental performance of companies who have not become involved in sustainability.

Sustainable products

Lack of overarching standards. There is a lack of standards for determining exactly what makes a green product or a green company. Increased regulations and public awareness are needed to help educate consumers on how to understand the increasing number of standards.

 

  1. Getting pricing right. Sustainable products are seen as being more expensive and often consumers don’t understand why.
  2. Choice editing. Should retailers be taking unsustainable options off the shelves to favor more sustainable options?
  3. Consumer support. Many companies report producing more sustainable products based on consumer demand but then consumers don’t buy these.

 

Confusing messages. Marketers can work to promote more sustainable products, but this only works if consumers are able to accurately and effectively interpret the information they give and the claims they make on their packaging.

 

Communicating with the customer virtually

customer virtually

One of the oldest adages in marketing is that ‘word-of-mouth is the best advertising.’ Customers have always received information and made choices based on word of mouth. But the level of information has exploded with the Internet and social media.

 

The amount of information overwhelms – stories, opinions, and facts highlighting both good and bad practices are constantly shared through blogs, wikis, and other social networks where people with the same interests come together to discuss those interests.

 

These networks are not only being used by consumers interested in learning more about sustainability but increasingly by companies as a way to connect directly with their current or potential customers.

 

Product developers are tapping into them to gather intelligence and ideas, directly from the customer, on what kind of products they should provide and how to make their current products better.

 

Popups

Retailers

Retailers are starting to explore a whole new kind of retail space . . . one that either doesn't last or doesn’t stay in one place. Brands are using empty retail space to create pop-up stores to increase awareness of their products or create some buzz. Others are creating tiny versions of their stores that can be moved around into public spaces.

 

Illy created a temporary coffee shop out of a standard shipping container in Venice, complete with tables and chairs. Timberland created a micro shop in New York City made out of 450 discarded plastic drinking bottles.

 

Honest Tea put up unmanned pop-up shops across the USA that relied on an honor system where passers-by who wanted to buy one of their products had to drop US$1 into a box.

 

Buycotts

Groups have been involved in boycotts for years, encouraging consumers not to buy a particular product or from a particular company because they are seen as unethical or unsustainable.

 

Today this is being flipped around. Buycotts are when individuals are actively encouraged to spend their money at particular stores as a way of supporting the sustainability efforts of those companies. Several groups are set up around the world to coordinate these boycotts, including Carrotmob.

 

Here, organizers make an agreement with a business that wants to make a change, then Carrotmob organizes hundreds of people to visit that business on a particular day. The business then uses the money to make the proposed social or environmental improvement (Vote with your money).

 

The barcode reinvented

Labels are taking on a life of their own. Marketers have been exploring opportunities to tap into the potential of the one item that billions of people have with them all the time and use the most throughout the day: their cell phones. How? Through the use of a barcode called the Quick Response (QR) code.

 

These special barcodes are designed to be read by mobile phones with built-in cameras, a feature now standard on cell phones. Companies put a special barcode on posters, magazines, interactive billboards, even lawns.

 

Once scanned by the cell phone camera, a message or set of instructions (such as a website or phone number) embedded in the QR code is revealed automatically on the phone’s display.

 

In Japan, senior citizens use the QR code to check bus times. Others are printed on t-shirts, directing interested people to visit the website of the wearer. Companies are also exploring snap tags, which can also be scanned with a phone camera.

 

Apps for the phone are also proving very popular. Clorox, for example, has an app that provides up-to-date information on all the ingredients in its products.

 

Advertising dos and don’ts

Advertising

How not to communicate . . . greenwashing Although there is clearly a rise in sustainability leaders, it seems that there is also a parallel rise in greenwashing.

 

According to TerraChoice, greenwashing is ‘the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service’ (note that companies will also ‘greenwash’ social issues).

 

It is believed that the term comes from a journalist who, in 1986, was covering the hotel schemes where you choose to keep your towel rather than washing it ‘for the good of the environment.’

 

The journalist examined the record of companies who promoted these schemes and concluded that since they did almost nothing else for the environment (at the time), and since towel schemes increased their profits by reducing washing costs, guests had to be cynical of their motives.

 

So why do people greenwash? Some say it is because of ignorance, some do it for quick wins. The best reason for avoiding greenwashing is that you should be spending your money on something better, something which helps people change behavior, to adopt a greener way of life.

 

Ultimately it is your credibility and reputation that is on the line, and once lost, these are very difficult to regain. Consumers and marketers should think twice about:

 

1. Green and social imagery. Just because something is packaged green and has trees on it or has pictures of children and farmers, it doesn't ’t mean that it is actually environmentally or socially friendly.

 

2. Using general statements. The same thing goes for products that use statements such as ‘socially friendly,’ ‘natural,’ ‘bio,’ ‘hypoallergenic,’ etc. When checked, many of these fail to live up to their promises unless accompanied by a recognized eco-label or regulated by the government.

 

Surprisingly many of these, such as the word ‘natural,’ are not regulated by national legislation even though they can be very misleading.

 

3. Missing the point. A product that is water efficient could be very energy inefficient. Beware of companies using one claim to distract from the key sustainability issues of a particular product.

 

4. When a label is not all it claims to be. Having an environmental management system in place, or an environmental or social policy, or being part of a voluntary network, does not automatically make a company, or a particular product, more sustainable.

 

Make sure these are backed up with policies and practices that are auditable, quantifiable, and have targets and objectives.

 

5. Giving options consumers can’t act on. Saying that a prod-uct has an environmental or social feature that consumers not only can’t check but also can’t follow up on is misleading.

 

This includes products that are recyclable but where no facilities currently exist to recycle them.

 

The recent push for biodegradable bags could be another example, as many of these are only biodegradable in certain environments, not when buried in a landfill.

 

6. When it isn’t really as good as it seems. This relates to claims that may sound good but aren’t really doing what they say.

 

For example, organizations which claim to be carbon neutral or have carbon-neutral services when neutral was achieved by buying offsets rather than through actual energy efficiencies.

 

7. The product may be good, but the company definitely is not. It is hard to take claims made about environmentally and socially friendly products seriously when the company producing the product has been shown to be anything but environmentally and socially friendly.

 

This includes companies that advertise or speak about corporate ‘green’ commitments while lobbying against pending or current environmental laws and regulations.

 

8. Baby steps. When a product makes tiny improvements and makes a big fuss about it. For example, a magazine claiming to have turned green because one issue was made of 10% recycled paper, leaving you wondering about the other 90% and all other issues of the magazine.

 

There are several NGOs and online groups working to bring out examples of greenwashing, including the CorpWatch Greenwash awards and Greenpeace. Greenwashing index allows people to view company ads and judge for themselves whether they are greenwashing or not (www.greenwashingindex.com).

 

Consumers can report what they believe to be greenwashing to national advertising organizations in many countries and often these organizations will follow up on claims made.

 

How to communicate . . . responsible marketing There is an increasing number of advertising and marketing codes, both mandatory and voluntary, which outline responsible marketing practices at the international, national, and company-specific level.

 

These include regulations dealing with misleading or deceitful advertising, voluntary codes, and professional association codes. A few such ideas include:

 

1. Be good. Do not market to groups by creating unnecessary pressure or concerns. For example, companies who use awareness campaigns to scare people about a supposed illness and then sell the medicine.

 

Unilever’s Marketing Principles require that marketing practices do not convey misleading messages, do not undermine parental influence, do not suggest time or price pressure, and do not encourage unhealthy dietary habits.

 

2. Be honest.

honest

Be transparent about what you are doing and share your successes and your challenges. Don ’t just make stuff up, make sure whatever you do, say, or claim is backed up and easy for the reader to understand.

 

Seventh Generation reports on all the things that are wrong with its product and that it is still working on those areas.

 

Innocent included on its fruit juice bottles how much of the content of the bottle was recycled and that they were working on the rest (a year later they were at 100%). Avoid abusing consumers’ concern for the environment or taking advantage of their possible lack of knowledge in this area.

 

3. Be creative. It seems that all ads for green business use trees and flowers. Look at other ways of getting your message out. The Creative Gallery on Sustainability Communications includes around 1000 campaigns produced by companies, public authori-ties, and NGOs from all over the world.

 

4. Be positive. Stay away from doom and gloom and instead surprise the customer with a positive message. Keep the message simple and easy to remember.

 

5. Be consistent. Consistency should exist between your engagement or initiatives and your image and product lines. It should be reinforced across your marketing messages as well as between your internal and external operations.

 

6. Make the connection. Communicate how products are relevant to people ’s lives and needs. Empower your customers by giving them something they can do. Get your customers involved.

 

7. Focus on what is important to your audience. Toyota Prius focused on fuel economy and quiet ride more than saving the planet. Link environmental and social benefits to things that concern customers in their daily lives and of which you can measure the impact.

 

Consumers are bombarded with messages every day from supposedly green companies. A lot of the information makes it seem that no matter what a company says, nothing is changing. There are lots of (continued ) companies that are truly working on these issues. For the consumer, here are some tips on how to do your part:

 

Don’t assume that everyone is lying or telling the truth, just pay attention to what they are claiming (for example, on their labels and packaging) and use your common sense to see if it looks right.

 

Don’t blindly believe all the bad things or good things you read, check the sources of the information and where possible check more than one source.

Question companies

Question companies who aren’t doing anything at all . . . or who seem to be doing too much. Don’t hesitate to contact those companies and request that they do something or find information to back up what they say they are doing. You are one of their stakeholders, they need to listen.

 

Report misleading messages. Many countries, including at the international and company levels, have guidelines for environmental and social marketing claims.

 

In many instances, customers who feel that a company is not telling the full truth can report them to relevant authorities who will investigate.

 

Following a complaint to the Council of Better Business Bureau, Clorox was told to make changes to some of the claims it made on how its green products work.

 

Reward companies who you feel are doing it right. Either through buying their products, telling the company, or telling others.

 

Operations

Operations

Chefs around the world are exploring molecular gastronomy, mixing science with cooking. Forward-thinking chefs such as Heston Blumenthal bring food to a whole new level by questioning the assumptions about what food is and redefining what food could be.

 

One of his treats is a candied beetroot and grapefruit lollipop with edible wrappers which look like plastic but melt in your mouth.

 

Edible packaging may not take off anytime soon in the world of business, but it does reflect an increasing number of innovative ideas to make the lifecycle of products and processes more sustainable – which can, and will, help businesses flourish.

 

Increasingly, successful businesses share three characteristics with chefs like Blumenthal: (1) they question assumptions; (2) they think across disciplines; and (3) they are creative about the way that products are made. These characteristics underlie modern operations management.

 

Operations management is all about a company’s supply chain and product lifecycles: its products and services; how they are designed, how they are made, how they are used, and how they are disposed of.

 

It is the area that has the biggest direct impact on sustainability, since all the things we make and the way we make them affect our natural and social resources.

 

Sustainability brings innovation into the supply chain, challenging our assumptions about the way things have always been done, and creating products and processes that are not only better for business, but better for society as well.

 

Until recently, management in many companies believed that what happened in parts of their supply chain, from design choices to overseas contractors, was not their responsibility.

 

Today, organizations are realizing that not only is it their responsibility, but that proper management can bring about competitive advantages. As we continue to move into the 21st century, sustainability and operations management will increasingly go hand in hand.

 

Why is it important?

There’s a lot of room for improvement. Considering that on average, 80% of a product’s overall cost is a consequence of its design, 93% of product materials do not end up in saleable products, 80% of products are discarded after first use, and 99% of materials used in the production of or contained within goods are discarded in the first six weeks, there is obviously a lot of room for improvement and innovative ideas.

 

Responsibility is shifting up the supply chain. Not long ago, it was up to the consumer to choose to be greener, but today, consumer demand is shifting this responsibility to the retailer to provide these products.

 

In some countries, it is becoming mandatory to display the environmental performance of some products, either on the product labels or the shelves. As more retailers decide to engage in more sustainable procurement strategies, the companies making the products will also have to uphold those standards in design and production.

operational efficiency

Reduce costs and improve operational efficiency.

By using fewer and safer source materials and less energy, transportation, and water resources, and by making processes more efficient, a company can significantly reduce production and labor costs.

 

Creating simpler products that are easier to disassemble and recycle reduces waste and disposal costs and gives a company the potential to reuse products. It can also reduce labor costs through reduced need for training.

 

Compliance with existing and future legislation. Steady increases in legislation and regulations drive operations management decisions on many fronts.

 

Regulations are being enacted to increase transparency in supply chains and standards, such as the European Union ‘take back’ laws, which require manufacturers to take back vehicles and electronic equipment sold in a particular country and recycle or dispose of them safely after use.

 

Increasingly, we are seeing product taxes put in place to discourage people from buying certain products; banned materials lists are covering more and more substances (e.g., chemicals) and packaging waste and pollution prevention regulations are on the rise.

 

Increased risk of bad press. Organizational stakeholders, the media, and others no longer hesitate to expose and report any questionable aspects of a company’s supply chain, including incidents of child labor, forced labor, illegal waste dumping, and product recalls.

 

This can result in significant losses not only to sales but also to a company’s hard-earned reputation.

 

Improved quality and customer satisfaction. Many consumers are looking for products that allow them to save money but also make them feel they have made a positive impact on society and the environment.

 

Delivering and promoting simpler, more efficient products that have reduced operational costs and result in reduced environmental impact can mean improved customer satisfaction and increased market share.

 

Eco-labeling schemes, ‘design for’ products, and other environmental awareness programs are creating an increasingly educated consumer who is not only willing to buy products designed for the environment and society but may even boycott those that are not.

 

Trends and new ideas

Trends and new ideas

Green = inexpensive

Green products are generally seen as being more expensive than conventional choices. This may be true now, but the future is likely to see a dramatic shift.

 

In fact, the same reasons that explain why green products have historically been priced higher could become the reasons why they are more affordable. For example:

 

Full costs across the lifecycle.

Green products often already include many of the costs that other products don’t (such as the cost of disposal), making them more expensive. When comparing traditional costs of manufacture, many green products actually cost less to produce and to use.

 

They also cost society less in terms of other direct costs and indirect costs, such as pollution and health effects. As more companies begin to analyze and incorporate the true full cost of production, we may actually see a complete flip, where unsustainable products become much more expensive.

 

Economies of scale. Pricing often comes down to simple supply and demand. Many of the materials used in these products have been more expensive because there has been less of a demand for them.

 

As the demand goes up for more sustainable alternatives and they are produced in larger quantities, the price of these products could go down. At the same time, the cost of unsustainable options is going up, for example, products produced using petroleum products.

 

Providing certain guarantees. These types of products are often providing a set of guarantees regarding safety, sourcing, health, and environmental impact that may cost a little bit more to insure.

 

As regulations and industry standards start requiring all products to uphold certain standards, other non-green products may also start to bear these costs, creating a more even playing field.

 

Economic to eco-embedded

eco-friendly

Ecoiconic is defined as ‘eco-friendly goods and services sporting bold, iconic markets and design, helping their eco-conscious owners show off their eco-credentials to their peers.’ Eco-iconic is not about all green products.

 

It is about those that from their appearance or stories actually show that they are green and in doing so attract recognition from their peers, in the same way as traditional status symbols do.

 

The best-known examples are cars such as the Toyota Prius. A New York Times article asked the question, ‘Why are Prius sales surging when other hybrids are slumping?

 

Because buyers want everyone to know they are driving a hybrid.’ Another, perhaps more important, trend that is slowly overtaking it is eco-embedding, ‘making products and processes more sustainable without consumers even noticing it.

 

Some tips to get started in product design through biomimicry:

  1. Don’t ask ‘What do I want to design?’ Instead, ask ‘What do I want my design to do?’ and ‘Why do I want my design to do that?’
  2. Ask ‘Does nature do this function, and if so, how?’
  3. Explore natural models by going outside and doing first-hand research.
  4. Brainstorm multiple solutions.

 

Products that do more

Products

We are starting to see the beginning of a new era, in which both companies and consumers are not just content with ‘doing no harm,’ but actually, look for ways to ‘do more good.’ Already we see homes installed with solar panels ‘selling’ excess energy back into the power grid.

 

What’s next on the horizon? Perhaps, cars that not only generate enough energy to run themselves but also put extra energy into the electrical grid and engines that filter the air, releasing it cleaner than it came in.

 

The next time you are waiting in line, keep an eye out for floors that use the footsteps of pedestrians to generate power, a great way to provide the energy needs of supermarkets and railway stations.

 

The Spinnaker Tower in Portsmouth, UK, will be using this technology on the stairs that visitors go up to reach the 560ft high viewing platform.

 

The next wave of global consumerism will focus more on selling products that make it easy for people to ‘go green’ and on allowing consumers to save money . . . or even make money by being green.

 

Manufacturing differently

Companies are exploring a range of ways to make their factories more sustainable, many of which are explored throughout this blog. PepsiCo has come up with an interesting plan to reduce water consumption by aiming to use the water taken from the 350 000 potatoes it uses annually.

 

Since potatoes are made up of 80% water, it is hoped that within the next few years all water used in UK factories will be from the potatoes, taking them off the water mains completely.

 

NGOs have been increasingly active in identifying and organizing campaigns against companies who are pursuing unsustainable activities in their manufacturing facilities. Greenpeace.

 

for example, has had a series of campaigns including Detox and Dirty Laundry, which raise awareness and push for action against pollution coming from textile manufacturing plants in China.

 

As a result, companies such as Nike, Puma, and Adidas are pledging to eliminate chemical discharges throughout their supply chain by 2020 and formed the Sustainable Apparel Coalition to collaborate in taking action.

 

Instant feedback

Instant feedback

People are being asked on a day-to-day basis to make decisions about changes to their lifestyles in order to prevent something bad from happening in the future, a future their children will see, but they themselves may never see.

 

Many sustainability messages focus on issues that are not tangible for the consumers, either because they are occurring far away, will not occur during this lifetime, or are difficult to observe on a daily basis.

 

The solution is to focus on those things that do impact consumers and communicate this to them.

 

According to the UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption and Production, 80% of data currently collected focuses on impacts from manufacturing; however, 80% of the impacts themselves occur during end use.

 

More and more we will see companies providing information to customers to enable them to use and dispose of the products sustainably. This includes monitors that show how much energy, gasoline, and water is being used in real time and how this translates to money saved and environmental impact.

 

Exploring new materials

Many eco-friendly raw material alternatives are being explored for use in everything from textiles to building materials, including algae, soy, bamboo, organic cotton, and hemp. For example, Patagonia makes fleece sweaters using recycled plastic bottles.

 

Bioplastics which have similar properties to plastic but are made of natural sources such as corn, potatoes, tapioca, and sugar are already being used in cars and shampoo bottles. Car manufacturers are looking at making greener cars using bananas, pineapples, and dandelions.

 

Dell ships its servers in mushroom-based packaging instead of foam. Researchers in Spain have even found a way to turn leftover cheese into food packaging.

 

There is even an annual competition focused just on rethinking the brick to make it more sustainable. Nike has a Sustainable Materials Index which lists over 16 000 materials used in their products each year.

 

Websites such as Ecolect, Materia, and Material Connexion provide searchable databases and information on a variety of sustainable materials options.

 

Co-creation

crowdsourcing

Companies have been using crowdsourcing for years now as a way of involving their customers and the general public in their brands.

 

Random Hacks of Kindness is a community of over 5500 innovators who work to make the world a better place by developing practical, open-source technology solutions to respond to some of the most complex challenges facing humanity. 

 

They work on solving problems posted by companies such as Yahoo! and NikeAn Austrian manufacturer asked customers to come up with new flavors for its all-natural hemp milk drink.

 

In the USA one politician started a ‘Make your own law’ contest, inviting the public to write legislation with the promise that the best would be introduced as a bill.

 

Now we are seeing a move toward co-creation when individuals or groups come together to design a whole new product or service. The car industry has tried to innovate for the past 100 years, but for the most part, cars look the same as they always have.

 

Loco Motors has an online community of car lovers who collaborate and compete to design vehicles incorporating sustainability and efficiency, for regional communities. The winning designs are then produced and sold to those communities.

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