‘Green Marketing’- An Oxymoron?: ‘Green Marketing’ - An Oxymoron? Denis Piquette Partner – Ogilvy Montreal Inc. October 4th, 2007


Why is this topic so relevant to me?: Why is this topic so relevant to me? I’m an avid outdoorsman And a father of young children In 20+ years of marketing ‘enviro-consciousness’ has not improved To date only 1 (Via), perhaps 2 (Unilever) of our clients actively pursue green marketing!


Why is ‘green marketing’ an oxymoron?: Why is ‘green marketing’ an oxymoron? ‘Green’ ultimately means using, replacing or buying less – across the board How many marketers or shareholders will accept negative volume growth? How many consumers will pay more for less? Consumption is the barometer of success! How many of you and your peers will accept more conservative and thriftier lifestyles Who understands what ‘green’ means?


A Few Ecological Pet Peeves: A Few Ecological Pet Peeves Paper copies of electronic documents Few bicycle or pedestrian lanes Perfectly manicured ‘natural’ lawns No neighborhood compost ‘green bins’ Environmental destruction caused by war rarely debated at key conferences


Concern about the environment was a key issue in early 1970s : Concern about the environment was a key issue in early 1970s Pollution of Great Lakes led to massive clean up efforts Oil crisis of the contributed to the birth of compact cars Awareness of deforestation led to paper recycling, packaging initiatives Launch of GreenPeace, Pollution Probe, Earth Day…


Why so few ‘green’ advances in the past 30 years?: Why so few ‘green’ advances in the past 30 years? If you look around, we seem to be getting worse: Bigger homes – in the suburbs! Energy print of suburban home is 3 to 4X greater than in city Bigger SUVs and sportier cars More wasteful packaging Big-box stores, pre-packed food portions… Shorter product life-spans for many consumer durables Computers, electronics, cars, clothing They may last longer, but we are encouraged to REPLACE Few corporations champion ‘green’


Slide7: Thinking ‘Green’ Is Tough Blue boxes, hybrids & bio-degradable packaging are just the tip of the eco-iceberg!


Defining ‘green’ remains a key marketing challenge: Defining ‘green’ remains a key marketing challenge ‘Green’ has many different meanings and implications among consumers: Organic/bio (foods, coffee, cosmetics) Chemical/toxin-free More energy efficient Longer lasting Re-use, recycle Preserve or reclaim environment (air, land, water) Local vs. global supply chain


Slide9: Who knows what ‘Green’ means? Just like consumers needed simple concepts like ‘hidden fats’ and ‘killer salt’ to prompt health consciousness, we all need clear definitions in order to better understand how to impact the environment around us


Many key impacts may have nothing to do with marketers!: Many key impacts may have nothing to do with marketers! Reduce water consumption 30,000L/year per toilet in a typical household Lawn sprinkling, car washing, 15 minute showers… Reduce hydrocarbon ‘footprint’ Fewer fires: 1 fireplace fire = 10,000km of driving! Drive less: Good for mass transit, but car companies and oil companies would suffer Reduce chemical wastes Cut back use of fertilizers, herbicides… Recycle, re-use, re-sell


Being green means accountability for all resources you may use: Being green means accountability for all resources you may use Impact on raw natural resource base Land, water, mineral, petroleum Agriculture: feedstock, water, chemicals Resources required for processing/manuf. Transportation, refinement, hydro, water… Resources required for packaging and shipping Resources needed for product’s use Petroleum, hydro, water, air…


How will a ‘green evolution’ impact your business?: How will a ‘green evolution’ impact your business? Long-term commitment vs. opportunism If you go green, you have to be green all the way Impact on profit margins Willingness to pay premiums for longevity and ‘green’ Added production/procurement costs Most global competitors not participating: Consumer products’ manufacturers in Asian nations S. American agriculture, Japanese fishing fleets Russian and Middle East petrochemical/mining industries


What environmental policy to pursue, how to align your brands?: What environmental policy to pursue, how to align your brands? Conservation Use less, more efficient, more local, more durable… Recycling/re-use Protection Less pollutants, safer practices, use non-toxic materials, monitor… Reclamation/repair Invest to decontaminate, clean-ups, dedication of green belts…


Do you want to lead or to follow?: Do you want to lead or to follow? 2 critical gaps: Need more eco-responsibility demonstrated by leading global marketers Wal-Mart, auto makers, McDonald’s, Apple… ‘Need for green’ campaign: Who takes ownership - governments, individual industries? Who educates and motivates consumers at large? Confusion - dozens of logos and hundreds of green marketing associations all claiming authenticity


Who to target and with what messages?: Who to target and with what messages? How broad is my ‘green’ claim E.g. Organic oatmeal - do I promote ‘packaged with recycled paper’, ‘only locally grown ingredients used’… What words and language do I use What’s my cause Save energy, clean up, educate… Who do I want to buy and become identified with my brand?


There are always opportunity costs!: There are always opportunity costs! e.g. Outlaw agricultural pesticides/herbicides Pros Less toxic substances in the environment More natural foods Cons Risk of widespread crop diseases/failures Increased costs Impact on the poor/starving populations?


Slide17: Marketing ‘Green’ To Consumers Is Tough Too


‘Green’ Consumers – Many Niches With Different Needs & Attitudes: ‘Green’ Consumers – Many Niches With Different Needs & Attitudes In addition to what cause motivates them: How action oriented are they? Passive > Supporter > Activist > Zealot Level of involvement/participation ‘Token’ support > broad > ‘enviro-freak’ Willingness to sacrifice Money , Choice, Inconvenience Change in lifestyle and habits? Level of knowledge and understanding Aware of buzzwords > info seeker > influences decision


Consider Hybrid Car Marketing: Consider Hybrid Car Marketing Hybrid technology available for past 5 yr. 4-5 manufacturers (Honda, Toyota…) Minimal sales to date (< 1%): Only 10,000 cumulative sales of Toyota Prius Significant rebates added in 2007 to stimulate sales Why haven’t they taken off yet??


Who is the ‘hybrid customer’?: Who is the ‘hybrid customer’? Compared to minivan, SUV or sedan targets… Men or women? Suburban or urban? Primary vehicle or secondary? Families, singles or couples? Want to save the planet, or save gas costs? What is the brand character that appeals to them? Hybrids lack the personality of other cars – aggressive, sporty, fun, peppy, classy, exotic… we cannot find a word that describes them!


Have consumers been provided with clear direction?: Have consumers been provided with clear direction? “I want to contribute to green causes, but…” What’s better – a hybrid or a smaller car Should I fix the old one (not replacing) Or drive less (metro, car-pool) “What am I giving up” Power, durability, cost? “It’s just marketing hype to gouge me” Why does it cost more than other models? How come none of my neighbors are doing it?


Have manufacturers effectively positioned hybrid cars?: Have manufacturers effectively positioned hybrid cars? ‘Compared to __________ , Brand X Hybrid is the one that ____________’ They all claim greater fuel economy, but have yet to clearly position ‘for whom’ with clear benefits Difficult to achieve this whilst they have to market the other 99% of their businesses!


How important are hybrid sales to automakers?: How important are hybrid sales to automakers? ‘Critical to success’ or ‘feel good’? Where are the PR events to promote them (rallies, best fuel economy awards…) Media spending versus total industry is very small What if an independent company launched a hybrid (like Smart) If it was the only car they marketed, would they do a better job than the Big 5, with all of their other brands?


If you are considering a career in ‘green’ marketing: If you are considering a career in ‘green’ marketing Create a vision – what do you stand for? Practice what you preach Build/create value for the social and environmental change that you advocate Innovate – Very few ‘green’ products or concepts exist today Think long, long-term: Consumers may not see a benefit in a lifetime Change takes generations (e.g. ethanol gas)


Pursue collective ‘green marketing’ initiatives: Pursue collective ‘green marketing’ initiatives Promote the concept of ‘eco-stewardship’ Create a 3rd party Ecological Standards Assoc. Similar to CSA, ISO accreditation Build a ‘Green Marketers’ Club Enlist Fortune 500 firms and marketers Prioritize key environmental issues and actions – what will have the greatest positive impact


Pursue collective ‘green marketing’ initiatives: Pursue collective ‘green marketing’ initiatives Lobby for replacement of environmentally harmful products Rebates for old clunkers and gas mowers Incentives for purchase of eco-friendly options (similar to current rebate programs for hybrid cars) The national ‘Eco-Challenge’ Like fitness or weight management programs Empowerment – what can I do?