Accelerating Green Product Growth


It would not come as a surprise to most marketers to learn that many ‘green’ products have not fulfilled their sales promise.  Strong environmental awareness among North American consumers has not translated into high market share for green-positioned products. Although enviro-friendly products have made inroads and enjoy solid growth, they still lag their conventional cousins in virtually ever category.  For example, in the US building material market, exterior green materials are only forecasted to achieve a 15.7% market share by 2011 (source:  BCC Research). Hybrid cars, though trendy, made up only 3.6% of the 2009 US vehicle market, and this with the benefit of lucrative ‘cash for clunkers’ incentives (source:  hybridcars.com).  Despite historical awareness around the environmental impact of synthetic detergents and cleaners, green alternatives attained no more than a 5% share (on average) in their respective US categories.

There are many reasons for the disparity between promise and results.  For one thing, psychological factors such as inertia, laziness and insincerity could be creating a disconnect between what a customer intends to do and what they actually do.  Another important barrier is price.  It is tough for green products to build market share in a recessionary environment when they often carry a 25%-100% price premium over traditional brands. Furthermore, in many categories such as detergents and cleaners, green products perform worse than the leading brands.  Finally, marketers need to acknowledge that many green products have been poorly positioned, distributed and promoted. Early introductions were often opportunistic initiatives, not based on deep consumer understanding or best practices. “Green is a marketing term, not a scientific one, and in consumer marketing overall, green is probably overused,” says Brian Sansoni, a spokesman for The Soap and Detergent Association.    

Environmental consciousness is no longer a fad and its financial implications are felt well beyond market share.  According to a McKinsey survey, 33% of consumers indicate they will pay a premium for green products while 87% care about the environmental impact of products and want to take tangible steps to mitigate climate change.  Although green product growth rates are often two times that of traditional products, only 33% of consumers have bought or are ready to buy green products.  What can firms do to help green products capture more market share?  

 Better understand consumer and market dynamics

Not all green consumers are the same and many are savvy enough not to buy a product just because it trumpets green benefits.  Furthermore, executives now can benchmark different green product market experiences to understand what works and what doesn’t.

Get the value proposition right

Environmental benefits, by themselves, are no longer enough to attract many consumer segments.  To improve consumer and trade appeal, marketers need to improve green product value through price reductions and/or enhanced product performance.

Enhance your green credibility to improve brand image  

Companies should embrace emerging, consumer-focused environmental standards.  As well, marketers need to quantify and communicate the green benefits and impact of their products.  Marketing communications must avoid misleading consumers by claiming green benefits that are not real or are mandated by regulation.

Optimize the marketing mix 

 To penetrate the mass market, green products need the support of ‘best in class’ on & offline marketing and sales programs.  This would include insights-driven and sustained advertising exposure, widespread, multi-channel distribution and impactful promotion programs that encourage trial and repurchase. 

Have realistic expectations

The popularity of environmentally-friendly products is on the rise but conventional alternatives will still dominate, at least in the medium term.  Despite this, firms will need to continue investing in green product development and marketing while coping with a more complex product portfolio and supply chain.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Advertisements

4 comments so far

  1. […] ad hoc efforts.  In particular, sustainability driven innovation, supply chain optimization and green product development will yield higher returns in a firm that treats S&CSR as a strategic priority with proper […]

  2. […] such as Nike, Walmart and SAP are using sustainability strategies like Product Life Cycle Analysis, green product development and the reframing of environmental standards to deliver on their sustainability goals. Now, we turn […]

  3. […] such as Nike, Walmart and SAP are using sustainability strategies like Product Life Cycle Analysis, green product development and the reframing of environmental standards to deliver on their sustainability goals. Now, we turn […]

  4. […] such as Nike, Walmart and SAP are using sustainability strategies like Product Life Cycle Analysis, green product development and the reframing of environmental standards to deliver on their sustainability goals. Now, we turn […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: