The Mass Market Embraces Sustainability

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The Mass Market Embraces Sustainability
Michael R. Solomon, Ph.D. Professor of
Marketing Director, Center for Consumer
Research Saint Josephs University Philadelphia
Responsive Homes Responsible Energy Use
Decisions MIT House_n Consortium Research
Review Cambridge, MA June 3, 2008
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Conscious Consumerism
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Pop Culture Goes Green

• Many celebrities are endorsing green causes.
• Mainstream newspapers and other media outlets
  feature stories daily on the latest trend in
  eco-friendly clothing, organic beer, and why car
  sharing is growing in popularity.
• In a recent survey, 81 of consumers say they are
  likely to switch a brand to support a causeIF
  price and quality are equal.

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From Treehuggers to Joe Six-Pack
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• In a 2007 survey, 8 in 10 consumers said they
  believe it's important to buy green brands and
  products from green companies, and that they'll
  pay more to do so.
• U.S. consumers focus on personal health is
  merging with a growing interest in global health.
  Some analysts call this new value
• Conscious Consumerism

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What does Sustainability Mean to Consumers?

• While sustainability is not (yet) a household
  word, it is an umbrella term for six key values
• Healthier
• Local
• Social responsibility
• Environmental responsibility
• Simple living
• Control
• Among these, health is the most significant.
• Consumers tend to link health to other key values
  and find it easiest to understand and participate
  in this dimension of sustainability.

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Conscious Consumers

• Nearly nine in ten Americans say the words
  "conscious consumer" describe them well and are
  more likely to buy (if products are of equal
  quality and price) from companies that
• Manufacture energy efficient products (90)
• Promote health and safety benefits (88)
• Support fair labor and trade practices (87)
• Commit to environmentally-friendly practices
  (87)

Source Consumers Prefer to Buy from Companies
that Reflect Their Values,Center for Media
Research, November 12, 2007
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• In this survey Americans readily self-identify
  as
• Conscious Consumers" (88 well, 37 very well)
• Socially Responsible" (88 well, 39 very well)
• Environmentally-Friendly" (86 well, 34 very
  well)
• Green" (65 well, 18 very well)

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• While price (58 very important) and quality (66
  very important) are paramount,
• Convenience (34 very important) has been edged
  out by more socially relevant attributes such as
• Where a product is made (44 very important),
• How energy efficient it is (41 very important)

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Source The Hartman Report on Sustainability, p.
114
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Mintels proprietary research (2006) also shows
that

• 52 of respondents say that they purchase
  recycled products.
• 45 purchase organic products.
• 37 purchase biodegradable products.
• 29 purchase earth-friendly products.
• 35 million Americans are True Greens who
  regularly buy Green productsapproximately 12 of
  the population.

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Greening of the Home

• As noted in Nation Building News
• There was a 20 increase in the number of green
  homebuilders in the U.S. in 2005.
• Analysts expect 10 of all new home construction
  to be built with green standards by 2010.

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Terramoor Village

• One example of the growing popularity of green
  homebuilding is the Terramoor Village development
  in Orange County, California.
• The green homes are priced 5 above other homes
  in the development. More than half of all
  Terramoor buyers pay up to 74 per month or
  13,500 in additional total mortgage costs in
  order to have the benefits of a green built home.
  

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Drivers of Conscious Consumerism
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Source Michael Solomon, Consumer Behavior
Buying, Having, and Being 8/e
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The Hartman Report on Sustainability, Summer
2007, p. 13, Figure 1.
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Zones of Risk Awareness

• Sustainability consciousness can be
  conceptualized as Zones of Risk Awareness
  centering on the body and ranging outward to the
  broader environment.
• In general, the body is the hub of category
  adoption and the pathway to Conscious Consumerism

• 1. In the body
• 2. On the body
• 3. Around the body

Adapted from The Hartman Report on
Sustainability Understanding the Consumer
Perspective, Summer 2007, The Hartman Group, Inc.
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Source The Source The Hartman Report on
Sustainability Report, p. 23
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Periphery (Light Green)
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• Wants gas prices to rise even higher so she has a
  good reason to trade-in her SUV.
• Drinks water from the tap unless it smells and/or
  tastes bad.
• Does not believe the hype about organic food.
• ?Believes climate change might be happening but
  defers to the experts.
• Travels with a waterless hand sanitizer because
  she thinks other peoples germs are gross.
• Just bought an energy-efficient dishwasher
  because of a rebate
• Uses curbside recycling because she wants to keep
  up with her neighbors.
•  

Adapted from The Hartman Report on
Sustainability Understanding the Consumer
Perspective, Summer 2007, The Hartman Group, Inc.
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Mid-Level (Green)

• Lacks deep knowledge of organic farming, but buys
  organic because it makes him feel safer
• Wears sunscreen because the hole in the ozone
  layer makes it more dangerous to be in the sun
• Uses a water filter on the kitchen tap but not in
  the shower
• Recycles out of an ambiguous sense of moral duty
• Ponders the possibility of buying a hybrid
  vehicle someday
• Monitors and evaluates the hand hygiene practices
  of his colleagues

Adapted from The Hartman Report on
Sustainability Understanding the Consumer
Perspective, Summer 2007, The Hartman Group, Inc.
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Core (Bright Green)

• Will pay premium prices for items produced by
  companies that treat their workers fairly
• Avoids use of plastic packaging and containers
  due to concerns about leeching and landfills
• Strategically plans errand trips so that she can
  minimize her gas consumption
• Recently purchased sustainable cotton bed sheets
  for her home
• Follows some of the products she buys from how
  they were produced to how they are disposed of
• Buys only cruelty-free personal care products 

Adapted from The Hartman Report on
Sustainability Understanding the Consumer
Perspective, Summer 2007, The Hartman Group, Inc.
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Consumer Segments and Strategies

• Phases of Adoption for Sustainable Products

Source The Hartman Report on Sustainability
Report, p. 34
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Consumers Reasons for Not Embracing the Green
Movement
Source The Hartman Report on Sustainability
Report, p. 58
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Greenwashing
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• Greenwashing, the practice of marketing a company
  or brand as environmentally-friendly while the
  major efforts of the company are not, is rampant.
  
• Truly green companies feel they face unfair
  competition from companies presenting themselves
  as friends of the environment in an effort to
  gain the trust and loyalty of consumers.

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What Cues do Consumers use to Identify
Sustainable Products?
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Green Cues
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• The GfK Roper poll Consumers use a product's own
  information to help them determine what is green
  
• 72 said product and package labels are major
  sources for environmental information.

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Problems with Labeling
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• Consumers are interested in being more ethical
  sustainable in their purchase decisions, but the
  proliferation of labels and certifications make
  it difficult for consumers to rely upon them
• Mintel Labels consumers recognize and/or
  understand

Label Recognized Understood More Likely to Buy With Label
Recycled 91 65 55
Energy Star 89 52 67
USDA Organic 72 39 33
Fair Trade 39 13 16
Green E-Logo 24 6 8
Cruelty Free 11 4 4
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Talking to Consumers about Sustainable Housing
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Age Breeds Skepticism
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• Consumers 18-25 and 36-40 are the most likely to
  think companies are more responsible now than
  they were several years ago.
• However, as consumers age, they become more
  skeptical. Those aged 56-65 are significantly
  more likely to say they do not think companies
  are always genuine.

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Gen Y

• Environmental messaging has a major impact on
  customer loyalty in this key demographic, with
  50 of respondents saying it influences their
  shopping behavior.
• About 46 of respondents say they'd shop at a
  retailer more if it were environmentally
  friendly.
• And 47 say they're willing to pay more for
  environmentally friendly services, products or
  brands.

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Baby Boomers

• Green consumers peak in the 45-54 year old age
  group. These respondents came of age in the 1960s
  and 1970s, when the green movement was gaining
  momentum and becoming a public concern.
• In addition, as people age they seem to become
  more aware of green issues, and are more likely
  to recognize that their lifestyles affect the
  environment.
• Parents also are motivated to protect the earth
  so that their children will be able to enjoy a
  full and healthy life.

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Target Age Cohorts Differently

• Gen Y Classic fashion pattern with small but
  fervent core of innovators. Viral campaign with
  strong social comparison//badge component
• Boomers A return to innocence, nostalgia for
  activism and cleansing after decades of
  materialism. Also longer-term generational view
  as grandparenthood looms

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Learning about Sustainability
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Leverage point for Gen Y HIGH
SCHOOL CAFETERIA
(Social hierarchy/display)
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Leverage point for Boomer Moms FAMILY REUNION
(Generational continuity)
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A rapidly growing new media platform can reach
both age cohorts
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Virtual Worlds

• Currently well over 100 virtual worlds are
  operating live or are in development.
• The research firm Gartner predicts that by the
  year 2011, over 250 million people will be
  involved in these immersive digital environments.
• U.S. firms spent an estimated 15 million on
  advertising in virtual worlds in 2006. This
  figure is expected to reach 150 million by 2012.

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The tip of the iceberg

• Habbo Hotel targets 13 -18 year olds and boasts
  over 92 million registered users and over 8.5
  million unique users each month.
• Gaia Online attracts more than 2 million unique
  visitors each month 300,000 of the members log
  in for an average of two hours per day.

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Shopping
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Trade Shows
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Corporate Training
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Education
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Creating (Virtual) Green Habitats The Next
Generation
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Giles will drive now Thank you!