December 4, 2007
Marketing to Green Buyers
By Tom Ryan
According to study released by Experian Local Market Services, only a small segment of green consumers, known as Behavioral Greens, are likely to spend the extra cash on environmentally-friendly products and services.
The study is part of a new segmentation marketing system, GreenAware, designed to address green marketing opportunities. It breaks down consumers by lifestyle, media and buying behavior into four distinct groups based on their green tendencies. The four groups are:
Behavioral
Greens: Consumers who think and act green. Have negative attitudes towards
products that pollute the environment and incorporate green practices on a
regular basis. Support environmental charities.
Think Greens: Think like green
consumers and might recycle but don’t always act or buy green.
Potential Greens:
Indecisive. Don’t behave or think along environmentally conscious lines but
remain on the fence about key green issues. The largest group.
True Browns:
Consumers who aren’t environmentally conscious and may actually have negative
attitudes towards media with a heavy environmental focus.
Chris Wilson, president of Experian Research Services, believes more granular segmentation and targeting of green buyers is required to identify those willing to either pay more or expend more effort in keeping their buying behavior consistent with their green attitudes.
“Which consumers are only thinking green? Which consumers are actually acting green? Who will be the most receptive audience for a green message or a new greener product or service?” asked Mr. Wilson.
Mr. Wilson also believes a deeper understanding of the green buyer is required because green consumers behave differently than average consumers. As such, mass marketing approaches may not work.
“For example,” said Mr. Wilson. “Not all media markets contain ‘behavioral greens’ and some markets have a higher concentration over others. The greenest markets are unique in their media and purchasing behaviors and are 33 percent more likely to avoid watching television commercials and are 40 percent more likely to shop online.”
Experian’s Green Marketing Map shows that that the cities with highest concentration of Behavioral Greens include San Francisco, New York and Los Angeles; Think Greens in Boston and Philadelphia; Potential Greens in Atlanta and Miami; and “True Browns” in Cleveland, Houston, and Dallas.
Going forward, Experian expects a larger number of consumers will move up to greener categories. As more companies join the green movement, the products and services they provide will help convert consumers who may only be “thinking green but not acting green.”
Discussion Questions: Do you think more targeted approaches are required to reach different segments of green consumers? To what degree can mass market approaches work?
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I think Camille sums this up nicely. Many consumers, homeowners and businesses believe in the “green movement,” but the real issue comes down to economics. For families and business on a tight budget (and who isn’t these days?) spending extra dollars every month on “green products” is not appealing, especially when there is a cost-effective alternative they are already comfortable with. We see this same principle in the foodservice market. Consumers know which foods and brands are healthier for them, but sometimes choose price and value over the higher cost of healthier foods. If all things were equal, I’m sure they would opt for healthy.
This study segmenting “green” consumers does not appear to have included disposable income as a factor. While many consumers believe in a “green environment” not all consumers can afford to support all green alternatives. One of the approaches that the green movement needs to consider is what can consumers actually do to make a difference and what can be done by consumers with different levels of disposable income.
Choosing to use new energy efficient light bulbs is a case in point. They can be marketed as something that every person believing in a green environment “needs” to do as a first step. They can also be marketed as a first step because they save X amount of money in the long run and have X impact on reducing environmental hazards AND that a good way to start is to replace the light bulbs used most often in your house. This approach gives people information on why the action helps, how it saves them money, and provides a direction for starting small so that if a consumer can afford to replace one light bulb at a time they are still helping the effort.
The segmentation listed above ignores these consumers and does not easily lead to an action of how can people start at whatever their income level is.
The #1 Green Divide: shoppers who’ll pay extra versus those who won’t. The Toyota Prius sells nicely. How many would sell if it was 20% higher? Sustainability isn’t free, in the short run, anyway. New Jersey utility customers are offered green electricity (from wind, solar, hydro) at a slight premium. Very few buy it.
A few years ago we were all in a panic on how to market to a growing Hispanic population. We’ve had many good discussions on how to market to Hispanics, gays, etc. Now it looks like Greens are the new fad minority. I don’t think we need to segment various green groups. As a new generation of consumers enter the market who have been taught “green” at a early age, along with government mandates toward being green, the green consumers will blend in with consumers as a whole and probably not be considered a special group. Sure there will always be some extremists but I’m not so sure we need to divide them further.
While we will need to continue to develop consumer insights against green segments, the real issue and opportunity at hand is education of the value and importance of green/environment/sustainability. This new research appears to support previous work by the Natural Products Institute, where they call out LOHAS (Lifestyle of Health and Sustainability) as the key green segment. So there is some consistency.
All parts of the value chain need to stand up and help educate consumers on the value and importance of being green. Companies are starting to do this and we will see more progress in the future. Retailers will continue to play a key role and Brand Owners are starting to step up their efforts. Various Non-Government Organizations like World Wildlife Fund and the Sustainable Packaging Coalition are also working hard to develop new programs around education and they are also working directly with companies to make a difference.
Triple Bottom Line thinking really does work and you can expect to see see growth over time. So the answer is: yes, we can conduct more consumer work to better understand the issues and opportunities for green consumerism but education to the masses is what we need to do more of to continue the conversion process to get more people to understand the value of the opportunity. And yes, we can still have shelf impact, personalization and be green–we just need to think about sustainability early in the process.
I love it when we talk concepts. Never once, when we discuss segmentation of any kind of audience, have I been able to fit anyone of my acquaintance into any of the designated categories. Which is kind of comforting because it means I’m not the only misfit around–my friends are just as much round pegs being inched towards square holes as I am. Where have we gone wrong?
Perhaps we should be careful to distinguish between “attitudinal segments” and “behavioral segments.” This study defines “True Brown” as “…and may actually have negative attitudes towards media with a heavy environmental focus.” That is an attitude, not a behavior. Do these people actually go out of their way to buy “brown” products? Would they pay a premium for “brown” over “green”? I don’t think so.
In addressing an attitudinally driven market, sometimes it is useful to think about in terms of “the relative value of green.” Picture a matrix going from “really Brown” to “really Green” on the X axis and “Much more expensive” to “Much less expensive” on the Y axis. Almost all U.S. consumers will fall on the “more Green” side of the axis unless there is a really steep discount. Why shouldn’t they? I don’t think we have that many willing environmental saboteurs. (Note: I’m assuming we don’t define anyone driving a gasoline powered automobile as an “environmental saboteur” for this exercise.)
So what we are really dealing with is determining the relative value of “Green” attributes to each consumer. The closer we get to a zero price premium, the closer we get to 100% Green adoption. So if we are serious about this, how about we get off the value of the “green premium” kick and start figuring out how to make “Green” cost neutral?
At this point, Green is a concept that’s more attuned to independent specialty retailers who are able to target market to that narrow niche of customers who are willing to pay a premium in order to purchase environmentally friendly products. Green will be a difficult concept for corporate retailers who have to target broadly to build the volume, and drive price, that their business models require.
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I think Camille sums this up nicely. Many consumers, homeowners and businesses believe in the “green movement,” but the real issue comes down to economics. For families and business on a tight budget (and who isn’t these days?) spending extra dollars every month on “green products” is not appealing, especially when there is a cost-effective alternative they are already comfortable with. We see this same principle in the foodservice market. Consumers know which foods and brands are healthier for them, but sometimes choose price and value over the higher cost of healthier foods. If all things were equal, I’m sure they would opt for healthy.
This study segmenting “green” consumers does not appear to have included disposable income as a factor. While many consumers believe in a “green environment” not all consumers can afford to support all green alternatives. One of the approaches that the green movement needs to consider is what can consumers actually do to make a difference and what can be done by consumers with different levels of disposable income.
Choosing to use new energy efficient light bulbs is a case in point. They can be marketed as something that every person believing in a green environment “needs” to do as a first step. They can also be marketed as a first step because they save X amount of money in the long run and have X impact on reducing environmental hazards AND that a good way to start is to replace the light bulbs used most often in your house. This approach gives people information on why the action helps, how it saves them money, and provides a direction for starting small so that if a consumer can afford to replace one light bulb at a time they are still helping the effort.
The segmentation listed above ignores these consumers and does not easily lead to an action of how can people start at whatever their income level is.
The #1 Green Divide: shoppers who’ll pay extra versus those who won’t. The Toyota Prius sells nicely. How many would sell if it was 20% higher? Sustainability isn’t free, in the short run, anyway. New Jersey utility customers are offered green electricity (from wind, solar, hydro) at a slight premium. Very few buy it.
A few years ago we were all in a panic on how to market to a growing Hispanic population. We’ve had many good discussions on how to market to Hispanics, gays, etc. Now it looks like Greens are the new fad minority. I don’t think we need to segment various green groups. As a new generation of consumers enter the market who have been taught “green” at a early age, along with government mandates toward being green, the green consumers will blend in with consumers as a whole and probably not be considered a special group. Sure there will always be some extremists but I’m not so sure we need to divide them further.
While we will need to continue to develop consumer insights against green segments, the real issue and opportunity at hand is education of the value and importance of green/environment/sustainability. This new research appears to support previous work by the Natural Products Institute, where they call out LOHAS (Lifestyle of Health and Sustainability) as the key green segment. So there is some consistency.
All parts of the value chain need to stand up and help educate consumers on the value and importance of being green. Companies are starting to do this and we will see more progress in the future. Retailers will continue to play a key role and Brand Owners are starting to step up their efforts. Various Non-Government Organizations like World Wildlife Fund and the Sustainable Packaging Coalition are also working hard to develop new programs around education and they are also working directly with companies to make a difference.
Triple Bottom Line thinking really does work and you can expect to see see growth over time. So the answer is: yes, we can conduct more consumer work to better understand the issues and opportunities for green consumerism but education to the masses is what we need to do more of to continue the conversion process to get more people to understand the value of the opportunity. And yes, we can still have shelf impact, personalization and be green–we just need to think about sustainability early in the process.
I love it when we talk concepts. Never once, when we discuss segmentation of any kind of audience, have I been able to fit anyone of my acquaintance into any of the designated categories. Which is kind of comforting because it means I’m not the only misfit around–my friends are just as much round pegs being inched towards square holes as I am. Where have we gone wrong?
Perhaps we should be careful to distinguish between “attitudinal segments” and “behavioral segments.” This study defines “True Brown” as “…and may actually have negative attitudes towards media with a heavy environmental focus.” That is an attitude, not a behavior. Do these people actually go out of their way to buy “brown” products? Would they pay a premium for “brown” over “green”? I don’t think so.
In addressing an attitudinally driven market, sometimes it is useful to think about in terms of “the relative value of green.” Picture a matrix going from “really Brown” to “really Green” on the X axis and “Much more expensive” to “Much less expensive” on the Y axis. Almost all U.S. consumers will fall on the “more Green” side of the axis unless there is a really steep discount. Why shouldn’t they? I don’t think we have that many willing environmental saboteurs. (Note: I’m assuming we don’t define anyone driving a gasoline powered automobile as an “environmental saboteur” for this exercise.)
So what we are really dealing with is determining the relative value of “Green” attributes to each consumer. The closer we get to a zero price premium, the closer we get to 100% Green adoption. So if we are serious about this, how about we get off the value of the “green premium” kick and start figuring out how to make “Green” cost neutral?
At this point, Green is a concept that’s more attuned to independent specialty retailers who are able to target market to that narrow niche of customers who are willing to pay a premium in order to purchase environmentally friendly products. Green will be a difficult concept for corporate retailers who have to target broadly to build the volume, and drive price, that their business models require.