consumerology july 2008

2

Methodology

• The Gandalf Group conducted qualitative and quantitative research to produce the

Consumerology Report.

• Online discussions were held over 3 days in June 2008 with 3 groups of Canadians,

– General population national sample men aged 18 - 65

– General population national sample women aged 18 – 65

– Tech early adopters who were very interested in environment – men and women

• A national proportionate quantitative online survey was conducted among 1500

Canadians.

• The survey was conducted in English and French and fielded from June 26 through

July 9, 2008.

• The margin of error is +/- 2.53%.

3

Assessments of the National Economy

• Optimism about the direction of the country has dropped since April. While two thirds of

Canadians still believe the country is headed in the right direction, this is a 7 point drop in

three months.

• And assessments of growth in the national economy are down 12 points since April.

Currently, 63% of Canadians think that the Canadian economy is currently in a period of

growth (only 5% say strong growth).

– Ontarians have the bleakest view of the economy- just about half think that Canada is experiencing

economic growth.

– In contrast, the economic downturn is not affecting Western Canadians - almost three quarters think

Canada’s economy is seeing growth.

4

Economic Expectations

• Optimism of economic growth into the future has also declined.

• Last quarter, 62% of Canadians thought that in a year’s time, Canada’s economy would be

stronger.

• Half of Canadians expect the national economy to be weaker in a year than it is today.

5

Direction of the Country

• Which of these two statements is closer to your own opinion?

6


• In general, how would you describe the state of the economy of Canada today

– would you say that it is in a period of strong growth, moderate growth, moderate decline,

or strong decline?

7


• In general, how would you describe the state of the economy of Canada today

– would you say that it is in a period of strong growth, moderate growth, moderate decline,

or strong decline?

8

Economic Expectations

• Looking forward to one year from now, do you think the economy will be much stronger than

it is today, a little stronger than it is today, a little weaker than it is today or much weaker

than it is today?

9

Challenges Facing Canada

• For the second consecutive quarter, the price of gasoline is seen as a pressing issue to

Canadians – ranking equal to the state of healthcare. Almost three quarters of respondents

said that the price of gasoline is a very important issue facing Canada. Those saying the

price of gas is important has climbed 9% since last quarter.

• This is the first time since 9/11 that an issue has equaled health care as the top issue facing

Canadians

• The environment, crime and safety, ethics in government, the economy, and the quality of

primary education are also top issues.

• The Canadian dollar and the war in Afghanistan have declined in importance in the

last quarter.

10

Challenges Facing Canada:

• Below is a list of issues that some people think are important challenges for Canada at this

time. How important is each issue to you?

Mean

7.9

7.9

7.5

7.3

7.2

7.2

7.1

7.0

6.9

6.8

6.7

6.6

6.1

5.929 45 27

30 48 21

36 51 12

38 49 13

41 48 11

43 48 9

48 41 11

51 40 9

50 43 7

50 45 5

52 41 7

59 34 7

71 26 3

72 23 5

0% 20% 40% 60% 80% 100%

The war in Afghanistan

Poverty among aboriginal Canadians

The inclusion of Cdns with disabilities in community life

Unemployment

The Canadian dollar

The cost of post secondary education

Climate change

Ethics in govt and politics

The quality of primary education

The state of the economy

Crime and safety

The environment

The state of the health care system

The price of gasoline

Important Somewhat important Not important

11

Key Findings on the Environment

• Three quarters of Canadians say they consider the environmental impact when they make a

purchase decision – only twenty percent of Canadians say they rarely or never do.

• But there is a crisis in confidence. Most Canadians (75%) believe that environmental claims

are just marketing ploys.

• Companies are the least trusted source of information about the environmental impacts of

products.

• Not surprisingly, Canadians overwhelmingly want government to regulate this arena and

create standards that ensure claims have a basis in fact.

• Terms like “green” are worn out and viewed with cynicism – consumers don’t know what it

really means and are therefore cynical about how companies use it

12


• Cost is the principal barrier to adopting more environmentally friendly behaviour and

purchasing more environmentally friendly products.

• Environmentally friendly products are overwhelmingly seen to be more expensive than

“normal” products. Two-thirds of Canadians say they don’t think environmentally friendly

products are any more expensive to produce, but that companies claim they are in order to

charge more.

• The perceived discrepancy between the price of environmentally friendly products and cost

of production is key because while three-quarters say they consider the impact of

companies/products when they make a purchase decision, less than forty percent say they

are financially able to make changes to benefit the environment.

13


• The primary demographic distinction of willingness to adopt environmentally friendly

behaviours and to purchase environmentally friendly products is not age, income, nor

education – but gender.

• About 40% of Canadians could be termed Strong Environmentalist Buyers – this group is

more concerned about the environment and environmental impact is a key determinant of

purchasing behaviour. They are the most likely to pay more for environmentally friendly

products, YET they are no more or less wealthy than those who won’t pay more.

• Another 40% of Canadians consider environmental impacts most of the time when making a

purchase, however, they do not believe they are financially able to afford the extra costs.

• The remaining 20% just don’t make environmentalism a consideration or a priority.

14

Concern for the Environment

• Three-quarters of Canadians say they are very (38%) or somewhat concerned about the

environment.

– Residents of Quebec and Ontario indicate a higher level of concern than do residents of the Atlantic

or Western provinces

– Women are significantly more concerned than men for the environment

• And one-third of consumers report thinking about the environmental impact most of the time

they make a purchase, while 48% say they think about it some of the time.

– Women are almost twice as likely as men to say that most of the time they make a purchase decision

they think about the environmental impact

• Only one in five Canadians either hardly or never think about the environmental impact

when they are making a purchase decision.

15

Environment as Gender Issue

• How concerned are you about the state of the environment?

16

Women are significantly more likely

to consider environmental impact

• When you are making purchases do you think about the environmental impact: ?

17

The Environment and Consumption

• Similarly, three-quarters of Canadians say they are very (33%) or somewhat motivated to

make personal changes that would benefit the environment.

• Yet only 39% of Canadians say they are very (6%) or somewhat financially able to make

changes in their life to benefit the environment.

– Quebec residents are the most likely to say they are financially able (46%)

– Less than one-third of Atlantic Canadians say they are financially able to make personal changes to

benefit the environment

18

Environmentally Beneficial Changes

• How strongly motivated are you to make personal changes in your life that would benefit the

environment in some way?

19

Financial Ability to Make Changes

• How able are you financially to make changes in your life that would benefit

the environment?

20

Environmental Issues

• Specific environmental issues have more resonance than the “environment” as a category.

• Canadians place a higher level of importance on issues such as keeping fresh water clean,

reducing excess waste, and reducing air pollution and smog than they do on the

“environment”.

• Many of these issues may be seen as “white space” in which companies could make a lot of

ground by identifying themselves with these issues.

• Of moderate importance are combating global warming/climate change, protecting

wilderness areas, promoting locally grown food and preserving wildlife.

21

Importance of Environmental Issues:

• How important are each of the following environmental issues to you personally?

Mean

8.29

7.90

7.81

7.59

7.56

7.55

7.13

7.06

6.36

22

Benefits vs. Likelihood

of Performing Environmental Measures

• Canadians believe many lifestyle and purchasing decisions are beneficial to the

environment.

• Practices such as recycling, driving energy efficient vehicles, buying energy saving light

bulbs, reducing the use of plastic bags and pesticides, and conserving household energy

are seen to benefit the environment by a significant majority of Canadians.

• Purchasing organically grown food or investing in ethical mutual funds are seen as the least

beneficial.

23

Benefit of Environmental Measures:

• How beneficial to the environment would it be if you personally: ?

19 37 31 14

28 40 26 639 37 14 1147 33 14 748 34 11 7

46 41 9 4

49 33 10 8

50 37 9 351 35 8 6

52 38 7 255 33 10 3

52 35 7 6

55 30 9 661 31 6 2

61 32 4 373 21 42

0% 20% 40% 60% 80% 100%

Put investments in ethical funds

Bought organic food

Installed a solar powered hot water heater

Stop or reduce drinking bottled water

Used public transpo more often

Turned down the heat/a.c. in your house

Switched to a more fuel efficient car

Bought locally grown food

Drove your car/vehicle less

Changed household cleaning products

Replace your light bulbs with energy saving bulbs

Set dishwashers/washing machines to energy saving

Stopped using pesticides

Used fewer plastic bags

Bought energy efficient appliances

Recycled all paper/cans/plastic products

Beneficial Somewhat beneficial Not beneficial DK/ref

Mean

7.97

7.63

7.57

7.36

7.26

7.24

7.24

7.23

7.14

7.10

7.06

6.97

6.81

6.61

5.76

5.19

24

So What Do They Do?

• Respondents were asked the likelihood of their carrying out such measures given the

specific sacrifice involved or entailed in each.

• We learned that price is a deterrent. Secondarily, time is a deterrent.

• Effort or discomfort are not.

• Changes that do not require extra money and that can be incorporated in daily life such as

using the energy saving mode on appliances, changing to efficient light bulbs, reducing use

of pesticides and plastic bags, buying locally grown food, and turning down the a/c or heat

are relatively likely to be adopted even though each of these actions requires more effort or

inconvenience.

• Recycling is seen to be the most beneficial environmental measure and most Canadians

(76%) say that they are likely to recycle.

25

ACTION SACRIFICE

Drove your car or vehicle less often A longer commute on public transit or car pools

Used public transit more More time getting anywhere

Turned down the air conditioning in my home Being warm on the hottest days

Used fewer plastic bags Having to buy and keep reusable bags

Bought locally grown food Less selection

Stopped using pesticides on your lawn or garden More weeding

Changed household cleaning products to non-toxic, green products Cost 10% more

Bought energy efficient appliances that use 40% less energy Cost more and take 5 yrs for the savings to pay for themselves

Used public transportation more often A longer commute on public transit or car pools

Set dishwashers and washing machines to energy saving mode Using no hot water

Bought organic food Costs 15% more

Put your investments in ethical funds They don’t get the best returns

Switched to a more fuel efficient car Less power and space

Replaced your light bulbs with energy-saving fluorescent bulbs Cost twice as much as traditional bulbs

Installed a solar-powered hot water heater that cuts energy bills in

half

Takes 12 years to pay for itself

Recycled all of the paper, cans and plastic products in your house Having an extra recycle bin in the house and having to take it

out separately

Stop or reduce drinking bottled water Using tap water instead

26

What Don’t They Do?

• Changes that require additional spending are significantly less likely to be adopted even if

they are seen to be very beneficial to the environment.

• While energy efficient appliances are seen to be very beneficial to the environment, only

38% say that they would act on this considering the additional price.

• Similarly, solar power hot water heaters are seen to be very beneficial to the environment,

but the cost means that most Canadians would not install one.

• While a fuel efficient car is seen as less beneficial, more people are likely to buy one – for

cost savings.

• The benefits of buying organic food and putting investments in ethical funds are not as clear

to people, both are costly, and Canadians are unlikely to do either.

27

Likelihood of Acting on Measures:

How likely would you be to do the following considering the sacrifices: ?

17 35 44 4

23 41 35 1

25 38 33 4

29 35 32 4

38 34 26 3

43 37 19 2

44 37 16 2

49 36 13 2

57 25 16 2

50 35 12 2

51 36 12 1

53 33 13 2

53 31 12 4

61 28 10 1

62 27 10 2

76 18 4 1

0% 20% 40% 60% 80% 100%

Put investments in ethical funds

Bought organic food

Installed a solar powered hot water heater

Drove your car/vehicle less

Bought energy efficient appliances

Switched to a more fuel efficient car

Turn down the heat

Stopped using pesticides

Stop or reduce drinking bottled water

Changed household cleaning products

Used fewer plastic bags

Set dishwashers/washing machines to energy saving

Bought locally grown food

Replace your light bulbs with energy saving bulbs

Turn down the a.c. on hot days

Recycled all paper/cans/plastic products

Likely Somewhat likely Unlikely DK/ref Mean

8.06

7.43

7.35

7.12

7.07

7.01

6.95

6.95

6.92

6.68

6.50

6.00

5.48

5.39

5.26

4.63

28

Benefits vs. the Likelihood

• When we analyse responses of how beneficial an action is by how likely people are to do it

because of the sacrifice, recycling is the clear leader for respondents on both.

• Investing in ethical funds and to some extent, organic foods are thought to both be the least

important and the least likely to be undertaken given the sacrifice.

• Among the rest in between we see the prioritization that occurs between those that require

effort and those that require costs.

• Women and men rank these and other initiatives in a similar fashion – but women are more

likely to both consider each one more beneficial and to undertake each given the sacrifice.

29

How likely would you be to do the following, considering the sacrifices?

How

beneficia

l to

the e

nvironm

ent

would

it

be

if y

ou p

ers

onally

_____?

Turn down the heat

Use public transpo more

Buy organic food

Energy saving mode for dishwasher/washing machine

Buy fuel efficient car

Buy a solar powered water heater

Switch to energy-saving bulbs

Change household cleaning products

Turn down a.c.

Invest in ethical funds

Buy locally grown food

Stop using pesticides

Stop/reduce drinking bottled water

Recycle paper, cans, plastic

Buy energy efficient appliances Use fewer plastic bags

Use car less

Perceptual Map: Benefit vs. Likelihood

30

Corporate Environmental Measures

• Most consumers say they consider the environmental impact of a product when they make

a purchase decision.

• There are many environmentally friendly initiatives corporations could adopt during

production that would increase consumer purchasing likelihood:

– Using less packaging is the most visible and persuasive environmental action

– Using renewable energy sources for production such as solar and wind

– Reducing energy use such as turning down lights, heat, a/c

– Using recycled parts for production

– Using organic ingredients

– Using environmentally friendly building materials

– Supporting non profit environmental organizations

31

7.65

7.23

7.20

7.18

7.09

7.01

7.00

6.91

6.48

5.90

Mean

Company Environmental Responsibility

The following are steps that some companies have taken to become more environmentally

responsible or make more environmentally responsible products. Would you be more or less

likely to buy these products if a company _______?

32

A Disconnect

• Environmentally friendly or green products are overwhelmingly seen to be more expensive

than “normal” products.

• Yet two-thirds of Canadians say they don’t understand why it’s more expensive to purchase

environmentally friendly products. Women are significantly more likely to say they do not

understand why it’s more expensive.

• Two-thirds of Canadians believe that it doesn’t cost more to produce environmentally

friendly products but that companies claim a product is green so they can charge more for it.

• Seventy percent of Canadians believe that environmental claims are just marketing to sell

more products.

33

“Green” Pricing

How much do you agree/disagree with the following statements: ?

26 44 17 5 7

30 37 19 6 8

34 31 20 10 5

0% 20% 40% 60% 80% 100%

I believe that many environmental claims are just marketing to sell

more products

I don't think it costs more to produce environmentally friendly products

- I think companies just use that claim to charge more for a product

I don't understand why it is more expensive to purchase products

that are environmentally friendly

Strongly agree Somewhat agree Somewhat disagree Strongly disagree DK/ref

34

Clearing up the Confusion

• Most Canadians say there are so many conflicting claims about the environment that they’re

not sure what to believe.

• Canadians overwhelmingly want regulation and labeling to clear up the confusion.

– What is just a marketing ploy?

– What is legitimately environmentally friendly?

• Eighty-five percent of Canadians want standards enforced on producers and labeling that

certifies and explains terms such as organic, low emissions, green.

• Two-thirds of Canadians say the term “green” has been used so much that it doesn’t have

much meaning for them anymore when a company claims it.

35

“Green” Marketing


8 26 39 20 7

11 39 31 12 8

17 42 23 11 7

18 47 20 9 6

48 36 7 4 6

52 34 6 3 6

0% 20% 40% 60% 80% 100%

I don't understand what most of the enviro terms used on products

mean so I don't pay attention

I don't know how to judge which products I should ensure are enviro

friendly and which are less important

There are so many conflicting claims about the environment that I’m

not really sure what the right things to do are

The term "green" has been used so much that it doesn't have much

meaning to me when I see a company claiming a product is "green"

The gov't should provide guidelines for companies to follow so we

understand what terms like green/organic/low emission/etc. mean

There should be labelling regulations so when a producer says

green or enviro friendly, the consumer knows what that means and

the company has to meet standards


36

Buying with the Environment in Mind

• Canadians are split over whether a company or brand’s environmental reputation is

important – just under half incorporate it into their purchasing decision.

• And just over half of Canadians want to know the environmental impact of a company or

product before they make a purchase.

• Almost sixty percent are willing to pay more for an environmentally friendly product because

they believe it will be worth it in the long run while the remaining forty percent are not.

Women are significantly more likely to say this than men.

37

“Green” Purchasing


9 38 33 12 8

12 30 36 15 6

12 43 27 9 9

16 43 23 9 9

0% 20% 40% 60% 80% 100%

I base my purchase decisions in part on what I

know of the brand or company's enviro friendliness

I'm not willing to spend extra money for a product

just because it's more enviro friendly

I want to know how a company or a product will

impact the environment before I make a purchase

I believe it is more expensive to purchase products

that are environmentally friendly but it is worth the

cost in the long run


38

Three Types of Environmental Consumers

• There are three groups of consumers when it comes to making purchasing or behaviour

decisions based on the environment BUT importantly – eighty percent of Canadians are at

least moderately likely to make purchasing and lifestyle decisions to benefit the

environment.

The three types are:

1. the strong environmentalist (42%)

2. the moderates (41%)

3. the overwhelmed and unconvinced (18%)

• These groups are principally distinguished, not by demographics, but by attitudes and

commitment to the environment.

• These groups do not differ by income, education, child status, or age.

• Women are significantly more likely to be strong environmentalist and men are significantly

more likely to be overwhelmed and unconvinced.

39

Strong Moderate Unconvinced

Total 42% 41% 18%

Atlantic 37% 44% 19%

Quebec 47% 42% 12%

Ontario 44% 38% 18%

West 36% 42% 22%

Environmental Consumers: Regional

• Some of the regional differences between Quebec and other Canadians is their higher

proportion of strong environmentalists and low number of unconvinced. As was mentioned,

the Canadian distribution of these groups is about 40% strong, 40% moderate and 20%

unconvinced – Quebec is the only province that strays quite considerably from this

distribution. Slight differences are seen in the other regions – Ontario has slightly more

strong environmentalists, and the Atlantic and the West have slightly fewer.

This would account for Quebec’s high level of concern for the environment and motivation to

make changes in their lives.

40

Strong Environmentalist Buyers

• This group of forty percent of Canadians are very likely to make purchasing decisions to aid

the environment even if it costs more.

• These people are very concerned about the environment – it is the primary motivator – 62%

say they are very concerned.

• More than half say they consider the environmental impact most of the time when they

make a purchasing decision and are very motivated to make changes in their life to benefit

the environment.

• They are the most likely to say they are financially able to make changes in their personal

lives to benefit the environment (even though they are no more wealthy than other groups).

41


• This group is distinguished not simply by willingness to take personal action but because

they also demand action of companies and brands.

• They are the most likely to want the government to regulate and clarify environmental

impacts – so marketing claims rest on fact.

• They want to know a company’s environmental record and they invest in ethical funds.

• They are significantly more likely to pay more for environmental products and to make

significant lifestyle changes such as public transit or carpooling.

• Note however that fully 70% even of this group believe that it does not cost more to produce

environmentally products but instead companies use that claim to charge more.

42


• There are no demographic distinctions for this group except gender and Quebec.

• This is an exceptional area in that it is truly attitude driven.

• Women are significantly more likely to fall into this group than men (half of women are

Environmental buyers compared to 40% of men).

43

The Moderates

• This group of forty percent of Canadians report considering the environment when they

make purchasing decisions but cost gets in the way.

• They are slightly less concerned about the environment than the Strong Environmentalist

Buyers yet 80% of them say they consider the environmental impact most or some of the

time when they make a purchasing decision.

• And while three-quarters say they are very or somewhat motivated to make personal

changes to benefit the environment, they see themselves as being unable to afford to– just

one third say they are very (4%) or somewhat financially able to make changes to help the

environment.

44

The Moderates

• Price is the biggest deterrent to this group. They are less likely than the Environmental

Buyer to spend more money for environmentally friendly products.

• They are also less likely to expend time or effort.

• The Environmental buyer and the Moderate are equally skeptical of marketing

environmental claims and increased costs of environmental friendliness.

• They both would like government regulation and standards.

45

The Unconvinced

• This twenty percent of Canadians tends not to be very concerned about the environment.

• It is not a purchasing factor for them nor does it motivate them to change behaviour.

46

Benefit: Strong Environmentalists

How beneficial to the environment would it be if you personally…?

(Strong environmentalist consumers, n=619, who indicated “very beneficial”)

47

Benefit: Moderate Environmentalists


(Moderate environmentalist consumers, n=565, who indicated “very beneficial”)

48

Benefit: Unconvinced Environmentalists


(Unconvinced environmentalist consumers, n=261, who indicated “very beneficial”)

49

Critically Important

• Even those who are most committed to making lifestyle changes and spending more in

order to help the environment are very skeptical about company claims – 75% believe that

environmental claims are often just marketing ploys.

• This is even higher among those who are not willing to pay more or make life style changes

to help the environment.

50

Who do they trust?

• Consumers look to environmental groups or research organizations for credible information

on the environmental impact/record of products and companies.

• Governments and family and friends are the next most trusted.

• The media, the internet and companies themselves are the least trusted.

51

6.5

6.4

6.1

5.8

5.4

5.3

4.8

4.5

4.6

0 1 2 3 4 5 6 7 8 9

Internet blogs

Companies who manufacture

Media

The federal government

The provincial government

Friends and family

Enviro organizations whose job

it is to lobby the govt for change

Research organizations

Non profit enviro organizations who work in the field

Credibility of Sources

“When you are looking for information about the environment or about the environmental

friendliness of products, services, or companies, there are many sources to turn to.

How much do you trust the following:?”

52

Corporate credibility

• How do corporations “sell” their environmental credentials and the programs they are

undertaking when consumers view them as not credible.

• It isn’t the information that is being imparted, it may be the way it is being sold.

• Consumers want tangible, practical information provided to them in an educational and

accessible manner. The environmental focus should appeal to consumer’s values and be

seen to reinforce the company values.

• Consumers do not want environmental platitudes which they feel are trying to “sell” them on

the company.

• Explaining to consumers why environmentally friendly products cost more to manufacture or

produce and giving them tools to make their own choices about what to buy is a prime

example of how a company can build credibility even in a less trusting environment.

53

Conclusions

• Our focus on the environment and purchasing decisions in this quarter’s survey occurs just

as Canadians report greater concern about the economy.

• The environment and to a lesser degree climate change are important issues for many

Canadians.

• But those are joined by rising concern about the economy and inflation notably with respect

to gas prices.

• This survey speaks to what consumers are willing to do when it comes to the environment

and how those actions are affected by sacrifice, particularly cost.

54

Conclusions

• Environmental impacts are now a primary purchasing consideration – a significant majority

of consumers are evaluating the environmental impacts of their purchasing and

consumption.

• There is a crisis in confidence in company/product claims of being “green” or

“environmentally friendly” – three quarters of Canadians believe it could just be a marketing

ploy.

• Consumers want clarity and assurance from a disinterested third party. There is

overwhelming demand for government to set standards and regulate environmental claims.

55

Conclusions

• Contributing to the lack of consumer confidence is the belief that environmentally friendly

products are more expensive but do not cost more to produce – essentially a gap created

for corporate profits.

• Forty percent of Canadians should be considered Strong Environmentalist Buyers – they

are very concerned about the environment and make purchase and lifestyle decisions to

benefit the environment.

• These environmentalist buyers are skeptical of corporate claims and want to know a

company’s environmental record.

• This group is the most likely to be willing to spend more for products that will benefit the

environment.

56

Conclusions

• In addition to the Strong Environmentalist Buyer, another 40% of Canadians consider

environmental impacts most of the time when purchasing. Cost is an issue for this group.

They are unlikely to spend more for an environmentally friendly product.

• However, there are several actions that companies can take that illustrate a product is more

environmentally friendly:

– Less packaging

– Use of recycled items/parts

– Use of renewable energy and/or improved energy efficiency during production

consumerology july 2008

Business

economy of canada

national economy optimism

canadian economy

moderate growth

assessments of growth

period of strong growth

quarters thinkcanadas

experiencingeconomic