green technology and consumers

8/8/2019 Green Technology and Consumers

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Green TechnologyGreen Technology andand

ConsumersConsumers

Mohammad Zakersalehi


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What is green tech and what are the goals of this new concept.

Trends of green technology and green products.

Outlook of green market and subjects.

Consumers of green market and its segmentation

Marketing mix to reach each customer segment and our suggestions.

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encompasses a continuously evolving group of methods and materials, fromtechniques for generating energy to non-toxic cleaning products.

is the application of the environmental science to conserve the natural

environment and resources, and to curb the negative impacts of humaninvolvement.

Present Expectation :

This field will bring innovation and changes in daily life of similar magnitude to the"information technology" explosion over the last two decades.

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Goals :

Sustainability

"Cradle to cradle" design

Source reduction

Innovation

Viability

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Energy

Green building

Environmentally preferred purchasing Green chemistry

Green nanotechnology

Green everything

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Cutting costs through lowered energy consumption and improved process control Improved energy efficiency,

can boost customer satisfaction and the overall brand image

superior corporate image in the marketplace

Green products provide:

The need to be healthy

Saving the money

Stronger and more effective brand image

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people prefer to have a positive moral self Thus, people tend to be stronglymotivated to engage in pro-social and ethical behaviors

people attach higher social and ethical values to green than conventionalconsumerism

PricewaterhouseCoopers(PWC) survey in September 2007 indicates:

61 percent of executives feel it is:

very important (29 percent) or

important (32 percent)

that their companies take steps to reduce their environmental impact

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94% of 300 American consumers , cited their most sought-after greenupgrade as energy savings, followed by water-saving appliances and recycledbuilding materials

Roughly nine in ten (91%) said energy-efficient features in a new home areextremely or very important

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In Sweden, an estimated 3,500 "clean tech" companies generate $14 billionannually

In 2003, with the help of energy-efficient technologies, Americans saved over$8 billion on their energy bills

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How Technology manufacturers expand their portfolio of green products:

Pursuing energy efficiency

Implementing designs that reduce or eliminate the use of hazardous materials,

Using recycled or recyclable materials, Building products that last longer,

Creating packaging that meets or exceeds global environmental standards.

Reducing the weight and improving capacity for recycling purposes.

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Developed countries:

Higher awareness, consumers seek out green products on their own

Third-world and developing countries:

Lower awareness, consumers have other priorities and green technology may not feature

prominently in that list.

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Government Support Green enterprises in Vietnam will enjoy a low tax rate of just 10% compared to 25 per

cent for other companies

Malaysia has formed Green Energy office in Malaysian Energy Center

- Green Technology counsel has been formed managed by prime minister to simplifylicensing and works in Green tech

For the next two years, the Swedish government is investing $180 million tosupport commercialization of green technology

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Fact book 2009:

$148 billion market size in 2007

Clean tech Group, 2008:

Global venture capital investments in green tech reached an estimated $8.4 billion,

38% increase over 2007 levels. Green tech Media, 2008:

Reported lower total expenditures but stronger annual growth, from $3.4 billion in2007 to $7.8 billion in 2008

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Industries are different in accepting green technologies.

Being Green is the main goal of some industries like automotive, and is difficult forsome to accept and move toward like Paper industry.

Green in the first sight Investment, mostly a huge amount

Unclear ROI to persuade managers.

Unclear and latent benefits.

Perceptions and understanding

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Why the pace is not as fast as it should be? Industry thinks of green as something costly and extra to do.

Despite that perception, Ursula M.Burns, VP of Xerox and member of board of directors statesthat The greener we get, the more we can reduce costs and boost efficiency. In 2006, Xeroxsaved $18 million because of efforts to reduce greenhouse gases.

Impacts of todays green technologies are hidden and more globally to be seen locally and it makes thedecision difficult for companies to choose. (Vales, 2009)

Industries think and believe it is hard to make customers to understand what is the effects of non

environmental friendly products on their disposable income like inefficient automobiles.

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Automotive & Transportation

Biofuel & Agriculture

Energy Management & Efficiency

Energy Storage Nanotech & Materials

Clean Energy (not solar or biofuel)

Solar

Waste Management

Water

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According to J.A. Ottman 2006, Green marketing must satisfy two objectives:

Improved environmental quality and customer satisfaction.

Green products must show at least 5 values of non green products: (E.R Stafford, 2006)

efficiency and cost effectiveness;

health and safety;

performance;

symbolism and status;

convenience.

He argues that producers must be careful of targeting and values. Cost efficient

green products must be positioned for cost-conscious consumers to be effective.

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Consumer perceptions and preferences Higher prices as misleading perception.

In some industries like Automotive or Fast food, people will buy regardless of non

green brand image. (Joel Makower, 2007)

Identifying the green products is an issue.

Bad perception of functionality of green products, Fashionable goods rather than applicable

Lack of facilities for maintenance and services of green products.

"The recession has almost been a catalyst to being green." Sheehan CEO of GFK research, 2008

Consumers are looking harder at energy- and money-saving measures,

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who should be taking the lead in addressing environmental problems?

46% of Americans believe Federal Government is responsible.

39% Believe Individuals should take the lead.

32% respond that Businesses are responsible for taking care of environment.

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Different types of customers, regarding their concern about environment.

The most famous segmentation of green market has been done by Natural Marketing Institute which iscalled LOHAS (Lifestyle of Health and Sustainability)

LOHAS very progressive on environment and society, looking for ways to do more; not too concernedabout price (16%).Naturalites primarily concerned about personal health and wellness, and use many natural products;would like to do more to protect the environment (25%).Conventionals practical, like to see the results of what they do; interested in green products thatmake sense (e.g., save money) in the long run (23%).Drifters not too concerned about environment, figuring weve got time to fix environmental problems;dont necessarily buy a lot of green products, (23%).Unconcerned have other priorities, not really sure what green products are; they buy productsstrictly on price, value, quality, and convenience (14%).

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Roper Inc. segmentation:True-Blue Greens -- the most environmentally active segment of society (11% of the U.S. population).

Greenback Greens -- those most willing to pay the highest premium for green products (8%).

Sprouts -- fence-sitters who have embraced environmentalism more slowly (33%).

Grousers -- uninvolved or disinterested in environmental issues, who feel the issues are too big for

them to solve (14%).

Apathetics -- the least engaged group who believe that environmental indifference is mainstream (33%).

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H

artman Group on understanding the consumer perspective: Radical Engagement -- (36%). Sustained Optimism -- (27%). Divine Faith -- (20%). Cynical Pessimism -- (9%). Pragmatic Acceptance -- (8%)

Geographically: Scandinavian countries, Germany, France and China are best in accepting green products. Germany is the first in green technology production and distribution China is the first in terms of costs, untouchably standing alone.

Demographically: Interestingly Generation Y is the best generation to target According to

China National Climate Council 2009. French, Chinese, Canadians and Germans are the most available people to accept

Green products.

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2. Naturalites, Greenback greens: They care about price but environment is ahead most of the times. Need more advertisement and a little bit of motivation to act green, but once they are

motivated they most probably become loyal customers. Mostly care about personal health and wellness.

Good part of market for short term and even long term targeting.

3. Conventionals, Sprouts: Interested in green products but those which make sense. Practical users who look for the real thing. To persuade these people product details is necessary. They are not into green products as previous groups, therefore they need product

introductions of the market. Better for a long term period till they adopt the technology.

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4. Drifters, Grousers: They are not concern with environment, so not motivated by environmentally friendly

aspects of products. May purchase green products due to the look or perception occasionally. Concern about price and costs, so price can be a good motive for them.

Products which reduce costs can be persuasive. Not lucrative in short term, even in long term.

5. Unconcerned: They buy product strictly on Price, Value, Quality and convenience. Partially practical and looking for the thing that works for them in their s ituation. Not a good segment to target for neither short term, not long term, unless they are in the

upper levels.

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Not an easy job to find the target market according to the segments of the market. There are not much information about demographics of each segment.

There are huge overlaps between different groups:

o A college degree holder can be among both Naturalites and LOHAS.

Green is a new trend and there are not much information about customers and it means

huge market researches and finding first hand data.

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Going green is not just a trend of the market, it is applicable and according to manyevidences helps the company to reduce costs:

Wal-Mart spent 500 M$ on reduction of CO2 emission 2008, now they are enjoying 25%

less consumption of energy and it means a huge cost reduction.

It is better to see the competitive advantages of the company and then choose the

segment, to avoid competing with wrong competitors.

Out sourcing is one good strategy in this technology, to reach the most efficient and up-

to-date technologies.

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Articles:

Alan S.Brown, 2009, American Mechanical engineering society, Conflicts on the greenDustkin S.Klein, 2009, Go for Green, Smart business Cleveland.Fujitsu Group Sustainability Report, 2004Jazmin Seijas Nogareda and Andreas Ziegler, 2006, Green Management and Green Technology - Exploring the Causal

Relationship, Discussion papare, Center for european Economic Research.Nina Mazar, Chen-Bo Zhong, 2009, Do Green Products Make Us Better People? Psychological Science

Patrick Hartmann and Vanessa Apaolaza, Green value added, Marketing Intelligence & Planning Vol. 24 No. 7, 2006.Kamal Manaktola and Vinnie Jauhari, Exploring consumer attitude and behaviour towards green practices in the

lodging industry in India, International Journal of Contemporary Hospitality Management Vol. 19 No. 5,2007, pp.364-377

Web pages:

http://www.futurelab.net/blogs/marketing-strategy-innovation/2007/05/the_many_shades_of_the_ecoloha.htmlhttp://www.futurelab.net/blogs/marketing-strategy-innovation/2006/10/witts_yoyos_and_why_americans.htmlhttp://www.futurelab.net/blogs/marketing-strategy-innovation/2009/11/green_consumers_and_recession_.htmlhttp://ecopreneurist.com/2008/04/16/how-to-reach-green-consumers-using-psychographics-to-define-your-target-market/

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http://www.businessweek.com/technology/content/jan2009/tc20090126_136438.htm

http://ec.europa.eu/environment/etap/index_en.htmhttp://www.biobasednews.com/http://makower.typepad.com/joel_makower/2007/05/the_many_shades.html

Books:

Marketing Management, Philip Kotler, 2006, Mc Graw Hill.

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