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The Power of Marketing a Green Business, Part I

Brad Simonis Comments

Editor’s Note: This is the first of a two-part series examining the marketing of environmentally friendly products and services.

“Consumers in the United States are expected to double their spending on green products and services in the next year to an estimated $500 billion,” according to an annual consumer survey by Landor Associates. With headlines like these, many in the self-storage industry who are in search of anything to win over customers during these difficult economic times can’t help but ask if green marketing offers the competitive advantage, perfect marketing message, or magic bullet they need.

The perfect storm of plummeting new car sales, slowing retail sales, the housing crisis, a nose-diving stock market and a never-ending media blitz on the state of the economy has resulted in dramatic dips in self-storage occupancies. Can green marketing help?

In consumer products and services, green marketing is already a well-established trend. We see more of it every day, from IBM inundating us with TV ads of a meek, environmentally minded employee winning over the tyrannical corporate boss to the ubiquitous lineup of earth-friendly claims plastered on product labels on retailers’ shelves.

So what is green marketing exactly? Does it matter? Do consumers care? Are we missing the boat if we’re not talking green to our customers? And if so, what is the right way to do it?

Our objective in this first article is to look at other industries, from manufacturing to retail, to see what we can learn from those who have been treading this sometimes slippery slope, and hopefully shorten the learning curve as a result. 

Defining Green Marketing

Green marketing is a broadly used term that can describe any marketing message that touts a company’s use of ecologically safer products or processes, including recyclable and biodegradable packaging, energy-efficient operations, better pollution controls or anything that lessens a company’s environmental or “carbon” footprint (a measure of the impact human activities have on the environment in terms of the amount of greenhouse gases produced, measured in units of carbon dioxide).

It’s a wide-ranging phrase, which is part of the challenge facing successful green marketing efforts. A bigger challenge may be the lack of standards and oversight. Part of this shortcoming is due to the wide variety of companies and industries making environmental claims. How do we oversee truth in advertising as it relates to organically grown chickens versus recycled building materials? By definition, both are “green” claims, but with two completely different bases.

The Federal Trade Commission began issuing green marketing guidelines in 1992 with its Guides for the Use of Environmental Marketing Claims, commonly known as the Green Guides. These guides are designed to help marketers avoid making environmental claims that are unfair or deceptive. The FTC updated these guidelines in 1996 and again in 1998 and is currently reviewing the Green Guides “to ensure that they are appropriately responsive to changes in the marketplace and in consumer perception of environmental claims,” according to its website.

This review is coming more than a year earlier than previously planned as a direct result of the shear volume of green marketing messages.

In the interim, it appears that consumers are dependent on the producer of a claim to validate it, so ultimately the consumer must make decisions as to the soundness of the claim. This gap between what consumers take a green message to mean and the actual truth behind the claim is known as the “green gap.” Conversely, a company’s false or erroneous claim of a green benefit is known as “greenwashing.”

Companies can often make a claim that is technically true but fails to tell the whole story, which, if known, might change the perceived benefit of the product. For example, if a new recycled product takes more non-renewable resources to produce than the product it replaces, a company’s green marketing claim of using recycled materials is technically true, but the process doesn’t result in a net environmental benefit.

According to the 2008 Green Gap Survey conducted by Cone LLC and The Boston College Center for Corporate Citizenship, nearly half of the U.S. population erroneously believes a product marketed as “green” or “environmentally friendly” has a positive or beneficial impact on the environment. Only 22 percent understand these terms more accurately describe products that have less negative environmental impact than previous versions or competing products.

“Most people agree green solutions are better than less green solutions, but how green?” says Frederic Brunel, associate professor of marketing at Boston University, in an interview with The Boston Globe.  “... We need goals and standards.”

Currently, there are many interpretations of green marketing, and every company and industry varies their use of terms and supporting claims. In today’s climate, each company needs to define green marketing for itself, but do so in a manner that makes sense to its customers.

First, though, companies must identify “green” opportunities as they relate to products, packaging, services, operations, processes, manufacturing, building and building materials. Only after a company has taken a thorough inventory of itself and its processes and has made changes that make a difference in its environmental footprint can it begin to market those changes. This is something we will explore in part two of this series.

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