MGN831

Lecture 24
 Market barriers to sustainable
products
• Price
• Price is a well-recognized hurdle for many consumers in purchasing sustainable
products and services.
• Sixty-six percent of US consumers view environmentally friendly products as too
expensive.
• Whether consumers are looking to purchase an energy saving light bulb or
environmentally friendly home cleaning products, these products often cost more
than the most popular consumer versions.
• Often the premium price puts these products out of the reach or interest of the
majority of consumers. And the price premium as a hurdle is magnified during
economic downturns.
• The price premium compared to the conventional alternative needs to be
addressed through the three other parts of the marketing mix
1. Product,
2. Place, and
3. Promotion
• But the most effective way to address the price premium is to address it
directly—to find ways to reduce it.
• Reducing the sustainable price premium is a key factor in having a greater
percentage of average consumers purchase more environmentally
favorable products.
Performance
• Marketers need to clearly communicate the product’s benefits and sustainable
position especially when commanding a premium price.
• The challenge is that greener products do not have a stellar history of performing
well.
• In the 1970s, green laundry detergents were developed as a result of concerns over
phosphates—a chemical that can cause environmental degradation in large quantities
—and resulted in gray, dingy clothes.
• The original organic cereals tasted like cardboard to many consumers and the early
versions of energy efficient light bulbs cast a green glow.
• Many consumers—roughly a third in the United States and around the globe—still
question the efficacy of green products versus their regular, nongreen product
alternatives despite strides made in product performance
• Marketers need to stress the traditional benefits of the sustainable good and
must demonstrate the product’s effectiveness.
• This can be more important than highlighting the sustainability benefits to
overcome inherent consumer skepticism.
• A good example of this is Glad Products Company’s 2011 introduction of a
version of its Glad tall kitchen drawstring trash bag that is made with less plastic.
• Glad Products, a joint venture of the Clorox Company and Procter & Gamble, spent over $30
million on a campaign to introduce the trash bags. The bags were billed in ads and on packages as
“strength with less plastic” and “stronger with less plastic waste.” (The bags were made using 6.5
percent less plastic than before, Glad Products executives say, and have what are called
reinforcing bands to make the bags stronger.) The company smartly kept the price at parity to
more conventional counterparts, thereby eliminating the green pricing gap. They have made it
easier for consumers to adopt this more sustainable product. Moreover, they have positioned it
correctly by combining an efficacy product benefit, “stronger,” with a sustainable benefit, “with
less plastic/less plastic waste.” That’s a win-win-win.
Behavioral Change
• Many sustainable practices require consumers to change their habits and adopt new ones.
Recycling, turning off the lights, lowering the thermostat in winter, using recyclable bags for
shopping—all require changing behavior.
• Typically changing a behavior is a slow process as consumers have to be retaught a habit.
• That is why Generation Y, often referred to as millennials, are quicker to adopt sustainability
practices since they are not breaking old habits.
• Most behavioral changes are more readily adopted when there is a perceived consumer
benefit, for example, using a kitchen bag with less plastic that is stronger and driving a fuel-
efficient car that saves money at the gas pump.
• Using a more energy efficient, longer-lasting light bulb and a programmable thermostat can
save on energy costs and conserving water using a more efficient toilet saves on the water bill.
• Marketers can help consumers more quickly adopt new behavior and buy new products when
they highlight the benefits and long-term cost savings in promoting the product.