Earth Day Turns 40 Next Year

Hard as it is to believe, next year will be the 40th anniversary of Earth Day, first celebrated in the USA on April 22, 1970.

That event, conceptualized as a nationwide grassroots demonstration on behalf of the environment, drew over 20 million participants at thousands of schools and local communities.

Today, while environmental concerns are a global phenomena with widespread grassroots support, a universal respect for our planet’s fragile environment and a deep-seated sense of sustainability are not yet what anyone could call natural human traits or tendencies.

However, there can be little doubt that the momentum for sustainable business practices and individual actions is escalating. Here are some statistics and data that I have come across recently worth sharing with you:

• there are 63 millions consumers in the USA eating organics, driving hybrids, and ordering fair-trade coffees. This represents 30% of the American market, a group which has proven willing to spend a good premium (usually over 20%) on clean, green products over non-sustainable alternatives.
• Baby Boomers and Millennials are twice as likely to associate their own personal values with companies and brands (that’s good for Green Marketing initiatives).
• Perceptions of environmental, ethical, and social stewardship are the fastest growing contributors to conssumer brand values (Z+ Partners).
• The market for “all natural” cleaning products is over $100 million per annum and is escalating rapidly (Forbes.com)
• Sales of organic and all natural products have increased 18% to 25% per year for five consecutive years.

No wonder marketers see Green as the “New Black” for today’s shoppers!

Is Green the “New Black” for Women Shoppers?

As stated in the previous blog post, Green Marketing is no passing fad. In fact, to some observers, including me, Environmental Marketing looks like the New Black for women shoppers.

According to a recent study by the marketing consulting firm Frank About Women, one-quarter of all products in a woman’s shopping cart are environmentally friendly. (Note: this is data from the USA, unfortunately our shopping carts here in Australia have no current way of achieving such lofty green levels.)

The study also shows, according to an article in Ad Week, that “women are less likely than men to scoff at ecological concerns.” Most importantly, “if they feel they are getting a comparable product with green benefits, 69% are game to buy it.”

Another study, being released this week at the Good and Green Marketing Conference, will reportedly show that 80% of adult women in the USA believe very strongly that individuals can affect the environment, but that almost 60% believe that they are personally not doing enough to protect it.

It’s no wonder why Procter & Gamble has announced it will embark on a multi-brand initiative in the USA to educate and encourage consumers (read: women) to “make sustainable choices.” Called Future Friendly, this new platform from P&G includes a line of “green” Pampers disposable diapers and a pledge to provide 4 billion liters of clean drinking water in the developing world.

Modeled on previously successful initiatives in Canada and the UK, P&G is attempting to differentiate itself by claiming their existing products use less waste, energy and packaging, rather than by creating new “green” brand extensions. P&G is targeting its loyal customer base, hoping these consumers will be more likely to remain with their trusted brands if these are shown to be sustainable products.

“We are targeting the mainstream consumer - rather than the ‘environmental’ consumer - who does not want to give up on the brands that they like, but wants to use them in a sustainable way,” explained Glenn Williams, a P&G official, in the Financial Times.

While P&G is a late entrant to the green household products market, the company is sending a clear message that corporations must adopt sustainable practices in order to stay competitive. Of course, P&G also has a bottom-line target for this program, which reportedly includes placing 30 million of the company’s sustainable products into U.S. households by the end of next year and achieving total sales of $50 billion in sustainable products by 2012.

Interestingly, this “future friendly” program from P&G was announced (at the Clinton Global Initiative) while the U.S. Chamber of Commerce is voicing opposition to the climate change legislation before Congress. It appears that P&G, unlike the U.S. Chamber of Commerce, understands the need to align their business practices – and their brands – with the growing environmental concerns of consumers.

P&G also understands that Green Marketing is the New Black for women shoppers in America.

Green Marketing Messages Not Getting Through To Green Consumers

A new survey from Grail Research reveals that 85% of consumers are either unaware of, or cannot recall, the green messages and green programs from companies considered to be at the forefront of sustainability initiatives.

Importantly, the research study also showed that consumers rely on product labels (63%) and word of mouth (45%) as their primary sources of information about green companies and their products. Advertising (38%) and corporate web sites (18%) are well behind as sources of information regarding green credentials.

Released in late September, The Green Revolution report is based on a nationwide survey of U.S. consumers.

Key findings include:

·       84% of consumers currently purchase at least some green products.

·       Price is the main reason cited (69%) by non-green consumers for not purchasing green products.

·       Green consumption has penetratged all demographic segments, but the majority of green consumers are married women with no children under 18 in the home (57%).

·       The vast majority (93%) of consumers feel that a company’s “greenness” is at least somewhat important to their purchase decision.

Most importantly, consumners expect green products to be on par or superior to their non-green counterparts with regards to safety (72%), healthiness (70%), quality (66%) and price (65%).

Significantly for marketers, across all product categories almost all consumers who buy green expect to remain green. Plus, those who don’t buy certain categories of green products intend to do so in the future.

It certainly looks like green is the “new black.” This is no passing fad.

What do you think? Add your comments below.

Trust Is An Issue For Brands

I don’t put much stock in the annual 100 Best Global Brands report from BusinessWeek for two reasons: the valuations by Interbrand never seem to have any relevance and the list is too U.S. centric to truly be called a global brand ranking.

Nevertheless, there is one interesting and pertinent point made in the BusinessWeek article accompanying this annual listing. This concerns the element of trust, or what the article’s two writers refer to as “the most perishable of assets.”

According to the article, recent polling (in the USA) shows that distrust amongst consumers for business as a whole is growing. Citing a phone survey by public relations firm Edelman, only 44% of Americans say they trusted business, a significant decline from the 58% level recorded two years ago.

This point got me to dust off a posting from The Reputation Garage Blog from October 2008 that I had filed.

In that post, a reprint from an article that appeared in HR Leaders magazine, trust is called “one of the defining issues of the emerging century.”

Public trust in big business, governments, and even non-profit organizations has been declining throughout the 21^st century. Here are some “fun” statistics that I gleaned from The Reputation Garage Blog:

• As few as 13% of all Americans place their trust in big business (and it’s not much higher for other mature consumer societies!).
• Only 39% of employees in a Watson Wyatt survey said they trusted senior leadership.
• Some three-quarters of US consumers feel that companies don’t tell the truth in advertising.
• Three-quarters of employees in big companies observed violations of the law or company standards in a 12-month period.

As economies start to rebound, marketers and organizational leaders have an important task in front of them: re-establishing their torn and tattered brands and re-building trust with all constituencies.

Failure to do so is not an option. Unless you want the tombstone for your organization’s brand to read “died of trust-related causes.”

Li Ning: First Global Chinese Brand?

According to Fast Company, Chinese Olympian Li Ning wants to build the first truly global brand to emanate from China.

In an in-depth article, the magazine touts how Li Ning (the company) is China’s largest domestic manufacturer of athletic footwear and sports apparel, with revenues over $1 billion from 6300 outlets.

While Fast Company focuses on the design of the Li Ning product line, the article fails to convince how this company is likely to take on Nike, adidas, Puma and others in the international arena.

I can think of only one athlete who has ever successfully launched a brand with their own name (Michael Jordan’s Air Jordans footwear line in partnership with Nike).

Can Li Ning build an entire global brand spectrum around his own name? Time will tell, but I have my doubts.

What do you think?

China Now 5th Largest Consumer Market

China has become the world’s fifth largest consumer market, according to an online Advertising Age article.

With consumer spending at $890 billion, the Chinese consumer market trails only the U.S., Japan, the U.K., and Germany. China reportedly now also has a larger car market than the USA.

McKinsey & Company, the global consultancy, predicts that China will become the third largest consumer market by 2020, moving ahead of both the U.K. and Germany, with an estimated consumer expenditure of $2.5 trillion.

With personal consumer consumption currently accounting for only 36% of China’s GDP, which is half the U.S. figure and approximately two-thirds of the ratio for the other top four consumer markets, it is obvious that consumer spending in China has tremendous growth potential.

With the World Bank recently upgrading China’s 2009 economic growth forecast from 7.2 percent to 8.4 percent and predicting an enhanced 8.7 growth rate for 2010, China is expected to surpass Japan as early as next year to become the world’s second largest economy.

In another measure of the strength of the Chinese economy, China became the world’s largest exporter for the first time, surpassing previous leader Germany in the first half of 2009.

If you are not doing business in China, you need to ask yourself why not.

Telstra Backflips on Fee for Paying Bills

Telstra, Australia’s largest telecommunications provider, has withdrawn a controversial A$2.20 fee imposed in September for customer payments made over-the-counter or by mail for monthly phone bills.

“This decision has been taken because it is the right thing to do by our customers,” a Telstra spokesman said. Telstra CEO David Thodey announced the decision to cancel the deeply unpopular fee at the company’s annual general meeting last week.

In our Monday Morning Marketing Memo dated 7 September, we wrote “If Mr. Thodey and his colleagues at Telstra are truly serious about improving customer satisfaction across the company, they need to have a serious look at the fees and surcharges that are not only driving customers crazy, but are also driving customers like me away.”

It appears that the senior management of Telstra has listened to customers like me, who spoke out vociferously against the imposition of this new fee, particularly at a time when Telstra’s corporate reputation and customer service levels are both being hammered.

One leading journalist in Australia referred to “the friendless Telstra” in an article last month, while the headline in an article last week read “Telstra arrogance towards customers exposed as Thodey moves on admin fee.”

As Mr. Thodey told the Telstra annual meeting audience, “We tried to impose this charge without first listening to the people it would affect.” He also admitted that the payment fee has caused customers to defect. [Nothing surprising in that!]

Removing this fee is a major first step in renewing customer preference for the Telstra brand. Hopefully Telstra has learned a great lesson about the need to listen to customers and engage its customer base in a proactive, two-way dialogue.

The other critical lesson here is the need for Marketing to have a presence in the Corporate Boardroom. Telstra’s Board is stocked with lawyers, accountants, financial managers and technical experts. Someone with a marketing focus could have easily advised the Telstra Board that this payment fee was not going to be readily accepted by the company’s customer base.

The Green Marketing Landscape: Ratings, Labels, and Certifications

GreenBiz.com is hosting a free webinar on October 15th featuring a panel of experts covering the topic The Green Marketing Landscape: Ratings, Labels, and Certificates.

With the field of Green Marketing in constant flux, many marketers are confused on how their organizations’ “green” marketing messages need to comply with changing customer expectations and legal requirments.

Moderated by GreenBiz.com executive editor Joel Makower, this webinar is designed to address “how to navigate the ins and outs of green marketing effectively and  legally in today’s world.”

Topics to be discussed include:

• How to avoid issues surrounding false or deceptive advertising allegations related to environmental or green messages.
• How to motivate mainstream consumers to make sustainable choices.
• The latest developments in green claims validation and product certification.

While this webinar will undoubtedly come from a U.S.-centric perspective, it should nevertheless be informative and useful to marketers around the globe.

For more details and to register for this free webinar, click here. 

If you attend and want to share your thoughts, please add your comments below for all to read.

Is Brand Loyalty BS?

Brand loyalty is still alive, though declining, at the supermarket according to a survey just conducted by Tim Manners and The Hub Magazine.

Most interestingly, this survey was conducted online with over marketing 200 practitioners, who reported that their loyalty for ten or more brands has dropped in the past year from 61% to 54%.

Over half the 200 respondents claimed that there is such a thing as brand loyalty, even if their own loyalty buying habits have changed in the past year. Another 31% said their loyalties had remained unchanged. Only 9% of these marketing professionals said there was no such thing as brand loyalty.

Surprisingly, the split in loyalty between brands and supermarkets was almost equal, with 45.8% saying they are generally more loyal to the supermarkets where they shopped and 54.2% agreeing they are generally more loyal to the brands they purchased than to the stores where these are bought.

The key factors in supermarket store loyalty would appear to be convenience and seeking savings from sales, based on the comments submitted by a quarter of those who took part in the survey.

Most interestingly, almost two-thirds of the respondents (64%) said that their supermarkets’ loyalty or charge card program did not make them more loyal to the store. In fact, some indicated that these so-called loyalty programs infuriated them and caused them to shop elsewhere.

In terms of category responses, 68% said that they usually purchase more than one breakfast cereal brand and more than one bread brand. What isn’t clear from the responses is whether these purchases are due to the different likes of household family members (which could indicate strong brand loyalty to multiple brands) or if these purchases are a sign of little entrenched brand loyalty in these two categories.

For instance, in my household, we regularly purchase four breakfast cereal brands, due to different taste buds between our adult members and our two teenage boys. However, as we almost always purchase the same four breakfast cereal brands, ours would be a very brand loyal family for this category, albeit across four different brands.

Speaking of brand loyalty, is there such a thing according to these marketing professionals? Not surprisingly, they feel there is. A full 85% responded “no” to the question “is brand loyalty BS.”  

However, the current state of play in loyalty may be best summed up by one respondent who wrote regarding brand loyalty:  “for certain brands and categories yes, for the vast majority no.”

Brand loyalty may not be dead, but it is certainly being applied to fewer brands and fewer product categories.

Of the 200+ respondents to this online survey, 30% were from consulting and marketing services firms, 16% from agencies and four percent from media.  The remainder were from manufacturers, the service industry, academia, and a handful of other industries. Over half (55%) of the respondents have more than 15 years in marketing, with another 17% having 10 to 15 years of marketing experience.

A full report of these survey results is promised for the November issue of The Hub Magazine, which will be devoted to the subject of loyalty.

Here’s a questions I hope Tim and his team cover: if marketing professionals, such as the ones in this survey, have declining brand loyalty despite their firm beliefs in the concept of brand loyalty, how can we expect the general consumer and populace to become more brand loyal?

After all, if marketing people do not “walk the talk” about brand loyalty in their own purchasing patterns, do we really expect the general public to listen to our marketing messages and “do as we say, not as we do?” 

Which Way Is Internet Advertising Headed?

A pair of expenditure reports on Internet Advertising has us wondering in which direction is this headed?

First, Britain became the first major market in which advertisers spent more on Internet advertising than on TV ads, with a record £1.8 billion (US$3.2 billion) invested online in the first six months of the year. Earlier this year Denmark became the first country where Internet ad spending overtook TV advertising spend.

Internet advertising now accounts for 23.5% of all advertising in the UK, with TV ads (down 17% in actual spend from the first half of last year) at just 21.9% market share.

Then, about a week after this report from the Internet Advertising Bureau (IAB) and auditor PricewaterhouseCoopers, the pair released a report stating Internet advertising in the U.S. dropped 5.3% to $10.9 billion in the first half of this year. Of course, that’s not as bad as the 15.4% decline in total advertising expenditure in the first six months of the year according to Nielsen figures.

Even more concerning (for those selling online advertising), IAB and PwC predict that total online advertising expenditure this year will fall in the $21 billion to $22 billion range, a significant drop from the $23.4 billion recorded last year.

So why has Internet advertising become the biggest advertising sector in the UK with a 4.6% year-on-year increase, while at the same time Internet advertising expenditures have dropped 5.3% in the U.S.?

And what’s happening in other major advertising markets, such as Australia, France, Germany and Japan?

Anyone have any insights on this?