Green Marketing: Ben and Jerrys Homeade inc. Strategic Analysis - Case Study Example

Green Marketing Ben and Jerry’s Homeade inc. Strategic Analysis Literature review Businesses are often undertaking “green marketing” and “corporate social responsibility” practices these days. This is not really about caring for the society but differentiation from the competitors. This has been evident on the way green marketing has taken a paradigm shift in today’s markets. Green marketing has begun taking shape in today’s markets. Marketers have realized the benefits of environment and have opted not to sell their products using the traditional style. They tend to use environmental features to attract customers purchase their products. The products are believed to be environmental friendly and the packaging and its entire production was done in an environmental friendly manner (Kozak, 2006). Most marketers assume that the customers will view the ‘green’ aspect as a benefit and opt to buy their products or services. This strategy has been adopted by so many organizations including the telecommunication companies and most of them are realizing profits out of it. The most dangerous aspect here is that, whereas green marketing is growing and the consumers are vividly increasing, the public may be skeptical and most companies may damage their brands. This is because; most organizations are becoming green not to be environmental friendly but to be different and compete in this competitive market. If this green aspect is proved to be false, then most customers will shift their interest. Ben & Jerry are in the ice cream industry that has been in the business for several years. The company has been on the front line to ensure the provision of natural high quality products. Their main commitment focuses towards social activism and more especially on the environmental responsibilities (Leung, 2009). LOHAS Lifestyle of Health and Sustainability (LOHAS) is an integrated and fast growing market for goods and services which appeals to consumers whose purchasing power depends on environment and social responsibility. The Natural Marketing Institute (NMI) estimates the current LOHAS to be USD209 billion across all consumer segments. These segments are; LOHAS: Are the dynamic buyers of green and socially responsible products. They are dynamic environmental stewards devoted to individual and global health. Naturalites: They purchase both LOHAS consumable and durable items. They depend mostly on personal health considerations. Drifters: Their purchasing behaviors follow trends and are active when trends are easy and reasonably priced. Conventionals: They are conscious with their resources and only do the right thing with intention of saving money. Unconcerned: They are unaware of societal and environmental issues. These types of consumers may not have time or the means. Eco Labels An individual’s attitude towards a product relies on the environmental claims and this issue of consumer’s interest in ecological products has become a skeptical of advertising agencies. Lack of scientific interpretation and exaggeration of advertising techniques as well as language problem are contributing to this skeptism .To improve the confidence in the assessment of environmental benefits of the brand towards strengthening purchasing power, autonomous organizations have guarantee messages on the environmental benefits of the brand with environmental labeling systems. This report focuses on the analysis of the environmental strategy and other general corporate strategies so as to be able to identify the consistencies and the disparities that may be present among the strategies. The report will seek to find out if “green” company can be in a position to sustain the competitive advantage that it has over the other companies in the same industry. It is also vital to discuss the potential impact that exists in the strategic vision in the unilever acquisition. This analysis will focus mainly on the strength and weaknesses examination of the environment and other corporate strategies that are linked to its resources and external non-market forces. MARKET DESCRIPTION Ben & Jerry is a company found in an ice cream industry. This is a very competitive super premium business that produces various products that will suit the needs of most of the customers in the market. Super premium ice cream targets customer of the high class because it has the top quality and thus its price is higher compared to other ice creams in the market. The main competitors in this industry include; Haagen-Dazs, Nestle, Healthy Choice, Starbucks and Dreyers’s Grand ice cream company. The marketing concept has evolved from the selling concepts having potential customers at hand. This evolution came from a mare production and selling method that were used traditionally. Marketing has taken a paradigm shift as a whole in its operations and its concepts. The production and selling concepts having not been fully manifested, the marketing concept was introduced. Marketing as much as it is still used by many executives to mean sophistication, it is simply a method of managing business so as all critical decisions are made in the business having customer in the mind during the production period. In the sales approach, the company only ends with the customer (Kozak, 2006). In the marketing approach, the customer is kept at the heat of every decision. This means that, the marketers will have to put their ears on the ground. They will go seek customers’ suggestions and give it to the production department to tailor make the products according to the specifications of every customer. In the marketing approach, organization profits are targeted more than the volume of production. In the marketing approach, the business always exists for the customers and most of the opinions given by the customers are always followed. The company’s activities to be undertaken depend largely on the level of quasi and greening strategies. Although strategic greening may or may not be effective with others, a firm can make radical changes in production process and choose not to power them by placing itself as an environmental leader. Strategic greening is effective in production area even though it is not strategically incorporated in other marketing activities. Company Description Ben & Jerry’s are the main manufactures of super premium ice cream, sorbet and yogurt in the industry. The company was founded back in the year 1978 in Burlington. The company was first started by Ben Cohen and Jerry Greenfield with a capital of $ 12,000. The two being childhood friends, they were able to run the company with a lot of mutual trust between themselves. The company is now known to be the best in the production of super premium ice cream. The dessert products produced in the company is normally done in Vermont (Leung, 2009). Their products are sold through various distributors that are dispersed all over the town. Unilever is a multinational food company that was acquired by Ben & Jerry Company at a cost of $326 million (www.lib.benjerry.com). The company board of directors maintains that, the two companies will be run on two separate entities. Decision making will be decentralized and there will be a new board of directors that will be chosen to run this new firm. Mission Statement According to their website the company mission statement is divided broadly in three parts; Product Mission: to formulate, distribute and trade the best quality of natural ice cream 3while relating their products in an innovative flavor from the Vermont dairy merchandise. Social Mission: To operate the organization while recognizing the importance of the society to the company. To attain this, there will be a need for the initiation of innovative methods so as to improve the quality of the immediate community without compromising with the quality of our products. Economic Mission: To improve the profits of the company while improving the values of our stakeholders and ensuring creation of career opportunities benefit the employees through financial rewards. With this mission, the company aims to seek innovative methods of approaching all the components while respecting the stakeholders. General Corporate Strategy The corporate strategy for Ben & Jerry Company is to ensure the implementation of their mission statement. This will be achieved through developing high quality in their products while incorporating their social responsibilities (Grant, 2009). The entire corporate strategy can actually be characterized as a marketing niche Product Differentiation Green marketing has been one of the best methods of differentiating from other competitors. As much as the customers may feel that the products are environmental friendly, this might not necessarily be true in the production department (Grant, 2009). The Use of natural high quality ingredients has made the company to attain a competitive edge in the industry. The use of the company recycling the materials that are used and reusing other materials in the packaging makes the company attain a unique attribute in the industry while their production cost are kept at a lower level. Socially- Conscious image The company strives to ensure that they support the dairy farmers. In other social event and public holidays, the company always donates free ice cream to the public to sample their quality (Leung, 2009). Brand loyalty Developing a brand loyalty is a better strategy of ensuring that the competitive edge is strengthened. If the company has opted to go green in its productions, then if the brand is preferred by the customers, there will be increased sales. This strategy has been a success as most of the customers are turning towards green produced products. Brand loyalty always ensures sustainability of the product such that, the customers are even willing to pay the premium prices to get the loyal product. This is the main issue that will ensure the green market remains stable in the economy. On occasions when the company is on the recession stage, the loyal customers are able to make the company to be able to operate and reach a break even point. Rewarding of customers when the company is on recovery point will not only attract new customers but it will also retain the existing ones. Small-scale Growth and Franchising The economic mission of the firm is fully achieved in this company. Ben & Jerry Company ensure maximization of their profits through reusing and recycling of their products to cut down on the production expenses. This makes them to have a very competitive price in the market while having the best quality and thus retain the sustainability of customers in the company. Marketing Strategy According to the annual report given by the Security Exchange Commission, the introduction of natural ingredients and grass root focus are very important for the companies marketing strategy. Corporate Environmental Strategy Coalition for environmentally Responsibility Economies was first adopted by Ben & Jerry Company. CERES is a non governmental company that works with other organizations so as to realize environmental obligations are achieved. This non governmental organization aims at ensuring the protection of the biosphere, the natural resources sustainability, waste disposals reduction and restoration of the environment. Another area that ensures that the company puts in mind the environmental strategies is the in the allocation of resources to enhance natural improvement. Changing Behaviors While Retaining the Attitude The most challenging part is how to change the behaviors of the stakeholders while retaining their attitude. Marketing an eco friendly product has never been an easy task to marketers. It is not easy to influence the consumers buying behaviors without affecting his attitudes and values. The values take some time to change and there is a need to allow time for these changes to occur and not rushing through the process. When one rushes through the changing process, one may have profits but this will take a short term and later experience long term losses. Following the entire process of change accordingly will take time but this has a great impact in the long run (Rubino, 2005). Targeting consumers who already have information on green messaging reduces the efforts of training a new customer who has no idea. From previous research, it has been confirmed that, values tend to drive behaviors. This means that, to influence an environmental friendly character, there is a need to address the values of the product first. Unlike in the past era, where business was all about buying and selling of a product, consumers are becoming more sophisticated as times goes by. People never want just to purchase a product but the value of the product is what is always bought Customers, who already pose values that are environmental friendly, will easily adopt environmental friendly behaviors (Schultz, & Tannenbaum, 1993). Consumers may however develop this type of behaviors if they are given enough time to engage in this behavior. Findings reveal that, consumers with green values will tend to develop greener behaviors if provided with relevant products and/ or services. The company can also decide to take advantage of the governments efforts to encourage green environment. For instance, the government is encouraging organic products and discouraging activities that will bring the continuity of global warming. If the attitude of the consumer is changed, then this affects sales in a negative way as the consumer may decide not to purchase or use the services. The behaviors should be environmental so as to fit in the new system that targets environmental friendly behaviors. There are various companies that have evolved towards the Green world. Telecommunication companies are one of the best examples that have successfully evolved in this type of marketing. Recent moves in Green Telco The suppliers and providers of telecom services discovered the importance of promoting greener face in this industry. It can just be said that people are now growing green whether is on the web environmental channels, solar panels or wind turbines. Telecom organizations have a bigger problem in going green as opposed to other businesses like a hairdresser. This is so because; the company affects major structures like the social, technological and economical structures (Grant, 2009). It is not just the aspect of environment that is important but the issue of cost reduction is very vital. There is a need to develop greener networks, using less expensive materials and the cooling systems ought to be efficient at the data center. The life of battery life in portable gadgets like laptops and handsets are being improved to reduce the number of charging them. This is one of the examples that show how the energy is taking a new design and thus going green. There is a need for the companies to formulate strategic plans that incorporates this aspect. This will give the company a clear roadmap of where the company is expected to be after some years. In the past years, telecom industries have ensured various effective measures are in place in order to reduce on the negative impact of the existing environment. Strategy Analysis This Analysis is vital as it determines the effectiveness of Ben & Jerry environmental strategies. Several tools are used to check the strength or the weaknesses of a company. In this area SWOT analysis is the key tool to determine the success of the company (Schultz, & Tannenbaum, 1993). Porter’s five forces model is used so as to determine the companies’ competitive forces in the ice cream industry. Rivalry among Competing Sellers The competitors in this industry are so diverse and therefore, to customers are able to easily shift to another competitor if they are not certified with the services given by another competitor. Haagen-Dazs compete almost on the same ground with Ben & Jerry Company and thus there is no much difference in terms of products and services provided. Buyers Buyers are so many and thus the power of buyers tends to be higher. Since retailers get the ice cream in large quantities, the customers have a substantial leverage as opposed to price. There are also numerous flavors and types of ice creams that a customers can choose from (Wasik, 1996). This makes the buying power to be so high. The customers will want a high quality product at a lower price. Suppliers The main suppliers in this industry include the dairy farmers and the manufactures of the papers and various flavors. In this industry, there are so many suppliers that a company can choose from. This lowers the power in the supplier and thus, they will tend to put a competitive price to compete well in the market while maintaining high quality of their products and services. Substitute Products There are so many existing substitute products in this frozen and food industry. When the substitutes are readily available in the market and customers can easily shift from one product to the other, then it can be said that this is a strong force. Potential New Entrants There is moderate barrier to entry in this ice cream industry. This is because of the brand preference in the rival companies (Grant, 2009). The use of eco friendly packaging and good quality ingredients makes the company to be in a better position to defend its products. Strategic Consistencies According to the mission statement provided by the Ben & Jerry Company, the main objective of the company is to ensure that there is an integration of the quality of the products with the social responsibilities together with success of the economy. For this matter it can be said that the environmental and other corporate strategies are so much connected to each other. Differentiation does not just improve the competitive advantage but it also leads to environmental success in any operational success. By the company focusing its attention on the product innovations, the company can ensure the reduction on the environmental impact while reducing the production costs (Mendleson, 1994). This will occur if he company focuses on the recycling of other materials and reusing them to avoid purchasing of the same. Through the use of rBGH-free ingredients, and other dioxin-free facilities, the company can attract environmental consumable products. For this strategy to be sustainable there is a need of the customers to be willing to boost the quality of the environment. This implies that, the customers must be ready to pay for the premium prices that come with these products that seem to be of higher quality. As much as it may not really be of higher quality, the customer perceives them to be of good quality and have no issue paying a little bit higher that other ordinary products. The company should therefore be very careful when setting up the prices of such products (Ottman, 1994). If the prices are set so much lower, the customer may doubt the quality and opt to go for a higher product. If the company also places a much higher price, the customer may also shift to the other products that are moderate in the price with the same perceived quality. Recommendation and Conclusion Basing on the analysis, it is evident that the environmental strategies are so well integrated. As much as there seems to be some disconnection between the two strategies, the company aims at achieving the economic success and other environmental responsibilities. In conclusion, the analysis has illustrated that an organization can be so much competitive without really sacrificing their environmental goals (Yeshin, 1998). The strategies that will ensure delivering of the customers’ value are mainly the cross and the up sell. These strategies are fine but in most cases, they tend to gorged such that the companies may impact negatively the relationship between their customers and the company. One of the most important strategies is to ensure the calculation of the value of the customers’ retention. A bank for instance can decide to deliver customer value through usage stimulation and down sell (Ottman, 1994). If a bank releases more credit cards to their customers, instead of product sales, they will also have increased the credit limit in the stimulation usage. Customer retention has various strategies that assist organizations to attract and retain their customers. It is therefore up to the company to keenly select the best strategy and implement it in their organizations. The company can opt to educate their customers on their products. This will make the customer to understand the values in the produced products. It will also make the customers to know how best to use their product. Nokia Company always gives training to their customers on how they can use their handsets. Some of the training has always focused on their new services like ovi. Another strategy that will ensure the retention of the customers is through rewarding the customers who have been loyal in the company. This can be done through issuing out of loyal cards to customers (Mendleson, 1994). This as much s it will be rewarding some points to the customers, it also retains the customers and thus the company benefits from their loyalty. The company should also save the clients who have indicated that they do not require their services. The company by having this database, they will be in a better position to make a follow up and finding out why they decided to quit the company. The company is also able to know the frequency of customer loss at as given period of time. This will make the company to optimize the needs of the customers that keep on fluctuating as time goes by. The sales representatives should be on the front line to give every small detail given by the customers about the changes the customers wish to be done in the company. The most important aspect in the development of strategies for the customer value delivery is ensuring the combination of synergistic impact on the value of the customers. For instance, combining of cross sell, customer training and up sell is one of the best ways. This strategy improves the perception of the customers towards the organization and the customers’ loyalty also improves. References: Grant, J. (2009). The Green Marketing Manifesto. Texas: Wiley and Sons Grant, R. (2005). Contemporary strategy analysis. Oxford: Wiley-Blackwell. Kozak, M. (2006). Progress in tourism marketing. Chicago: Elsevier. Leung, L. (2009). Digital experience design: ideas, industries, interaction. New Jersey: intellect Books. Mendleson, N. (1994). Using strategic alliances to develop credible green marketing. Harvard: Mc-Graw-Hill Professional. Ottman, J. (1994). Green marketing. Harvard: NTC Business Books. Rubino, J. (2005). The ultimate guide to network marketing: 37 top networks, marketing income earners share their most preciously guarded secrets to building extreme wealth. Chicago: John Wiley and Sons. Schultz, D. & Tannenbaum, S. (1993). Integrated marketing communications. Harvard: McGraw-Hill Professional. Wasik, J. (1996). Green marketing & management: a global perspective. Chicago: Wiley Blackwell. Yeshin, T. (1998). Integrated marketing communications: the holistic approach. Texas: Butterworth-Heinemann. Read More