Strategies for Environmental Advertising and Consumer Behavior - Case Study Example

REPORT ON CONSUMER BEHAVIOR ON “GREEN PRODUCTS” by Student’s Names Code + Course Name Professor’s Name University/College Name City, State Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Literature Review Findings and Discussion 4 Green Branding 4 Green Shoppers 5 Green Marketing 7 Rate of green purchases 8 Recommendations 9 Conclusion 11 Reference List 12 Executive Summary Green shoppers tend to be older members of the society with relatively high incomes, good education and tend to exist in small families. However, these shoppers are not limited to this category as they are distributed across diverse demographics. Most green shoppers are driven by sustainability considerations. Some shoppers, however, consider sustainability an important but not the main driver to their purchasing decisions. For other shoppers, sustainability acts as a tie breaker when the shopper is indifferent towards all other conditions and, therefore, leads to product switching once consumers establish a product suited to their needs. Green shoppers are loyal to their brands and are likely to shop more often than other shoppers. They purchase their products frequently and are thus high value segments. They are also price insensitive making them nearly ideal targets for producers. The shoppers are also continuously learning about green products from companies’ education programs and the media. However, they do not always understand all the social aspects of their purchases and, therefore, may need to be supported when making purchases. Green shoppers are sensitive to the communications and knowledge regarding their intended products within retail stores. Manufactures and traders in green products can utilize characteristics of green shoppers to satisfy the specific needs of green shoppers while enhancing their sales and profits from green products. The latter can be achieved through product branding and marketing. Introduction In the past decades, the interest of the public on environmentalism has increased considerably with a considerable increase in consumers of green products who emphasize on more than just the purchasing and consumption of these products. The advantages of green product over other non-green products have been well documented before. However, some consumers may not be comprehensively familiar with the advantages to drive them towards consistent purchasing and consumption of green products. Moreover, consumer’s demand for green products has not been satisfied by an equivalent increase in the productivity and marketability of these products by traders and manufactures. This report identifies available literature on consumer behavior on green products, discusses the literature findings on the behavior and recommends possible options geared towards enhancing consumption and sustainability of these products. A review of literatures shows that consumers of green products have to find these products sustainable to increase and maintain the purchase of green products. Therefore, manufactures and traders of green products have to identify product development techniques, ways of communication and how to better avail their products that would not only attract consumers to these products, but also lead them to buy the products on several occasions. Literature Review Findings and Discussion Green Branding Creation of a popular green brand is part of the green marketing strategies employed by institutions. Cheng (2010, p. 307) examined how to improve the extent to which a company can enhance the value of a brand through green marketing. This study was conducted through questionnaires that were mailed to consumers of electronic products in Taiwan. Study results suggested that three factors contributed significantly towards green brand equity; green trust which is the credibility assigned to the brand by consumers, green brand image which is the way the company portrays itself as being green, and green satisfaction that entails the satisfaction derived from the consumer from consuming the products of the company (Cheng 2010, p. 311). The study, however, focused on a specific product within a specific country and, therefore, its applicability to other countries will require further research. Furthermore, Beckenstein, Long and Arnold (1995, pp. 23-26) investigated the relationship of green branding and the desire to purchase the product. It investigated the effect on the emphasis of “green” properties of a product to the demand of that product. To do so, they used two advertisements, with one laying emphasis on the green attributes while the other emphasizing on low cost of the product. This study found out that the ad emphasizing on the green attributes of products appealed more to consumers (Beckenstein, Long & Arnold 1995, p. 24). However, this study was conducted on a single product in a specific country, and more research needs to be conducted to investigate its global implications. Green Shoppers In another study done by GMA/Deloitte (2009, pp. 4-8), the data collected on green products and consumers of these products included brand perception, purchasing decision criteria, purchasing intent, impact of the actual purchases and the retail environment. Interviewing consumers of green products was conducted using factual questions so as to reduce leading responses. The interviewers presented shoppers with available green products in the participating retail outlets and described the characteristics that defined the products as green. Also used was a questionnaire that acted as a shopping guide to the respondents. The study was carried out with the sustainability consideration in mind. This was chosen since it has emerged as a key factor influencing the shopping decisions of shoppers. This study’s objectives were to find out purchasing decisions influenced by sustainability, how consumers wished to be informed about sustainability of green products, how the environment hosting the retail store influence the sustainability of purchasing decisions, and what key lessons could be learnt from the consumer sustainability trends (GMA/Deloitte 2009, pp. 5-6). GMA/Deloitte (2009, pp. 8-9) found out that a typical green shopper is better educated, earns higher incomes than the average shopper, hails from small families and is also somehow older. This was, however, from a general point of view since the green shoppers are diverse among different groups in the society. The study classified consumers into five segments; proactive, committed, unsure, unaware and influenced. Using this classification, consumers were tested on their sustainable lifestyle attributes in order to understand their attitudes and behaviors. In most cases, consumers always seem to recognize the importance of environmental conservation and corporate responsibility. Therefore, in order to test their commitment to going green, shoppers’ purchasing behavior were matched with the green products they consumed. GMA/Deloitte’s (2009, p. 9) study outcome revealed that from the green shoppers interviewed, two percent of the committed minority shoppers made their shopping decisions based on sustainability. 18 percent of the interviewed shoppers were proactive in integrating sustainability into their purchasing decisions. One third of the interviewee group was influenced to incorporate qualities such as sustainabilitiy in their green purchases. These shoppers were often indifferent in their purchases, and green issues were thus used as a tie breaker. One third of those interviewed were unsure about sustainability considerations while 54 percent used sustainability as a way of recognizing their different product mixes. The remaining shoppers who made up 13 % of the interviewee were not familiar with, and/or refused to accept considerations bordering on sustainability in their shopping decisions. They, however, made limited purchases whenever it fit their purchasing criteria. Shoppers increased their purchases of green products as their sustainability awareness increases. In the initial influenced stage of green shopping, they bought one or two categories of products (GMA/Deloitte 2009, p. 10). As their awareness increased, they added more categories to their shopping lists as they continued to appreciate the social benefits of green shopping. Most shopper's purchasing decisions, however, were based on different factors including brand loyalty, retail location, availability of the green product and maturity. The proactive shoppers readily adopted green products similar to committed shoppers (Nath et al. 2013, p. 455). However, despite this, each of this groups of shoppers are still adopting different purchasing patterns. Therefore, manufacturers and retailers of green products need to often review their data on consumer purchasing trends and be able to meet changing consumer demands. Green Marketing A different study conducted by Polonsky (1994) defined green marketing and its importance to firms and the positive attribute of environment conservation associated with it. The study recognized that more consumers are becoming aware and vigilant over the natural environment. These consumers constituted more than 50% and a further 80% agreed to have modified their purchasing behavior because of environmental reasons (Polonsky 1994). This has led to companies marketing green products having a competitive advantage over companies trading in non-environmental friendly products. For example, McDonald at one time shifted to using waxed paper packaging over clamshell packaging due to consumer concern over production of polystyrene and Ozone depletion (Polonsky 1994). However, as firms employ green marketing strategies not all are legitimate in their activities as some may make false claims of the "greenness s” of their products to promote sales and attract more green conscious consumers. Therefore, firms or companies going green should not use misleading marketing strategies and they should abide by regulations or legislation dealing with green marketing (Ryan 2012, pp. 73-75) These companies are expected to clearly state environment friendly attributes of their products, explain how the mentioned attributes can be achieved and only use pictures and terms that are meaningful. However, in going green, firms should understand that by following consumer’s perception with regard to green products in the manufacture and marketing of their goods, it may not translate to increased sales and profits as sometimes consumer’s perception may be incorrect (Polonsky 1994). Rate of green purchases Studies conducted by Hartmann (2005, p. 23) in the US found out that 22 percent of those interviewed bought green products during their routine purchases. The proportion of green purchasers varied depending on the category of the green shopper and different retail formats. The greatest number of purchasers were found in the grocery format. Least number of shoppers occurred in the specialty retail format. This disparity in purchase rate can be attributed to presence of different categories of green products and availability of diverse baskets of products in each of the retail outlets (Hartmann 2005, pp. 21-30). More purchasers visited groceries because most green products are readily available in groceries and are familiar to more individuals than green products in other retail formats. In addition, groceries contain food products that most consumers are more sensitive in relation to the impact of such products on health than other non-food products available in other retail formats (Hartmann 2005, pp. 24). Recommendations From the results of the above studies, a behavior pattern can be seen that explains the relationship between sustainability and other purchasing forces. Green shoppers adopt over time across the different segments based on how much they appreciate the sustainability aspect of the products they purchase (Chen 2001, p. 257). Sustainability accounts for approximately 54 percent of the shopping decisions among the surveyed population (GMA/Deloitte 2009, p. 9). Retail outlets and product companies have to accept the benefits associated with sustainability to consumers. Therefore, firms dealing in green products should improve the development of their products and marketing strategies that will promote sustainability of the products among consumers (Kilbourne & Beckman 1998, p. 517). Frequent green shoppers often pay more for their products. However, most green shoppers feel that prices should be set to be favorably competitive as products that seem to have cheaper packaging costs but equal attributes to other similar products sometimes cost more than other ordinary products (Hartmann, Apaolaza & Forcada 2005, p.10). Therefore, manufactures and traders in green products can use this consumer lamentation in their marketing campaigns to explain the significance of such differences in costing and its impact on the overall quality and greenness of the product. This will make these products more acceptable to consumers. In addition, green shoppers are more responsive to advertisements and surprisingly less responsive to promotions (GMA/Deloitte 2009, p. 11). This means mean that the green shoppers are more interested in the information they can get and a sustainable decrease in price levels other than temporary promotional decrease in prices. This is closely related to the characteristics a shopper considers in the purchase of green products (Crane 2009, p.290). Similarly, understanding that consumers of green products are more interested in perpetual sustainable prices, green products’ traders can employ measures to provide products at affordable prices to most consumers other than just temporary promotions and special offers. Green product customers are loyal to their products and take a relatively long time to switch their preferences. Therefore, companies that manufacture green products and have established markets are likely to be way ahead of their competitors in terms of their market share. Companies that take more time before embracing production of green products may face a huge task in getting customers to switch allegiance away from their already established competitors. Thus, the time for going green for such companies should be as early and as soon as possible (Temperate Forest Foundation 2008, p. 45) This demand for green products can be translated to increased revenues by companies via various ways. One way is by defining the prices of green products in the company and learning to understand their high value customers. This is because different green products have different degrees of sustainability attached to them by target customers (Smith & Perks 2010, p. 6). Therefore, understanding the demands of the target customers is vital to boosting the revenues of the company in question (Ginsberg & Bloom 2004, p 86). Since green shoppers are frequent purchasers of their products and portray a high degree of product loyalty, they should be considered and valued greatly by traders and manufactures of green products. In order to verify their market share potential, the companies should fathom their product’s reception by their target markets and establish an understanding with retailers in order to determine the demands of their target group (Ginsberg & Bloom 2004, p. 86; Kilbourne & Beckman 1998, p. 518). Furthermore, companies should come up with a comprehensive strategy and proposition of value for products. They need to develop a proactive approach towards evaluating the standings of their products in terms of sustainability and acceptability (Coddington 1993, p 143). Therefore, the companies should conduct internal assessments to determine the depth of their strategies in marketing their green products so that they gain and retain more customers. It will be detrimental for a company that has a long positive history with its customers to lose these customers to its competitors since it is more difficult to win and keep customers than to lose them (Davis 1993, p. 21). Companies can come up with plans to market and communicate better with consumers of their products and state factual information regarding their products without failing to fulfill promises affiliated to their brands. Communication is effective in determining the best market mix for green shoppers, and this will enable companies to determine from retailers what needs to be supplied in order to meet the prevailing demand (Olson 2008, p.25). Conclusion An analysis of literature on green products and their consumers show that the number of green consumers is larger than previously thought. Their value is also higher than earlier projected. Attracting these consumers depends on the green products and marketing strategies employed in promoting the products. Green shoppers are loyal to their products, a quality that can be beneficial to producers. Sustainability considerations are a significant impetus to consumers towards continuous purchasing of green products. Therefore, companies need to assess their consumer preferences and interests so as to take advantage of the growing demand in the green industry and increase their revenues. 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