teachthe4ps.com - For instructors of marketing.

With the launch of the Nissan Leaf and the soon-to-be available Chevy Volt, Americans finally have access to mass produced electric cars.  But how will consumer respond to these new products?  There are many challenges facing Nissan and Chevrolet.  This article “Electrics power into mainstream” (USA Today, November 8, 2010) outlines some of these challenges.  You could have your students read this article and then ask how Nissan should deal with these challenges?  Run through the marketing strategy elements – target market and the 4 Ps.  Our students can relate to this market.  How Chevrolet, Nissan, and eventually Ford and other automakers deal with these issues will have a profound impact on how quickly electric cars are adopted — and on our environment.

This short article, “Misleading Claims on ‘Green’ Labeling” (Wall Street Journal, October 26, 2010 – non-subscribers may have to click here) calls attention to the troubling ethical and environmental problem of greenwashing.  For more detailed coverage, check out TerraChoice’s “Greenwashing Report 2010.”

Some highlights in the TerraChoice report:

• 4744 products in 2010 claimed to be “green” (up 73% from 2009)
• 95% of these committed at least one of the sins of greenwashing.

File under product labeling, product, ethics, social responsibility or sustainability.  What responsibility do marketers have?

This article in the British newspaper, The Guardian “Unilever unveils ambitious long term sustainability program” (November 15, 2010) describes Unilever’s Sustainable Living Plan.  The company outlined a 10-year plan to cut its carbon footprint as well as the water and waste impact of its products.

Interestingly, this comes at a time when there are questions about consumer interest in sustainability.  An article in Advertising Age, “Has Green Stopped Giving?” (November 8, 2010 – you may need to be a subscriber to link through) notes:

In recent months, sales have begun to slow in categories such as green cleaners and grow in not-so-sustainable ones like bottled water as shoppers decide they may not be worth the tradeoff. And a September study showed big swings in the number of consumers who believe environmentally friendly alternatives are too expensive, don’t work as well as other products and aren’t actually better for the environment — all of which seem to add up to what Timothy Kenyon, director of the GfK Roper Green Gauge study calls “green fatigue.”

OK, so about a week ago we made a rather disheartening post “It’s Better for Whose Environment,” (Teach the 4 Ps, October 17, 2010) that described how Sun Chips abandoned an environmentally friendly (but noisier) package when sales dropped.

Well, maybe we marketers just need to figure out the best way to change consumer behavior.  This fascinating article “The Secret to Turning Consumers Green” (Wall Street Journal, October 18, 2010 – click here if non-subscriber - then link through).  The article describes a variety of techniques — most relying on perceptions of peer behavior — that have been shown in research to change behavior.  Let’s hope we can nudge people to make more sustainable choices.

This might be fun to talk about when talking about consumer behavior or social responsibility.

Consumer interest in making sustainable choices may be limited.  Sun Chip is ditching its environmentally-friendly compostable (but noiser) bag.  Sales of the snack dropped after the new bag was introduced (“It’s Better for Whose Environment?“, Wall Street Journal, October 8, 2010 – note this link takes you to a back door for non-subscribers). This sentiment is also expressed at Adweek, “Consumers Don’t Warm to Eco-Friendly Products” (October 12, 2010).  It might be interesting to ask students why they think this is happening?   Note:  Also posted at Learn the 4 Ps.

The power of marketing in action.  A recent story on National Public Radio highlights an important environmental problem — indoor air pollution from unsafe cooking in many developing countries.  We have written a case about this problem, a quote provides you with a bit more background:

“Every day, over 2.4 billion people — more than one third of the world’s population — burn solid biomass fuel (wood, charcoal, dung and cola) for cooking and heating.  These fuels are usually burned indoors in open pits or traditional cook stoves.  About two-thirds of the people using this fuel have no electricity, so the open fires often burn into the night to provide light….  It is estimated that htis source of pollution contributes each year to the death of 1 million children under the age of 5, and it is a leading cause of miscarriage and women’s health problems.”  (quote from the case Bright Light Innovations:  The Starlight Stove, Essentials of Marketing and Basic Marketing — our text books).

The case was written a few years ago and focuses on Nepal, but this NPR story provides an update from India.  It describes how Envirofit (the company we base our case on) has designed a successful marketing mix that is now making inroads in India.  A great listen (or read – the text of the story is on the same page) – “Smoke Clears On Safer Cookstoves For World’s Poor” (National Public Radio, September 21, 2010).

The story is of great personal interest.  The Envirofit Cookstove was a project that came out of the Engine’s and Energy Conversion Lab at Colorado State University.  I (Joe) have watched the lab develop creative energy solutions that benefit mankind.  I wrote the Bright Light Innovations case in our text book and still enjoy teaching it in class.

CNN is on a roll with the global green consumer.  Earlier today I posted an article and video clip about a store in London.  Now we have an interesting story from China, “Would Chinese consumers ‘go green’ — if given the choice?” (CNN.com, May 4, 2010) including, to my surprise, the following revelation:

Landor recently conducted a brand survey that shows consumers in China are actually more concerned about green issues than consumers in the United States or Europe. For example, 45 percent of those surveyed in China said they consider it very important that a company is green when thinking about which brands to purchase, compared to 23 percent in the United States.

This video clip could be shown along with the earlier one to try to get a better handle on how green affects consumers.  I have seen other studies which suggest Chinese consumers can be very price conscious — one study we cite in our text books indicated a willingness to pay a premium of only 2% for branded products they purchase regularly (as opposed to unbranded products).  In the U.S. and many other developed countries the premium is typically 20% or more.  There can be many reasons for that of course.

The aricle and video clip raise interesting issues around sustainability, consumer behavior across cultures, and international marketing.

I believe that the discussion of a “green premium” makes for a great marketing discussion.  In essence we are trying to teach our students to address target customer needs by designing a marketing mix that addresses customer needs.  We also talk about the importance of differentiation.  This article “Shoppers weigh up green premiums,” (CNN.com, May 4, 2010) includes an example of a shop selling organic produce in London.  The video describes the results of a survey that offers surprising results on the number of people willing to pay a green premium.  I found a bit more on that survey in this article, “UK consumers will pay more for green, but not much more” (Green Wise, September 29, 2009).  A class discussion might also be an opportunity to raise the point (alluded to in the video) about whether attitudes expressed in a survey align with behavior.

In this interview (CNN Money, April 13) Lee Scott, Chairman of Wal-Mart,states that sustainability and everyday low costs “are totally aligned.”  He makes a strong case for sustainability being at Wal-Mart’s core.  There is also some discussion about the Wal-Mart customer and their green values.  Not sure how well this would work in class — basically two talking heads (and a 30 second commercial at the introduction).  Might work as an outside assignment and in-class discussion (especially for an online course maybe with online discussion).  With our books it might fit with the first chapter or the last chapter in either book.

The Institute of the Environment at the University of Minnesota publishes a magazine (print and online) titled Momentum.  The current issue (sorry, I cannot seem to find a date) has an article titled, “Certified Confusion.”  It explores the confusing landscape of green claims, how it leads to “green fog” and confusion.  Consumers that want to make green choices are not sure how to do it.  Marketing bears some responsibility here.

The article could be used with our books in chapter 1 where we introduce corporate social responsibility, in the first product chapter where we describe labels and sustainability or in the final chapter which returns to corporate social responsibility and ethical behavior.