Market Barriers and Business Risks
Market Barriers to Sustainability Products
With all the attention given to sustainability, the question remains, why aren’t more consumers using green products? There are three key barriers that sustainability marketers need to keep in mind to better position their products for growth:
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.
Global Online Environment and Sustainability Survey
Overall, 83 percent of global online consumers reported in Nielsen’s 2011 Global Online Environment and Sustainability Survey  say that it is important that companies implement programs to improve the environment, but only 22 percent say they will pay more for an eco-friendly product.
Willingness to pay extra for environmentally friendly goods is highest in the Middle East and Africa, where one-third of consumers are willing, and lowest in North America, where only 12 percent of both Canadians and Americans say they will pay extra for eco-friendly products.
Many consumers reported a personal preference for eco-friendly goods, but large percentages of respondents report setting aside this preference and buying whichever product is cheapest, including 48 percent in North America, 36 percent in the Middle East and Africa, 35 percent in Europe, 33 percent in Asia Pacific, and 27 percent in Latin America.
The price premium compared to the conventional alternative needs to be addressed through the three other parts of the marketing mix (product, place, and 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.
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.
Going Green Packaging? Go Softly.
In April 2009, Frito Lay introduced a biodegradable bag for Sun Chips with a big marketing effort to play up its environmentally friendly nature as it was made from plants and not plastic and could break down in compost. Sound good?
Well, the stiffer material made the packaging give off a loud annoying noise that measured at roughly eighty to eighty-five decibels. Consumers compared this sound to a noisy busy city street or even a jet engine. The criticism grew so much that within six months, the company was forced to switch back to its original bag. It didn’t help that sales dropped 11 percent during that timeframe as well. 
Traditional Benefits of Sustainable Products
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.
Example - Glad Products
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.
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.
Adopting Behavioral Change
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.
 “SunChips Bag Proves It Not Easy Being ‘Green,’” Washington Post, October 7, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100606681.html.
 Stuart Elliot, “Glad Cuts the Hyperbole for Its New Green Trash Bag,” New York Times, October 19, 2011.
End of Unit:
Click Next to proceed to next Unit.
Log in to save your progress and obtain a certificate in Alison’s free Diploma in Sustainable Business online course
Sign up to save your progress and obtain a certificate in Alison’s free Diploma in Sustainable Business online course
Please enter you email address and we will mail you a link to reset your password.