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УДК 339
Capturing Meaning through Brand Value and Green Marketing
MARINA A. KALININA, Ph.D (Econ.), associate professor of the Marketing and Logistic Department, Financial University (Moscow, Russia)
E-mail: [email protected]
Abstract. Capturing and retaining customer's value is always a key point in marketing and in business. Marketers always follow the changing portrait of a customer, trying to predict and satisfy their changing tastes and priorities. This article analyses trends of customer's changing needs towards «green customer» and propose some strategies for satisfying their needs through brand repositioning and green marketing.
Key words: capturing and retaining value, green marketing, consumer value, repositioning, energy conservation, sustainable development, ecological environment.
«Зеленый маркетинг» как способ удержания потребителей и увеличения стоимости бренда
марина АлЕКСЕЕВнА КАлининА, кандидат экономических наук, доцент кафедры маркетинга и логистики Финансового университет (Москва) E-mail: [email protected]
Аннотация. Завоевание и удержание потребительской ценности во все времена являлось краеугольным камнем бизнеса и маркетинга. Основная задача маркетологов - уследить за меняющимся портретом потребителя, стараясь предсказать его меняющиеся вкусы и предпочтения. В этой статье анализируется современный тренд изменения потребителя в сторону «зеленого потребителя» и предлагаются стратегии по его удовлетворению посредством стратегий репозиционирования и «зеленого маркетинга». Ключевые слова: зеленый маркетинг, потребительская ценность, репозиционирование, сохранение энергии, устойчивое развитие, экологическая среда.
During the last decades, many changes took place that influenced customer's behavior and their economic and social purchasing requirements. Customers are much more demanding than ever before. Our customers nowadays want to live longer, look better, be healthier and stay active. They are more connected, knowledgeable and suspicious, becoming more aware of the ethics of the products or services they acquire. Businesses must therefore respond by taking matters of sustainability seriously.
Even retirement as itself changed. People don't want to rest as we understood it before, they just want to change their life style and do something else and learn something more. My greatest example, that I will never forget, took place in 1988 during my first visit to Canada. Visiting a class of
Russian language and literature in the University of Western Ontario, London, I've met a woman, who was 70 years old and she happened to be the student in the class, learning Russian culture. When I asked her about her intentions — she answered that she always wanted to learn Russian but didn't have time before — busy with work, children, grandchildren, and now that's the time for her to do and learn what she was missing before. 15 years ago, I was shocked about it and thought that that's a unique person in a very developed society. Now we can see such a trend all over, even in Russia, where the life is still different.
One of the most characteristic market trends nowadays is — sustainable development. That's a relatively new concept, that came with other concepts such as green marketing, environmental and
ecological development, technological myopia, that became more adaptive to new social and economic requirements.
In general, it means that customer's attitudes and behavior changed and became more sensitive towards sustainable development. They require legislation norms related to pollution and environment protection, increase stakeholder's awareness towards the necessity of more socially responsible actions, healthy eating and drinking, wise use of natural resources, so-called new quality of life.
Sustainable marketing concept means forecasting future needs and requirements of customers, and an equal responsibility between the government and corporations has to be introduced. It doesn't mean that consumers have to consume less, but differently and smarter — rather than necessarily reduce consumption of goods and services, that could require substantial changes in the way consumers and corporations behave.
Consumerism and environmentalism — another two major characteristics of modern society that help to promote sustainable marketing [1, p. 413417,613-614,].
Proposals for preserving the world for future consumption include promoting the use of sustainable ingredients, recycling, reducing solid waste and managing energy consumption. Sustainable marketing applies to consumers, who have the responsibility to protect themselves and present sustainable instead of irresponsible consumption.
Environmentalism — is a move towards wise consumption, maximizing life quality. Nowadays the corporate responsibility is — to build their core mission around environmental sustainability. It includes greening activities such as pollution prevention, changing the whole product life cycle.
1. Customer's requirements. Understanding the customer, it's important to mention that some customers are ready to accept green idea and behave "green".
The study fulfilled by Roper Survey within American market shows that some consumers (58%) try to save electricity at home, 46% recycle newspapers, 45% — return bottles or cans, 23% buy products, packaged in recycled materials. More educational programs must be launched for repositioning customer's needs and wants for green product [2, p. 29-34].
"Greenish criteria" can be proposed for marketing segmentation. Segmentation strategies have to be
developed according to customer's attitude towards environmental concerns.
The Roper Survey, using greenish criteria, divides consumers into following segments:
• True Blue Greens (9%) — have strong attitudes towards environmental values. They are looking for products that are environmentally friendly and avoid the others;
• Greenback Greens (6%) — are not involved into politic actions for Green movement, but still prefer environmentally friendly products;
• Sprouts (31%) — usually all those who would not spend extra money or time for going green, but respect environment and movement and could be called "target market" for green marketers to work with;
• Grousers (19%) — uneducated about environmental issues. They think that green products cost too much and are not worth spending extra for that;
• Basic Browns (33%) — all the others who care about day-to-day concerns and do not care about environment at all.
This survey shows that there are up to 46% of population who care about environment and there are ways to increase the percentage using the proper educational programs. These figures indicate that there are between 15% and 45% of the overall consumer market who are ready to go "green". And there are social, cultural and economic trends that could make this target market grow.
Customization is orienting towards the needs of individual customer or one-to-one marketing. Ethical consumerism — is kind of vision of life beyond overconsumption, helping customers, families and individuals to live better lives. Environmentalism covers all the issues connected with the earth, air and water protection. Green marketing that unites all those movements helps to improve people's living conditions, protect the environment, provide more eco-friendly products, healthier life and longer livings. It actually means the movement towards the use of renewable raw materials, elimination or, at least, minimization of polluting effluents and toxic wastes.
2. Moving marketing strategies towards "green". As we consider marketing as a satisfaction of customer's needs, it means that as customer change — all the marketing tools and strategies have to be changed as well. Green marketing is promising to be one of the key business strategies of the future that incorporates environmental concerns, social
conscience and strategic partnership into marketing planning.
It has to be incorporated to Green Marketing Mix as well. Product quality has to represent organic, hormone-free, energy saving, noise-reducing, salutary and sustainable characteristics. Distribution system has to follow eco requirements — use eco, environment friendly containers and all the supply chain has to be changed. Promotion and advertising have to be selective and follow green regulations, and pricing strategy has to adopt green marketing principles.
It's clear that over years those corporations win and stay in business who adopts new technologies and innovations in conjunctions with social and environmental demands. The greatest example is — Ford Corporation. In spite of its 100 years old history, or thanks to it, it's still the second largest automobile company in US and fourth largest in the world based on the number of vehicles sold annually. One of the reason — lots of changes to the product, which have to stay environmentally friendly.
They were the first to recognize the climate change as a significant global challenge that must be addressed. The result was — launching Ford Escape Hybrid, which is considered as one of the world's most eco-friendly car in the world.
When consumers are proposed to make trade-offs between product attributes or helping the environment, the environment almost never wins. Most consumers simply will not sacrifice their needs or desires just to be green. The case proposed by Ford two-seater electric car Think failed in 2002 [3].
The Think, which required six hours of recharging after being driven for only 50 miles, would have required drastic changes in driving behavior of its owners. The lesson is that — regardless of their environmental benefits, electric-powered cars will remain a niche product at best until manufacturers can radically improve battery life and cost.
This also explains why car manufacturers are now pinning their hopes on gas- and electric-powered hybrids.
Still we face a growing number of people who are willing to pay a premium price for organic foods because they believe organic food to be healthier, tastier and safer. Some consumers have been willing to pay an up-front premium for energy-efficient, water-conserving washer and dryer units [4, pp. 54-57].
Those consumers realize that they will actually save money on energy and water bills over the long term.
Companies also realize that consumers are unlikely to compromise on traditional product attributes, such as convenience, availability, price, quality. And it's even more important to realize, that there is no single green marketing strategy that fits every company.
The research shows that there are strategies that could be classified from relatively passive and silent — "lean green", "shaded green" and "extreme green" [5, pp. 9-17].
Managers who understand these strategies and the reasoning behind them will be better prepared to help their companies benefit from an environmentally friendly approach to marketing.
In addition to doing careful research for guide strategy selection, managers should also cultivate the corporate culture.
The organization and its people must support a truly green marketing strategy in order to succeed. Managers should encourage the increasing impact of all employees for new ideas and vision. They should also keep in mind that most customers and employees get satisfaction from being part of an organization that is committed to operating in a socially responsible manner.
Another key element of green marketing strategy is — credibility. Having a good reputation to begin with can go a long way in helping to ease customer skepticism. Companies with socially responsible corporate values will appear more credible.
Now new standards and certifications allow customers to identify green products easily. In 1992, the U.S. Federal Trade Commission developed general principles and specific guidelines on the use of environmental claims [6, pp. 21-23].
By following those guidelines, marketers can avoid overstating environmental claims. The use of eco labels such as "Blue Angel" in Germany and "Energy Star" in the United States can help assure customers that the products they are purchasing are in fact green.
Finally, because consumers buy products and services primarily to fulfill individual needs and wants, companies should continue to highlight benefits and values of green products.
3. Capturing customer's meaning through brand value can be expressed in many ways. Branding and brand positioning are very important marketing tools for capturing and retaining customer's value, increasing their loyalty as a mean of communication with customers. Customers nowadays are
Pic. 1. Functional and emotional attributes
expecting to get brand message not only through TV or other advertisements, but want to have nonmedia contacts with the brand. Brand design has an increasingly important role for that, well-articulated brand positioning statement is aiming at clarifying brand meaning for customers.
Brand design — is an important part of brand positioning or repositioning. Design is a feel, look, a sensibility that captures an underlying meaning. If we think about a big brand, Pierre Cardin, for instance, many different sub brands from clothing to jewelry comes to your mind - it's an idea that could be designed into many things. Customers have to have the same value to all those things under that brand. The positioning statement can manage design and help to express the meaning of the brand concept.
Capturing meaning and communicating with customers could be expressed in many ways. It can be expressed verbally through words, visually through pictures and images, even through touch and smell and dialogue [7, p. 42].
Verbal
• Naming — descriptive name to product,
• Wording — slogan that can express the meaning,
• Describing — phrases that capture the meanings.
• Visual
• Picturing — illustrate meaning with photographs or drawings,
• Symbolizing — meanings through more images and graphics,
• Animating — moving objects.
McDonalds brand design, for instance, can be seen as a combination of verbal and visual images that express the meaning.
Dialogue
Another concept that has to be mentioned — is "dialogue". In 1999 Daniel Yankelovich in his book "The Magic of Dialogue: Transforming conflict into cooperation" provided an excellent analysis of dialogue as a special type of communication process. Dialogue — is an effort to listen with empathy to other groups where all groups are on an equal footing and each group makes a clear assumption. The crucial point here is — that only after the dialogue people could clarify their assumptions and expect that the brand design is finalized.
A green brand identity is defined by a specific set of brand attributes and benefits related to the reduced environmental impact of the brand and its perception as being environmentally friendly. A well-implemented green brand identity should provide benefits to environmentally conscious consumers.
4. Brand positioning. According to the 2002 Roper survey, labels and displays can play an important role in making an environmental statement about a brand.
More than half of all Americans say they have purchased a product because the advertising or label indicated that it was environmentally safe [8, pp.1-7].
Explaining how or why a product is environmentally sound can also make a big difference. Product packaging or in-store displays can be a major source of information about environmental action.
Point-of-sale demonstrations and knowledgeable salespeople can help to educate consumers. Giving out free samples might be a good way to ease customers' initial reluctance to try a new product.
Brand has to be positioned clearly in, so-called, target customer's mind. There are three levels where brand could be positioned:
• Product attributes — it's the least desirable level for brand positioning Competitors can easily copy attributes. More than that, customers nowadays are not interested in attributes, they are interested in what the attributes will do for them;
• Benefits — second level of brand positioning, go beyond technical characteristics and talk about resulting effects;
• Beliefs and values — go beyond attributes and benefits, engaging customers on a deep, emotional level, they have "to inspire loyalty beyond reason".
It's important to realize that consumers are unlikely to compromise on traditional product attributes, such as convenience, availability, price, quality and performance, In other words, green products must match up on those attributes against non-green products in order to earn consideration from the vast majority of consumers. A green positioning strategy based on functional brand attributes aims to build brand associations by delivering information on environmentally known product attributes. This positioning strategy should be based on relevant environmental advantages of the product compared to competing conventional products, and may refer to production processes and product use.
This study supports significant attitude effects on both — functional and emotional green positioning strategies.
Thus, brand managers should deliver emotional benefits through the brand, at the same time making sure that target groups get real environmental benefits. When positioning a brand, it's important to establish a mission for the brand and a vision what a brand must be and do. A brand is a company's promise to deliver a specific set of features, benefits, services, experiences to the buyers. It has to be simple and honest. A well-implemented green positioning strategy can lead to a more favorable perception of the brand, giving support to the green marketing approach in general [9, p. 53-57].
A car brand, for example, may be considered environmentally sound if the models produce significantly lower emissions than competitors". Several studies address the value perception of selected environmental product attributes [10, pp. 21-41].
However, the success of a brand strategy, which positions the product exclusively by its functional attributes, may be limited by the fact that the
reduction of a product's environmental impact generally does not deliver individual benefits to its buyer.
Therefore, the perceived customer benefit may be insufficient as a motivating factor for brand purchase. For most products, a consumer would experience functional benefits (i.e. improvement of environmental quality) only in case of generalized environmentally sound consumer behavior [11, pp. 17-79].
It's evident that green marketing is a win-win strategy — consumers, shareholders, stakeholders and the whole society can benefit from it.
If properly implemented, green marketing can help to increase the emotional connection between consumers and brands. Being branded "green" company can generate more positive public image, which can increase sales and stock prices.
A green image may also lead consumers to have increased affinity for a company or a specific product, causing growing brand loyalty. While there are obvious benefits to integrate environmental friendliness into consumer marketing, there are also some significant risks. There is a lot at stake for companies that choose to implement green marketing strategies, including the magnitude and risk of capital investments, the rigors of regulatory compliance and the potential for consumer backlash. An ability to anticipate and react to the next environmental issue could mean the difference between maintaining a green reputation or losing status as a green company — and potentially much more.
5. Combining Industry and Green Marketing. One of the example for the company go green is Mikromashina [12]. It is an old enterprise of electric small appliances, situated almost downtown Moscow,
Pic. 2. Moscow enterprise Mikromashina
in 20 minutes driving from the Kremlin towards the East side of Moscow.
In 2013, it turns 90 years old, it survived through all those restructurings that took place in Russia, staying in the same business. There are people there who works for more than 40 years, gained their top management positions in the company and Board through carrier advancements.
The assortment lines represent small electric appliances such as coffee grinder, mesh razors, hair clippers, hairdryers, tea pots, pellet removal devices, etc.
For a long time during the Soviet period it used to be the only enterprise for production of small electric appliances in public sector. Products are delivered to Russian regions, Belarus, Ukraine, Kazakhstan, Baltic countries.
The enterprise always attracted attention from the big international branded corporations such as Moser and Braun, but the real transformation towards the international standards started in 2003 when cooperation with one of the biggest global brand (Phillips) started.
Philips started the auditing process, presenting the Questionnaire that contained 150 questions. In order to follow the international requirements and changing customer's priorities Mikromashina made many changes — training and retraining the staff, certification of the finished products and production process, implementing green technologies, new light balls, wasteless technologies. The system providing raw materials was changed dramatically considering changing requirements from the environment and customers. Based on new "green technologies" and "green customers" the Company got Quality Certificate — ISO 9001: 200, that shows customer's appreciation and satisfaction.
In 2008-2009, the company jointly with Philips produced more than 100 000 units of "green products".
At this point new Marketing Paradigm and green marketing presented new requirements to the Company and all its business units:
• One of the most successful products that have to be introduced as a "hit product" — is coffee grinder. The "green customer" presents updated requirements to the products — it has to demonstrate the highest quality as a finished good. Recent testing gave stunning results. Market survey showed that Mikma got the second place, losing only in front of
Pic. 3. New product - Coffee Grinder
Bosch. Over years Mikma demonstrated great results in duration of product life.
• Mikromashina introduced recently the special coffee grinder as a souvenir line — Matreshka Co-fee grinder doll. Linden as an eco-friendly material is used for production process, thanks to which the grinding process is much quieter. Also it's hand colored, each product differs from another, the size is optimal and following customer's needs.
• Another feature that directly influence towards the quality of the product and management is "internal marketing". The stuff of the Company have to demonstrate deep connection with external customers, the total understanding of business processes, friendliness, awareness and high social and corporate responsibility.
The General Director of the Company spends time visiting departments, communicating with people explaining and presenting new rules of corporate management and its mission.
And as a result the portrait of a worker is changing. Workers demonstrate high level of responsibility, awareness of main goals and problems of the company, involvement into corporate life and decision making process.
• All management and production processes are deeply depend on the spirit of people working for the Company. The spirit of friendship was incorporated over years: workers are constantly communicate with upper level managers and customers, loans for different purposes are available, especially for younger people and it's purposes (graduations, weddings, birthday parties, birth of kids). Mikromashina has
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М. А. Калинина «Зеленый маркетинг» как способ удержания потребителей..
special programs attracting young people for management positions.
Retired people get unlimited pass to the Enterprise and financial help or assistance if needed.
The Company shows high effectiveness and efficiency. It's proud for their plastic product line. One fifth of the stuff company covers 30% of the production volume. The production process and management in that department follows the highest standards. Mikromashina has a line of big names waiting for placing orders there.
The Company is caring about pollution and environment. Reducing the environmental footprints — another concept for sustainable development. The Company nowadays is controlling each phase of its production line; manufacturing, distribution, sales and recycling carried out using the system of special care for natural resources. If the Company use linden for manufacturing, for instance, — it has to have a system for planting and growing trees. The Company has to support innovation and research in this kind of activity.
The Company wins if it takes a sustainable approach to business that balances environmental, social and economic needs.
Conclusion. Sustainable companies are those that create value for its partners and customers through socially, environmentally and ethically responsible actions. Building strategic partnership means that more businesses have to be involved into sustainable development process.
As David Lubin, an observer of Harvard Business Review, mentioned: "Green marketing and sustainability have to be incorporated to business megatrend, like electrification and mass production that will effect company's competitiveness and even their survival. It means pursuing the mission of a triple bottom line: "planet, people, profits" [13].
Companies in the future will be evaluated not by immediate results but by ultimate effects on social wellbeing. Green sustainable marketing is a concept that goes beyond caring for the needs and wants of today's customers.
Sustainability as a concept is becoming a core issue for any company. It has to be implemented in the company's corporate governance and strategy. It means having concern for tomorrow's customers, survival and success of the business, shareholders, employees and the whole world where we live.
Other terms like green PR, green distribution, green sales came to the force. In the advertisement
world the concept of "storytelling" is coming extremely important for green marketing.
New criteria's for brand repositioning, new green demands from the environment and customers set up the Green Marketing Paradigm. Green sustainable marketing provides the context in which companies can build profitable customer relationships by creating value for customers in order to capture value in return — now and in the future.
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