Green marketing 2010.01
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The presentation was part of a one-day roundtable session held for the membership of the Association of National Advertisers (ANA). It contains a real-world case study that illustrates how a former client: 1) dissected and ultimately defined what it means to be "green" in their industry, 2) identified key purchase decision-makers associated with "green," 3) segmented the market based on customers' attitudes toward "green," and 4) developed a compelling "green-based" value proposition and go-to-market strategy for the chosen target segment.
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Green marketing 2010.01
- 1. Utility Communicators International Communication Challenges of Green Energy January 2009
- 2. Utility Communicators International SUBSECTION TITLE 2 What does it mean to be ?
- 3. Utility Communicators International SUBSECTION TITLE 3 Case Study: āCompany Aā Ingoing Hypotheses: ā¢āÆ Opportunity exists for Company A to drive growth and strengthen its competitive advantage by positioning itself to satisfy emerging Green requirements ā¢āÆ Green is NOT a one-size-fits-all proposition. Green means different things to different buyers, and the market can be segmented based on how attitudes differ toward Green ā¢āÆ The process of identifying a value proposition grounded in Green is no different from a standard value proposition effort (segmentation, targeting, etc.) Company A: ā¢āÆ A large, āsuper-regionalā supplier of building materials for the commercial construction industry
- 4. Utility Communicators International SUBSECTION TITLE 4 Project Objectives ā¢āÆ To understand how builders/contractors define Green and their motivation to pursue/not pursue green building materials/solutions ā¢āÆ To identify the key drivers of Green purchase decisions and dimensionalize their relative importance ā¢āÆ To identify and prioritize distinct segments of Green based primarily on differences in attitudes toward Green ā¢āÆ To identify a Green-oriented value proposition that is compelling and distinctive to the target segment
- 5. Utility Communicators International SUBSECTION TITLE 5 Questions to answer How does the market segment? !āÆ How similar or different are attitudes, needs, and behaviors across markets? !āÆ How many distinct segments does the optimal schema yield? !āÆ What are the behavioral and firmographic profiles of each segment? 1 What value proposition appeals to our target? !āÆ What primary benefit serves as the foundation for a value proposition? Is the foundational benefit motivating, credible, and differentiated? !āÆ What competencies are required for Company A to deliver the VP? !āÆ What are the interrelationships between attributes and benefits (how do they link)? 3 Which segments should we target? !āÆ Which segments are the most economically attractive? !āÆ Which segments align best with Company A internal competencies? !āÆ With which segments does Company A currently perform best? 2
- 6. Utility Communicators International SUBSECTION TITLE 6 Types of segmentation Key Question: Dimensions: Tactical Strategic Type: Focus: Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel Ā§ļ§ Category attitudes, desires and beliefs Ā§ļ§ Required/ Have to have Ā§ļ§ Preferred/ Like to have Ā§ļ§ Not needed Ā§ļ§ Product usage Ā§ļ§ Brand awareness, usage & loyalty Ā§ļ§ Price paid, share of wallet, and purchase frequency Ā§ļ§ Sector Ā§ļ§ Geography Ā§ļ§ Spend Level Ā§ļ§ Company size Ā§ļ§ Purchase Ā§ļ§ Key influencers Why are they doing it? What do they desire? What are they doing? Who are they? How are they doing it? Attitudes Needs Behavior Demographics Channel
- 7. Utility Communicators International SUBSECTION TITLE 7 uļµ How does the market segment? Discriminating Attitudes qļ±āÆAttitudes that are most discriminatingāthose for which respondents have the strongest levels of either agreement or disagreement Segment Definition & Profiling qļ±āÆFor each segment, the key attitudes, behaviors, and firmographics that characterizes it, plus: ā¢āÆ Geographic distribution ā¢āÆ Percent of market ā¢āÆ Percent of spend Strongly Agree Strongly Disagree Attitudes Segmentation Schema qļ±āÆClusters of respondents who are similar in terms of their responses on the discriminating attributes ā¢āÆ 4-segment solution? ā¢āÆ 5-segment solution? ā¢āÆ 6-segment solution?
- 8. Utility Communicators International SUBSECTION TITLE 8 Attitudes ā the basis for segmentation Green Attitude Statements A. Green products are as effective as non-Green B. Green products are expensive C. I would pay more for Green products D. I only explore Green products because my customers demand it E. Green is an unnecessary distraction for my business F. Government regulation of Green is only going to increase G. Manufacturers' Green self-certifications are credible H. I only explore Green if my organization mandates it I. I don't see the value of Green J. Green will help me save money over the long-term K. Green will help me save money in the short-term L. Recyclability is a required element of a Green offering M. Green is worth the investment N. I am willing to pay more to work with a Green manufacturer Green Attitude Statements O. Green is a way to for me to achieve a competitive advantage P. Business leaders are expected to adhere to Green practices Q. Practicing Green is a way to attract new customers R. Practicing Green improves my company's image S. Adhering to Green improves morale among my employees & staff T. Adhering to Green effectively protects the environment U. Building materials are inherently not Green V. Building materials with low levels of toxicity are Green W. Green is confusing to me X. Green requires a lot of training Y. Green is difficult for me to implement Z. There is no accepted consensus on what it means to be Green AA. Manufacturers are the best source of information on Green BB. I only buy from suppliers that share my Green commitment Which attitudes are the most ādiscriminating?ā To what extent do you agree with the following statements? (1=strongly disagree; 5=strongly agree)
- 9. Utility Communicators International SUBSECTION TITLE 9 Discriminating attitudes ā the ones that cause clustering D. Customers require H. Company mandates K. Saves money in short-term Q. Attracts new customers J. Saves money in long- term O. Competitive advantage -0.47 -0.70 0.50 0.78 0.94 0.88 -0.48 -0.43 -0.49 -0.52 -0.39 -0.44 0.05 0.08 -0.61 -1.04 -1.14 -1.25 1.15 1.33 0.60 0.68 0.41 0.63 Attitudinal Ratings ā āGreenā Segments -2 +2 Variance from mean Segment 1 Segment 2 Segment 3 Segment 4
- 10. Utility Communicators International SUBSECTION TITLE 10 4 segments ā as defined by their attitudes toward Green 155 92 85 63 Distribution of Respondents Green Lovers Independently Green Green Rejecters 25% 23% 34% 18% Spend Indices Green Lovers āItās Not Easyā¦ā Independently Green Green Rejecters āItās Not Easyā¦ā Green Lovers ā¢āÆ Believe Green building materials impact the environment ā¢āÆ See value in Green building materials for commercial construction ā¢āÆ Believe Green is worth investment ā¢āÆ The least price sensitive segment Not Easy Being Green ā¢āÆ Believe Green building materials impact on the environment ā¢āÆ Believe government regulation is increasing ā¢āÆ Dependent on manufacturers for knowledge, expertise and compliance ā¢āÆ Looking for help in understanding Green Independently Green ā¢āÆ Believe Green building is important for comm. construction ā¢āÆ Not looking for assistance ā¢āÆ Believe government regulation is increasing ā¢āÆ See value in Green building, and believe it has a notable impact on environment Green Rejecters ā¢āÆ Do not see business benefits in Green ā¢āÆ Not willing to pay more for Green offerings ā¢āÆ Most skeptical about the validity/efficacy of Green building ā¢āÆ Do not believe Green building has a notable impact on the environment
- 11. Utility Communicators International SUBSECTION TITLE 11 Questions to answer What value proposition appeals to our target? How does the market segment? 1 3 Which segments should we target? 2 !āÆ How similar or different are attitudes, needs, and behaviors across markets? !āÆ How many distinct segments does the optimal schema yield? !āÆ What are the behavioral and firmographic profiles of each segment? !āÆ What primary benefit serves as the foundation for a value proposition? Is the foundational benefit motivating, credible, and differentiated? !āÆ What competencies are required for Company A to deliver the VP? !āÆ What are the interrelationships between attributes and benefits (how do they link)? !āÆ Which segments are the most economically attractive? !āÆ Which segments align best with Company A internal competencies? !āÆ With which segments does Company A currently perform best?
- 12. Utility Communicators International SUBSECTION TITLE 12 vļ¶ Which segments should we target? Stated vs. Derived Importance qļ±āÆThe difference between what customers tell you is important and what actually IS important to them (demonstrated through their behavior) Competitive Landscape qļ±āÆImportant purchase drivers that we own; the ones that are owned by key competitors; and ones that are āup for grabsā Company A āWinsā Competition āWinsā Required Crucial Uninspiring Motivating Stated Derived Segment Screening & Evaluation qļ±āÆThe basis for determining which segment(s) to select as a target(s) ā¢āÆ Primary target ā¢āÆ Secondary target Financial Attractiveness Market Relevance Organizational Capabilities Benefits
- 13. Utility Communicators International SUBSECTION TITLE 13 Desired benefits ā stated vs. derived importance Helps green transition Healthy work environment Increase customer satisfaction Supports comp advantage Improves company image Reduce fines Conserves energy Reduce financial liabilities Maintains property value Reduce costs Credibility Complete solution Certified green Enhance efficiency Superior knowledge Industry leader Demonstrate environ commit High Stated Importance % Top Two Box High Low CRUCIAL UNINSPIRING MOTIVATING REQUIRED Derived Importance Correlation to āLikelihood to Recommendā Demonstrated credibility, and commitment to helping customers transition to Green
- 14. Utility Communicators International SUBSECTION TITLE 14 Competitive landscape ā where do we win? Company A Best-in-Class Competitor Competition āWinsā Certified green Complete solution Credibility Reduce costs Maintains property value Reduce financial liabilities Conserves energy Reduce fines Improves company image Supports comp advantage Increase customer satisfaction Healthy work environment Helps green transition Demonstrate environ commit Enhance efficiency Superior knowledge Industry leader 35 40 45 50 55 60 65 35 40 45 50 55 60 65 % Top-Two Box % Top Two Box
- 15. Utility Communicators International SUBSECTION TITLE 15 Screening segments ā which one(s) should we target? Green Lovers āItās Not Easyā¦ā Independently Green Green Rejecters Segments Compare Financials Compare Relevance Compare Capabilities Financial Attractiveness Market Relevance Organizational Capabilities Target Recommendation Select Targets Primary Secondary
- 16. Utility Communicators International SUBSECTION TITLE 16 Questions to answer What value proposition appeals to our target? How does the market segment? 1 3 Which segments should we target? 2 !āÆ How similar or different are attitudes, needs, and behaviors across markets? !āÆ How many distinct segments does the optimal schema yield? !āÆ What are the behavioral and firmographic profiles of each segment? !āÆ What primary benefit serves as the foundation for a value proposition? Is the foundational benefit motivating, credible, and differentiated? !āÆ What competencies are required for Company A to deliver the VP? !āÆ What are the interrelationships between attributes and benefits (how do they link)? !āÆ Which segments are the most economically attractive? !āÆ Which segments align best with Company A internal competencies? !āÆ With which segments does Company A currently perform best?
- 17. Utility Communicators International SUBSECTION TITLE 17 wļ· What value proposition appeals to our target? Derived Importance Analysis qļ±āÆIdentify key drivers of behavior (i.e., most important benefits) for target segments JohnsonDiversey Project Rubicon ā Slide 41 176 156 143 131 123 114 114 108 108 106 106 106 103 F. Products tailored to industry O. Provides expertise for compliance N. Provides environ-friendly chemicals T. Offers purchasing from one source H. Provides integrated chem, serv, equip W. Provides training for your employees M. Offers products that use less water, energy, labor AA. Distributors recommend L. Enhances your reputation DD. Provides deep application expertise D. Enhances results thru tools & access BB. Gets to know your business EE. Provides best overall value Performance Partners - Derived Importance* N = 402 Important More Important *Statistically determined importance of attributes that drive willingness to recommend, indexed to the full set of benefit statements Benefits Pathway Modeling qļ±āÆDevelop pathway models to understand the optimal relationships among benefits Proprietary and confidential property of Prophet. Do not distribute. JohnsonDiversey Project Rubicon: āGreenā Research ā Slide 6 āGreenā Research: Pathway Modeling Desired Outcome: Healthy work environment Hierarchy Higher-order associations Functional attributes & touchpoints Desired Outcome Green Mandate Green ROI Building Green Brands & Business Green is Healthier & Safer Easy to Be Green Green Expertise & Advice Pathway Model Healthy work environment Help demonstrate commitment to environment Increase customer satisfaction Complete solution Certified green Industry thought leader on environmental issues Reduce financial liabilities Enhance efficiency 0.33 .39 Helps you transition to green 0.26 0.44 0.25 0.41 0.34 0.30 0.38 0.54 0.32 0.41 0.33 0.44 Value Proposition Development qļ±āÆDevelop the value propositionāour distinct promiseābased on themes most resonant with target segments Points of Parity Points of Difference Points of Preference Benefits
- 18. Utility Communicators International SUBSECTION TITLE 18 Purchase Drivers ā the foundation of the value proposition Benefits Index Safe work environment 132 Help demonstrate commitment to environment 128 Superior knowledge & expertise 110 Enhance productivity 109 Improves company image 108 Increase satisfaction 106 Comprehensive solutions 105 Industry thought leader on environmental issues 104 Reduce operating costs 101 Certified green 98 Reduce fines 95 Supports competitive advantage 95 Credibility 89 Maintain property value 88 Reduce financial liability 86 Conserve energy 80 Derived Importance Analysis Green Lovers Point of Preference
- 19. Utility Communicators International SUBSECTION TITLE 19 Pathway Modeling ā the relationship between benefits and features Help demonstrate commitment to environment Healthy work environment 0.41 Improves company image Enhances Productivity Reduced Costs Credibility Thought Leadership 0.47 0.32 0.48 0.54 0.38 0.52 0.36 0.42 0.43 Pathway Model Green Lovers Points of Parity Points of Difference
- 20. Utility Communicators International SUBSECTION TITLE 20 Value Proposition Model ā Company A Company A is the commercial construction provider thatā¦ Healthy Work Environment Thought Leadership Credibility Improves Company Image demonstrates a commitment to the environment, and to helping customers transition to Green Target Frame of Reference Primary Benefit Proof Points Forā¦ Green Lovers
- 21. Utility Communicators International SUBSECTION TITLE 21 Value Proposition Model ā from strategy to activation Post-purchase Experience Pre-purchase Experience Purchase and Usage Experience Brand-Customer Relationship Web Site Advertising Word of Mouth In-store Experience Sales Collateral Product Performance Service & Delivery Training Customer Care Technical Support Outsourcing Upgrades Customer Experience Value Proposition