Saturday, 28 February 2009

Green Products

To the impulse to go “green” is spreading faster than morning glories. In almost every opinion poll on the subject, consumers say they are very concerned about climate change and also about the environmental and social impact of the products they buy. But when it comes to actually buying green goods, words and deeds often part ways.

The reasons are:

1) Lack of awareness.

2) Negative perceptions

3) Distrust

4) High Prices

5) Low Availability

The importance of each barrier varies by product industry and geography. In 2006, green laundry detergents and household cleaners accounted for less than 2 percent of US sales in their categories. Hybrid cars, though trendy, made up little more than 2 percent of the US auto market in 2007.

To solve this problem Companies first need to figure out which customers would probably want which products and then examine how people in each market segment make their purchasing decisions. In other words, companies have to move customers through every stage of the purchase process—from becoming aware of eco-friendly products to finding them.

Educate customers: Because consumers are largely unaware of green products, a business that sells them must see itself first as an educator, not a sales machine. This lack of knowledge means that companies must explain not only their own products but also the larger issues of pollution, climate change, overfishing, and other environmental problems.

Build better products: Consumers will not think better of green products until companies make them equal to, or better than, their conventional alternatives. Most people values performance, reliability, and durability much more than ecological soundness. Toyota dealt with early perceptions of the Prius (an eco friendly car) by increasing its horsepower and mounting a campaign that promoted the car as “quick, roomy, and economical.”

Be Honest: Consumers doubt not only the quality but also the very greenness of green products. In this area, they trust scientists and environmental groups, not the government, the media, or businesses. Some companies mislead consumers by highlighting a single positive product feature while ignoring the negative ones. To build public trust, companies must come clean about the true environmental impact of their products and their attempts to reduce it, and many will need to address historical concerns about specific products or operations. Only then will consumers believe a company’s green claims.

Offer more: Price is the largest obstacle to purchases of green products. Companies must ensure that consumers understand the financial and environmental returns on their investment in green products. Sales of such products may also rise if their design stands out and signals their owners’ commitment to the environment. The value of the Prius, for instance, goes well beyond traditional functionality. The car caught the attention of consumers because of its unique and contemporary style and its innovative dashboard, which, via an onboard computer, displays the various energy-efficient functions of the car.

Bring products to the people: Having decided to buy green products, many consumers encounter a last hurdle—finding them—either because manufacturers don’t keep up with demand or advertise where they can be bought, or because wholesalers and retailers don’t stock them or display them prominently. Companies with successful green products ensure that they are available and easy to find.

Today, green products and services are only a niche market, but they are poised for strong growth. Entry into the green market can also improve a company’s reputation, thereby increasing the value of its brands. Companies that have a strong position in the green market can protect their market share from competitors. Newcomers, in turn, can steal market share from established companies through appeals to the ever-growing legions of green consumers.

Going green while staying competitive can be challenging but once businesses remove the obstacles that now make it hard for consumers to act on their environmental beliefs, sales of green products could explode. A company that builds a reputation for eco-friendliness can do much more than increase its revenues. The better its reputation, the more talented the employees it can attract, the more loyalty it can inspire in its customers, and the more it can charge for its products.

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