 The Rise of Green Products Thursday, December 2 nd

An Evolving Economy  A 2009 study found that in the current times of economic crisis and global recession consumers are more likely to prefer eco- friendly food, beauty and household products.  Why?  7 out of 10 Americans (of those studied) said that in these tough economic times it is essential to buy products with “social and environmental benefits”.  Half expressed a willingness to spend more money for these products.

Social & Moral Responsibility  71% said they rather avoid purchasing from companies whose practices they do not agree with.  48% advised others not to buy products based on a company's social and environmental practices.  Wal-Mart was rated by the surveyors as the least socially responsible company.  The study’s author stated, "The economic crisis has created a moment of reflection where consumers are redefining what truly matters and evaluating purchases based on both value and values…"

What is important?  Consumer priorities for green product attributes – listed as very important in the study:  Price – 66%;  Quality – 64%;  Natural products that are "good for your health,” – 55%;  ”Hormone or pesticide-free" – 40%;  “Made from all natural ingredients” – 31%;  ”Not genetically modified” – 30%;  "USDA Organic” – 22%.  43 % turned out to be "box-turners" and check the list of ingredients in cosmetic or beauty products before making a purchase  18% always, and 25% most of the time  4 out of 10 consumers buy environmentally friendly cleaning products on a regular basis – 12% always, and 28% almost all the time.

Eco-Labels and Green Product Certification  What the green certifications, otherwise known as eco-labels, do is verify that a product meets specific standards.  They offer a third-party validation, a way to determine a product’s green qualifications.  Because any green certification or label is voluntary, green product certifications are showcases for manufacturers genuinely interested in being taken seriously by facility executives who want to purchase products with verified green claims.

Demand for “Green” Products  When shoppers are given choices, many say that eco-friendly products are a meaningful way to make an individual contribution to the good health of the planet.  Comparison-shopping for just the right product now includes a demand for the lowest carbon footprint.

“Green” Branding  It is now an imperative for all brands to be green. Because of the consequences of global warming, corporations may find themselves lightening rods on the issue.  Those companies that do not “go green”, risk being branded socially irresponsible, making them vulnerable to criticism and brands at risk.

Implications of “Green” Branding  Such a strong association between corporate action – and potentially inaction – on the environment and social irresponsibility leaves brands at risk unless proactive steps are taken to become green.  Emerging green consumer purchase behavioursuggests this scenario:  Demand for green (or greener) products will increase over time as attitudes and social norms evolve;  New product choices become available and information that enables consumers to make informed purchase decisions (e.g. green labels) is introduced;  Consumers will start to shift spending to greener brands within a category;  Consumers will increasingly prefer to purchase from companies with a brand that is perceived as green, regardless of whether or not the product that they ultimately purchase is one of the company’s “green” products.

Chapter 6 Review Questions  Due Friday, December 10  Pg  # 1, 2, 4, 6 & 10