Far-reaching business opportunities
Consumer demand for greener products and services creates opportunities for businesses to promote their greener offerings, and introduce profitable new ones, all the while building their top-line sales, enhancing their image, and bolstering the morale of employees newly engaged in a higher purpose.
Polls indicate that consumers are willing to pay a premium for green. However, empirical evidence is demanded by skeptical businesspeople to justify the investments in new technology, special materials or ingredients, and high start-up costs of introducing new greener products. A key new rule of green marketing: people will now pay a premium for such brands as Aveda, Burt’s Bees, Method, Stonyfield Farm, and Toyota Prius, all discussed in this book, indicating that today’s consumers have higher expectations for the products they buy and that environmental soundness is a new dimension of quality. To the extent that businesses can meet or exceed these new consumer expectations, they will enhance their products’ image and ability to command a premium.
According to the old rules, consumers didn’t expect ecologically preferable products to work well. However, as will be demonstrated throughout this book, and specifically in Chapter 4, thanks to advances in technology, today’s greener products work far better than their predecessors that languished on health food retailer shelves; by definition, the current crop of greener products are perceived as healthier, less toxic, and capable of saving time and money, as well as contributing to a sustainable future. Just a few examples: faucet aerators and water-saving showerheads help slash water and energy bills, concentrated laundry detergents can be carried and stored with greater ease, and non-toxic cleaning products, pest control, and garden products are viewed as safer for children and pets.
Some greener products appeal to consumers for many reasons, suggesting the potential to win over more than one segment of the now enormous market for green. Own a hybrid? You might because it’s more fuel-efficient, but chances are you want to eventually save money (beyond the purchase premium) or to make fewer trips to the filling station. You may also want to drive in the HOV (High Occupancy Vehicle) or just to look good while tooling around town. And so it goes with so many other greener products, as demonstrated in Figure 1.4.
Figure 1.4 Green products offer mainstream benefits
Chart: J. Ottman Consulting, Inc.
Expect the genuine value-added benefits of superior performance, convenience, cost savings, and increased health and safety to continue to propel the mass market for eco-inspired products in the years and decades ahead.
New source of innovation
Historically, going green helped to unearth efficiencies that beefed up a company’s bottom line. Under the new rules, businesses are discovering the even more attractive eco-opportunity for innovation that boosts top-line revenues. That’s because green means doing things differently. As will be demonstrated in Chapter 5, proactive companies are inventing new greener technologies, new business models, and new designs that are capturing media attention, grabbing new customers, and establishing a competitive advantage – if not changing the rules of the game altogether. Examples abound. Zipcar, the new time-sharing scheme for cars, is changing the models for vehicle ownership, leasing, and rental. Toyota’s Prius has reawakened a truck- and SUV-focused Detroit to the future-saving possibilities of hybrid-engine vehicles, and a new generation of electric cars and fuel cells is right on Toyota’s tail. Cargill’s NatureWorks is proving that plastics don’t have to rely on fossil fuels and can be recyclable and compostable as well. And “smart grid” technology, coupled with in-home energy meters and web-based monitoring systems, is creating exciting new business opportunities springing from increased consumer awareness about the ability to save money through efficient resource management.