In today’s highly-competitive environment, organizations are constantly focused on meeting profit goals and the one marketing mix element that generates revenue is pricing. We must first understand that pricing is only one element of the consumer’s total cost of acquiring, using and recycling or disposing of a product. As such more companies are taking a proactive approach and switching from cost-based pricing to value-based pricing.

Whether destined for emerging markets or developed markets, firms make mistakes when designing and pricing social innovations. First of all, they miss opportunities to respond to customer needs by over-engineering their offerings or making them too complex. Secondly, they over-price these offerings, thinking that customers will be willing to pay for “green” or sustainable products or for products that serve social needs in developing or under-developed markets. In other words, they over-design or over-price their products or services.

Sustainability has received a lot of attention in recent years. Recent concepts of sustainable value for social innovation have been explored and introduced by experts such as presenting sustainable offerings designed around user needs, tailored for local markets, widely accessible to the target markets, simple in nature and presenting little trade-off with respect to quality. In other words, products and services that fall in the social innovation sphere, carefully crafted to local markets and subject to advanced, needs-based segmentation approaches. Johnson & Johnson, for example, has been very successful at entering the larger Indian hygiene market by designing simple and basic products that respond to the needs of a large market, and priced based on local willingness-to-pay.

Many companies have entered emerging and developing markets by adopting a local-local strategy: local products designed for local customers. They have embraced the fundamentals of the value-based pricing methodology: careful market segmentations, assessment of willingness-to-pay for value drivers, pricing based on this willingness-to-pay, and communication to the market of the sustainable value messages. Value-based pricing in that case does not mean high or premium prices. It means pricing sustainable and social innovations based on the local customers’ willingness-to-pay. Many companies complain they cannot get additional premiums in emerging markets for their “green” or sustainable technologies. They are looking at this in the wrong way. By over-designing their offering or miscalculating willingness-to-pay, they over-price innovations and miss their market target.

Referenced from:

1) http://www.marketingdonut.co.uk/marketing/marketing-strategy/pricing/why-value-based-pricing-works-best

Look around within 2 feet of yourself. What do you see? Maybe a pen, paper, snack, electronic device, or jewellery? Well have you ever wondered how its raw materials managed to be manufactured, shipped, bought, and finally rest within a hand’s reach? Believe it or not, a lot of thinking has been put into planning just that.

Of course, it’s great for companies to keep rolling out more and more sustainable and eco-friendly options but will people buy them? One of the top reasons I can think of is customer convenience. Just how easy is it for a potential customer to not only come across and learn more about a product but to also purchase and bring it back home. Having adequate and easy-to-understand product information at the point of purchase is also key to ensuring that sustainable choices are more convenient to make. However on the business side, the higher the level of convenience, usually the longer and more complicated the supply chain and logistics. Of course, this leads to rising carbon footprints as the product is trekked all over the world. This is the trade-off that face most companies of sustainable goods.

Questions these companies face include the kind of purchasing venue (ie. One-stop shopping vs. local market, online vs. brick-and-mortar stores), resource management, and of course, waste management. Perfect models of convenience include McDonalds and stores like Forever 21 and H&M, big name brands that have managed to corner massive market mostly to due to customer convenience amongst other things. They too are realizing the importance of compensating their enormous carbon emissions and waste generation with sustainable initiatives and developmental programs.

It is also incredibly easy for the everyday person to say “sure! I would pick the more eco-friendly option even if I had to pay a bit more or go to a different store”. But the reality is that we, as humans, are a species engrained in habit. During the few minutes it takes to make a purchasing decision, convenience and overall benefit or utility of the sustainable product just has to be worth the price we pay for it. And companies realize this triple bottom line. We just got to be more creative and keep on working to find innovative solutions to all our needs!

Referenced from:

1) http://www.greenbiz.com/blog/2014/01/24/6-steps-more-sustainable-supply-chain

2) http://www.motherearthnews.com/homesteading-and-livestock/living-off-grid-convenience-vs-sustainability.aspx

Who likes ice cream? Well to those of you who do (and I’m sure there’s a fair amount of you), did you know that you can have ice cream that is either good or bad for the earth? Ben & Jerry’s were the first ones to let us in on this news. Through sustainability promotion and communication, Ben & Jerry’s have opened up their product and allowed dialogue between consumer and company. They have communicated sustainability solutions provided in their product, communicated about their company as a whole and most importantly, they communicate through the consumption of ice cream!

As the first ice cream company in the world to use Fair-trade certified ingredients in 2005, Ben & Jerry’s has committed to production that is environmentally responsible and socially and economically fair. Along with a guaranteed minimum price, farmers are paid a premium for investment in social, environmental or economic development projects that are decided upon by the producers. With this strategy, not only has this become a marketing campaign by itself but, it has raised awareness of this issue to consumers. By rapidly and successfully converting all flavours to qualify for Fair-trade certification, Ben & Jerry’s is not only strengthening the brand name but are opening the doors for other companies to convert as well. They hope to create a growing global marketplace for smallholder Fairtrade producers. And to do this, the answer lies in effective communication.

Effective communication of sustainable business practices lies not only in the end consumer but in business-to-business relationships as well. However, with so many positive economic effects of sustainability on the market, companies must be sure not to be accused of greenwashing. So often, businesses believe that simply sticking on more eco-looking symbols or claiming to be “compostable” immediately elevates their brand. And more often than not, consumers fall for it all the time. The charade cannot last long but it does show how effective the right kind of communication can be.

Referenced from:

1) http://www.unilever.com/sustainable-living-2014/reducing-environmental-impact/sustainable-sourcing/fairtrade-ben-and-jerrys/

2) http://www.theguardian.com/sustainable-business/2014/jul/18/ben-jerry-turn-ice-cream-into-energy

Sometimes when companies are exploring new ways to be sustainable and energy conserving, they become stumped because they keep analysing ways to change their current product. They must look beyond the physical product and directly at the customer’s needs and wants that were satisfied. If a company can make any product or design change to still take care of their customer, they’re in business!

In this post, we’ll be studying the importance of fulfilling customer solutions rather than attempting to mutate a product. By going beyond a customer’s current wants and needs, we ask ourselves, “what kind of services are they really getting out of the product?” and “can we turn that good into a service”? From shared Google docs to Netflix to online shopping, people have been revolutionizing buyer behaviour in the most appealing of ways. They have targeted real needs and created efficiencies for both company and consumer. The movie, TV and music industry are great examples of how much raw material has been saved from stopping production of CDs, DVDs, VHRs, players and of course, storefronts. We are optimizing the Internet world and slowly, almost everything is being converted from real to virtual. Rather than rethinking the production process of these materials, companies are striking directly into the need to watch movies in a mobile manner. Customers are happier than ever with the convenience and ease of using services like Netflix and Shomi.

However, there are some established big-name brands that can’t help but keep their product because that IS their business. McDonalds and resource extraction companies are some of the few that are constantly under fire for unsustainable and Earth damaging behaviour inherent to the business. For this reason, they have found alternative services such as carbon-offsetting and setting programs in developing countries.

Referenced from:

1) http://smallbusiness.chron.com/sustainable-marketing-solutions-24063.html

2) http://weareinnovative.ca/whats-on-our-minds/creating-a-sustainable-marketing-strategy

Following from my previous blog post, we can see more and more companies yearning to be identified and labeled among popular green companies. Sure coming up with a great product is one thing but how do big name brands go about making sure they are number one on the consumer list?

They use green marketing strategy. Let’s take the Toyota Prius hybrid cars for example. High in both greenable attributes and green development capabilities, Toyota has decided to use the five I’s of green marketing: intuitive, integrative, innovative, inviting, and informed.

Prices and specifications of the Toyota Prius hybrid cars were relatively higher than conventional cars fuel oil (BBM) because this eco-friendly technology was still relatively new in the world even though the concept car was developed in Japan when 1997. The Prius was developed as a response to concerns from the high society world about global warming being caused by high amounts of carbon dioxide released from motor vehicles. Today’s similar example could be Tesla’s electric cars.

The Toyota Prius concept car uses petrol and electric power sources. With innovative technology, this car is more fuel-efficient and most importantly, has lower exhaust emissions and is eco-friendly. Some related awards achieved by the Toyota Prius include being certified as a super ultra-low emission vehicle (SULEV) by the California Air Resources Board. This car was also named the Best Car in America in 2004 and amongst Europe’s best cars in 2005.

Toyota’s green marketing campaign has made the sustainable choice accessible and easy-to-grasp, combines technology and ecology, accurately informs buyers and mostly, importantly, makes buying the Prius an enjoyable and positive experience.

By conducting a green marketing campaign, the company automatically becomes unique and attractive to consumers willing to make an economic benefit, be truly sustainable or just be seen doing good.

Referenced from:

1) http://www.greenbiz.com/blog/2014/01/14/five-strategies-avoid-taint-greenwash-your-business

2) http://602communications.com/2011/08/how-emotional-marketing-turned-the-toyota-prius-into-a-social-revolution/

Remember the days when the word “sustainable” connoted boring, inconvenient, expensive, and most of all, ugly? For some, that is still true. However, luckily, this view is changing and no longer as negative as it once was. There has been lots of research of the benefits of being sustainable. So not only are more and more top companies coming on board but, they are becoming smart about marketing more appealing products. Sustainability is now a fad!

Let’s look at the Method brand of soaps. Just over a decade ago, sustainable cleaning products were either expensive or ineffective on dirt and oil. However, Method revolutionized the soap industry with their philosophy of making beautiful cleaning products that are as kind to the product as it is tough on dirt. Their bottles look beautiful with its modern sleek lines and clean labeling. People love their products and there’s also an added incentive of feeling good about the planet when using Method. It’s a win-win for both company and consumer alike.

But how has Method managed to find this magic method of meeting the triple bottom line? They aimed to be “Susty”: sustainable and sexy with their positioning. Their product also appealed to the economic goals of customers by being equally comparable to other choices on the market. By targeting the masses and not simply the eco-conscious, they did not limit themselves and so far it has paid off for Method. Now considered a global leader, Method runs a value-driven business and builds social and environmental benefit to its products. We can also see many other companies driving change forward by making its products not only sustainable but sexy in the eyes of consumers. I can tell you that I am definitely a fan and easily sold by this powerful combination.

Referenced from:

1) http://methodhome.com/about-us/our-promise/

2) http://www.sustainablebrands.com/news_and_views/communications/uk-dream-bridging-gap-between-environmental-and-branding-experts