Green Segments and Strategies: Companies’ Call to Climate Action
As Nigeria and other countries of the world are making commitments to climate actions in line with climate change mitigation and adaptation ambitions, firms, institutions, and corporate bodies are not left out in this connection. It is time for them to begin to strategically meet the needs and convenience of customers and consumers who seem to have various degrees of environmental concerns and demands. With the increasing human activities today, this call has become ever so necessary for the “salvation” of the degrading environment.
No wonder the United Nations Framework Convention on Climate Change (UNFCCC) through the different COPs (Conference for the Parties) arrangements and other platforms has made it possible for countries and corporate organisations to commit to climate actions, especially in the light of the Paris Agreement. For those in the mainstream, which includes the Fast Moving Consumer Goods (FMCGs) companies, public and private institutions, service providers, and others to carry out these (green) actions, deliberate green (strategic) actions are required with regards to green market segmentation.
Strategy is a broad brush approach towards an enterprise or business, experts say. It is holistic in that it links the functional area of a company to the external environment. Basically, a market involves what, where, and to whom one is selling. Therefore, survival in the marketplace largely depends on living up to the natural pressures that attend these market elements. Since a company’s posture is determined by its identification of strength and weaknesses, proper assessment of the forces affecting competition of such company in any industry in connection with the underlying causes becomes necessary. It is said that “those that adapt best displace the rest”. The moral lesson of that statement is the practical sense upon which strategy is deployed in all realms, especially in relation to “green market segments and strategies”. Notably, to the extent that strategy entails the utmost use of imaginative thinking for possible business scenarios for optimality and profiting, it is not without risks when deployed in reality.
The concept of strategy looks beyond immediate chances towards long term growth and development, and that is the reason it can be inconvenient for companies to pursue any strategic goal. Why? It implies that they forgo instant profits for long term dominance. Overall, strategy must cope with competition. Whether in price of a product or service, product quality or quantity, it is important for organisations to know what competition is doing to maintain relevance in the marketplace. To be ignorant of what competition is about in the marketplace is to kill the business, and that is almost always a proof of lack of industry on the business owner’s side. To stay afloat in your area of business focus is to fine tune what others are doing; that is, innovate new ideas for continuous business growth or “die”! What is more, in pursuance of this strategic business aspiration, which has undoubtedly become a global trend, companies must keep it real. Organisations who are taking responsibility of their environment by reducing ecological footprints must do so with utmost sincerity. Otherwise, such effort might earn them bad press by Civil Society Organisations (CSOs), or environmental activists, or others. Regardless of possible negative Public Relation, such efforts, no matter how little, must be encouraged by same groups in all fairness.
More important, adequate knowledge of consumer segment helps companies to apply the right strategy and the right strategic mix to put in place as and when due. This is the critical point where a company must stack the odds in its favour. That said, understanding the target consumer, which is the bread and butter issue in marketing, will help marketers to know whether “greenness”, in this case, is a good selling attribute and how it should be incorporated into the overall marketing strategy. Recent research shows consumers’ growing concern about the environment and their demands for healthier goods and services; hence, this is a good time for companies to start to pursue green programs in Nigeria. Again, finds show that a good chunk of consumers are willing to patronise green products, even though they cost more. This group comprises the green segment where a marketing communication can be tailored around it. Given the palpable competition in the market today, building a conversation around the green attributes of a product or service is an obvious strategy that is capable of winning huge customer loyalty to the organisation.
Green Consumer Segments
The reality of greenness of products and services has come upon decision makers at different levels of the market. Therefore, the appreciation of the target consumer will help marketers to recognize greenness as a selling attribute and how it should be tactically introduced into the marketing mix. With a corresponding action in line with the varying degrees of consumers’ environmental concerns, companies can segment the market into different shades of green (as seen in the Roper Survey) which includes the following:
True Blue Greens
This segment of the green market has strong environmental values, and they take it upon themselves to try to effect change through their buying habits. True Blue Greens (as they are called) are over four times more likely to avoid products or services by companies that are not green compliant.
Greenback Greens
Greenback greens are more willing to purchase environmentally friendly products than the average consumer. However, unlike True Blues, they do not take the time to be politically involved.
Sprouts
In theory and not in practice, Sprouts believe in environmental causes. They rarely spend more to purchase a green product, although they can go either way and can be persuaded, especially if the green product appeals to them.
Grousers
Grousers are seemingly uneducated about eco-friendly issues. Since they believe that eco-friendly products are pricey and do not perform as well as the competition, they can be distrustful about the change they can effect with their buying attitude.
Basic Browns
This segment does not care about eco-friendly and social issues, as they are caught up with every day concerns of life.
Green Strategies
Lean Green
Lean Greens always seek long-term preemptive actions, and they like to comply with regulations. But, they do not see enough money to be made from green market segments. Lean Green companies like to pursue programs that put them in a good light by supporting green activities, which they might not particularly publicise; hence, they create a non-green lower cost competitive advantage. For fear of being held accountable and not being able to differentiate themselves from competition, they are mostly hesitant to drive their green programs or certain products or services with green attributes. An example is Coca Cola Company and its Odwalla brand, although this brand is not available in the Nigerian market yet.
Defensive Green
This type of strategy takes notice that green market segments are important and profitable aspects of the market that it cannot totally avoid, but it views green marketing actions mainly as a precaution. Since companies that apply this strategy seek to enhance brand image and prevent damage, they apply green measures as a way of responding to crisis or as a measure to fight back at competitors without pursuing an aggressive greenness generally. In fairness to this green business strategy, their green efforts can be sincere and sustained, yet its promotion is random and short lived. Companies who adopt this strategy are known to sponsor smaller laudable environmental programs through Public Relations and advertising, especially when they are being attacked by regulators and activists. Unless they foresee a rewarding competitive advantage, they would not embark on a ground breaking green campaign.
Shaded Green
This strategic approach differs from defensive green in that it invests in a long term eco-friendly program even though it involves huge finance. Companies that apply this strategy see greenness as a veritable opportunity to come up with innovative products and technology that amount to competitive advantage. However, they prefer to sell their products with the mainstream attributes and channels. They intentionally refuse to play up environmental attributes as they view it as secondary. As far as they are concerned, playing up the direct and tangible benefits of their products earns them more money, although they have the capability to position themselves as per greenness.
Extreme Green
From inception, eco-friendliness is the mainstay of extreme green. As green values shape its decisions, green is amply integrated into its business and product life cycle. Extreme Greens mostly serve niche market as they utilize specialty channels to sell their products and services. Honest Tea of Bethesda, Maryland, USA, which has built its brand on authenticity, purity, and integrity, is an example of one of the few companies that apply this strategy.
Finally, in green marketing strategies the focus is on a segmented market and not on a mass market where particular customer’s buying habit is paid little or no attention to by the companies. This article is a clarion call to companies to begin to look at their areas of strength and weakness in the light of climate change to come up with cutting edge green strategies in a segmented green market to serve the market with sustainable green benefits. Through the appreciation of these segments, companies can, based on their competitive advantage, deploy a corresponding strategy to leverage the opportunities that abound in the green segments. That way, and in time, sprouts, grousers, and the basic browns can be enlightened to green loving segments, at least. When companies begin to tailor their products and services with these segments in mind, and converting the uneducated and not-so-educated segments to become green loving, the aim of this article would have been achieved in the light of the global climate crisis.
Wisdom Okoronkwo is a writer and a green advocate with special interest in Green Marketing. Research is his hobby horse!