True Green or Green-Washing? A Consumer Point of View.

True Green or Green-Washing?

A Consumer Point of View

How Green is Your Brand… Really?

2

How would you answer this?

Q: Is it important to you that BRAND X use environmentally-friendly practices?

3

The Green Challenge

Who is not going to say green is important?

This is a question that will

provide a brand with an

un-actionable answer. It’s

an excellent answer to a

meaningless question.

4

A Similar Research Question

Q: Do you believe that cheating on a spouse is wrong?

A: 90 percent of Americans answer that they believe adultery is morally wrong.

5

The Truth?

• Recent studies reveal that 45-55% of married women and 50-60% of married men engage in extramarital sex at some time or another during their relationship.

(Atwood & Schwartz, 2002 - Journal of Couple & Relationship Therapy)

6

The Problem with Direct Questioning

Especially with a subject like green, research absolutely must fly below respondent radar to get at what consumers really think and feel, and not what they say they think and feel.

7

Brands need to know:

What contribution to consumer engagement and loyalty does being “green” make in the category the brand competes in?

Is it a competitive differentiator?

And what does “green” mean exactly to the consumer shopping the category?

8

Green or Green-washing?

Only then can a brand move away from generic “me-too” green-washing and create a differentiating, and profitable, green strategy.

9

Brand Keys Commodity-to-Human Brand Continuum (U.S)

© Brand Keys, Inc. 2008

Degree To Which Products & Services Are Imbued With Real (Or Perceived) Emotional Values

None High

21st Century “Brand”

Human Brand

Martha Stewart

Donald Trump

Tiger Woods

CategoryPlaceholder

INC International

Label

Commodity(aka Stuff)

42005 Brand Keys Study done in North America and UK, among 1700 brands

Is Differentiation Important?

11

The Emotional Differential


12

Brand Loyalty & Engagement Experts

Read The ARF’s “First Opinion”

Research ReviewOn Brand Keys’

Engagement Method atwww.brandkeys.com

Dr. Robert Passikoff -------------

Named a “2007 ARF Research

Innovator”


Amy Shea, EVP-------------

2008 ARF“Great Mind” Award

in Innovation

13

Loyalty is driven by brand equity…

how well the brand meets or exceeds consumer needs/expectations in a category.

(These needs and expectations change from category-to-category. Consumers don’t buy burgers the same way they buy computers!)

But whatever the category, the greater the brand equity, the more loyalty, leading to profits for the brand.


Brand Equity Loyalty = Profitability

14

How Do You Drive Loyalty?

By having predictive answers to these questions:

• How do consumers buy the category?• What’s important in the category?• What are consumers expectations in the category?• How well does your brand meet (or even exceed) consumer

expectations?


Factor Analysis +

Regression Analysis+

Causal Path Modeling

Read

FUSING

The Brand Keys MethodologyThe Brand Keys Methodology

Emotional Psychological

Jungian-based PersonificationQuestionnaire

Rational Category

Attributes, Benefits & Values

Brand Equity MetricsExpressed as easy-to-read index

numbers and diagnostic bar charts

15© Brand Keys, Inc. 2008

Brand Keys Customer Loyalty Engagement Index

• Annual survey (2008 is 11th year)

• 57 categories

• 26,000 consumer interviews

• Drawn from the 9 US Census regions

16© Brand Keys, Inc. 2008

• 18-65 years old• 85% phone interviews; 15% in-person for cell

phone only• Self-classify for category and brand

• Male/Female

Not what can the brand do, but what does the

consumer want?

© Brand Keys, Inc. 2008 17

Real World Validation

18

The Starbucks Story

19

Sample of Data Output: The 2007 Coffee Category Ideal

Loyalty Drivers – Order of Importance

Cus

tom

er E

xpec

tati

on L

evel

s

3

Highest Lowest

1

1. Loyalty Drivers in order of importance.2. Percent contribution to future purchase/loyalty.3. Customer Expectation level for each Driver.


Low =Table Stakes

High =Differentiator

2Percent of Contribution

#1: How do consumers view the category?

#2: What is the hierarchy of contribution to loyalty?

#3: Where’s the opportunity for greatest differentiation?

20

Percent - Contribution of Individual ABVsDriver #1: Location & Value (30%)

31%

28%

19%

14%

8%

0%

20%

40%

60%

80%

100% Is competitively priced

Has convenient hours of operation

Is worth the money

Is near to where I work

Has convenient locations


21

2006 Customer Loyalty Engagement Index: Coffee

118

105

112

107

125

114116

110

129

110

119

110 110

106107

105

100

110

120

130

140

Location & Value Quality & Taste Service & Surroundings Variety & Selection

Ideal Dunkin' Donuts Starbucks Krispy Kreme

Loyalty Drivers – Order of ImportanceHighest Lowest

Cus

tom

er E

xpec

tati

on L

evel

s


Starbucks dominates in the driver with strongest customer expectations.

22


119

111 110

106

135

115

109

106

122

117115

114 113115

112

106

100

110

120

130

140

Location & Value Service & Surroundings Quality & Taste Variety & Selection



Cus

tom

er E

xpec

tati

on L

evel

s


As customers articulate the increasing importance of Service and Surroundings at the start of ‘07, Starbucks loses it strength to Dunkin’ Donuts.

23

What happened?

Text of Starbucks Memo

From: Howard SchultzSent: Wednesday, February 14, 2007 10:39 AM Pacific Standard Time

Subject: The Commoditization of the Starbucks Experience

As you prepare for the FY 08 strategic planning process, I want to share some of my thoughts with you.

Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in the commoditization of our brand.

Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces. For example, when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines. . . .

March 3, 2007

TALKING BUSINESSGive Me a Double Shot of Starbucks Nostalgia

By JOE NOCERA . . .

Last week, this Mr. Schultz was on vivid display when an internal memo he wrote to his top executives was leaked to Starbucksgossip.com. . . . He pointed, for instance, to the company’s decision some years ago to install automatic espresso machines, which, he wrote, “solved a major problem in terms of speed and service,” but also made buying a cup of Starbucks coffee a more antiseptic experience. . . .

Robert Passikoff, president of the brand consultant Brand Keys, said that Starbucks had taken its eye off the brand. “In trying to migrate from a coffee brand to a lifestyle brand, there has been a certain brand dilution.” He agreed that the “whole European coffeehouse experience” was no longer how people thought about Starbucks, to the company’s detriment.

http://starbucksgossip.com/

25


138

115

111

106

135

116109

106

116

111113

108110

115

111

106

100

110

120

130

140

Service & Surroundings Quality & Taste Location & Value Variety & Selection



Cus

tom

er E

xpec

tati

on L

evel

s


Service and Surroundings are most important to customers at the start of ’08; Starbucks continues to struggle in the category they largely shaped.

Drivers are Changing for Green in Certain Categories

26

A Green Strategy

A look at the top-ranking brands in both the Athletic Footwear and the Automotive categories demonstrate the payoff for brands that move beyond “green-washing” to specifics that consumers care about.

27

Athletic Footwear: January 2007


Uses Recycled MaterialsUses Natural Materials

At the end of 2006 consumers in this category found materials and manufacturing, which included some green attributes, to be least important and not an area where a lot of differentiation was possible.

Athletic Footwear: January 2008Doesn’t Produce Greenhouse Gases (SF6) Uses Recycled Materials Uses Environmentally Preferred MaterialsConserves ResourcesMaintains Sustainable Practices Through Supply Chain Partnerships

In one year, green has moved up in importance from fourth to second, and the definition has expanded—offering marketers clear strategic direction.

Top 5 Athletic Footwear Brands

1. Air Jordan

2. New Balance

3. Adidas

4. Nike

5. Skechers

30

2008 Brand Keys Consumer Loyalty and Engagement Index Ranking

True GreenNike reports the Air Jordan is the first product in its

companywide “Considered” initiative, under which by 2011 all products will be designed to reduce waste and incorporate environmentally friendly materials. The Air Jordan uses a minimal amount of adhesives and glues that are considered environmentally unfriendly, instead relying on a system of interlocking panels, which meant designing new machines to produce the product.

31

A Green Strategy

While going green is not the only thing that is important to consumers, it’s movement in the category suggests that no athletic footwear brand can afford to not have it, and talk about it, as part of their brand and communications strategy.

32

Automobile: January 2007


Gets Good MPGHas Hybrid Vehicles

Fuel efficiency and having hybrids were part of the second most important driver in the automotive category when consumers were polled in late 2006 in Brand Keys annual Consumer Loyalty Engagement Index.

Automobile: January 2008


Increases Fuel EfficiencyHas Hybrid VehiclesProduces Reduced EmissionsOffers Alternative Fuel TechnologiesSupports Smart Driving

Green means more today, and expectation levels are significantly higher. Brands have the chance to differentiate with these values.

Top 5 Automotive Brands

1. Toyota

2. Mercedes

3. BMW

4. Nissan

5. Honda

35

2008 Brand Keys Consumer Loyalty and Engagement Index Ranking

True Green

Toyota posts a very specific 5-year environmental plan on its website. According to CBS News, Toyota has the best selling hybrid on the market, commanding 51% of the hybrid market—up from 48% the previous year despite the influx of new players.

36

A Green Strategy

With Toyota’s success, and the escalation of fuel costs and supply concerns, automotive brands are in overdrive to meet consumer demands. As seen in the metrics, green is gaining ground and is a way for an automotive brand to differentiate in an increasingly-competitive category.

37

When it comes to green….

Understand your category and what green means to your customer!

38

Thank You!Thank You!

A blind pig may find truffles, but it helps to know that they grow under oak trees.

—David Ogilvy (1911–1992)© Brand Keys, Inc. 2008 39

40

Executive Vice President, Global Director Brand Development Practice - Amy Shea

Amy Shea, Executive Vice President and Global Director of Brand Development, has worked with brands for over twenty years, specializing in

translating research-based insights into effective brand communications. Her diverse background spans every facet of brand communications, offering

her clients an expertise that includes a comprehensive understanding of the complexities of brands.

From her beginnings in media sales, Amy evolved her career to the creative side of the house, helping brands operationalize their strategy in

their advertising communications. As head of her own production company, she worked with Pioneer to create branded content for their video

walls placed in malls across the United States. Her work on this approach to brand communications helped create and define the category of

branded entertainment. Amy’s work in this area has continued as the genre has matured. In her work with the AAAA/ARF Committee to Study

Emotional Response in Advertising, Amy led the research and published her findings on what many consider the gold standard in branded

entertainment: the BMW online films. A sought-after presenter, Amy brings a direct and creative-based perspective to the conference stage. Her

unique analysis of the data within the context of fundament story structure is in high demand, and she presents on brand development,

differentiation, engagement, and branded entertainment category in the United States, Europe, and Asia on a regular basis.

A published and fellowed poet and writer, Amy brings an agility to communications informed by a deep understanding of metaphor. She has

worked as an independent consultant, leading teams of copy editors, artists, and designers in aligning both internal and external communications

with a brand’s identity. She has experience in media sales, media buying, and media creation, as well as a deep background in marketing research.

Previous to her work with Brand Keys, Amy was Vice President and Research Director for Ameritest, where she worked on many top brands,

including the global research for IBM. Her work was recognized with IBM in 2003 with the David Ogilvy Excellence Award, taking both the Grand

Ogilvy and First in Category for the research conducted on IBM’s integrated campaign on infrastructure. Amy has worked with clients across

categories — ranging from CPG, to financial services, to retail giants — as well as across media — researching television advertising and

programming, newspaper, magazine, direct mail, and packaging.

Her published work with MTV Networks on the impact on embedded advertising of viewer engagement with programming has also marked her as a

key contributor to the growing body of knowledge on engagement. She continues to serve the industry through her work in this area.

A graduate of the University of Georgia’s Marketing Research Program, Amy’s academic background also includes an undergraduate degree in

Creative Writing earned by the University of New Hampshire, with joint studies at Harvard University. Some of her writing fellowships include a

fellowship at Wesleyan University and the Dylan Thomas Poetry Fellowship from the Paris Writers Guild in France.


41

Thank you for your attention.

For Further Information Please Contact:

Amy Shea

Vice President, Brand Keys, Inc.

V: 505.228.6513

E: [email protected]

www.brandkeys.com


True Green or Green-Washing? A Consumer Point of View.

Documents

Transcript of True Green or Green-Washing? A Consumer Point of View.