Green marketing 2010.01

Utility Communicators International Communication Challenges of Green Energy

January 2009

Utility Communicators International

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What does it mean to be ?


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Case Study: ‘Company A’

Ingoing Hypotheses:

•  Opportunity exists for Company A to drive growth and strengthen its competitive advantage by positioning itself to satisfy emerging Green requirements

•  Green is NOT a one-size-fits-all proposition. Green means different things to different buyers, and the market can be segmented based on how attitudes differ toward Green

•  The process of identifying a value proposition grounded in Green is no different from a standard value proposition effort (segmentation, targeting, etc.)

Company A:

•  A large, “super-regional” supplier of building materials for the commercial construction industry


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Project Objectives

•  To understand how builders/contractors define Green and their motivation to pursue/not pursue green building materials/solutions

•  To identify the key drivers of Green purchase decisions and dimensionalize their relative importance

•  To identify and prioritize distinct segments of Green based primarily on differences in attitudes toward Green

•  To identify a Green-oriented value proposition that is compelling and distinctive to the target segment


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Questions to answer

How does the market segment?

!  How similar or different are attitudes, needs, and behaviors across markets?

!  How many distinct segments does the optimal schema yield?

!  What are the behavioral and firmographic profiles of each segment?

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What value proposition appeals to our target?

!  What primary benefit serves as the foundation for a value proposition? Is the foundational benefit motivating, credible, and differentiated?

!  What competencies are required for Company A to deliver the VP?

!  What are the interrelationships between attributes and benefits (how do they link)?

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Which segments should we target?

!  Which segments are the most economically attractive?

!  Which segments align best with Company A internal competencies?

!  With which segments does Company A currently perform best?

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Types of segmentation

Key Question:

Dimensions:

Tactical Strategic

Type:

Focus:

§ Category attitudes, desires and beliefs

§ Required/ Have to have

§ Preferred/ Like to have

§ Not needed

§ Product usage

§ Brand awareness, usage & loyalty

§ Price paid, share of wallet, and purchase frequency

§ Sector

§ Geography§ Spend Level§ Company

size

§Purchase

§Key influencers

Why are they doing it?

What do they desire?

What are they doing?

Who are they?

How are they doing it?

AttitudesNeedsBehaviorDemographicsChannel




§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?






§ Not needed

§ Product usage



§ Sector


size

§Purchase

§Key influencers




Who are they?




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u How does the market segment?

Discriminating Attitudes

q Attitudes that are most discriminating—those for which respondents have the strongest levels of either agreement or disagreement

Segment Definition & Profiling

q For each segment, the key attitudes, behaviors, and firmographics that characterizes it, plus:

•  Geographic distribution

•  Percent of market

•  Percent of spend

Strongly Agree

Strongly Disagree

Attitudes

Segmentation Schema

q Clusters of respondents who are similar in terms of their responses on the discriminating attributes

•  4-segment solution?




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Attitudes — the basis for segmentation

Green Attitude Statements

A. Green products are as effective as non-Green

B. Green products are expensive

C. I would pay more for Green products

D. I only explore Green products because my customers demand it

E. Green is an unnecessary distraction for my business

F. Government regulation of Green is only going to increase

G. Manufacturers' Green self-certifications are credible

H. I only explore Green if my organization mandates it

I. I don't see the value of Green

J. Green will help me save money over the long-term

K. Green will help me save money in the short-term

L. Recyclability is a required element of a Green offering

M. Green is worth the investment

N. I am willing to pay more to work with a Green manufacturer

Green Attitude Statements

O. Green is a way to for me to achieve a competitive advantage

P. Business leaders are expected to adhere to Green practices

Q. Practicing Green is a way to attract new customers

R. Practicing Green improves my company's image

S. Adhering to Green improves morale among my employees & staff

T. Adhering to Green effectively protects the environment

U. Building materials are inherently not Green

V. Building materials with low levels of toxicity are Green

W. Green is confusing to me

X. Green requires a lot of training

Y. Green is difficult for me to implement

Z. There is no accepted consensus on what it means to be Green

AA. Manufacturers are the best source of information on Green

BB. I only buy from suppliers that share my Green commitment

Which attitudes are the most “discriminating?”

To what extent do you agree with the following statements? (1=strongly disagree; 5=strongly agree)


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Discriminating attitudes — the ones that cause clustering

D. Customers require

H. Company mandates

K. Saves money in short-term

Q. Attracts new customers

J. Saves money in long-

term

O. Competitive advantage

-0.47 -0.70 0.50 0.78 0.94 0.88

-0.48 -0.43 -0.49 -0.52 -0.39 -0.44

0.05 0.08 -0.61 -1.04 -1.14 -1.25

1.15 1.33 0.60 0.68 0.41 0.63

Attitudinal Ratings – ‘Green’ Segments -2 +2

Variance from mean

Segment 1

Segment 2

Segment 3

Segment 4


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4 segments — as defined by their attitudes toward Green

155

92 85 63

Distribution of Respondents

Green Lovers Independently

Green Green Rejecters

25% 23% 34% 18%

Spend Indices

Green Lovers “It’s Not

Easy…” Independently Green Green

Rejecters “It’s Not Easy…”

Green Lovers

•  Believe Green building materials impact the environment

•  See value in Green building materials for commercial construction

•  Believe Green is worth investment

•  The least price sensitive segment

Not Easy Being Green

•  Believe Green building materials impact on the environment

•  Believe government regulation is increasing

•  Dependent on manufacturers for knowledge, expertise and compliance

•  Looking for help in understanding Green

Independently Green

•  Believe Green building is important for comm. construction

•  Not looking for assistance

•  Believe government regulation is increasing

•  See value in Green building, and believe it has a notable impact on environment

Green Rejecters

•  Do not see business benefits in Green

•  Not willing to pay more for Green offerings

•  Most skeptical about the validity/efficacy of Green building

•  Do not believe Green building has a notable impact on the environment


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Questions to answer



1

3


2











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v Which segments should we target?

Stated vs. Derived Importance

q The difference between what customers tell you is important and what actually IS important to them (demonstrated through their behavior)

Competitive Landscape

q Important purchase drivers that we own; the ones that are owned by key competitors; and ones that are “up for grabs”

Company A “Wins”

Competition “Wins”

Required Crucial

Uninspiring Motivating

Stated

Der

ived

Segment Screening & Evaluation

q The basis for determining which segment(s) to select as a target(s)

•  Primary target

•  Secondary target

Financial Attractiveness

Market Relevance

Organizational Capabilities

Benefits


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Desired benefits — stated vs. derived importance

Helps green transition

Healthy work environment

Increase customer satisfaction

Supports comp advantage

Improves company image

Reduce fines

Conserves energy

Reduce financial liabilities

Maintains property value

Reduce costs

Credibility Complete solution Certified green

Enhance efficiency

Superior knowledge Industry leader

Demonstrate environ commit

High

Stat

ed Im

port

ance

%

Top

Tw

o B

ox

High Low

CRUCIAL

UNINSPIRING MOTIVATING

REQUIRED

Derived Importance Correlation to ‘Likelihood to Recommend’

Demonstrated credibility, and commitment to helping customers

transition to Green


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Competitive landscape — where do we win?

Company A

Bes

t-in-

Cla

ss C

ompe

titor

Competition “Wins”

Certified greenComplete solution

Credibility

Reduce costs

Maintains property value


Conserves energy

Reduce fines


Supports comp advantage



Helps green transition

Demonstrate environ commit

Enhance efficiency

Superior knowledge

Industry leader

35

40

45

50

55

60

65

35 40 45 50 55 60 65

% T

op-T

wo

Box

% Top Two Box


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Screening segments — which one(s) should we target?

Green Lovers

“It’s Not Easy…”

Independently Green

Green Rejecters

Segments

Compare Financials Compare Relevance Compare Capabilities

Financial Attractiveness

Market Relevance

Organizational Capabilities

Target Recommendation

Select Targets

Primary

Secondary


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Questions to answer



1

3


2











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w What value proposition appeals to our target?

Derived Importance Analysis

q Identify key drivers of behavior (i.e., most important benefits) for target segments

JohnsonDiversey Project Rubicon — Slide 41

176

156

143

131

123

114

114

108

108

106

106

106

103F. Products tailored to industry

O. Provides expertise for compliance

N. Provides environ-friendly chemicals

T. Offers purchasing from one source

H. Provides integrated chem, serv, equip

W. Provides training for your employees

M. Offers products that use less water, energy, labor

AA. Distributors recommend

L. Enhances your reputation

DD. Provides deep application expertise

D. Enhances results thru tools & access

BB. Gets to know your business

EE. Provides best overall value

Performance Partners - Derived Importance*

N = 402

Important

MoreImportant

*Statistically determined importance of attributes that drive willingness to recommend, indexed to the full set of benefit statements

Benefits

Pathway Modeling

q Develop pathway models to understand the optimal relationships among benefits

Proprietary and confidential property of Prophet. Do not distribute.JohnsonDiversey Project Rubicon: ‘Green’ Research — Slide 6

‘Green’ Research: Pathway Modeling Desired Outcome: Healthy work environment

Hierarchy

Higher-order associations

Functional attributes & touchpoints

Desired Outcome

Green Mandate Green ROI Building Green Brands & Business Green is Healthier & Safer Easy to Be Green Green Expertise & Advice

Pathway Model


Help demonstrate commitment to environment


Complete solution

Certified green

Industry thought leader on environmental issues


Enhance efficiency

0.33

.39Helps you transition to

green

0.26

0.44

0.25

0.410.34

0.30

0.38

0.54 0.32

0.41

0.33

0.44

Value Proposition Development

q Develop the value proposition—our distinct promise—based on themes most resonant with target segments

Points of Parity

Points of Difference

Points of Preference

Benefits


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Purchase Drivers — the foundation of the value proposition

Benefits Index

Safe work environment 132

Help demonstrate commitment to environment 128

Superior knowledge & expertise 110

Enhance productivity 109

Improves company image 108

Increase satisfaction 106

Comprehensive solutions 105

Industry thought leader on environmental issues 104

Reduce operating costs 101

Certified green 98

Reduce fines 95

Supports competitive advantage 95

Credibility 89

Maintain property value 88

Reduce financial liability 86

Conserve energy 80

Derived Importance Analysis Green Lovers

Point of Preference


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Pathway Modeling — the relationship between benefits and features

Help demonstrate commitment to environment


0.41


Enhances Productivity

Reduced Costs

Credibility

Thought Leadership

0.47

0.32 0.48

0.54 0.38

0.52 0.36

0.42 0.43

Pathway Model Green Lovers

Points of Parity

Points of Difference


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Value Proposition Model — Company A

Company A is the commercial construction provider that…

Healthy Work Environment Thought Leadership

Credibility Improves Company Image

demonstrates a commitment to the environment, and to helping customers transition to Green

Target

Frame of Reference

Primary Benefit

Proof Points

For… Green Lovers


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Value Proposition Model — from strategy to activation

Post-purchase Experience

Pre-purchase Experience

Purchase and Usage Experience

Brand-Customer Relationship

Web Site

Advertising

Word of Mouth

In-store Experience

Sales Collateral

Product Performance Service &

Delivery

Training

Customer Care

Technical Support

Outsourcing

Upgrades

Custom

er Experience

Value Proposition