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The subjects of 'people', 'planet' and 'profits' are hotly debated ones across various countries around the world. But has that really translated into consumer spending and choice? The Annual Green Brands study conducted by Penn Schoen Berland (PSB) in partnership with Landor Associates shows some very interesting results about the US consumer perception of leading brands' commitment to 'green' practices. While the primary audiences of this study were Americans aged 18 or older, I believe there could be lessons that Indian marketers could learn from its findings.
Let's set the context first. More than half the consumers believe that the state of the environment is on the wrong track; however, when it comes to relative importance, the concerns about economic growth far overweigh their concerns about the state of the environment. This suggests that 'green' is important to people only when they have money to spend and the going is good. Jobs and prosperity are always first. Of the top three issues that concern them, the most important is 'energy use' followed by 'climate change' and then 'chemicals/toxins'.
When it comes to consumer choice, quality products and service and good customer care are still two of the most critical brand attributes. 'Green' is valuable but not critical to them. When you look across the demographics, this was most important to young consumers aged 18-29 principally residing in urban areas equally across males and females. Given the demographics of India, one can see that the urban youth is expressing itself like never before and being green is important to them. Marketers targeting this demographic should take note of this. So what are the hurdles in creating green products?
Two out of every three consumers feel that green products are too expensive, followed by limited selection which makes them difficult to find. What is most interesting is the fact that almost one out of four consumers say they do not trust the green labelling. Marketers have to gain the trust of the consumers and here I believe the 'green reputation' of companies will be the differentiator. And this is evident from the fact that almost two third of consumers look at the certification marks such as 'energy star', 'recyclable', 'recycled' followed equally by what they read/see/hear about companies from the media and what the packaging says. So packaging is an area of opportunity.
So here again re-used/recycled products can offer great value. Only one of every three consumers is more likely to purchase products carrying labels that say 'green', 'organic' or 'sustainable'. Last in terms of communication, the findings show that 'recyclable' and 'recycled' are terms that are universally recognised and consumers across all age and income groups are familiar with them. Only with very high income groups, words like carbon-neutral and LEED certified show any resonance. Words like 'organic', 'green' and 'natural' find greater resonance with higher income groups.
Our several previous studies have shown that Indian consumers have the same concern about the environment as their global counterparts, especially on the subject of energy use and are keen to buy green products in line with the international trends. They see the auto and the technology industries leading the way.
According to previous PSB studies, more than half of the consumers in India find it difficult to identify green products as they are not labelled properly. Also their biggest worry is about the credibility of the labelling of the products. The biggest challenge for Indian marketers is building 'trust' through reliable and credible product certification. Transparency, availability and consumer education would be the key focus areas for Indian government and companies if they want to really leave an impression.
Ashwani Singla, managing director & chief executive, PSB Asia
