Eco-Conscious Meets Cost-Conscious at P&G

Discussion
Mar 17, 2010

By Tom Ryan

While Procter & Gamble’s Future Friendly initiative aims to clear up
the confusion around how to be eco-friendly, it is also designed to remove
the perception of high prices that keeps consumers from buying green products.

Unlike other CPG brands that have come out with environmentally-friendly
products under umbrella brands at premium prices, P&G will be promoting
some of the products it already sells — among them, Tide Coldwater, Pur water
filters, Cascade dishwasher detergent and Gain detergent — as ecologically
oriented, while maintaining prices. Combining familiar, trusted brands along
with the value message, P&G is hoping to lead mainstream consumers to conservation
while creating excitement around staple categories for retailers. The new green
consumer education platform – including television commercials, digital ads,
social media, package labeling and displays – is slated for a March 29 national
rollout by 115 grocery/club retailers for a total of about 15,000 stores.

To qualify for the Future Friendly designation, products must provide "measureable
and meaningful" savings in one of three areas: energy, waste and water.
About one dozen products/brand franchises currently meet the criteria.

At a news conference in New York on Tuesday, P&G execs identified three
types of green customers:

  • Dark Green, representing 17 percent of consumers, will pay more and sacrifice
    performance for eco-friendly product;
  • Basic Living, also representing 17 percent, have no interest in green
    products, even being offended by the sustainability message;
  • Sustainable Mainstream, making up 68 percent, are interested in helping
    the environment but aren’t willing to sacrifice price or performance.

"They want to do the green thing but they don’t want a product that
doesn’t meet their needs or costs more," said Glenn William, P&G’s
external relations manager.

That finding is backed by a survey conducted January 29 – January 31 by Ipsos
Public Affairs. When asked what two factors were most important when deciding
which product to buy, price came in first at 41 percent; followed by performance,
38 percent. The impact on the environment came in at 22 percent.

Saving money was also the most frequently mentioned reason why consumers
would take measures to reduce waste, save energy and save water in their home,
at 64 percent. (Coming in second was Preserving Resources for Future Generations,
56 percent.)

On the positive side, 74 percent reported they would switch to another brand
if it helped them conserve resources without having to pay more and 69 percent
reported they would recommend the product to others under those conditions.

But Future Friendly also addresses the confusion or skepticism over eco-products.
Asked why they don’t by green products, ‘Not Having Enough Information’ was
the top answer, at 37 percent, even higher than ‘Costs too much’, 29 percent.
‘Not Having Enough Interest’ came in at 36 percent, and ‘Too Complicated,’
21 percent.

As such, rather than a guilt message about not doing enough for the environment,
Future Friendly focuses on making it easy for consumers to find and use products
that help save energy and water, and reduce waste. In-store signage reads "Simple
Choices. Meaningful Results." Under the Reduce Waste heading, a shelf-strip
for Pampers Cruisers reads, "Our lightest diaper ever, with 14% Less Material." P&G
execs also noted that consumers link saving water and energy to saving money,
but some signage talks directly to saving money. A Save Energy heading reads, "Save
up to $18 a year by switching to cold with Tide Coldwater HE."

For retailers, the use of existing brands such as Tide and Duracell that
consumers "already know and trust" offsets the risks of encouraging
consumers to switch to new products, according to Duncan Love, P&G’s associate
director of strategy and marketing. Upgrading the eco-content of existing brands
also makes it "simple to accomplish"
for stores when coming up with new brands runs counter to SKU rationalization
trends. Various options are also available to tie eco-messages to local communities.

But Mr. Love said bringing innovation to categories ultimately drives trips
and basket rings. After price and performance, P&G’s research shows eco-impact
now rates as an important purchase driver. While downturns have crushed conservation
movements in the past, Mr. Williams said, "The recession didn’t kill the
green movement.”

Discussion questions: Will the Future Friendly initiative help bring conservation
efforts to mainstream consumers? What elements of the program will be critical
to its success?

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6 Comments on "Eco-Conscious Meets Cost-Conscious at P&G"


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Max Goldberg
Guest
11 years 2 months ago

The public has never lost its desire to help the environment; they just don’t want to pay more money to do it. I’m glad to see that P&G and other companies are taking the initiative to go green and holding the line on prices. Given the opportunity to have the same product for the same price in a more environmentally friendly mode, many consumers will opt to help the environment. Let’s hope P&G can find a way to roll this initiative into more than 15,000 stores.

Ron Margulis
Guest
11 years 2 months ago
Education and simplicity are the keys to a successful environmental campaign. It amazes me how simple we sometimes have to make things in order for the shopper to even consider buying a product or service. Let me be clear; I’m not suggesting that consumers are dumb or have to be sold as if they are. Rather, we’re all so time pressed that if something takes too long to figure out, especially something we’re not genuinely interested in, then most likely we’ll be on to the next thing. I saw an example of this recently through our town’s Environmental Commission, on which I sit. Members of the commission went out to our neighbors last year handing out free compact fluorescent light bulbs with a hint sheet of how to reduce power consumption. More than a third of the people I offered these free bulbs to refused them. As a result, we changed the info sheet, which looked a bit like stereo instructions with dozens of ideas, to a leaflet that had just four hints. When we… Read more »
David Biernbaum
Guest
11 years 2 months ago

P&G has always excelled at understanding the consumer. Consumers in the critical mass are unwilling to pay premium prices for eco-friendly products.

Al McClain
Guest
Al McClain
11 years 2 months ago

I like this program a lot (full disclosure: P&G is a RetailWire sponsor) for three reasons:
1. Keeping the prices in line with “regular” products makes so much sense, with the state of the economy what it unfortunately is. It also sends a message to consumers that being environmentally friendly doesn’t always have to cost you money.
2. Focusing on known brands – leverages the equity P&G already has and gives shoppers the hopefully correct impression that they will get the full product benefits they are used to.
3. Emphasizing the simplicity of it all. Unlike Ron, I do think many consumers are dumb, or at least choose not to pay attention to things like the environmental consequences of their actions. This helps them do that without much effort.

Ryan Mathews
Guest
11 years 2 months ago

Ron is right–education is the key.

That said, the road to Hell is paved with good intentions. I recently completed an engagement with a customer that was justifiably proud of its work supporting recycling. The problem was that the support of recycling conflicted (from a business point of view) with their ability to fully support sustainability.

Suddenly, they were forced to chose (in a very literal sense) between two vendors–one with a recycled product and the other with a sustainable product. Sadly, it didn’t make economic sense to try to support both of them.

Consumers face these same choices. Is less material really a quality one intuitively would like in a diaper?

Cost is a factor, but this is an issue that extends beyond pricing into how people look at the world.

The proof, as they say, will be in the sales–or lack of them.

Gene Detroyer
Guest
11 years 2 months ago

This effort will catch on across many CPG companies, and with it (please, forgive the cynicism) exploitation of the consumers’ good intentions. The companies’ objective will turn from not “what can we do?” to “what can we say?” The claims will be extraordinary to the point of eventually being meaningless.

Consider how CPG companies have bastardized “natural” and “organic.” Consider how they made “Fat Free” by adding sugar. This too will pass.

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