Last week David Almy published a nice essay on green marketing. He looked at consumers’ statement of intent to buy green products across a wide array of product categories, and divides them into two silos of green-ness:
1. Products that are good for me – products that benefit the consumer directly (healthier to eat) and secondarily are good for the environment. For example, buying locally grown organic oranges is good for the consumer, and is a better choice environmentally. Marketers focus on how this product improves one’s personal environment (better for you), not the global impact.
2. Products that are good for my budget. His examples are automobiles, home improvement items, or appliances. Selling a big ticket item that is also environmentally friendly is especially tough during an economic downturn. His point is that marketers should lay out the financial payback very clearly to justify the expense.
My point of view: there’s a third condition. While it is possible to demonstrate payback for some big ticket products, it often is not possible. The financial payback just isn’t there (example, hybrid vehicles). What to do?
The durable goods marketer in this situation can point out what financial benefits there are (let the consumer try and figure out if it really does pay out in the end), and/or reinforce other benefits, such as product performance or the psychic, altruistic benefits. This is what Toyota did when it first came out with the Prius: its marketing did not focus on cost savings, it focused on the psychic benefits.
Takeaway: The impact of the recession on consumers’ price sensitivity for these two classes of products (small ticket, good for me vs. big ticket, good for the world) is likely to be quite different not only because the absolute dollars involved are so different but also because the underlying thinking behind the purchase decision is so different.