Selling Conspicuous Conservation: Successfully
Marketing Green Tech In A Brown-Tech Economy
The Toyota Prius and other "green" products are
beginning to gain acceptance in mainstream markets, but they must be carefully
positioned to provide value over virtue
by Edwin R. Stafford
As gas prices hover near record highs demand for fuel-efficient gas-electric hybrid cars is soaring. Conserving gas in a hybrid is now seen as smart and chic! But getting a hybrid today isn't so easy. Toyota reportedly has a backlog of over 22,000 orders for its Motor Trend Car of the Year-winning Prius, and buyers are paying upwards of $500 just to get on six-month waiting lists. Some dealers are even auctioning off spots on their waiting lists on eBay. The few Prius hybrids that are available, which were originally priced between $20,000 and $26,000, are now being marked up thousands of dollars by dealers. Last month, one impatient driver paid over $32,000 for his Prius on eBay when his dealer couldn't deliver quick enough.
Hybrid cars combine gas engines with battery-powered electric motors to achieve 40 to 60 mpg, depending on the model. Because their batteries are recharged during braking, hybrids never have to be plugged in. While only Toyota and Honda have offered hybrid cars, next month Ford will launch its highly-anticipated hybrid sports-utility vehicle that is expected to achieve about 35 mpg. Because Ford will offer only 20,000 hybrid Escapes for an estimated 30,000 willing initial buyers, Ford dealers gleefully expect to get in on the hybrid frenzy.
The huge price premiums for hybrid cars are remarkable considering that most other conventional new cars, especially gas-guzzling SUVs, can't be pushed off dealer lots without significant discounts and incentives. Ford currently offers, for example, $5000 in cash back and financing options for its popular Explorer.
Priced so high, however, hybrid cars are no longer economical for most drivers interested in saving gas. On average, hybrids will save only a few hundred dollars annually on gas compared to similarly-equipped conventional cars. Given the price mark-ups for hybrids, it could take years -- probably beyond the useful life of the car -- to achieve any real cost savings. Thus, fuel economy alone isn't driving the demand for hybrids. Rather, social consciousness appears to be the motive. The media reports that many hybrid owners see hybrids as a way to show off their conservation values and concerns about the planet's future.
While hybrids take up only a tiny niche of America's car market, the overheated demand for hybrids could signal the emergence of a new phenomenon: "Conspicuous Conservation."
The Age of "Conspicuous Conservation?"
Although conspicuous conservation has yet to become part of the common American lexicon, the phenomenon has become increasingly evident in the wake of 9/11, the Iraqi war, and increasing oil prices. Environmentalists' longstanding advocacy for energy and oil conservation has taken on added resonance. Conceptually, conspicuous conservation is similar to the better known spectacle of "conspicuous consumption," coined by social critic Thorstein Veblen in his 1899 book The Theory of the Leisure Class in that they both carry the implicit idea that "you are what you own." Initially, conspicuous conservation denoted the noble, but decidedly un-cool image of plain folks living the "simple life" (in its pre-Paris Hilton connotation) by paring back on the mechanized world. Getting along without cars, refrigerators, electricity from the grid, or indoor plumbing was indeed conspicuous, but hardly enticing. Today, conspicuous conservation has a decidedly smarter, high-tech image of chic frugality and superior performance.
www.Wordspy.com defines it as "using technology to live more frugally and to conserve resources," and the website references a 1997 Wired Magazine quote describing a futuristic world of well-engineered, state-of-the-art machinery involving efficient washers and dryers, resource-conscious "high performance" homes, and gas-electric hybrid cars. Given the existence and mounting interest in these products today, it appears high style prudence has indeed taken off.
While hybrid cars are hip for the moment, can their popularity spread to other drivers? Can the zeal for hybrids rub off onto other products warranting efficiency make-overs, such as high-speed computers and air conditioners? Recent "green marketing" research and practice may offer some insights. Savvy engineers and marketers can take advantage of -- and perhaps profitably help push -- the conspicuous conservation trend into the mainstream and into other product categories with the right product innovations and marketing messages. What past green marketing experience tells us is that sweater-wearing President Jimmy Carter was all wrong when he urged Americans to sacrifice and turn down their thermostats in the late 1970s. What he should have done was find ways to make sweaters a smart fashion statement.
Some Lessons from Green Marketing
Traditionally, consumers have resisted "green" products (eg, energy-efficient appliances, eco-safe detergents), distrusting their claims or believing that they are not as effective as conventional, "non-green" products.
To address this, the non-profit Alliance for Environmental Innovation and household products-maker S C Johnson conducted research some years ago to explore ways to market legitimate green products beyond the narrow "green" consumer niche. Their research uncovered some interesting insights.
First, to have broad appeal green products must function as effectively as non-green products, and avoid the quality/cost trade-off. Consumers are not willing to pay more for inferior products. Second, the environmental product features (eg, energy efficiency, biodegradability) should not be promoted as the primary advantages of the product. Because consumers select products primarily on how well they meet basic needs (ie, how well they clean, their convenience) rather than how they save the planet, marketers should tout green features as "added selling points" to already effective products rather than try to change consumers' priorities.
Last, the green product attributes should be promoted to be personally beneficial to consumers. Consumers are more likely to act on product messages that promote advantages they can experience personally such as "safe," "non-toxic," or "cost-effective," rather than messages of less-personal features, such as "ozone-friendly" or "recyclable." Because green product attributes frequently offer inherent personal health, safety, economic, and convenience advantages, companies should emphasize and deliver on these benefits to encourage broader appeal.
In short, green and efficiency product features must be positioned as smart product advantages.
Philips learned these lessons when marketing its energy-saving "EarthLight," launched in 1994. At first sales were lackluster. After some consumer research, however, its name was changed in 2000 to "Marathon" to emphasize the product's long-life convenience and energy cost savings: features that better resonated with consumers compared with the "save the earth" connotation of the previous name. Since the name change, according to the Wall Street Journal, Marathon has enjoyed an annual sales growth of 12%. The implication for hybrid cars and conspicuous conservation is clear.
Businesses need to build into resource- and energy-efficient products the right personal benefits that are most attractive to consumers and that allow them to feel smart. While social consciousness may be driving hybrid sales today, to expand hybrids' appeal marketers need to pitch other personal benefits sought by other market segments. For example, many consumers seek time savings and convenience, and these may become smart selling points for hybrids. Aside from the commuter convenience of not having to fuel up so often, hybrid cars may even quicken commutes in some states, such as Virginia, where hybrids are allowed in car pool lanes even without other passengers on board. (California is expected to pass similar legislation, but opponents are concerned that the move could add congestion to car pool lanes and diminish their advantage to legitimate high-occupancy commuter vehicles.)
Ford's new hybrid Escape will offer another convenience -- electrical outlets that may appeal to a variety of consumers who need to plug in laptops, power tools, or other appliances while on the road for work or play. Performance is also destined to become another attractive feature for hybrids. While early hybrid engine systems lacked the power of conventional engines, Lexis will be entering the SUV hybrid market next January with the RX-400h, based on the existing RX-330. It will couple a V-6 engine with an electric propulsion system, giving it improved acceleration over the RX-330, plus the power of a V-8 with the fuel economy of a compact car. While the Lexis hybrid is clearly designed for the status-oriented driver, such speed and power advantages will interest other markets, such as law enforcement and the park service.
Other cool advantages and novel features are destined to be realized as auto engineers and savvy marketers identify ways to further leverage hybrid cars' unique technology and align these innovations with the needs of other market segments. Advancing conspicuous conservation requires piggy-backing the right benefits onto good resource- and energy-efficient products and promoting them as smart and stylish. Conspicuous consumption has long characterized the "good life." Good engineering and green marketing, however, can help make conspicuous conservation the hallmark of the "smarter life."
Edwin R. Stafford teaches marketing strategy at Utah State University in Logan. His research centers on the diffusion of cleaner technology. His e-mail is Ed.Stafford@usu.edu