CHAPTER 7: MARKET SEGMENTATION, TARGETING & POSITIONING FOR

SUSTAINABILITY

Introduction: LEGOmaniacs

In 2003 LEGO was the first (and in 2008 it remained the only) toy company to have
signed on to the United Nations Global Compact,
1
which is described as a strategic policy initiative for businesses that are committed to
aligning their operations and strategies with ten universally accepted principles in the
areas of human rights, labour, environment and anti-corruption.2 A key component of
LEGOs mission is building human capital globally through child development.

If someone were to ask the question, Who is the market for LEGO building blocks? the
fast and easy answer would be children. But that answer would be at best partially right.
And in many important ways it would be utterly wrong. LEGO owes much of the vitality
and profitability of its products and company to adult users.3 In the early 1990s, Adult
Fans of LEGO went from being a mostly invisible market segment to an organized,
trademarked and influential market force.4 Currently, adult fans manage entire on-line
communities (e.g., LUGNET)5 and local clubs (e.g., Tucson LEGO Club)6 all over the
world. LEGOfan.org sponsors official LEGO Ambassadors, who are expected to be
active contributors to the LEGO world-wide community by engaging in activities such
as:

Engaging in fan-to-fan support in online forums

Actively participating with local LEGO clubs, or forming LEGO clubs if none
exist locally
Posting feedback, guidance, and other types of support in their favorite online
communities
Writing articles for publication online and offline
Presenting LEGO building subject matter at events and conferences, as well as
local user group meetings7

At this point we might conclude that the market is segmented into two demographic
groups, children and adults, right? Not so fast. It turns out that the adult market is
fragmented into smaller segments based on special interests as diverse as trains,8
medieval life,9 modern architecture10 and zombies!11 To better experience the remarkable
range of interests of LEGO users, visit YouTube and search on LEGO.

Think About It: Market Fragmentation and the Internet

According to Chris Anderson, Wired editor in chief and author of The Long Tail,12 the
power of the Internet to provide virtually anything to anybody anywhere has allowed
markets to fragment into millions of tiny niches. Market niches (such as train-loving
fans of LEGO) can become profitable for marketers because they can be identified
and reached with very specific products, services and messages with relative ease and
little cost.
 What does this fragmentation mean for traditional assumptions about market
segmentation and market potential? Will Internet-based businesses, such as Amazon,
with their ability to offer an unlimited variety of goods, ultimately make traditional
marketers, such as bookstores, obsolete? Why or why not? What kinds of marketing
ventures are possible now that couldnt have survived before the Internet? What kinds
of opportunities does the Internet provide for more sustainable marketing? Are there
implications for reduced waste? Reduced energy use? Product reuse or recycling?

Chapter Objectives:

Devising a marketing strategy typically involves segmentation, targeting and positioning.

Companies segment markets in order to account for different customer wants and needs.
Companies then choose to target one or more market segments that they can serve
competitively. Finally, companies position their offerings by crafting marketing mixes
and communicating to appeal distinctively to their target segments. In this chapter you
will explore:

The Emerging Green Market

Segmenting the Green Market
Positioning for Sustainability
Taking the Green Position in Business-to-Business

The Emerging Green Market

As businesses desire to improve the sustainability of their products and practices, they
often seek to identify customers who will be receptive to more sustainable products and,
if possible, who will pay a premium for them. The term green market is commonly used
to distinguish sustainability-oriented consumers and the businesses that serve them.

One of the most powerful cultural trends driving branding today is a worldwide shift in
consumers attitudes toward environmental sustainability. This is true the world over.
Citing major studies from 2007 and 2008,13 the World Business Council for Sustainable
Development reports that:

96% of Europeans say that protecting the environment is important for them
personally. Two-thirds of this group say that it is very important... consumers in
most countries are becoming more aware and willing to act on environmental
concerns. The US had the largest rise of all, from 57% in 2007 to 80% in 2008.
Chinese consumers also showed increased willingness to act on their concerns
about climate change.14

The size of the green market is debatable and depends on definitions. One fact, however,
is not debatable: The green market is growing. The Hartman Group is a research firm that
tracks consumer sustainability trends. Their 2008 report15 noted that:

Most Consumers (93%) say they want to participate in sustainability but dont
know how.
Only half (54%) understand the term. Only 12% can name a product and only
5% can name a company that is sustainable.
Consumers have high expectations and look to companies and brands for
direction. They want to align with companies that share their core values and
do so in an authentic, transparent manner.
Sustainability starts at a personal level. Consumers want to save themselves
before they save the planet. Hence, food and beverages, health and wellness,
and pivotal life experiences (e.g., having children) are key entry points.
When considering environmental values, recycling and plastic packaging are
fundamental issues. However, social values (e.g., programs that treat
employees well and serve communities) often trump environmental programs.
Optimism, connectedness, care, and responsibility are important values to
communicate.
Most consumers (81%) are willing to pay 10% more for a tangible
sustainability benefit.

Another research firm, GfK Roper, creates an annual Green Gauge report for businesses
interested in tracking the attitudes and behaviors of the green market. Their 2008 report16
also confirms continued growth in the numbers of Americans that are concerned about
sustainability. Among their findings:

72% (up 10% from 2007) of Americans claim to know a lot or a fair amount
about environmental issues and problems.
28% (up 20% from 2007) say they often seek out environmental information.
The most prevalent green behaviors are those that also save people money,
such as purchasing energy-efficient light bulbs and more fuel-efficient
vehicles.
In some categories, such as paper products and cleaning products, more
consumers are choosing more sustainable options, despite spending more for
them.
32% of all Americans still feel they arent doing enough to benefit he
environment.

The 2008 Green Gauge report also finds that environmental concerns and green behaviors
have become a primary topic of conversation in a majority of US households, and that the
information flows not only from parents to children, but also from children to parents.

Think About It:

In your household, how often do environmental issues enter into discussion? Which
members of the household are most likely to initiate such discussions? From where
do they get their information?
Segmenting the Green Market

Segmenting markets allows firms to target marketing programs directly to those who are
most likely to buy. This also holds true for the green market. Consumers that are
interested in more sustainable goods and services are far from being homogeneous.
Understanding the differences among them requires various approaches to market
segmentation.

Traditional market segmentation relies on a variety of assumptions. One such assumption

is that individuals who share common demographic characteristics, such as age, sex and
ethnicity, will desire similar products. Unfortunately, except in terms of very broad
tendencies, demographics are limited for identifying target segments for sustainable
marketing. Imagine two people of the same age, sex and race that live next door to each
other. Demographically they are identical. Now imagine that one of them favors country
music and Wrangler jeans, cares deeply about wilderness issues, and has no real
awareness of global poverty. The neighbor listens to progressive punk, collects body
piercings, is passionate about social equality, and hates the very idea of being stranded
outside of a metropolitan area. In some product categories they may have similar
preferences, but in others they will be vastly different. How and why they relate to
sustainability will also vary widely.

Within any demographic group the range of psychological needs, values, attitudes,
lifestyles and aesthetic preferences is potentially enormous. Such variations are better
captured with psychographic measures. Psychographic criteria tend to be more useful
than demographics for identifying differences in consumers environmental and social
priorities.17 In fact, the majority of published segmentation schemes are based on
psychographic measures.

Lifestyle segmentation, one form of psychographics, focuses on overall patterns of

consumer choices and behavior. One of the simplest forms of lifestyle segmentation
divides the green market into two broad categories. Primary conservationists are people
who make major changes in their lives in an effort to reduce consumption. Secondary
conservationists dont change their basic consumption patterns, but they seek to offset
their impact through reusing, recycling, and the use of developing technologies.18

Think about it: Who buys what?

What kinds of goods and services are most likely to appeal to primary
conservationists? What kinds of products are more appropriate for secondary
conservationists? Why?

In a 2009 report,19 the Hartman Group presents another psychographic segmentation

scheme for the green market. Hartman described four segments of The World of
Sustainability, which differ based on their levels of concern for social and
environmental issues and the frequency and intensity of their pro-sustainability
behaviors. The Core consumer segment displays the highest levels of involvement in a
sustainability lifestyle, including such behaviors as purchasing environmentally friendly
products, and the strictest adherence to pro-sustainability attitudes. The Inner Mid-
Level and Outer Mid-Level segments demonstrate progressively less commitment to
sustainability and fewer related behaviors. The segment Hartman calls the Periphery
display only minimal concern for social and environmental sustainability. The twelve
percent of consumers that live outside of Hartmans World of Sustainability say that
they rarely, if ever, factor social or ecological factors into their purchase decisions.

Figure 7-1: The World Of Sustainability20

GfK Roper is another organization that conducts segmentation research in the area of
consumers and environmental sustainability. Ropers 2008 Green Gauge report also
divides the population into the following six segments:

Genuine Greens (17%) Environmental activists, committed to pro-

environmental behavior. They perceive no barriers to action.
Not Me Greens (21%) Environmental believers, daunted by the perception
that most issues are too big to handle. Their behaviors lag behind their
attitudes and tend to be limited to convenient actions like recycling.
Go-With-the-Flow Greens (16%) Environmental moderates, likely to do
easy things, like curbside recycling, but without much real concern. They tend
not to relate to problems like global warming.
Dream Greens (13%) Environmentally friendly but nave. They would do
behave more sustainably if they knew how and why to do so.
Business First Greens (21%) Environmentally indifferent. They tend to
think that the environment is somebody elses problem, to the extent that there
is a problem, and that somebody else should deal with it.
Mean Greens (11%) Environmental cynics and skeptics. They are likely to
think environmentalism is a sham or a political conspiracy.21

Most segmentation schemes focus on common purchase and consumption behaviors. At

least one, however, focuses on attitudes and behaviors associated with product
disposition and disposal. In other words, different segments treat products differently
once they are done with them. The Disposition Decision Taxonomy (fig. 7-2) shows the
range of choices consumers make when disposing of a product.

Figure 7-2. The Disposition Decision Taxonomy (Source shown in Fuller, 1999, p.
331)22
Caption: Most of the common schemes for identifying sustainability-related market
segments make some use of psychographics. However, other bases of segmentation, such
as benefits sought, are also useful and may be combined with demographics and
psychographics.

All of the above psychographic segmentation schemes attempt to categorize major

chunks of the American population. In so doing they may be too broad and general to be
very useful for an individual firm, especially considering the trend toward market
fragmentation described by Wireds Chris Anderson (See Think About It 7-x). More
accurate and relevant segmentation may well depend on a firm conducting its own
research.

When companies desire to identify market segments more finely and narrowly than
demographics and psychographics allow them to do, they often turn to benefit
segmentation. Benefit segmentation identifies groups based on the combinations of
benefits they desire from a particular purchase or product category.

When consumers purchase products or services, what we are really doing is purchasing
certain solutions or benefits. There are three general classes of benefit, and consumers
desire for them in different forms and combinations helps to define market segments. We
value utilitarian or functional benefits23 because they help us solve problems. We value
symbolic or self-expressive benefits because of what they communicate about us to
others and to ourselves. Hedonic or experiential benefits24 are important for the
qualities of the experiences they deliver.

The automobile industry uses benefit segmentation. Functional benefits include things
like fuel efficiency, safety ratings, reliability and the capacity to carry passengers and
possessions. Symbolic benefits include vehicle styling and brand associations with
different lifestyles or levels of status. For example, a sports car, a four-door sedan and a
pickup truck all make different kinds of statements about their owners. Even two
different sedans may express very different personalities or priorities. Experiential
benefits include different levels of creature comforts, audio experiences, visual
stimulation, or acceleration and handling characteristics. Every vehicle has a certain
benefits profile with respect to the three benefit categories. Benefit segmentation helps
match automotive design with complex customer needs.

The market success of the Toyota Prius owes much to its benefits profile. Functionally it
doesnt perform any better (and arguably worse) than many other compact cars.
Symbolically, however, it became a badge of environmental awareness and action. In
2007, The New York Times commented on the Prius as a status symbol:

A riddle: Why has the Toyota Prius enjoyed such success, with sales of more than
400,000 in the United States, when most other hybrid models struggle to find buyers?
One answer may be that buyers of the Prius want everyone to know they are driving a
hybrid.... The Prius has become, in a sense, the four-wheel equivalent of those
popular rubber issue bracelets in yellow and other colors it shows the world that
its owner cares.25

It turns out that the Prius also delivers unexpected experiential benefits. One product
reviewer sums it up like this:

...the Prius is probably the closest you'll come to playing a video game while
driving. The constant goal of maximizing your MPGs quickly makes the Prius a fun
car to drive in possibly the least traditional sense of the word fun. Well, get comfy
 in that video game chair because the Driving Mode buttons make the Prius go from
being an Atari to a Wii.26

Other products, including very simple and mundane ones, also have identifiable benefits
profiles that can be matched with appropriate market segments. For example, the
functional benefits (i.e., cleaning power) of Clorox Green Works cleaners are emphasized
clearly in the brand advertising. Symbolically, the product communicates caring for
health and the environment, and that, in turn, may result in a consumer experiencing a
heightened feeling of satisfaction. Other details, like fragrance can add further to the
experiential benefits of using the product.

Think About It: Sustainability and Benefit Segmentation

Can sustainable products and services be appealing to consumers at a utilitarian or

functional level? If yes, how so? What problems can be solved for them? Do
sustainable products or consumer behaviors provide symbolic or self-expressive
benefits? Are there certain segments for which this is especially true? Can living
more sustainably yield experiential benefits? What kinds of positive experiences or
feelings might come from it?

As weve seen, sustainability means different things to different people, if it means

anything at all, and successful benefit segmentation requires companies to understand
those differences. For some people the most important sustainability-related benefit is
personal safety or family health, which motivates the purchasing of organic foods and
non-toxic personal care and household items. For others, the most important benefit is
saving money and living more frugally, which leads to energy conservation and waste
reduction. Many consumers are passionate about nature and the outdoors, and they focus
on environmental benefits for the sake of preserving the worlds wild places. Others place
higher priorities on humanitarian issues, leading them to seek out products from
companies that provide fair pay and healthy working conditions. Still others prioritize the
humane treatment of animals, which may lead them to vegetarian or vegan lifestyles,
which in turn create lower carbon footprints.

For a more complete look at the benefits consumers seek from their purchasing
behaviors, consider the results from the following study:

In August of 2008, the Center for a New American Dream collaborated with Boston College researchers
Juliet Schor, Amory Starr, and Margaret Willis, to survey affiliates of the Center about conscious
consumption. The detailed online questionnaire asked participants about the decisions they make in their
everyday lives to reduce and change their consumer habits, the goals and values that motivate them, and the
actions that they are taking socially and politically in their communities to support a more just and
sustainable world. Over 1800 affiliates participated.

The vast majority (87%) of respondents reported that they had made some change to their lifestyle to make
it more sustainable, and of those, many had made an effort to consistently reduce energy use, drive less,
reduce their use of plastic water bottles, and reduce meat consumption, among other actions (see Table 1
for several of the items included in the survey).
Table 1: Conscious Consumer Practices CNAD Survey %
Have you done anything to change your lifestyle to make it more environmentally sustainable?
Yes 87
No 2
Not sure 11
Of those who answered yes to the above question, percent who:
Change light bulbs 97
Reduce utility use (energy efficient house/windows, unplug appliances, wood heat, etc) 93
Drive less (combine errands, walk more, etc) 90
Discontinue purchases of plastic water bottles 88
Conserve water 87
Buy green household products 81
Have considered / have become a vegetarian 78
Take fewer airplane flights 64
Commute to work in a way other than an automobile 44
Purchase a hybrid car 14
Data for the first question (change in lifestyle) are based on 2164 responses. Data for subsequent
questions are based on the 87% of respondents who answered yes to the first question, 1890 respondents.
Percents for different consumption practices based on those who answered from 4 to 7 on a scale of
1=very inconsistently and 7=very consistently engage in the practice.

A number of values and goals motivate these actions. Living in accordance with my values was most
consistently rated very important among respondents. But other motivations, from promoting personal
health to supporting the local economy, were also very important among respondents and not mutually
exclusive (see Table 2).

Table 2: Percentage of those rating various motivations for consumer decisions as very important
% Number of
repondents
Living life in accordance with their values 64 2195
Reusing, recycling, secondhand 57 2201
Reducing overall consumption 56 2202
Addressing ecological issues 51 2233
Promoting personal health and product safety 50 2196
Seeking quality products, craftsmanship 47 2205
Addressing climate change 45 2222
Promoting the well-being of the next generation 43 2223
Supporting the local economy 43 2225
Supporting alternatives to the dominant consumer culture 43 2184
Living simply 41 2208
Promoting fair wages and incomes for workers and producers 38 2225
Enjoyment 30 1796
Serving as a model for other people to see 25 2197
Being avant-garde 6 1730
Percent includes those who answered 7 on a scale from 1= Not very important to 7= Very important
(Source: http://www.newdream.org/consumption/survey.php;
pdf download available; permission not required licensed through Creative Commons,
http://creativecommons.org/licenses/by-sa/2.5/)

LOHAS and the Cultural Creatives

One of the most successful and widely recognized segments in the green market is the
self-described Lifestyles of Health and Sustainability (LOHAS). LOHAS is an
organization of businesses that monitors the changing U.S. marketplace for goods and
services focused on health, the environment, social justice, personal development, and
sustainable living.27 In reality, the LOHAS market can itself be segmented in a wide
variety of ways, including lifestyle segmentation, benefit segmentation or usage
segmentation, which identifies market segments according to the amounts or quantities
they purchase within a given product category.

The diverse and growing community of LOHAS businesses provides goods and services
largely to consumers identified as Cultural Creatives.28 These are educated consumers
who make conscientious purchasing and investing decisions based on social and cultural
values. Around one in four adult Americans is part of this group. These consumers will
wield significant influence on the future of business and also on the future of progressive
social, environmental, and economic change. Formally identified in 2000, the LOHAS
market in the U.S. in 2006 was conservatively estimated at $209 billion and growing
fast.29 One business that capitalizes on the growing LOHAS market is The Green
Microgym, a gym that harnesses the energy of members workouts with power generators
hooked up to cardio machines.30 In a Burn and Earn program, gym members receive a
dollar for each hour of electricity they generate, helping power the facility and reducing
their membership fees while they strengthen their bodies.

LOHAS businesses classify themselves according to six general sectors or product

categories. At first glance it may appear that the six LOHAS sectors have little in
common. For example, a manufacturer of recycled plastics or an automaker working on
next-generation, energy-efficient vehicles may not appear to have much in common with
an eco-tour operator or a retailer of organic clothing. But 30 million consumers believe
there is a commonality that transcends any operational and structural differences.31

Table 7-1
LOHAS Product categories:
Personal Health
Natural Lifestyles
Natural, organic products
Indoor & outdoor furnishings
Nutritional products
Organic cleaning supplies
Integrative Health Care
Compact flourescent lights
Dietary supplements
Social Change Philanthropy
Mind Body Spirit products
Apparel
US Market--$118.03 billion
US Market--$10.6 billion
Alternative Transportation
Green Building Hybrid vehicles
Home certification Biodiesel fuel
Energy Star Appliances Car sharing programs
Sustainable Flooring
 Renewable Energy Systems US Market--$6.12 billion
Wood Alternatives

US Market--$50 billion

Eco Tourism Alternative Energy

Eco-tourism travel Renewable Energy Credits
Eco-adventure travel Green Pricing

US Market--$24.17 billion US Market - $380 million

The interconnections between global economies, cultures, environments, and political

systems play a large role in the holistic worldview of the typical LOHAS Consumer.
LOHAS businesses and customers emphasize the interconnections of mind, body and
spirit within individuals. The focus on personal development, with the ultimate goal of
achieving ones full human potential, is of utmost concern to Cultural Creatives. The
current growth in this market group strongly supports the notion that spirituality is no
longer relegated to churches or to the New Age periphery. It is migrating to the center of
mainstream cultural awareness. The LOHAS segment is a values-driven segment that
tends to vote its values with its dollars.

Think about it: Are you a Cultural Creative?

Check off the statements you agree with. If you agree with 10 or more, you probably
are one and a higher score increases the odds. You are likely to be a cultural
creative if you

o 1. ...love nature and are deeply concerned about its condition.

o 2. ...are strongly aware of the problems of the whole planet (global warming,
destruction of rain forests, overpopulation, lack of ecological sustainability,
exploitation of people in poorer countries) and want to see more action on them.
o 3. ...would pay more taxes or pay more for consumer goods if you knew the
money would go to clean up the environment and to stop global warming.
o 4. ...place a lot of importance on developing and maintaining your relationships.
o 5. ...value helping other people bring out their unique gifts.
o 6. ...volunteer for one or more good causes.
o 7. ...care intensely about psychological and spiritual development.
o 8. ...see spirituality or religion as important in your life but are also concerned
about the role of the Religions Right in politics.
o 9. ...want more equality for women at work, and more women leaders in business
and politics.
o 10. ...are concerned about violence and the abuse of women and children around
the world.
 o 11. ...want our politics and government spending to put more emphasis on
childrens education and well-being, on rebuilding our neighborhoods and
communities, and on creating an ecologically sustainable future.
o 12. ...are unhappy with both the left and the right in politics and want to find a
new way that is not in the mushy middle.
o 13. ...tend to be optimistic about our future and distrust cynical and pessimistic
views.
o 14. ...want to be involved in creating a new and better way of life in our country.
o 15. ...are concerned about what big corporations are doing in the name of making
more profits, e.g., downsizing, creating environmental problems, and exploiting
poorer countries.
o 16. ...have your finances and spending under control and are not concerned about
over-spending.
o 17. ...dislike all the emphasis in modern culture on success and making it, on
getting and spending, and on wealth and luxury goods.
o 18. ...like people and places that are exotic and foreign, and like experiencing and
learning about other ways of life.32

Alternative Consumption Segments

Within the category of primary conservationists there are several segments engaged in
alternative consumption, meaning that they reject consumerism, or the notion that
happiness and wellbeing are derived from the accumulation of material goods. One form
of alternative consumption is voluntary simplicity or simple living,33 the option to live
with less, reducing ones material consumption by choice.34 This choice often entails
changing jobs or lifestyles in an effort to achieve more free time and a richer life.35
Another segment, referred to as locavores,36 stresses the environmental, social and
economic value of eating products grown close to home.

Virtual Field Trip: Dee Williams Dream House

For a warm-hearted look at one persons adventure in alternative consumption, watch
this short video on You Tube in which Dee Williams downsizes to a tiny house on
wheels. What lessons does she learn from her experiment? What aspects, if any, of
her lifestyle would work for you?
http://www.youtube.com/watch?v=eZM2G-PfEbc&feature=player_embedded

Some consumers attempt to opt out of the dominant consumption culture entirely. They
embrace anti-consumption, a socio-political movement against consumerism.37 Motives
for anti-consumption include resistance to commodity culture and corporate brands,38 a
desire to feel more authentic through ones consumption behavior,39 and a desire to
demonstrate love of the natural world.40 For some consumers, the move toward anti-
consumption is a direct response to corporate efforts to gain a share of the green market.
For example, as mainstream marketing developed an interesting the organic food
movement, early adopters of organic foods actively resisted this effort to co-opt the
values of organic food production and consumption. Rather than becoming customers of
the corporation, these consumers engaged in actively oppositional behaviors.41 One of the
most radical anti-consumption segments calls itself Freegans.42 As accomplished
dumpster divers, their pride and hallmark is living from other peoples waste, including
food waste from restaurant and grocery stores, and clothing and household items from
residential trash.43 Millions of Freegans and other especially frugal consumers around the
world network online44 and face-to-face in order to trade free and found items.

Positioning for Sustainability

Positioning a product or brand entails the use of marketing communication to create a

distinctive identity for it in the minds of consumers. To position themselves for success in
the growing green market, firms need to examine the benefits provided by their products
and services and match those benefits with target customers core sustainability values.
Herman Miller is one example of a company that has achieved a unique and powerful
position in the office furniture industry while leading the industry in both environmental
and social sustainability. Combining emphases on design and holistic human experience,
their market position reads almost like a mantra for the Cultural Creatives: Herman
Miller, Inc., works for a better world around you. We do this by designing furnishings
and related services that improve the human experience wherever people work, heal,
learn, and live.45

Virtual Fieldtrip: Run a mile in my shoes.

END stands for environmentally neutral design, and its the name of a company that
manufactures running shoes. Explore the END website (www.endfootwear.com) and
then read about the company from other online sources. What is ENDs market
position? What sets END apart from its competitors? Now compile the description of
a poster person for the END target market. Who is this person demographically?
What are the persons core values? What is his or her occupation? What unmet needs
would drive this person to END?

One way to position for sustainability is to create a line of products that are demonstrably
green. Lets return to the example of the automotive industry. Both Toyota and Honda
have sought has to claim a sustainability position through the introduction of hybrid
models. The race to sustainability has Honda and Toyota neck and neck with the finish
line still far in the distance. In 2007 Honda was named the greenest car company by the
Union of Concerned Scientists.46 In 2009 Toyota received the same honor from Business
Car in the UK.47 In its bid for a position of sustainability in the office products industry,
Office Depot produces an entire catalog dedicated to their most sustainable products.48
The same positioning strategy hasnt worked for Chrysler, however. Chrysler designed
and marketed hybrid-power versions of both the Dodge Durango and the Chrysler Aspen.
According Los Angeles Times reporter, Ken Bensinger, Chrysler discontinued
production of its hybrids even before they had hit the dealer showrooms.49
 Photo 7-1: Cover shot of Office Depot Green Book catalog

In successful segmentation, targeting and positioning, the key is to discover and resonate
with the meanings and values that target customers hold most strongly. The ads below
illustrate four different sustainability-related positioning strategies.

Photo 7-2: Health/Safety insert ad for Mythic Paint: www.mythicpaint.com

Photo 7-3: Money Savings insert ad for energy star cfl bulbs:
http://www.energystar.gov/index.cfm?c=cfls.pr_cfls

Photo 7-4: Appreciation of Nature insert screen grab for Backpacker Magazine:
The outdoors at your doorstep, http://www.backpacker.com/

Photo 7-5: Humanitarian goals insert ad for Brilliant Earth diamond jewelry:
http://www.brilliantearth.com/

Striving to become sustainable does not necessarily require a company to position its
products as green or sustainable. For example, as we learned in Chapter 2, Nikes
positioning strategy has nothing to do with sustainability and everything to do with
athletic performance, even though the company is an industry leader in both
environmental and social issues. Similarly, Sprint Nextel appears to be serious about
environmental sustainability,50 having, among other things, instituted an ambitious cell
phone take-back and recycling program.51 However, Sprints market position focuses
primarily on the functional attributes of its wireless network, such as speed, reliability
and mobility.

Ultimately, at the heart of a companys market position is its reputation, and reputation
arises not only from what the firm says about itself, but also, and perhaps primarily, from
what others say. In the era of free-flowing information on the Internet, it is more
important to act sustainably than to proclaim sustainability as a virtue.

Taking the Green Position in Business-to-Business

Businesses that sell to other businesses are also finding increasing interest in
sustainability among their customers. A multi-billon dollar environmental services
industry (ESI) provides both products and services to the business-to-business (B2B)
sector.52

Some products in the ESI category meet the need for employee health and safety in the
workplace. For example, AFM developed Safecoat and Safechoice paints, a nontoxic line
of paints and cleaners. AFMs customers include companies such as Herman Miller, Gap
and Banana Republic, that are looking to safeguard their employees by creating more
sustainable workplaces.53
Other services help companies become more sustainable in their own operations. For
example, one service company identified a need for better chemical management among
large and medium-sized companies. Many companies use between 5,000 and 50,000
different chemicals in their maintenance, repair and operations. And for many toxic
chemicals, safer, more sustainable options are available.54

In some cases, the impetus to become a sustainable supplier comes directly from the
business customer. For example, Ford Motor Company works with its suppliers to
increase recycling and waste reduction. As a result, less waste goes into the environment,
and costs are lower for Ford.55 In the supply chain for casual and athletic clothing, post-
consumer recycled polyester fleece made from polyethylene terephthalate (PET) plastic
bottles is becoming increasingly popular.56 Outdoor clothier Patagonia, working with
fabric manufacturer Malden Mills, refined the fabric into a finer, softer version called
Synchilla. As a result, Sales exploded, and the company became known for the fleece
jacket.57

Sustainability-minded suppliers can offer innovative solutions to customers problems,

such as the age-old problem of waste disposal. Consider the story of Rocky Mountain
Recycling in the mini case study:

Mini Case Study: Rocky Mountain Recycling

Retail stores generate tons of waste, much of which is highly recyclable,58

including loose plastic and plastic bags, corrugated cardboard, aluminum cans,
plastic hangers, plastic beverage bottles, office paper, and paperback books.59
Traditionally, however, stores have lacked the processes to make most of the
recycling financially feasible. It simply took too much effort to separate and
consolidate the various waste items into quantities worth dealing with. As a
result, stores typically recycled cardboard, which they could compress in their
balers, and paid to have the rest hauled away.

In 2006, former garbage truck driver Jeff Ashby saw the solution. What if other
recyclables, such as plastics and aluminum, could be sandwiched in bulk
between layers of cardboard in balers at the retail site? Recyclers could easily
separate the layers and have end up with marketable quantities of the various
commodities. Enter Rocky Mountain Recycling with a new idea, The Super
Sandwich Bale. The recipe for the sandwich is as follows: First, add a bottom
layer of cardboard, then add the filler layer of shrink wrap and hangers, plastic
bottles and cans, and office paper and crush it into a two- to three-foot high
midsection. Top it off with cardboard and serve to a material recovery facility
(MRF). 60

Photo 7-6 : Jeff Ashby standing on a Super Sandwich Bale

http://www.deseretnews.com/photos/midres/5387944.jpg
 The Super Sandwich Bale was originally designed for Wal-Mart. Other
organizations, including retail competitors and the US military are now looking
into the process.61 According to Ashby, Wal-Mart now recycles more than 25
percent of what once was tossed into the trash compactor. And recyclables are
valuable. Manufacturing from virgin polyethylene resin is almost twice as
expensive as using recycled plastic, thus What was once an expense for W-M
has now become an income source.62 Rocky Mountain Recycling now
employees over 200 people in 11 states and recycles over 50,000 tons per
month.63

In what ways does Rocky Mountain Recycling help its customers to address the
four system conditions of The Natural Step? How does the Super Sandwich Bale
facilitate closed-loop or cradle-to-cradle manufacturing?

In the B2B sector, even more than in consumer marketing, there is a growing green
market. Businesses see the strategic advantages of sustainability, and they are
moving rapidly to make changes. They are building greener buildings, working to
eliminate waste and emissions, seeking renewable sources of power and materials,
and providing safer and more rewarding workplaces. B2B market segments are
different in that they are aligned with specific industries, materials and processes, but
the need for sustainability is universal.

Critical Thinking Exercise: Talkin' 'bout my generation (Apologies to The Who)

Echo Boomers. Millennials. The Net Generation. Generation Y. Generation Y the

Hell Not!? No matter what you call the current generation of young adults, born
between 1981 and 2000, the fact is they have inherited and grown up in a very
different world culturally, politically, technologically and in practically every other
way than any generation before them. And more than any previous generation, they
have a stake in creating a sustainable society.

Think about generation Y in terms of distinct lifestyle segments (Hint: Every large
high school has readily identifiable cliques or social groups that reflect different
values, tastes, styles, attitudes and behaviors).

1. List and name as many segments as you can. If you arent a member of
generation Y, interview someone who is.
2. For each segment, try to identify at least one core value (more if possible) that
resonates with environmental or social sustainability.
3. Now put yourself in the position of a clothing marketer with multiple brands,
one for each segment, and all of which are environmentally and socially
sustainable. Craft a marketing message to position a clothing brand to each
segment, such that the message taps into that segments core values.

Chapter Summary
Research points to a large and growing market for sustainable products and services in
both business-to-consumer and business-to-business sectors. So-called green products
used to be targeted to small and specialized market segments, or niches. Now, the green
market is so large, complex and mainstream that it requires segmentation. Green
segments include the LOHAS customers, anti-consumerists and alternative consumers of
all kinds. Consumers have different personal priorities with respect to sustainability.
Effective segmentation requires attention to demographics, psychographics and benefits
desired by consumers. Choosing which segments to target has implications for product
positioning. And, as we shall see in coming chapters, it also affects every aspect of the
marketing mix.

Review of Chapter Objectives

Segmentation for Sustainability
The Emergence of the Green Market
Segmentation in the Green Market
Positioning for Sustainability
Sustainability in the Business to Business Market

Key Concepts

Green Market
Demographics
Psychographics
Lifestyle Segmentation
Primary Conservationists
Secondary Conservationists
Benefit Segmentation
Functional Benefits (also known as utilitarian benefits)
Symbolic Benefits (also known as self- expressive benefits)
Hedonic Benefits (also known as experiential benefits)
Benefits Profile
Lifestyles Of Health And Sustainability (LOHAS)
Usage Segmentation
Cultural Creatives
Alternative Consumption
Consumerism
Voluntary Simplicity
Locavores
Anti-Consumption
Positioning
Business To Business Sustainable Segments
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