Green Marketing

Why do we believe in eco-marketing

Eco-marketing has great potential to become one of the most profitable and successful areas in the long term. Limited natural resources, increased consumption and pollution are the main catalysts for the implementation of green ideas around the world. Growth in the market for environmental goods and services exceeds all predicted indicators, and there is no reason to believe that this trend will not reach Russia. Russian consumers and building owners are learning more about green technologies and products, and the market for environmental materials and services is growing. For example, in the first post-crisis year in Russia, there were about 40 projects declaring themselves "green" to some extent (in accordance with the announced nomination for Green Building). Industry leaders are positioning themselves as environmentally friendly, including such brands as Bayer, Philips, Siemens, Boon Edam, Arup, Bovis Lend Lease, Aecom, etc.

For those who doubt that green building will ever achieve mass application, let's take the example of Apple Computer as a company that regularly manages to innovate in the market. When the iPod first appeared on the market many people considered this product too expensive and limited in the market (note, the same is a common opinion for green building). At the end of 2006, Apple's sales exceeded 70 million iPods. Why did their strategy work? Most would say it was a successful design. Marketers will answer - understanding the needs of customers. When Eco Buildings combine great design with eco-friendly technologies, when architects and engineers start to use the economic justification of the benefits of eco building for different projects depending on the needs of clients, Eco Buildings can overcome the "gap of misunderstanding" and will be in demand in the mass market.

Why does it take time

The green building market is like a market for technological innovation. According to classical marketing theory, innovation takes time to develop mass application. Usually, innovation reaches 90% of the market application within 15-25 years (i.e. 1st generation). Innovations are only adapted by the market if their application is economically justified and therefore there is a so-called barrier to economic efficiency. The cost of studying new working methods, economic risk of investments and business risks should be compensated by the corresponding increased profitability.

The process of innovation is as follows. A group of pioneers, armed with expertise in a particular field as well as the ability to take big risks, experiences a new technology or material. When the sales volume of this group reaches the threshold of 2.5% of the total market volume, the baton is taken up by a market category of consumers called "researchers". Researchers will wait for the successful outcome of the first experiments with the product. The group of researchers is less tolerant to risk, but they are attracted by the increased profitability of the innovation sphere. When this group reaches 16% of the potential market volume, the new group - the early majority - comes into play. The process of mass adaptation of the product begins. As a result, at 50% of the potential market, the category of cautious consumers joins the majority. And already on completion of process of introduction on the market the group of conservatively adjusted market players joins the mass consumer. There are, of course, also those consumers who will never take advantage of innovation.

Now, turning to the Russian reality, it is possible to note fast development of the first stage of innovative ecological construction - application of the approach by pioneers, note completion of this phase two first buildings certified on ecological certification systems. It is expected that a critical mass of 2.5% of potential consumer demand will be achieved in 2011 - 2012, when the main green Olympic venues will be put into operation (10 buildings certified under BREEAM) and preparations for other major sporting events (which will also carry the elements of eco-friendly) will begin. The restoration of the real estate market and the search for new methods of market differentiation will contribute to the accelerated development of the promotion of green building.
How to find a place in the sun
Companies that are seriously thinking about eco-marketing as a differentiation method need to clearly decide for themselves at what stage they will join the trend. Flexible mid-sized companies that are easy to perceive risks will become 'researchers', while large inert organizations will prefer mass adaptation of eco-products. Both researchers and mass consumers need to thoroughly investigate all risks of eco-marketing. These may include the inability to achieve economic efficiency, technological risks, as well as slow market reaction to innovation. The risks of delayed adaptation of eco-innovations by the market can be mitigated by a proactive 'researcher pool' approach.
Where to get the money?
Low market awareness and complex supply structure slows down the process of ecomodernization. A number of myths about green building present serious obstacles to market penetration. The most important one is the increased costs associated with green building. For example, according to Turner Construction's research among senior management of foreign companies, the estimated markup for green construction, according to the directors, is 14-20%, when in reality it rarely exceeds 8%.
You need to demonstrate to your clients how you can reduce or cover the capital costs associated with green building by reducing operating costs, reallocating marketing budgets and adding value to green buildings. The structure of the greening costs consists of a 0-8% surcharge on the total building budget, as well as funds spent on certification services - no more than USD 50 -70 000. If a general approach to building budgeting is taken, it is easy to find the means to cover these costs.
For example, the marketing budgets of mega-projects often include significant costs for outdoor advertising and media placement. Just imagine what results can be achieved if you direct these funds to improve the environmental performance of the project. Improve the quality of your project - and it will speak for itself!
Practice what you preach.
Architects and all professionals in the construction business should learn to present environmental certification not as an architectural whim or fashionable fad, but as a basic element of the development of a successful quality project, as well as a method of proving the quality characteristics of the building. Companies providing eco-services, as part of their activities, should develop tools and methods to identify and measure the economic benefits of sustainability as part of their product offering.
The holistic approach includes implementing green office programs and using only environmental suppliers, as well as implementing environmental management systems such as ISO 14000.

Reduce lighting bills by education

For green building to reach the stage of mass application, a group of "researchers" must take over the promotion of ideas to the "early majority". This is why the role of education is so important in raising customer awareness. Sharing experiences and learning together can be a solid foundation for linking the success of your company to that of your client. Presentations and seminars, articles and events should be the main marketing tools. For each company, it is necessary to develop its own system of arguments in favour of green building, based on real examples from practice at home and abroad. Numbers and performance indicators are often published in Russian and foreign sources to help you create more effective presentations.

The advantage of the educational approach to marketing is the formation of long-term partnerships with clients. We should not forget that this type of marketing also requires certain investments. Numerous interindustrial associations, exhibitions and conferences will help to spread the news about your new approach more effectively.

Opinion leaders
Sustainable construction involves understanding the importance of close cooperation between all participants in the construction process. Developing a new market is costly and demanding, and will be more effective if you find those who share your point of view. Innovations are distributed much faster through relatively small communities by working with people with good connections who impress others and who act in an emotionally charged context (almost clan-based entities) between people who know, trust and like each other. Green building approaches will spread much faster among like-minded people, through people who are willing to openly and comprehensively share their knowledge (so-called experts whose opinion is valued and respected) and through "opinion leaders" who have the capacity and ability to convince others of the benefits of sustainable design.
In conclusion, we would like to add another, very important perspective on eco-marketing. Eco-marketing is the original positive tone of your brand. Eco-marketing appeals to people's most important needs - to be generous and to feel valued by being able to do something positive. In a study conducted by MacGrow-Hill Construction, "positive creation" was mentioned by most respondents as the main reason for applying environmental strategies in their projects. Be positive and share your enthusiasm with others!

Read more

Tags: #breeam #leed #ecoconstruction #marketing