Succeeding in the green market II: Marketing Strategy

In part one of this series on marketing green products (see below), I gave some insights on consumers and their perceptions regarding green products. Now I will share some recommendations for going to market with organic and fair trade products, which are the result of my research into marketing fair trade chocolate for Sustainability and Environmental Marketing courses as part of my MBA at the Sauder School of Business (UBC). The research included secondary research and a survey to MBA students.

1. Positioning
As mentioned in my previous post, there are two promising markets for fair trade and organic products: ethical buyers –who highly value the green quality of products– and those who buy it for selfish qualities which can be related to health, quality or taste, depending on the product. In my research into fair trade chocolate, for example, I realized that though “ethical buyers” in my survey highly valued the environment and sustainable practices, fair trade and organic qualities rated 5 and 6 in a list of 8 qualities that they valued most when shopping for chocolate. Considering that chocolate is a low-risk purchase and involves little time and thought when purchasing, it is likely that even these buyers would prefer a known brand, a preferred variety of chocolate, or better yet, the quality and taste of the chocolate. So even with ethical buyers, green qualities are not enough. The brand must also build the perceptions of high quality, health/indulgence depending on the product (which green buyers also rated highly) and other functional qualities (like different flavors, in the case of chocolate). For indulgers, a promising positioning strategy would be to use the “single source” quality that fair trade products can offer, because they are usually sourced by specific cooperatives and bought directly by the manufacturing company, as opposed to commodity cocoa, which is bought from distributors from all over the world at the cheapest prices possible.

2. Price and Distribution
As I mentioned in my previous entry, though ethical buyers and indulgers are willing to pay a higher price for the green qualities/experience of the products, a promising strategy is to create a line of products that is affordable and accessible to the general population. Divine Chocolate, a successful non-for-profit based in the U.K., has achieved successful growth thanks to a strategy where it places its chocolate products in popular retail chains and sells at affordable prices*. Placing organic and fair trade products in supermarkets and other accessible retail locations (instead of high-end and specialized boutiques only) also helps sales**. Of course, if the strategy is to compete in the fast-growing high end chocolate segment, fair trade is also very promising. In that case, as mentioned above, single-source qualities and percentage of cocoa are important qualities when demanding a premium.

4. Promotion
From my research I came up with many recommendations for promoting and communicating the value of fair trade and organic chocolate. Advertising should be focused on educating people on the benefits of fair trade, which even the ethical buyers I surveyed were not very aware of. This means not only expressing the social benefits of cocoa bought at above-commodity prices from poor farmers in developing countries, but also the environmental and health benefits that it can bring because of the reduced use of chemicals and growing the plants in a forest, rather than in a dedicated cocoa plantation. PR and events are also key. Divine Chocolate Company, for example, has created buzz by using comedians and celebrities to talk about the cause on TV. It even managed to get then Prime Minister Tony Blair to visit the farms where the cocoa was grown in Ghana**. Another promising opportunity, especially for indulgers, are chocolate tastings and wine pairings, which have become more popular in the recent years.

In conclusion, organic and fair trade products –like many green offerings– are not as easy a sell as we wish they could be. The big lesson from this is that green qualities are not enough. Though they are increasingly important to consumers, and a key in any corporate social responsibility program, green products must also have functional qualities that benefit consumers directly. It is important to price them competitively, and assure that distribution and promotion contribute to making them more accessible and creating value in the buyer’s minds.

*Doherty, B., & Tranchell, S. (2005, July). New thinking in international trade? A case study of The Day Chocolate Company. Sustainable Development, 13(3), 166-176.
**Regmi, A. (2001) Changing Structure of Global Food Consumption and Trade. Market and Trade Economics Division, Economic Research Service, U.S. Department of Agriculture, Agriculture and Trade Report. Retrieved from the USDA Website on March 10, 2009.