Your sustainable brand’s “green” product competes within a product category, like household cleaners, interior paint, or iced tea. Each brand in your category differentiates its product differently as it passes through its life cycle; you are likely to emphasize your product’s low environmental impact or health benefits.
Competition between individual products is just one part of the story. According to Clayton Christensen, cumulative changes in individual product features determine the nature or basis of competition within categories, which shifts in cycles of evolution. The shift from one cycle to another occurs when the product’s features surpass the customers’ demand or absorption rate. That the basis of competition progresses from functionality to reliability to convenience to price poses a significant challenge to “green” products: sustainability is markedly absent from the model. Let’s look at the product evolution model to identify opportunities for “green”.
The product evolution model
The initial basis of competition within a category is functionality. A major challenge “green” products used to face was the results they delivered. It turned out consumers cared less about the environmental attributes of a cleaning product than about its ability to perform the intended function – clean.
Once the functionality of products exceeds what the market demands or can absorb, the basis of competitive differentiation shifts to reliability. “Green” products that failed to meet the expectation for reliability failed.
When reliability reaches a plateau for every product within a category – when products are reliable enough – the nature of competition shifts again and convenience becomes the differentiator. Companies compete on the convenience of purchase, use, disposal, or back office support. Once again, “green” products have tended to underwhelm here; some require purchase in green-only stores, others can’t quite make it to the mainstream shelves.
Finally, when all products in a category become convenient enough, the basis of competition shifts to price. Needless to say, the “green premium” eliminates any chance of competing on price for “green” products. (In a Catch-22 fashion, you can’t drive down prices without higher demand and you can’t increase demand with high prices.)
To sum up, in the product evolution model green is a meaningless attribute for competitive differentiation. In fact, the focus on green may have hampered the success of those sustainable brands that ignored the functionality – reliability – convenience – price spectrum of competition.
Beyond price, beyond green
So what’s a “green” brand to do? The main way that “green” brands have tried to succeed in the marketplace is appealing to the niche of consumers that appreciates green – ethical or “green” or LOHAS consumers. It doesn’t work. The gap between stating the intent to buy green and actually buying green has consistently frustrated green marketers. More importantly, you cannot achieve mass market appeal, not to mention transform the nature of competition or the market itself, with a niche strategy. “Green” is not a useful differentiator – products must, first and foremost, adhere to the product evolution model.
The problem with the product evolution model is that it relates primarily to the product itself – its features and benefits. It’s also unclear where competition shifts after price. Another possibility, therefore, is to expand the product evolution model itself. With products becoming commodities in the crowded marketplace, meaning has been on the rise as an attribute of differentiation. Incorporating meaning into the model would include the consumer in the equation – her identity, self-perception, and aspirations. The idea is to appeal to the consumers’ self-actualization need (and not necessarily the need to protect the planet). Though meaning as a differentiator is yet to be tested in the product evolution model, many signs point in that direction.
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Image credits: Colin Purrington and kevindooley
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Great post. You’re right, green is not a differentiatior. But the insights into why are often fairly obvious: “I can’t see disparate impact.” As a result, appealing to self-actualization or more likely idealized self are difficult to connect. This is because there isn’t enough context.
Your hints at meaning are the key to that though. Sustainability has to mean more than impact. Consumers don’t always understand impact but they understand fair wages, education, poverty, etc. Those traits, in my opinion, allow a brand to more easily compete on functionality with category competitors. Hopefully, they’re enough to support the price premium the brand needs to address impact and social sustainability.
In Toms case, you’re not buying one pair of shoes, you’re buying two.
For Lands End, a homeless person gets a coat.
The more esoteric ones are Method et al. “I don’t really understand why cleaning products are nasty; I’ve just heard they are.”
Tough question, I know I don’t have the answer. Just my $0.02.
@Matt: Yes, the connection between a product and its environmental impact is fairly abstract, and so difficult for an average consumer to create. Going concrete, as in your examples, certainly helps connecting gratification with a wider impact.
There may be yet another way to incorporate “green” in the product evolution model: redefine the categories. Functionality as the benefit to the consumer and to the community at large. Convenience along the entire life cycle. Price as the price of the good plus what is now considered externalities. A task for the long haul for sure.