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Volume 4 | Issue 3 | Page 27-33 | Jun 2013
Save the Environment and More! Lessons in Green Marketing
The Henry Ford/Flickr
The incandescent light bulb has remained essentially unchanged since Thomas Edison (right) invented it. Far more versatile and efficient are LEDs, but their popularity suffers from niche marketing.

“I don’t like the federal government taking choices away from consumers,” declared United States Representative John J. Duncan, Jr., of Tennessee’s second congressional district, “I think the country is much better off if we give the American people more choices instead of fewer.”1

This sentiment framed the political firestorm over light bulbs in early 2011. Duncan was part of a growing chorus of policy makers and pundits voicing opposition to the part of the Energy Independence and Security Act (EISA) of 2007 which mandated that, beginning in 2012, light bulbs sold in the United States would have to be approximately 25 percent more energy efficient.

At issue was the idea that existing, inexpensive incandescent light bulbs would be banned. This technology had not evolved much since Thomas Edison’s invention in the 1880s, making it terribly inefficient. The Alliance to Save Energy (a coalition of light bulb manufacturers, power utilities, environmental groups, businesses, and government agencies) asserted that lighting accounted for about 22 percent of America’s energy use, and it estimated that elimination of incandescent bulbs could save Americans $18 billion annually in electricity consumption, an amount equivalent to the power generation of 80 coal-fired power plants.2 Interestingly, many light bulb manufacturers supported a national efficiency standard to avert the enactment of conflicting standards by individual states. In December 2007 the EISA passed with broad bipartisan support and was signed by President George W. Bush.

In the divisive political climate following EISA’s passage, however, the narrative of the light bulb mandate shifted from “smart energy savings” to “lost American freedom.” Critics contended the law would force citizens to buy costly compact fluorescent light bulbs (CFLs) and light-emitting diodes (LEDs), products that they said produced unattractive illumination that was inferior to tried-and-true incandescent bulbs. In particular, CFLs were demonized because they contain mercury, a hazardous material if exposed to humans, which could happen if the bulb were to break.

“If I dropped this light bulb I’m holding,” declared Rep. Ted Poe of Texas’s second congressional district in an impassioned speech before Congress in March 2008, “we would have to evacuate the House of Representatives.”3 Lambasting CFLs, Poe claimed that they’d fade cherished family photos, interfere with Monday night football TV reception, and hurt American jobs because CFLs were all made in China. Video of Poe’s speech on CSPAN went viral, becoming a rallying cry for citizens concerned about government overreach. Anxious consumers were soon hoarding incandescent bulbs before they became illicit contraband.4

In December of 2011 Congress defunded enforcement of the EISA’s light-bulb performance standard. Though touted as a moral victory for consumer choice, the light bulb industry, which had largely remained silent during the debate, had already retooled and moved on,5 recognizing CFLs as a transitional technology toward rapidly improving LEDs.

LEDs are more efficient than CFLs, last longer, and function more like conventional incandescents—lighting instantly and working with dimmer switches. LEDs also do not contain mercury (though, as with any electrical gadget, they do contain toxic metals and need to be recycled accordingly). LEDs are built with extremely durable components that can withstand shocks and external impacts in the harshest conditions and temperatures. Consequently, they’re ideal for rough handling in workshops and for decorative holiday displays exposed to snow, wind, and rain.

The problem with LEDs is their upfront costs. Typically ranging from $10 to $60 each, LEDs can take 10 years to recoup costs in energy savings.6 Even Consumer Reports says that, until LEDs drop in price, there is no monetary benefit from replacing CFLs.7 Though analysts predict prices will decrease in the coming years, LED sales are likely to lag behind purchases of the inferior CFLs until then.

So the question stands: does society need another government mandate or further price reductions to encourage consumers to adopt environmentally preferable LEDs? If the history of green marketing is any guide, then the answer is likely “no.” Some manufacturers are already making this case through action. Their successes offer smart lessons on how to broaden the appeal of environmentally preferable products like LEDs.

Selling Green or Selling What Consumers Want?

Interestingly, almost 20 years ago, CFLs faced a marketing problem similar to the one confronting LEDs today. In 1994 Philips’ CFLs were launched in the United States under the brand name Earth Light. Consumers, unfortunately, didn’t care for the initial quality of the CFL’s illumination and bulky shape. Despite improvements, sales of Earth Light remained weak.

Philips asked consumers why they weren’t buying energy-efficient CFLs and found that the name Earth Light wasn’t reaching them. Although the environment was important, “saving the earth” wasn’t a primary consideration for buying light bulbs. Rather, consumers said long-lasting convenience was what they wanted—an overlooked benefit of CFLs.8 Hence, a name change in 2000 to Marathon emphasized the CFL’s seven-year life over incandescent lighting, and sales eventually took off.9

Per_Stafford_Figure2.jpg
Alan Parkinson/Flickr
The solar-powered SUNNAN lamp from IKEA, with mod design and a promise to donate one lamp to UNICEF and Save the Children per purchase, has expanded sales beyond simply the environmental market.

Marketers need to avoid “green marketing myopia”—focusing too much on product greenness over what’s in it for consumers.10 Marketing research indicates that while consumers may care about the environment, they generally don’t act on it because they perceive green products as inferior, too costly (as in the case of LEDs), or not aligned with their values. Indeed, by some estimates, environmentally conscious consumer purchasing accounts for only 1 to 5 percent of the market, a tiny niche.11 If more environmentally preferable products like LEDs are to make a difference in the world, the other 95 to 99 percent of consumers need to embrace them as mainstream. This requires companies overcoming the negative perceptions of greener products and delivering on consumer value—not just environmental value.

Fortunately, several compelling benefits that can be promoted to broaden consumer appeal are often inherent in environmentally preferable products. These include:

  • cost and energy savings
  • convenience
  • health and safety
  • better performance
  • status and prestige
  • “bundling” (or adding consumer value to greener products)10

For example, DropLED Pro leverages the better performance angle over incandescent and CFLs, offering a practical workshop light that is cool to the touch and nearly indestructible (it can survive being run over by a forklift)—attributes highly valued by mechanics and plumbers who often suffer from both light burns and the inconvenience of broken glass bulbs.

Thus, while some LED bulb manufacturers are already promoting these conventional benefits, status and bundling, as explored below, appear to offer the most promising value propositions today. The diode technology can be incorporated into unconventional, imaginative, and entertaining lighting forms far more easily than incandescent and CFL bulbs, resulting in smart functionality and got-to-have-it appeal for many consumers beyond the green market niche.

Catching Some Sun

Solar-powered LED light fixtures are quickly taking hold in the developing world, bringing evening illumination to the 1.5 billion people who do not have access to reliable electricity. Because of their high efficiency, LEDs can be integrated with small solar panels and rechargeable batteries into all-in-one lanterns that power hours of light after sunset.12 Many nongovernmental organizations (NGOs) and socially aware companies distribute such lanterns either for free or at low-cost to off-grid communities across Africa and Asia, replacing kerosene lamps. Kerosene is expensive, and burning it is unhealthy and a fire hazard. The safer and better LED lighting allows children to study and adults to cook and work after dusk, improving their productivity and quality of life.

Interestingly, lamps designed for developing world applications that bundle solar energy with LEDs are finding their way into Western markets as practical outdoor lighting or interior accessories for the contemporary home or office. Typically, manufacturers take proceeds from sales in developed countries to support donations of the same solar-powered LED lanterns for aid and relief efforts. For example, the sturdy, utilitarian S20 lamp from d.light is designed for remote villages, but it is sold in the United States as a heavy-duty and convenient alternative for use in tents, hiking, or in case of emergency.

Similarly, LuminAID offers solar-powered LED lamps in the form of durable and water-resistant inflatable plastic bags. When deflated, the lamp can be folded compactly for storage or hooked onto a backpack or tent for charging in the sun. At night, LuminAIDs can be inflated into the size of small pillows to offer a diffused light that can be carried or hung overhead.

By contrast, the Swedish retailer IKEA has taken solar-powered LEDs in a radically different direction with its sleek, gooseneck SUNNAN designed to suit modern décor. For each SUNNAN sold, IKEA donates one to children in developing countries via UNICEF and Save the Children. Even Oprah Winfrey has endorsed the product as a recommended holiday “gift that gives back.”13

Appealing to youth—the next generation of consumers—is also smart. One lamp created for Africa is the Little Sun, which looks like a toy sunflower, though the exterior plastic petals protect the lamp if it is dropped and help ventilate the battery when charging. Little Sun can be worn around the neck, carried, hung, or attached to a bike. The aim is to make the solar-powered LED device kid-friendly, like a Pokemon figure, and move the technology beyond the realm of aid and relief.14 Just as mobile phones and electronic gadgets have become status symbols among youth, the same is possible with personal solar lamps that have the right “cool” look and utility. In sum, bundling solar power and smart design is expanding the functional value of LEDs in developed markets beyond just energy efficiency.

Per_Stafford_Figure3.jpg
Scurzuzu/Flickr
The Philips Hue LED also holds appeal well beyond environmental consumers—with wireless, color-changing abilities, ArsTechnica described it as “addictive.”

There’s an Addictive App for That

Because LEDs are built from computer chips, some companies and programmers are capitalizing on their high-tech capabilities to change the notion of light bulbs from cheap, throwaway items into things that can be shown off.

Philips Hue bulbs, sold at Apple Stores, are a set of three, wirelessly connected bulbs that can be controlled with a smartphone iOS app to display a full spectrum of rich colors and intensities, representing a quantum leap beyond what could be achieved with CFLs and incandescent bulbs. App users can manipulate Hue LEDs by tapping on preset “light recipes” like Relax, which bathes a room in dimly warm golds, or Energize, which brightens a room into stark white with a hint of blue. Users can also tap photographic scenes, including a sunrise, a beach, and a sunny Greek garden, all of which can be mimicked by the LEDs. Users can even add their own favorite pictures to faithfully reproduce the lighting ambiance of happy memories. Software developers are creating more free apps for a range of new features, including making the lights voice- or music-activated.

Lee Hutchinson, gadget critic for ArsTechnica said that after “a couple of weeks of almost nonstop fiddling” with Hue bulbs, he found them “indispensable” and “addictive.”15 Despite their $200 cost, The New York Times reported recently that Hue LEDs are “a hit,” especially among young, tech-oriented consumers.16 These consumers even like to brag about them—the ultimate word-of-mouth and Holy Grail of marketing.

Bundling ever-more imaginative apps with LEDs’ unprecedented technical capabilities is destined to change our perception of light bulbs and how we interact with them in our homes, offices, and businesses.

More Consumer Choice

Contrary to what some policy makers say, LEDs are now offering consumers more choices and applications instead of fewer, and that should be the industry’s narrative. Bundling LEDs with novel apps, solar-battery chargers, practical functionality, feel-good charity, celebrity approval, and imaginative designs is creating consumer value well beyond conventional energy savings and economics.

The key lessons for green marketing are then twofold: One, to broaden adoption of environmentally preferable products, manufacturers need to position green to pique mainstream consumers’ desires and interests. Many green products have inherent conventional value (LEDs’ long life) or can be aligned with core personal values (buying solar-LED lanterns can serve altruistic desires) to broaden their appeal. Green marketers shouldn’t focus so much on the greenness of products that they lose sight of basic consumer needs.

Second, when the conventional value of greener products isn’t sufficiently compelling for mainstream consumers, manufactures can bundle or add novel, consumer-sought “bells and whistles” to broaden their appeal, like software applications to manipulate LEDs and serve consumers’ status-seeking desires. LEDs’ technical capabilities offer unprecedented opportunities for creative engineers, product designers, and software programmers to make the technology an integral part of twenty-first-century living.

LEDs do, however, pose a future business problem. Because LEDs can last for decades, consumers will buy significantly fewer replacement light bulbs. While that may benefit the environment, manufacturers face stark revenue prospects with falling LED prices and demand. It remains to be seen how manufacturers will profit from this transition, but that’s another story.

In the meantime, how savvy companies are thinking beyond energy savings to encourage the transition to LEDs presents some good insights about how makers of greener products can break out of the green market niche and position their offerings as more appealing, addictive, and mainstream.

References

  1. Collins, M. GOP lawmakers question light bulb mandate. Knoxville News Sentinel [online] (March 11, 2011) (www.knoxnews.com/news/2011/mar/11/gop-lawmakers-question-light-bulb-mandate).
  2. Wald, ML. A U.S. alliance to update the light bulb. The New York Times [online] (March 14, 2007) (www.nytimes.com/2007/03/14/business/14light.html?_r=0).
  3. Poe, T. Important information about “energy saver” [sic] light bulbs. [online] (May 13, 2008) (www.youtube.com/watch?v=Tv59PJ30WeM and, for a transcript, www.citizinemag.com/stories/08021.html).
  4. O’Donnell, J & Koch, W. Some consumers resist ‘green’ light bulbs. USA Today [online] (February 8, 2011) (usatoday30.usatoday.com/tech/science/environment/2011-02-07-lightbulbs_N.htm).
  5. Bingham, A. Congress defunds ban on incandescent light bulbs but doesn’t quite save them. ABCNews [online] (December 16, 2011) (abcnews.go.com/blogs/politics/2011/12/congress-defunds-ban-on-incandescent-light-bulbs-but-doesnt-quite-save-them).
  6. Lightbulbs: LEDs and CFLs offer more choices and savings. Consumer Reports (October 2011).
  7. Lightbulbs: LEDs outshine CFLs in our latest tests. Consumer Reports (October 2012).
  8. Makower, J. Green marketing: Lessons from the leaders. Two Steps Forward [online] (September 2005) (www.worldchanging.com/archives/003502.html).
  9. Fowler, GA. “Green” sales pitch isn’t moving many products. Wall Street Journal (March 6, 2002).
  10. Ottman, JA et al. Avoiding green marketing myopia. Environment [online] 48, 22–36 (2006) (www.greenmarketing.com/files/Stafford-MyopiaJune06.pdf).
  11. O’Rourke, D. Consumers can get results. New York Times [online] (July 30, 2012) (www.nytimes.com/roomfordebate/2012/07/30/responsible-shoppers-but-bad-ci...).
  12. Blake, L. Sun King solar lanterns in rural India. Wall Street Journal [online] (December 4, 2009) (www.youtube.com/watch?v=gd5UIuq3aoQ).
  13. Swerdloff, A. One for me, one for you: 4 standout gifts that give back. O, the Oprah Magazine [online] (December 2010) (www.oprah.com/omagazine/Gifts-That-Give-Back_2).
  14. Solar lighting: Lighting the way. The Economist [online] (September 1, 2012) (www.economist.com/node/21560983).
  15. Hutchinson, L. In living color: Ars reviews the hacker-approved Philips Hue LEDs. ArsTechnica [online] (November 19, 2012) (arstechnica.com/gadgets/2012/11/in-living-color-ars-reviews-the-hacker-approved-philips-hue-leds).
  16. Cardwell, D. LEDs emerge as a popular ‘green’ lighting. New York Times [online] (January 21, 2013) (www.nytimes.com/2013/01/22/business/leds-emerge-as-a-popular-green-light...).
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