The Five Foundations of Marketing Sustainability in the New Economy

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The Five Foundations of Marketing Sustainability in the New Economy

Summary

Consumers around the world breathed a collective sigh of relief when the “oughts” passed into history on January 1, 2010. A rough decade characterized with bubbles popping, political, corporate, sports star scandals, terrorism becoming part of the daily news cycle, and international turmoil concluded with the worst financial crisis since the Great Depression. Americans have every reason to be exhausted, bitter, and skeptical.

• However, while there is evidence of that downbeat sentiment among consumers, NMI sees many reasons to be optimistic:

• We are in the midst of the most meaningful debates on health care and climate change that America has ever seen, both of which have the possibility of reshaping market sectors of the economy.

• Companies are taking greater responsibility for their actions in the marketplace – internalizing externalities without regulation.

• Consumers are making small but meaningful changes in their day-to-day lives to both lighten their footprint on the environment and to be physically healthier.

  • Mainstream consumers are awakening to sustainability and identifying points of relevance to their lives.

  • Meanwhile, LOHAS consumers (the environmental stewards) continue to evolve and push for greater accountability – demanding ever-greener products and deeper behavioral commitment on their part.

• As the world gets more challenging, Americans persistently pursue the ideals that our country was built on – a Puritan work ethic and the concept of American exceptionalism. We are making the most out of the cards we’ve been dealt, and believe that we can rise above and beyond the current status quo.

This year, we have changed our reporting structure in two significant ways:

• We migrated to a presentation-style format to ease integrating these data into your internal presentations.

• We structured the report around five key topics we believe are foundational to the current sustainability marketplace:

  • Will Sustainability Survive the Recession?

  • The Rise of Consumer Responsibility

  • Transparency 2.0 – The Next Evolution

  • A Redesign of Consumer Targeting and CSR Communications

  • Taking Action and Communicating Across the Product Lifecycle

This year’s report also includes an updated calculation of consumer spending in the US LOHAS marketplace (Chapter 6)

NMI pioneered quantifiable consumer research on the sustainability, environment, and social issues space in 2002, long before it was mainstream, covered in the daily news, or commonly discussed in Fortune 50 boardrooms. Despite the challenges of the past decade, and 2009 in particular, it is as clear as ever that sustainability is here to stay, that it drives business strategy, returns positive results to shareholders, and appeals to consumers across the green spectrum.

Methodology

NMI first designed the LOHAS Consumer Trends Database® (LCTD) in 2002 to measure and describe the marketplace for LOHAS products/services, the consumers that use them, consumers’ expectations of corporate behavior, and attitudes toward environmental and social issues. Particular attention is paid to consumers’ attitudes, behaviors, psychographics, lifestyle activities, and product/service usage patterns in order to provide readers with the information they need to capitalize on growing sustainability and corporate responsibility initiatives.

In many ways, this project scope has evolved beyond a typical market research study that focuses solely on buying behavior and product benefits. Because consumers are increasingly “voting with their dollars” and aligning their personal values with the brands they buy, companies need to understand consumers’ expectations beyond simply the product. And, they need to articulate and demonstrate their own values – what the brand and the company stand for (beyond basic product attributes and benefits) and how they manifest what they really stand for.

Undertaken by NMI on behalf of its sponsor clients, this research was fielded in July 2009 via a primary consumer survey of 4,033 U.S. general population adults. The results of this survey are nationally projectable to the U.S. adult population and statistically valid at the 95% confidence level +/- 1.2%. The data have been post-weighted to match multiple U.S. Census demographic measures. The study utilized a leading online research firm, and was designed, managed, and analyzed by NMI.

Development of NMI’s unique and proprietary consumer segmentation model began with evaluating over 170 different attitudinal and behavioral variables, later narrowed to approximately 15. Cluster centers were defined as dense regions in the multivariate space based on a k-means segmentation of the attitudinal variables from the LOHAS survey.

• This segmentation can be used to identify and predict LOHAS segment membership as part of a quantitative extrapolative analysis of future consumer behavior.

• Each segment is mutually exclusive and is designed to have the maxi-mum differentiation between consumer groups and the maximum homogeneity within each consumer group. The predictive accuracy is high at 80%.

• NMI routinely reviews the segmentation to ensure that it is an accurate representation of the consumer marketplace.

NMI conducts LOHAS research in more than 20 countries around the world, including Europe, Canada, Asia, and Pacific regions. For more details on other LCTDs, please contact NMI.

For information on NMI’s European LOHAS report, click here.