This is the second in a three-part series by Fruitful Strategy's Jennifer Rice, in which she explores sustainable, world-changing brands. She will delve further into the topic in the workshop "Sustainable Brands 101: Integrating Sustainability at the Brand Level" at SB '13 on June 3.
Continuing from our previous post, let’s look at two P’s of world-changing brands: power and permission.
World-changing power often depends on a brand’s reach. Logically, global brands and mass-market brands have more power than small or niche “green” brands to truly change the world for the better or for the worse. The largest brands have the most leverage, are usually making the greatest negative impacts and are desperately needed as key players in social and environmental systems change. They can bring instant visibility, credibility and collaboration to key issues.
The Power of '&': Integrating Sustainability into Business Strategy
Join us as Procter & Gamble CEO Jon Moeller and Chief Sustainability Officer Virginie Helias share their insights on how companies can embed environmental sustainability throughout their business and the role it can play in a business strategy — Tuesday, Oct. 17, at SB'23 San Diego.
A good example is LAUNCH, a strategic collaboration between Nike and NASA, USAID and the U.S. State Department to seek out ideas and technologies that can create a more sustainable world. Last month, Nike convened 150 materials specialists, designers, academics, manufacturers, entrepreneurs and NGOs in green manufacturing at the two-day LAUNCH 2020 Summit. Nike has the brand power to make this type of initiative happen around the world, and it’s well aligned with their brand mission.
Yet if your brand doesn’t have the scale or mass appeal as Apple or Nike, all is not lost. David beat Goliath with a slingshot; you can make an outsized impact as a disrupter. That means you can’t play it safe; your focus should be on industry transformation. One way to do that is to be a market maker, not a market follower. Unlike many risk-averse big brands that wait for a market to show up, it’s the small brands that go out and demonstrate that one exists.
- CafeDirect is now the fifth-largest coffee brand in the UK, demonstrating that consumers appreciate — and will pay for — Fair Trade and other ethical certifications.
- New Leaf Paper was founded specifically to shift one of the most resource-intensive industries on the planet. New Leaf Everest — its line of bright white writing paper — became the market leader and other paper companies have since followed suit with competing brands.
Permission is a concept traditionally used in brand extendibility. Permission answers the question, “Do customers think it makes sense for the brand to play in ‘x’ space?” (I previously wrote about brand extendibility here, here and here.) Apple, Nike, Virgin and others are able to extend into new markets beyond their core offerings because their brands are anchored on how they do business, not on what they make.
Sustainability can be considered a new market for products, services and business models, and mass brands should be seriously evaluating their ability to extend into this space. Not only is it a competitive opportunity in many sectors, it’s critical for systems change. As long as sustainability continues to lurk in the supply chain and operational efficiency, markets won’t move. Consumers won’t change their behavior or vote with their pocketbooks if there are no better options for which to vote. Competitors won’t be forced to change how they manufacture products if sustainability doesn’t become a purchase criterion. And for all that to happen, brands can’t sit around waiting for the market to spontaneously create itself. Marketers have been creating markets for non-essentials for hundreds… no, thousands of years. Let’s stop playing it safe now that it really counts.
The extent to which a brand can extend into customer-facing sustainability activities will depend on permission levels. Customers will have a hard time giving permission for sustainable product offerings or initiatives to oil and mining companies, cigarette companies or fast food companies without some serious and overwhelming proof of addressing the real issues. But companies in benign sectors should investigate not only how much permission they have, but also how relevant sustainability is to customers. In other words, customers may give permission for sustainability but not care enough to make it a purchase criterion.
Nike came to a misguided conclusion (in my opinion) about customer permission levels for sustainably branded shoes back in 2005. As recounted in Business Week:
“The company launched its first line of environmentally friendly shoes, called "Considered," in 2005. It had high hopes for a walking boot, made with brown hemp fibers, that looked obviously earthy. Critics called the $110 shoes "Air Hobbits" because of their forest-dweller feel and took Nike to task for a design that detracted from its high-tech image. The boots didn't sell well, and within a year were taken off the shelves. The lesson for Nike was that its green innovations should continue, but its customers shouldn't be able to tell."
Customers failed to give Nike permission for a shoe that didn’t align with its performance image. A “forest dweller” shoe is more in alignment with Ecco, not Nike; this is a classic brand extendibility failure that likely had nothing to do with sustainability. If Nike had launched a sustainable performance shoe brand, the results may have been very different. And who knows, maybe not. The lesson for Nike and other brands is to invest in knowing exactly where customers give permission and where they don’t.
Next up: We’ll look at brand perception versus credibility, plus using a brand portfolio approach to create flexibility in how you go to market.