By Victoria Fritz

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By Victori Frit
How to Develop a Green Brand
STRATEGY POINTS
A green brand is one that successfully combines performance and perception in being
o·o¦tab|e, et||ca| aoo eco|o¿|ca||¸ ·esooos|b|e
There are two approaches to green marketing: the functional and the emotional
T|oo¿| ¬o·e oeoo|e oo. .aot to bo¸ .|at t|e¸ oe·ce|ve as ¿·eeo o·ooocts, o·|ce
·e¬a|os a |o·o|e, becaose oeoo|e ooo't a|.a¸s t||o' t|e eov|·oo¬eota| beoe¦t ¦·o¬ a
o·oooct ,ost|¦es a ||¿|e· o·|ce
3as|c ·o|es o¦ t|o¬b. ¬|o|¬|ze sac·|¦ces ·eoo|·eo o¦ cooso¬e·s, asso·e o·oooct ooa||t¸
and availability
BUSINESS
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:NKcenSEI8KVUXZ ‡September 3-16, 2012
In
these times of greater environmental
and social awareness, companies see the
ImporLunce oI beIng known us u ¨green¨
brund. ¨Green¨ meuns LIuL LIe compuny munuges noL
onIy hnuncIuI buL uIso socIuI und envIronmenLuI rIsks,
obligations and opportunities. Consequently, those
determined to be green brands receive recognition
and an improved reputation.
¨TIe besL green brunds ure .. prohLubIe, eLIIcuI,
and ecologically responsible,” according to Jez
Frampton, Global Chief Executive of Interbrand, a
global brand consultancy company. Interbrand, in
partnership with Deloitte, has been evaluating the
world’s top brands based on performance as well
as the public’s perception of their green credentials
sInce zo1o. TIeIr reporL, ¨Best Global Green Brands
zo1z,¨ runks LIe Lop ¸o compunIes uccordIng Lo LIese
criteria, with Asian car manufacturer Toyota topping
this year’s list.
Studying a brand's performance and
perception. The report noted that companies
ure now LukIng sIgnIhcunL sLeps Lo reduce LIeIr
social and ecological impact and conveying this
message to their consumers. Hence, the screening
process for choosing the green brands includes a
careful study of a brand’s actual performance as
well as market perception.
Deloitte assesses each brand’s performance based on
sIx muIn cuLegorIes:
1. Governunce - poIIcIes Lo munuge
environmental impacts and execute
environmental programs
z. OperuLIons - meusure oI energy, greenIouse
gas emissions, water management, waste
management, and toxic waste management
¸. TrunsporLuLIon und IogIsLIcs - compuny`s
performance in measuring, reporting and
mitigating the environmental performance of
their transportation and logistics, business travel
and commuting
q. SLukeIoIder engugemenL - IeveI oI
engagement with their relevant stakeholders
¸. SuppIy cIuIn - meusurIng, reporLIng, und
mitigating environmental performance of their
supply chain
6. ProducLs und servIces - green uLLrIbuLes oI
ILs producLs In Lerms oI ėcIency, susLuInubIe
production, and use of life-cycle assessment,
among others.
A brand’s perception is measured according to six
muIn eIemenLs:
1. AuLIenLIcILy - perceIved credIbIIILy oI LIe
brand’s environmental claims
z. DĬerenLIuLIon - Iow dĬerenLIuLed LIe
brund`s green ĕorLs ure perceIved Lo be vIs-u-vIs
their competitors
¸. Presence - consumer uwureness oI LIe
brand’s green activities and its green reputation
in the market
q. ReIevunce - ussessmenL oI LIe reIevunce oI
the brand’s environmental claims; comparing
the perceived importance of the brand’s green
activities with the brand’s green perception
¸. ConsIsLency - oI LIe brund`s vurIous
green communication
6. UndersLundIng - IeveI oI undersLundIng oI LIe
brand’s green activities as a whole.
The overall green brand score is calculated as a
quuIIhed neL oI LIe sLundurdIzed perIormunce score
and the standardized perception score. In cases where
performance is greater than perception, Interbrand
calculates a simple average. When perception outdoes
performance, Interbrand calculates a simple average
and then applies a consistent discount factor based
on the gap between perception and performance. This
discount factor is designed to penalize brands that are
not living up to public expectations.
How to develop a green brand
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Ranking is based on the extent that overall score
improved or regressed from the preceding year.
This means achievements of the preceding year
remain credited, and are added on to the current
year’s achievements.
To illustrate the method of scoring and ranking,
¡nLerbrund cIose LIe Lop hve green brunds us IoIIows:
There and back again
What is a green brand, in more concrete terms? In the case of Toyota, a quick look at Toyota`s website
reveals its recycling initiative, among other efforts.
The following video illustrates Toyota`s Hybrid Vehicle Battery
Recycling System, tracing the battery through a complete
loop from sale through disposal, shredding, production and
reassembly in a new vehicle.
In this instance, a brand has not only created an earth-friendly
process, but also communicated it effectively to its stakeholders
in this user-friendly video.
¡L muy come us u surprIse LIuL LIree ouL oI LIe Lop hve
green brands are car manufacturers, since cars are a
major source of carbon emissions. But that is probably
LIe reuson curmukers ure mukIng LIe mosL ĕorL Lo
proLecL LIe envIronmenL In LIe hrsL pIuce.
FunctionaI and emotionaI positioning
strategies. Developing a green brand is possible
usIng u vurIeLy oI sLeps. A zoo¸ sLudy, ¨Green
brundIng ĕecLs on uLLILude: IuncLIonuI versus
emotional positioning strategies,” by Hartmann
et al of Universidad del Pais Vasco in Bilbao,
Spain, sought to test suggested green positioning
sLruLegIes uguInsL one unoLIer, und see LIeIr ĕecL on
perceived brand positioning and brand attitude. The
uuLIors observed LIuL posILIonIng u ¨green brund¨
requIres ucLIve communIcuLIon und dĬerenLIuLIon
from its competitors through its environmentally
sound attributes. Furthermore, they classify green-
brand positioning strategies as functional or emotional
(puge 11).
A functional approach builds brand associations by
conveying information on environmentally sound
product attributes that are advantages over competing
brands. These attributes include production process,
product use, and disposal. For example, a car brand
cun bousL sIgnIhcunLIy Iower emIssIons. However,
this strategy has its limitations. It may not deliver
IndIvIduuI benehLs Lo ILs buyer, und LIereIore muy noL
motivate the customer to purchase.
1 Toyota -02.56
2 Johnson & Johnson 03.89
3 Honda -00.38
4 Volkswagen 04.20
5 Hewlett-Packard 11.72
TOP GLOBAL GREEN BRANDS 2012
Partial table from “Best Global Green Brands 2012,” Interbrand
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:NKcenSEI8KVUXZ ‡September 3-16, 2012
FUNCTIONAL VS. EMOTIONAL APPROACH IN
IMPROVING BRAND ATTITUDE
Graph from "Green branding effects on attitude: functional
versus emotional positioning strategies," Hartman et al,
Universidad del Pais Vasco, 2005, page 18
Instead of, or in conjunction with, a functional
approach, the company can choose from three
dĬerenL Lypes oI emoLIonuI brund benehLs:
1. ¡eeIIng oI weII-beIng Irom conLrIbuLIng Lo LIe
improvement of the environment
2. Personal satisfaction from exhibiting his/her
environmental consciousness to others
3. Having sensations normally experienced
through contact with nature; embedding
the brand in pleasant imagery of
natural environments evokes vicarious
nature experiences.
Which works best in improving brand
attitude? The research study thus proposes
two things. First, perceived green-brand positioning
Ius Lwo upproucIes - IuncLIonuI und emoLIonuI.
Second, green-brand positioning improves brand
attitude. The question posited by the research
sLudy Is: WIIcI sLruLegy Ius LIe sLrongesL ĕecL on
brund uLLILude?
TIe sLudy surveyed 16o munugemenL senIors, uged
zz Lo z6, wILI ¸6% IemuIe respondenLs. TIe sumpIe
wus deemed upproprIuLe Ior LIe brunds (q smuII-
sIzed curs, und one experImenLuI green cur) LIey
were exposed to in the study. They were each shown
advertisements on individual computer terminals,
and then were asked to respond to a set of questions.
TIe sumpIe wus dIvIded InLo Iour groups - one
control and three experimental groups. The control
The reseurch stody proposes two things: Iirst, green-
brund positioning hus two upprouches - Ionctionul und
emotionul. Second, green-brund positioning improves
brund uttitode
group wus exposed Lo u reguIur cur (Mercedes A-cIuss).
Experimental groups were shown a hypothetical
cur (Mercedes ATMO). TIe hrsL experImenLuI group
was shown an experimental ad based on functional
brund posILIonIng sLruLegy, by sLuLIng ILs IueI ėcIency.
The second used the emotional approach, embedding
the brand in nature scenery. The third combined
both strategies.
Merecedes ATMOS (Combined Posit.)
Merecedes ATMOS (Emotional Posit.)
Merecedes ATMOS (Functional Posit.)
Renault
Mercedes A Class
Fiat
Seat
Opel
-1.0 -.05 0.0 0.5 1.0 1.5
1.5
1.0
0.5
0.0
0.5
-1.0
N
A
T
U
R
E

(
E
m
o
t
i
o
n
a
l
)
How to develop a green brand
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PercepLIon Improved sIgnIhcunLIy on LIe IuncLIonuI
scale with the functional approach ad, and improved
on the emotional scale with the emotional ad. The
greatest increase happened, however, with the
combined functional-emotional strategy.
¡n Lerms oI uLLILudInuI ĕecLs, IL wus Iound LIuL LIuL
the emotional dimension on brand attitude has a
sIgnIhcunLIy IIgIer ĕecL.
Results show that there are indeed two approaches
of green-brand positioning. Likewise, green-brand
positioning does improve brand attitude. On the
reseurcI quesLIon, LIe hndIngs ¨suggesL u sLronger
Inßuence oI LIe emoLIonuI IuLenL dImensIon oI
green posILIonIng on brund uLLILude In LIIs specIhc
case.” However, the authors caution against using
emoLIonuI posILIonIng excIusIveIy, becuuse LIe ĕecL
of both approaches on brand attitude is positive. The
combined functional and emotional strategy still led
to the strongest perceptual shift.
RuIes for marketing green products. In terms
of consumers actually parting with their money
over ¨green¨ udvunLuges, LIe International Institute
for Sustainable Development (IISD) sIures
guidelines in the MurkeLIng secLIon oI LIeIr zooz
prImer, ¨BusIness und SusLuInubIe DeveIopmenL:
A GIobuI GuIde.¨ One ruIe Is Lo mInImIze sucrIhces
asked of consumers. Few will pay more for greener
products; additional product value is what they will
pay for. Assure them of quality at the same time.
Also, bring the products within easy reach, since
consumers will not go out of their way just to buy
green products.
TIIs wus ecIoed In LIe U.S. resuILs oI LIe zo11
ImagePower Green Brands Survey, as represented
In u sIIde sIow, ¨Green Brands, Global Insights
zo11.¨ CoIn & WoIIe (descrIbed In sIIde ¸1),
¡undor AssocIuLes (sIIde ¸¸), und Penn ScIoen
BerIund (sIIde ¸¸), LogeLIer wILI EsLy EnvIronmenLuI
PurLners (sIIde ¸z), conducLed LIe reseurcI und
unuIyses Irom 1,zoo onIIne InLervIews conducLed In
AprII und Muy zo11.
Findings show that concern for the environment
rebounded to pre-recession levels and consumers
¨wunL Lo buy green, buL prIce remuIns u IurdIe.¨
AccordIng Lo LIe survey, 6z% oI respondenLs
regard cost as the biggest barrier to buying green
producLs, 6¸% beIIeve LIe udded cosL oI green
producLs Is more LIun 1o%, buL onIy zz% ure
willing to pay the premium.
In other words if prices were the same, a consumer
is likely to buy what he perceives as a green
~ Minimize sucriñces
usked oI consomers
~ Assore them oI qoulity
~ Bring the prodocts
within eusy reuch
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:NKcenSEI8KVUXZ ‡September 3-16, 2012
1. Seventh Generation “They are very forthcoming in their work to keep
environmental impact to a minimum in their products and in
their company”
2. Whole Foods Market “It is my impression that they are committed across the
board to selling organic foods grown under green conditions,
that they are concerned about the carbon footprints of their
products in terms of purchasing local or regional foods,
and that they emphasize recycling, minimization of energy
consumption, etc.”
3. Tom’s of Maine “Their products are all natural and their packaging is made
from recycled materials. They also use sustainable practices
in their business.”
4. Burt’s Bees “Because all of their products are natural and organic.
They care about the environment which is refected in their
packaging and products.”
5. Trader Joes’ “They are concerned about their suppliers being green, they
are always advertising sustainable products and they really
seem to care”
TOP U.S. GREEN BRANDS 2011
TCR compilation of data from “Green Brands, Global Insights 2011," Cohn & Wolfe, Landor Associates, Penn Schoen
Berland, Esty Environmental Partners, slide 15
producL. Up Lo ;¸% oI U.S. consumers suy IL
is very or somewhat important to buy from
green compunIes (sIIde 1q). ¡urLIermore, mosL
consumers trust advertising to inform them about
green producLs (sIIde z6).
One important survey result is that consumers
are most likely to buy green personal care, grocery
and household products.
Though the complete list was not included,
respondenLs were usked: ¨How 'green` wouId you
consIder LIIs brund Lo be (1-1o wILI 1o beIng LIe
IIgIesL)? RunkIng wus bused on LIeIr scores. TIe
Lop hve ure us IoIIows:
Consumer education is important. One
important aspect of green marketing is consumer
education. This is according to Jacquelyn
Ottman, head of J. Ottman Consulting, which
wus esLubIIsIed In 1q8q, Is u pIoneer In green
marketing, and lists several ¡orLune ¸oo
companies and the U.S. government among
its clients.
According to her bIog enLry oI OcLober z6, zo11
(which is also an excerpt in her book, The New
Rules of Green marketing: Strategies, Tools and
Inspiration for Sustainable Branding), OLLmun
says consumer education could spell success
for a campaign. She cited the case of Whirlpool,
How to develop a green brand
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SustainabIe brands in the Asia-Paciñc region
In Asia, sustainable brands are recognized through the Asian Sustainability Rating™ (ASR™), an
environmental, social and governance benchmarking tool developed by Responsible Research and
CSR Asia. The research methodology uses 100 indicators covering the four categories of sustainability
-General, Environment, Social and Governance. It examines the publicly available information of the
companies, including: annual reports, sustainability reports, corporate communications, press releases
and website information.
According to the 2010 report, the following 10 countries and territories were studied: China, Hong
Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand. In the
country reports, ASR ranked the Philippines 9th out of the 10, which calls for greater efforts among
local companies to address sustainability issues. South Korea topped the list, while China was
the laggard.
A total of 542 companies covering 12 sectors were included in the research study: banking, consumer
discretionary, consumer staples, energy, health care, industrials, information technology, materials,
other fnancials, real estate, telecommunications, and utilities. During that year, Ayala Land was chosen
the leader among Philippine companies, with an ASR of 77%. San Miguel Corporation and Jollibee
were the laggards on the list, garnering ASRs of 11% and 9% respectively.
For the year 2011, Petron Corporation was named the top Philippine company in the 3rd ASR due to
its focus on sustainability in combination with proft goals, according to a June 4, 2012 news release by
the Philippine Daily Inquirer. Petron was ranked seventh among of 29 Asian companies in the energy
sector, and made it to the top 10% of 750 companies in the Asia-Pacifc region, which was defned as
Australia, China, Hong Kong, India, Japan, Malaysia, Pakistan, Philippines, Singapore and Thailand.
The full 2011 results have not been made available yet.
wIo In 1qqo won u $¸o-mIIIIon uwurd Irom LIe U.S.
DepurLmenL oI Energy Ior InLroducIng LIe hrsL C¡C-
free refrigerator. Consumers, not knowing what CFC
wus, were unwIIIIng Lo puy LIe 1o% premIum Ior LIe
improvement. She added that educational messages
could help boost involvement, enhance imagery and
increase credibility.
It’s not enough to present a green product. She
emphasizes the need to explain how a product can
safeguard one’s health, or protect the environment. If
you cun concreLIze benehLs LIrougI IIIusLruLIons und
statistics, you make buyers feel their choices make a
dĬerence. OLLmun sIured LIe exumpIe oI LIe PepsI
recycIIng cumpuIgn In zoo8, ¨Huve We MeL BeIore?,”
wIere PepsI prInLed ¨Iun IucLs¨ Irom LIe NuLIonuI
RecycIIng CouIILIon on LIeIr cuns, sucI us ¨RecycIIng
couId suve q¸% oI LIe energy used Lo muke LIIs cun,¨
und ¨TIe uveruge person Ius LIe opporLunILy Lo
recycIe z¸,ooo cuns In u IIIeLIme.¨
How to develop a green brand
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