There is a better way: the perceived cost of going green
A few weeks ago, an article appeared discussing the major record labels’ reticence to make CD packaging greener. The execs interviewed said that going green had taken a back seat to trying to make money, with such gem puns as “We’re thinking about another kind of green right now … green of the dead president kind.” Let’s put aside for a moment an entirely different discussion around the value of going green to stand out to consumers in a tough economy and just focus on the specific argument they are putting forward. The case they are making that going green is going to cost them money just doesn’t hold water. Many other industries have learned that lighter, more efficient packaging can cost less to create and save on fuel costs.
In fact, achieving sustainability in design can be a lucrative venture. Dell computers estimated savings of more than $8 million over the next four years for its new computer packaging that should eliminate about 20 million pounds of packaging material over the same time period.
And Poland Spring was one of many Nestle brands that in recent years also switched to more sustainable packaging, saving them on materials cost (they use much less plastic) and shipping costs (the lighter bottles require less fuel to transport).
I bring this up because it seems like what is happening is that the premium perception and desirability of going green may be affecting the way decision-makers think of the topic: it’s trendy, it sounds complicated, and it’s probably going to cost me money. If we apply a typical demand model we would find that demand is high - everyone seems to want to be green. So therefore it must be valuable, i.e., expensive.
I can’t help but draw a parallel to Integrated Marketing Communications (IMC). Like going green, IMC is a popular ideal that everyone seems to want, which means that it is perceived as a costly venture reserved for companies with a budget surplus. And yes, like going green, IMC is about being willing to make an initial investment. But in the long run, it is about creating efficiencies, streamlining processes, and making communications more efficient, all of which translate to dollars saved.
I’m wondering, in both cases, what environmental factors or other catalysts might change the perception of cost. (Just like rising gas prices made many consumers suddenly willing to invest in hybrid engines.) Although counterintuitive, it seems possible that this recession may be just the thing that will encourage companies to embrace new ways of doing business that may eventually save them money. According to a study we conducted in concert with Booz and Co. this winter, 41% of senior marketers, if faced with slashed budgets, said that they would move away from mass communications and rely instead on much more targeted and efficient ways to reach their consumers.
So maybe the music industry is a little behind in that they are letting the recession scare them away from progress (it would be far from their first misstep). It remains to be seen how other companies will react to a new landscape in which finding unique ways to streamline – whether streamlining shipping weight or streamlining communications costs – will differentiate those that survive and those that don’t.


I don’t know so much about the marketing and production end of things, but I DO know, as a consumer, that sometimes you feel like going green is costing way too much money. Enter Josh Dorfman and his book about no muss, no fuss, low-cost environmentalism, “The Lazy Environmentalist on a Budget.” If you want to read just one book to understand the rapidly developing environmental marketplace, then this is the book for you.
Thanks Liz, that book and website look really interesting. I will check it out.
[...] at Naked references a Reuters article quoting a handful of recording industry executives, referencing an industry-wide [...]
I agree that companies can save money by “going green” and that more should get on board (as they should w a more integrated marketing strategy).
I think one of the issues here, is the way large corporations (and their employees) are incentivized to deal with money. Budgets are often done on a quarterly basis and the people who initiate and approve the project/ investment are held accountable for the results. If there isn’t a big short-term payoff to the dollars spent (or something that shows immediate success), the person is slapped on the wrist. Long-term company savings aren’t as closely tied to an individual’s success so employees are less motivated to initiate programs like the green ones that you suggest pay off later.
Hopefully as companies adopt new incentive structures and frameworks to measure success (and some are starting to), they will also realize that things like green design and integrated communications don’t preclude profit.