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This chapter was written by Diane Devine.
Sustainable marketingInvolves developing and promoting products and services that meet consumer and business user needs utilizing society’s natural, human, and cultural resources responsibly to ensure a better quality of life now and for future generations to come. involves developing and promoting products and services that meet consumer and business user needs utilizing society’s natural, human, and cultural resources responsibly to ensure a better quality of life now and for future generations to come. Sustainable products and servicesAs they are commonly defined are more sustainable than traditional products and services, without necessarily being environmentally neutral or sustainable in a scientifically valid way. as they are commonly defined are more sustainable than traditional products and services, without necessarily being environmentally neutral or sustainable in a scientifically valid way.
The size of the sustainable market is significant and is expected to grow to $922 billion by 2014.“Consumers Claim They Are Willing to Pay Extra for Green,” eMarketer Green, April 1, 2010, http://www.emarketergreen.com/blog/index.php/consumers-pay-extra-green; http://newhope360.com/business-directory/definitions-healthy-products-healthy-planet-hp2-sectors. This represents an increasing but still relatively small portion of the US and world economies, with the size of the US economy being approximately $15 trillion and world economy being about $60 trillion in 2010.
What are some of the marketing strategies that have helped to create this market niche and have helped it to grow? How much can the market grow in the future? This chapter focuses on one company that is a leader in sustainability, Seventh Generation, to address these questions and to gain detailed insight and perspective about sustainable marketing.
Seventh Generation (http://www.seventhgeneration.com/about) is one of the first companies founded on sustainability principles and mission in the United States. It is a Burlington, Vermont–based privately held manufacturer and distributor of environmentally friendly household and personal care products. The company’s marketing vision and marketing mixA planned mix of the controllable elements of a product’s marketing plan commonly termed as the four Ps (product, price, place, and promotion). known as the four Ps—product, price, promotion, and place—emanated from its founding principles and the ideals and aspirations of its founder, Jeffrey Hollender. Seventh Generation’s products are made using only natural, recycled, or renewable materials that use nontoxic ingredients and the company focuses all its operations to minimize its impact on the environment. Initially Seventh Generation started out as a small mail-order company. As of 2011, Seventh Generation was a $150 million brand selling products at eco-focused stores, such as Whole Foods, and also in the broader consumer market at outlets, such as Target and Walmart.
At its core and driving its marketing plans is the company’s mission to enable consumers to make a positive difference for the planet and people’s health through everyday consumer choices. For Seventh Generation, this means providing consumers the opportunity to make a positive difference through their purchases of laundry detergent, paper towels, and other household products.
Figure 8.1 Jeffrey Hollender—Sustainable Visionary, Entrepreneur, Business Leader, Author, and Activist
Source: Flickr, http://www.flickr.com/photos/businessinnovationfactory/2981552844/.
Jeffrey Hollender was born in 1954 and raised in New York City. In many respects his social values and activism grew out of discontent growing up in a wealthy family on Park Avenue in the early 1960s. According to Hollender, “I grew up in ‘Mad Men.’ Everyone was smoking. Everyone was drinking, and I was encouraged to watch TV.” His parents had a beach house on Long Island, in Westhampton, New York, near which he would surf, a welcome escape. “I turned on all that in a pretty rebellious way,” he said.Laura Holsen, “An Environmentalist’s Latest Laundry List,” New York Times, February 23, 2011. At age seventeen, Hollender left home and headed to Santa Barbara, California, where for a short time, he lived in his car. He protested the Vietnam War. He returned to New York City after about nine months, finished high school, and headed to Hampshire College, a nontraditional college in Massachusetts, in 1974.
Hollender’s discontent first motivated him to break the rules and expectations of him in his own life and over time to try to change business and consumer practices. His marketing instincts and savvy might have come from his father, Alfred, an advertising executive with a prestigious New York City advertising firm. And his inclination toward the dramatic might have been from his mother, Lucille, a former actress.
Hollender dropped out of college and began his business career in 1977 by developing a not-for-profit skills exchange program based in Toronto. The program was successful but had to be shut down as a result of Hollender’s personal failing to get a work permit. After spending time on his cousin’s ginseng farm in Vermont, he decided to go back and continue his entrepreneurial career in the education industry, but this time as a for-profit business in New York City. He created Network for Learning, with nontraditional classes such as “The Art of Flirting,” which quickly grew, attracting sixty thousand students and turned a profit by its second year. Mr. Hollender sold the business to a Warner Communications unit for more than $2 million in 1985.“Three Who Thrived after Early Gaffes,” Wall Street Journal, May 4, 2010, http://online.wsj.com/article/SB10001424052748703648304575212151578380586.html. As a result, he became president of Warner Audio Publishing, a division of Warner Communications, a position he held through 1987.
Following his tenure at Warner Audio Publishing, Hollender partnered with Vermont “eco-preneur” Alan Newman and acquired a small mail-order catalogue centered on energy conservation products known as Renew America.Jess McCuan, “It’s Not Easy Being Green,” Inc. Magazine, November 1, 2004, http://www.inc.com/magazine/20041101/seventh-generation.html. This business provided him with the opportunity to change the society he was discontented with and it eventually became Seventh Generation in 1988.
The company’s beginning was not easy, and the partners soon split. But Jeffrey Hollender had passion and kept the company. His values and unique personality moved upfront in the company and dominated its marketing and branding. This helped to differentiate the company and its products in a very competitive market.
“Many of us who have businesses run them within our cultural restraints,” said Yoram Samets, an early investor in Seventh Generation who has known Hollender for two decades. “We compromise ourselves. Jeffrey has done the opposite.”
Fast forward to 2010 and Hollender has served as the president, CEO, and “Chief Inspired Protagonist” of Seventh Generation, building the company to a $150 million brand and a leading authority on making a positive difference in the health of the people and planet through everyday choices. This included Seventh Generation being named the seventh most responsible brand in America in 2004 based on a study performed by Alloy Media + Marketing.Seventh Generation, 2007 Corporate Consciousness Report, http://www.seventhgeneration.com/files/assets/pdf/2007_SevGen_Corporate-Consciousness.pdf. The commitment to sustainability was what their products were about and throughout the company—from founding CEO to product ingredient sourcing through marketing and to the end of the product’s lifecycle. For Seventh Generation as a sustainable brand, the company seeks to have positive impact in the world and do it all transparently.