The Not So Strange Case of Dr Jekyll and Mr Hyde: CSR Market Segments and Growing Corporate Sustainability Consciousness

The Personal Values Market or PVM is a term I use to define any purchase with some form of inherent sustainability.

Eco friendly, fair trade, buy local are well recognized PVMs but they are not the lot of them, not by a long shot. PVM can be found in a single product for example. Dove soap and its wonderful advertisements featuring “real” women or Lego for its vocational value, are every much PVMs purchases as buying solar panels. Sometimes putting sustainability in a product or service is simply good business, here think eco-efficiencies.

It’s a bit hard to nail down how big a given PVM is or the degree of sustainability in a given product, but like the proverbial duck, you’ll know it when it quacks.  So while we can only speculate on the aggregate size of PVMs, we do know with observed certainty they are not insignificant, are growing fast, and have roots in almost every sector in the economy.

Traditionally the PVM has been identified more in terms of market types than consumer groups as is often done in conventional marketing segmentation exercises;  but simple observation tells us that two of the most influential PVM groups come from entirely different parts along the sustainability spectrum.

PostCoolers

Postcool, according to Ted Gioia in a recent edition of Adbusters  (www.adbusters.org),  is an attitude-cum-lifestyle which combines simplicity, earnestness, with downscaling lifestyles — Urban Cool meets Rural Hippy.

This, Gioia writes, contrasts with simply being “cool” the  conventional segment analog which is all about rapidly changing fashion and “accumulate lots and do it now” modus operandi (this group thrives particularly well in a credit bubble).

The era of human arrogance is at an end: the age of consequences is upon us

David Abram, quoted from Adbusters November 2011, Today as Earth Shivers into a Fever

PostCoolers are relatively small in numbers, representing perhaps less than 3% of the US marketplace, but Gioia argues they pack a substantial market leadership punch and are, in fact, driving broader and growing PVM market trends. They want authentic, natural, and easy-on-the-world goods and services, and have a penchant for less than more.

This is not the only bad news for bottom lines, Post Coolers are not known for keeping their opinions to themselves, and as Gioia notes, Post Coolers have a susceptibility to anger and confrontation, with an unstable reliance on bluntness and aggression. With the internet and protest as its tools, Post Cool is not only a market force, it’s one that punches far above its weight.

WalMart Greenies

By far, the largest PVM are the Walmart Greenies. This group is far more supply-led than demand driven, however, and typically only buy “sustainable” when all things else are equal (i.e., price). Energy efficient light bulbs, eco-friendly packaging and the odd organic chicken figure in their shopping baskets. They are best typified by Walmart shoppers (hence the nickname), who, contrary to much popular opinion amongst sustainability folk, will and do shop sustainably on a regular basis.

WalmartGreenies are highly price conscious, which is unfortunate for PVM development because it is this group, beyond almost all others, that have seen their purchasing power diminish over the last few years.  They will continue to buy sustainable when the opportunity is there, that is when retailers like Tesco, Walmart, among others, integrate sustainability value into products;  and they will continue to be the largest consumer segment purchasing sustainable, albeit and again, when the price is right.

On the Other Side of the Fence

If sustainability PVMs are growing they are still small compared to the most obviously important non-sustainability market forces.

Brandees

At the far end of the sustainability spectrum, far but oddly not that different from the PostCools are the Brandees. These folks buy the high-end brands refused on principle by the PostCoolers”; but like their antipodal counterparts, Brandees are driven less by price than by the intangible value inherent in a product, except for them it’s not public good they are looking for but status, self-image, etc.

This group is so influential there have been attempts to create and or position luxury brands as sustainable. (see The Sustainable Luxury Form for example at http://www.sustainableluxury.ch/?tag=luxury-brands).  Good thing for sustainability, Brandees are not particularly dogmatic and will most certainly respond to sustainability if brands are of high quality (not always a forte of sustainability products which have uneven reputations e.g.,  environmentally-friendly soap that doesn’t clean, eco efficient clothes dryers that don’t dry clothes etc.) and result in some contribution to their status. My rule of thumb is that if you can get a Brandee to talk about your sustainability product at a cocktail party, you are in.

But it’s not their purchasing that is terribly harmful, for as a group, Brandees consume much less in absolute terms than any other group; rather, it’s the repercussions of their down-market influence that hurts: Brandees fuel trends that drive Cool consumers but often in a way that results in shoddily made replicas produced very unsustainably (if you buy knock offs then you can think child labor, disregard for commercial law, environmental degradation etc.).

Hyper Coolers

Hyper Coolers are found in large numbers in developing world markets, where the rapidly growing middle class is naturally responding to generations of pent-up demand (poverty and deprivation) and the “cool” of international brands.  Because growth is so fast in these markets Cool is not just cool, but Hyper Cool. The Hyper-Coolers are buying cars, clothes, phones, everything and fast.  Consumption is less an activity than a lifestyle, and as a Turkish friend of mine once said, “after generations of deprivation, demand is as insatiable as a drug addiction.”

The HyperCool consumer is not only found in Developing Country markets and but in Europe and the United States as well and they aspire equally to Hyper Cool status. There numbers are legion and their impact profound.

HyperCoolers are however a bit of a hybrid as they, like the WalMartGreenies, are price sensitive which is why in many developing countries you don’t just see just brand knock offs but entire brand knock offs stores.

What this Means for CSR

I am the first to admit these market segmenting are based on nothing more than my reading of PVMs over the last several years, and that a more robust analysis would undoubtedly lead to refined observations.

I am certain, however, these classifications are not so far off, a conviction, paradoxically, centered less in my segmentation analysis than by the obviously bipolar behavior of many large companies, who, most logically want to serve both ends of the market; that is, the sustainable and the non-sustainable.

One simply cannot ignore the PostCool in America or Europe, so like Coca Cola you need to sell Coke with one hand and Odwalla Juice with the other. Pepsi does Naked Juice while for Hersey’s its Seeds of Change. At Kraft it’s a minority stake in Hain Celestial and, of course, let us not forget the biggies: Ben and Jerry’s in the Unilever fold and L’Oréal’s buy out of Body Shop… the list is long and ever larger.

Playing both ends of the flute, hedging bets, call it what you will. this Dr. Jekyll and Mr. Hyde affair with sustainability demonstrates a) the growing power of the PVMs and b) the seriousness with which some leading companies are taking them.

“Now if I do what I do not want to do, it is no longer I who do it, but it is sin living in me that does it.”

Romans 7:20

Is the Post Cool/WalmartGreenies vs Cool/HyperCool market duality igniting an inner corporate dialogue or, dare I say, conflict over what is good (sustainability) and evil (business as usual)? Is what separates the corporate “moral self” from its many sins beginning to erode?

Whichever the case, bringing disorder to light is always the first step to a cure, or one can only hope (oh, yea and buy sustainable)