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sustainable products


A marketing playbook for sustainable products 

Published 7 May 2024 in Sustainability • 7 min read

Marketing campaigns for sustainable offerings often fail, leaving businesses with products that do not sell. How can companies reach customers more effectively?

Companies marketing the sustainability features of their products often overlook the fact that social and environmental benefits have a different impact on purchasing decisions than basic product attributes do. Indeed, many firms fail to realize that sustainability benefits never satisfy a customer’s primary goal for making a purchase.

A recent report showed that while products that incorporate environmental or social messaging now account for 48% of new consumer packaged goods, their share of the overall US consumer goods market was only 17% in 2021. This consumer trend is mirrored in the B2B sector.

To understand why this is happening, it is necessary to understand what motivates consumers — and why sustainability benefits are not the primary driving force behind purchases. Indeed, even an environmentally conscious purchaser of chocolate is likely to be primarily motivated by the prospect of a sweet treat rather than the working conditions of the farmers who grew the beans.

Likewise, people do not choose to buy an electric car to prevent climate change; they do so to satisfy a need for mobility. Then there are the consumers who simply do not care about sustainable features — and may even be put off by marketing messages promoting them. To gain insights into the complex factors governing sustainable product choice, we conducted a three-year research initiative encompassing surveys, interviews, and interactive sessions with more than 500 executives in B2B and B2C sectors from various countries. The result is a guide for sustainability marketing based on an understanding of how consumers weigh the relative value of traditional, social, and environmental benefits.

Matching consumer and product types

The starting point consists in recognizing the fact that three types of consumers coexist when it comes to sustainable products: those who place a premium on sustainability (greens), those who value it moderately (blues), and those who do not care much about it (grays). Potential customers for such products require different marketing approaches depending on where they are on this continuum.

As we recognized that sustainability benefits differ from traditional benefits, we focused on the possible interaction between these two types. This interaction can boost or limit the success of the product. We examined all three cases: Sustainability benefits can have no impact on a product’s performance (independence), diminish it (dissonance), or enhance it (resonance). Marketers need to follow different playbooks for these three levels of impact, tailoring their approaches to green, blue, and gray customers in each instance.

“The starting point consists in recognizing the fact that three types of consumers coexist when it comes to sustainable products: those who place a premium on sustainability (greens), those who value it moderately (blues), and those who do not care much about it (grays).”

To understand how traditional and sustainability benefits interact, consider how three “sustainable” laundry detergents might compete with a conventional product that promises no environmental or social benefits.

The first is a detergent (priced slightly higher than a comparable mainstream product) containing eco-friendly natural ingredients, which cleans as well as the traditional detergent. In this case, the relationship is one of independence as the customer gets traditional benefits with added environmental benefits.

In the second detergent, natural ingredients diminish the product’s performance, causing dissonance. Consumers perceive that it is eco-friendly but that it delivers less and costs more than a traditional product; reasons to care increase, but reasons to buy decrease.

With the third detergent, the product’s ingredients have unique properties that enhance both its cleaning power and planet-friendly status. This is a case of resonance, in which consumers’ reasons to buy and care both increase.

Tapping the sustainability budget

Making a buying decision is a multifaceted psychological process, one that is not always steered solely by the tangible attributes of products or services. For example, customers may shift consumption profiles from product to product. Someone may be a green consumer in one category (exclusively purchasing clean energy), blue in another (preferring recycled packaging if there’s no cost difference), and gray in another (avoiding sustainable cleaning products on the assumption that they underperform).

Even customers who fall into the “green” category for most of their shopping have a subconscious “sustainability budget” and may be willing to spend only a limited amount of money on sustainable products across all their purchases. This means that firms in different industries may be competing for their share of this budget, and any firm that can provide customers with greater sustainability benefits has a potential competitive advantage.

In this context, promoting the sustainability of products is a good strategy to access customers’ subconscious budgets. However, research shows that merely suggesting a product is green can create negative perceptions about it, a phenomenon called “sustainability liability.” For instance, consumers may perceive environmentally friendly products as less effective or durable than they are. Although this perception of liability may change as consumers become more accustomed to sustainable products, it can be a problem in the short term.

Complicating matters further, consumers may also engage in “moral licensing,” whereby making a significant eco-friendly decision like investing $50,000 in an electric vehicle makes them less likely to spend an additional $5 on an ecological product because they feel they have earned a pass. Similarly, the desire for social signaling could drive more conspicuous sustainable choices like solar roof panels over less visible ones.

sustainable products
“Consumers perceive that it is eco-friendly but that it delivers less and costs more than a traditional product; reasons to care increase, but reasons to buy decrease.”

Playbooks for sustainability success

The three types of products (independent, dissonant, and resonant) all have different playbooks for targeting green, blue, and gray consumers.

Independence strategies typically offer temporary differentiation advantages. Because customers may choose to get their sustainable benefits from a completely different kind of product, it’s difficult to charge a premium for them over the long term. A B2B client of ours, Georg Fischer (GF), uses renewable materials in all the polyvinyl chloride (PVC) metric pressure pipes, fittings, and valves. With gray customers, there is no upside in emphasizing sustainability attributes — particularly since grays may wonder if there is a hidden sustainability price premium or performance cost. However, GF’s sustainable manufacturing is a selling point for green and blue customers.

Dissonant products require customers to accept reduced performance in exchange for sustainability, but firms can profitably sell such products to green consumers and, in some instances, even to blue ones. One strategy to broaden the customer base is to attract a subset of blue customers who can be persuaded to accept a performance sacrifice because of new benefits tied to a firm’s sustainability actions. An example of this is Oatly, whose plant-based milk struggled to secure sales when launched in 1994 as a lactose-free alternative. However, in 2014, it shifted its image to a lifestyle brand for the “post-milk generation,” attracting customers in the blue category.

Products with resonant sustainability features have much more latitude to target a broad customer base. However, when targeting grays, they still need to tread with caution. GEA, a B2B manufacturing client of ours, designs equipment with a focus on sustainability and cost-efficiency. Its AddCool solution for milk-powder production slashes carbon emissions by up to 80% and operating costs by 20% to 30% while preserving product quality. European customers, mainly greens and some blues, have often paid premium prices for GEA’s equipment. However, certain U.S. and Asian clients tend to be gray. For these markets, GEA adjusted its messaging and pricing, underscoring the economic advantages (such as reduced energy and water use) rather than sustainability.

One size does not fit all

Our research provides ample evidence that sustainable products cannot all be marketed in the same way. How their social and environmental benefits interact with traditional product benefits will affect which consumer segments they appeal to and the strategies that work best with them.

Social and environmental features interact with traditional attributes in ways that significantly affect a product’s appeal to different consumer groups. Adopting a one-size-fits-all approach to sustainability marketing risks alienating certain customers. Brands need to segment their customers by attitudes toward sustainability and tailor their messages accordingly.

At the core of successful sustainable offerings lies innovation, and the real battle for sustainable products will not be waged through advertising or public relations stunts but in research-and-development labs. This is how successful companies will develop groundbreaking solutions that not only deliver unparalleled performance but also champion environmental protection and societal well-being.


Goutam Challagalla

Professor of Marketing and Strategy and dentsu Group Chair in Sustainable Strategy and Marketing at IMD

Goutam Challagalla is Professor of Strategy and Marketing and dentsu Group Chair in Sustainable Strategy and Marketing at IMD. His teaching, consulting, and research focuses on strategy with a focus on digital transformation, business-to-business commercial management, value-based pricing, sales management, distribution channels, and customer and service excellence. At IMD, he is Director of the Advanced Management Program (AMP), Digital Marketing Strategies (DMS), and Strategy Governance for Boards.

Frédéric Dalsace

Frédéric Dalsace

Professor of Marketing and Strategy at IMD

Frédéric Dalsace focuses on B2B issues sustainability, inclusive business models, and alleviating poverty. Prior to IMD, he spent 16 years as a Professor at HEC Paris where he held the Social Business / Enterprise and Poverty Chair presided by Nobel Laureate Professor Muhammad Yunus. Prior to his academic life, Frédéric accumulated more than 10 years of experience in the business world, both with industrial companies (Michelin and CarnaudMetalbox) and as a strategy consultant with McKinsey & Company. At IMD he is Co-Program Director of the Leading Customer – Centric Strategies program.


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