Savons Protav is considering marketing options for its Bio-Vert products in Canada and U.S.
External analysis & issues
• 2007 Environment Quality Act (EQA) in Quebec province demanded low-phosphorus and phosphorus-free laundry and dishwashing • “EcoLogo” certification on green cleaning products and high certification cost • Blue-green algae crisis effects • Inevitable “spring cleaning” of industry consolidation in the eco-cleaning products • International brands held 95.3% of market share of household cleaning products; They have invaded into green products market
Uncertainty in this industry; highly susceptible to new regulations; increased competition from multiple-size competitors
External analysis & issues
• Customers’ shifting preference towards green products for their minimal environment effects and less health concerns • Confusing information in the media surrounding green cleaning products impeded consumers’ abilities to make informed purchasing decision • Stereotype towards common green cleaning products regarding inferior effectiveness/performance • “ value-action gap” • Media advocated for green products • Environment products were “not yet in fashion”
Customers’ perception decides the future of green cleaning products
Internal analysis & issues
• Products: Differentiated from competitors in the market for “EcoLogo” certification and superior product efficiency; recommended by Quebec-based consumer protection organization • Positioning: local small manufacturer which lacked the economies of scale • Price: Very competitive price in the market • Cost: Increasing operating cost • Place: Quebec ; carried by many of Canada’s major pharmacies, grocery chains and “big box” stores ; weak presence outside of Quebec • Sustainability: Partnerships with multi-sectors for innovation; encompass a long-term “cradle to cradle” approach to its business and products • Promotion: successful consumer education campaign, engagement with local community for promoting environmental awareness
Reasonable short term strategies
Internal analysis & issues
• Non-hierarchal family business with environmental minded employees • Core values: environmental awareness, sustainable decisions, meticulous hiring processes, uncompromising quality, honesty, most importantly, valuing the company more its mere financial worth • Rapid growing periods: 20% to 35% annual growth from 2005 to 2008; 500% in 2008 • Strive for product efficiency and innovation • Weak financial backup
“act green” defines who we are Need to have long-term survival strategies
Issues
• Which distribution channels Savons Prolav should take? • How Savons Prolav should pursue targeted consumers? • How to monetize on environmental awareness? • How to differentiate Bio-vert from competitor’ products
Differentiate Bio-Vert from competitors’ products is the key; environmental awareness is not paradox to financial benefits
Alternative #1- status quo
Pros
• Consistent with its core values and missions • Continue its long-term “cradle to cradle” approach to its business and products • Low risk of formulation leak • Autonomy
Cons
• • • • • Loss of market shares in the increased competition Unclear targeted population strategies Increased cost pressure on a small business Slow innovation progress unmatched with rapid increase of competition Unsustainable long term business model
Status quo = Value slippage
Alternative #2 – Take up a distribution offer to create formulation for a house brand of cleaning product
Pros • Long term contract • Longer market reach: Western Canada and U.S.
Cons • Sacrifice or damage core values and missions • Loss of the core differentiating feature • Loss of autonomy • high risk of formulation leak • Low profit
Distribution offer = identity loss
Alternative #3 – niche player in local communities
Pros • Consistent with core missions and values • “Greener” image • Easily pursue targeted customers • Create shared value in communities • High barrier for new competitor to enter the market • Closer partnerships with multiple organizations and groups Cons • More employees are needed • Slow growth in the beginning
Niche player in local communities = renewed customer perception
Recommendations
1. Subcontract Bio-vert products to small manufacturers in local communities in Canada and U.S. 2. Set up partnerships with local convenient stores in the community 3. Set up Eco-brand to differentiate with competitors 4. Use internet and Apps on smartphones for environmental advertisement
Implementation
1. 2. 3. 4. 5. 6. 7. Subcontract Bio-vert products to small manufacturers which have similar social and environmental values in local communities in Canada and U.S. Help these small manufacturers to set up “GREEN” standards in production Sell Bio-vert products in convenient stores in communities via local manufacturers besides current sale channels Change the package of products with all green color with bigger EcoLogo Provide Bulk quantity package Promote products in local community with partnership with local environmental groups and distribute free samples to local residents Continue partnerships with Innu-Science, CIRAIG and other organizations for improvement on product efficiency and “greener” formulations Use internet websites, such as Facebook, to promote products and provide education on environmental issues and update community environmental events. Set up Partnership with On-line discount store to give good deals to customers from time to time
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SWOT Analysis
Strengthens
• • • • • High product efficiency Competitive price “EcoLogo” certification Good reputation from media Multi-sector partnerships
Weakness
• Limited market reach • High operating costs
Opportunities
• Stricter environmental legislation • Consumers’ increased environmental awareness • Customers' emotional buying attachment to the brand
Threats
• Increased competition • International brands achieve “ EcoLogo” certification • New evolutional formulations from competitors • Dramatic cost increase of raw material, such as Oil price hike
PEST Analysis
Political
• 2007 Environment Quality Act (EQA) in Quebec province • “EcoLogo” certification on green cleaning products
Economic
• More consumer dispensable income • Higher raw materials cost than those of conventional products • Increasing operational cost
Social
• Consumers’ increased environmental awareness • “ value-action gap” in customer behaviors • Confusing information in the media surrounding green cleaning products • Blue-green algae crisis
Technological
• Partnerships with multi-sectors for “greener” formulations and product efficiency
Source materials
• Pickett-Baker, J., & Ozaki, R. (2005). Pro-environmental products: marketing influence on consumer purchase decision. Journal of Consumer Marketing, 281-293. • Rahbar, E., & Wahid, N. A. (2011). Investigation of green marketing tools’ effect on consumers’ purchase behavior. BUSINESS STRATEGY SERIES, 73-83. 