How Will the Hourglass Marketing Trend Affect Green Products?
This week The Wall Street Journal reports that Proctor & Gamble is pursuing a new product introduction strategy. The consumer products giant has noted that products targeted at middle class consumers are staying on the shelves as those consumers trade down to bargain-priced products. Furthermore, P&G; is not alone. Borrowing a term attributed to Citigroup, this growing practice is being called "hourglass" marketing. How will this trend affect greener lifestyles?The "hourglass" image was adopted by Citigroup to describe an investment strategy focused on companies that seek growth either by selling top end products (Estée Lauder, Saks) or marketing to the masses (Family Dollar Stores, Kellogg). It represents the bifurcation of income classes into wealthy and lower classes, with a disappearing middle class.
Green Premium at the Top of the Hourglass
On the first level, this trend marks business as usual for eco-friendly alternatives. Green products traditionally carry premium prices when they enter the market, meaning they have always been introduced to the upper end of the hourglass. Marketing strategies targeted at that demographic will continue to thrive, as green product sales remain a growth sector, even in a down economy.
The problem lies with the expansion of greener lifestyles to the bottom end of the hourglass. It really does little good for the environment as a whole if the 1% of the population controlling 25% fo the wealth shift to a greener mode of overconsumption.
Will the Green Sands Trickle Down?
Of course, eco-friendly products tend to enter the mainstream when the "green" aspect introduces sustainability on the micro rather than macro level. What do I mean by that? Consider a product that costs a bit more, but pays itself back on the energy bill on a timescale that convinces consumers the product is actually more cost effective than its cheaper, less green competitor. It has a chance of sifting into the bottom half of the hourglass on its own merits.
But a product that has sustainability only on the macro scale, for example grass-fed beef, will not show up in the market basket of the bottom half. When money is scarce, the advent of superbugs or the collapse of an over-subsidized corn economy are not high on the agenda of factors influencing buyers' choices.
The Green We've Got is Here to Stay
Is there another force that can give green the gravity to travel to the bottom of the hourglass? Let's look at the newest indicator of a trend to an hourglass market strategy, according to WSJ: "for the first time in 38 years... the company (P&G;) launched a new dish soap in the U.S. at a bargain price."
The material safety data sheet for Proctor & Gamble's GAIN Liquid Hand Dishwashing Detergents, "all surfactants are readily biodegradable," and the product contains no phosphates. So it appears that even the bargain-priced product conforms to the modern, green aesthetic.
Is it because that is what R&D; has on their shelves now that sustainability has become mainstream? Is it because European regulations require readily biodegradable surfactants, and P&G; formulates for a global market? Either way, this case study indicates that even a trend to hourglass marketing will not entirely stop the already established trend towards greener products, at least not right away.
The question becomes whether actions like the adoption of biodegradable surfactants can continue as economic worries grow. If the energy of those committed to sustainability is defrayed into fighting the (unsustainable) income inequities implied by the hourglass, then environmental progress will surely feel the pinched.
More on Green Product Marketing:
Proctor and Gamble Makes New Major Commitment to Sustainability
Can Capitalism be Harnessed to Save the World?
Walmart's Sustainability Index: The Greenest Thing Ever to Happen to Retail?