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Corporate reputation important for 87 pc Indians while making buying decisions: WPP study

23-July-2009
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Corporate reputation important for 87 pc Indians while making buying decisions: WPP study

‘Green is in’ may sound too clichéd. However, a new study conducted by WPP agencies Cohn & Wolfe, Landor Associates and Penn, Schoen & Berland Associates, as well as independent strategy consulting firm Esty Environmental Partners, identifies some critical global trends regarding consumers’ preference for green products and companies.

The survey, conducted in seven countries – the US, the UK, China, Brazil, India, Germany and France – indicates that while many environmental beliefs and behaviours are shared across different consumer cultures, others vary widely. Generally, consumers in the US, UK, Germany and France tend to align in their attitudes, while consumers in Brazil, India, and China have divergent views, and are particularly inclined to seek green products and to favour companies they consider green.

Consumers from all seven countries believe that green products cost more than comparable non-green products, and also indicate they plan to spend more money on green products in the coming year. China, India and Brazil showed significant support for additional spend: 73 per cent of Chinese consumers say they will spend more, 78 per cent of Indians say they’ll spend more, and 73 per cent of Brazilians plan to increase their green spend. The percentage of respondents who indicate willingness are to spend 30 per cent or more on green ranges from 8 per cent (UK) to 38 per cent (Brazil).

The study finds similar global agreement when consumers are asked about how important it is that companies be ‘green’. At least 77 per cent of consumers in all countries say it’s somewhat or very important; in India and China, the numbers are significantly higher: 87 per cent and 98 per cent, respectively, say that corporate reputation is an important purchase consideration. Consumers from all seven countries also agreed that the most important step a company can take to demonstrate its ‘green-ness’ is to reduce the amount of toxic or other dangerous substances in its products and business processes.

The research also reveals areas in which the countries, or groups of the countries, differ. For example, consumers in three of the seven locations – the UK, France and Brazil – believe that the state of the environment in their country is “on the wrong track”, while those in the US, Germany, China and India consider the environment to be going in the right direction.

“Our study shows that Indian consumers are concerned about the environment and would love to spend more on green products, but don’t know how to because of limited choice, limited distribution and limited labeling. This implies a huge latent opportunity for brands to tap into the power of green and create greater relevance for consumers,” remarked Lulu Raghavan, Country Director India, Landor.

India and Brazil, however, are the only two of the seven countries in which consumers express more concern for the environment than for the economy. In the US, 77 per cent of consumers communicated deeper concern for the economy than the environment, which is unchanged from 2008.

“With the global climate change discussion focused on what the major new economic powerhouses like China, India, and Brazil are willing to do to control their emissions, those three countries stood out in our polling as more interested in buying from environmentally friendly companies and more willing to spend more on green products,” said Scott Siff, executive vice president of PSB. “From a political perspective, this turns the assumptions about those countries on their heads, and from a business perspective it says the market for green branding and green products may be even bigger than generally thought.”

The study finds similar global agreement when consumers are asked about how important it is that companies be ‘green’. At least 77 per cent of consumers in all countries say it’s somewhat or very important; in India and China, the numbers are significantly higher: 87 per cent and 98 per cent, respectively, say that corporate reputation is an important purchase consideration. Consumers from all seven countries also agreed that the most important step a company can take to demonstrate its ‘green-ness’ is to reduce the amount of toxic or other dangerous substances in its products and business processes.

“While reducing toxics heads the list of consumer priorities the data also show that the public holds companies accountable for good environmental behavior across the board,” said Dan Esty, chairman of Esty Environmental Partners. “Consumers expect companies to recycle, use energy efficiently, reduce packaging, and pursue green innovation. So to gain loyalty, a company’s environmental strategy must be comprehensive.”

The research also reveals areas in which the countries, or groups of the countries, differ. For example, consumers in three of the seven locations – the UK, France and Brazil – believe that the state of the environment in their country is “on the wrong track”, while those in the US, Germany, China and India consider the environment to be going in the right direction.

“Our study shows that Indian consumers are concerned about the environment and would love to spend more on green products, but don’t know how to because of limited choice, limited distribution and limited labeling. This implies a huge latent opportunity for brands to tap into the power of green and create greater relevance for consumers,” remarked Lulu Raghavan, Country Director India, Landor.

India and Brazil, however, are the only two of the seven countries in which consumers express more concern for the environment than for the economy. In the US, 77 per cent of consumers communicated deeper concern for the economy than the environment, which is unchanged from 2008.

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