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Copy of Environmental Sustainability
Transcript of Copy of Environmental Sustainability
Managing packaging and production for environmental sustainability.
What is environmental sustainability?
Evolution of Sustainable Product
How are P&G Sustainable?
Proctor & Gamble are a global leader in the production of consumer products since 1837.
The company began as a small candle and salt manufacture and developed into a large multinational.
P&G state that they continuously uphold it's overall "purpose of providing products and services of superior quality and value".
With the company's substantial growth they recognized the need to give back to the community and the environment, supporting sustainability through product safety and social and environmental responsibility.
Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations (www.epa.gov 2014)
P&G green campaign began over 50 years ago.
At P&G, sustainability efforts means making every day better for people and the planet through how they innovate and how they act. It is about satisfying consumers with innovative products and services that are better for the environment (www.pg.com 2014)
P&G green initiatives began in the 1960's when they first started testing products to see the effects on the environment.
By redesigning their products and developing new formula for their washing detergent , P&G were able to save 500 million ltr of water, 100,000 metric tonnes of Co2, 40,000 truck shipments and 15,000 metric tonnes of packaging material.
Since environmental sustainability became a mainstream issue, the visual design and the physical make-up of products has changed dramatically.
By reducing plastics, packaging, and developing new formulas, companies have over the years become more eco-friendly.
Batteries comprise of many toxic chemicals and damage the environment. P&G have reduced their impact on the environment by making batteries more sustainable.
P&G have increased their concentration of their washing detergents reducing their impact on the environment. They have incorporated fabric softener and stain remover into their products.
P&G have designed their kitchen roll so that it absorbs more and is less damaging to the environment.
Washing up liquid is more concentrated at lasts up to 50% longer.
P&G have designed razor blades that last much longer than traditional blades, such as disposable razors, which reduces their impact on the environment.
Life Cycle Assessment
Provides competitive advantage
Increase Productivity and Reduced Costs
Increase Employee Retention and Recruitment
High Conversion Cost
More Expensive Products
Lack of Support
Negative Customer Response
Establish broader customer base
Gain Market Share
Become Global Leader in Sustainability
Reduce carbon footprint
Develop "Greener" products
Lose Market Share
Easily transferable business model
How Companies establish sustainability initiatives
Companies can establish their sustainable efforts by investing time and money into green initiatives
Create green initiative team
Invest and develop eco-friendly products
Sponsor Green Initiatives
Reduce Office Waste
Encourage Car-pool at work
How P&G prove their sustainability
P&G have proven their sustainability in the following ways:
Development of eco products
Company wide workshops
Self sustaining offices
Reduced packaging on products
Increased concentration of liquid products
Sponsorship of initiatives
What does consumer uncertainty about eco packaging mean for P&G's marketing strategy:
Consumer uncertainty has been found to exist, in relation to eco friendly packaging. This lack of knowledge about eco-friendly packaging impacts P&G's efforts to market their green initiatives effectively.
This lack of knowledge impacts the companies marketing strategy in the following ways:
Requires more emphasis on exactly what is eco-friendly about the products
P&G need to educate consumers about different types of packaging
Increases costs of P&G marketing campaigns
Campaigns should focus on targeting the "uncertain" consumer.
Impact on potential profits of P&G
Globalization- Worldwide company impact
Pressure from Interest Groups- Greenpeace
Increased desire for greener products
Increased demand for safer products
Demand for companies to become "green"
Social awareness need for environmental sustainability
Advances in technology can further R&D
Increased usage of "green" energies i.e solar panels
Rate of technological change means new products can be launched faster
P&G sell a wide range of products across 3 main categories
Each category has a key core product e.g. Pampers in baby care
Beauty and Grooming
Household care brands
Health and well being brands
To convince consumers that P&G are serious about their green efforts they should make consumers aware of their efforts in:
Higher concentrated liquid -saves 500m litres of water
More eco-friendly plastics
Less packaging -22%- smaller, better shaped bottles
Streamlined manufacturing process - reduces waste
Reduced distribution costs and C02 emissions
In the 1990's P&G incorporated value pricing strategy . The company adopted this strategy by cutting its coupon, production and logistics costs, and increasing efficiency and advertising by 20%.
This strategy resulted in higher brand loyalty and stronger brand image.
As a result P&G has the most effective pricing of its brands and customer loyalty means they are willing to pay extra for the companies brands.
Despite this high loyalty a suvery found that 85% of consumers believed that manufacturers should incur the costs of eco-friendly packaging.
To convince consumers that P&G's green efforts are serious, they should:
Maintain prices slightly above normal market prices
This reflects the increased R&D that Procter and Gamble must incorporate in their sustainable product development.
Higher prices will allow to company to further invest in R&D
The higher price allows P&G to continue their sustainable efforts in green initiatives around the world
To convince consumers that P&G's green efforts are serious, they should:
Make consumers worldwide aware of their sustainable business model
Use transport methods that use less fuel/ emit less fumes.
P&G engage in a relatively high level of advertising - using 35% of their revenue for advertising
Approximately 8.68 billion dollars in 2009
Advertising percentages reflect on the companies market share
Company makes use of television mass advertising, internet marketing and other mediums to promote the brand
P&G products will be positioned in more developed economic environments
They operate on a worldwide scale
Various productions facilities across the globe
We believe that :
P&G should raise awareness about their environmental sustainability program.
To combat the 85% that are unwilling to pay extra for greener products, P&G should incorporate some of the cost.
P&G should launch a campaign to educate people on their environmental efforts i.e. use of plastics, packaging etc
They should consider labeling their products with eco-labels so as to ensure that their customers know P&G products are officially certified green.
Introduce green loyalty cards which consumers earn green points for purchasing P&G eco labels
P&G should invest more in green initiatives in communities worldwide.
They should have a long term plan to transform their facilitates to self sustaining facilities.
Launch social media campaign to try get consumers to send out pictures and stories to show how they are being environmentally green.
Loyalty Card System
Benefits of Loyalty Programs
Loyalty cards may encourage customers to purchase more green products due to the rewards available.
Loyalty card scheme could give P&G the opportunity to build a green community and develop possible brand advocates
This is a cheap way to promote P&G's green efforts.
Loyalty schemes can give P&G insight into consumer purchasing habits
The loyalty scheme should allow P&G to increase market share
we believe that this should be P&G's first port of call.
Consumers can scan this code and green points would be added to their account.
When a consumer has enough points they can redeem them for various products and special offers.
By establishing a loyalty program they can raise awareness of their green efforts while encouraging customers to help the environment.
Products that carry the P&G eco label, should also have a QR code printed on the packaging.
to raise awareness about their green initiative so that the majority of P&G's target market fully understand how their sustainability efforts will benefit mankind for long periods of time.
fully implement the green eco labels system which we hope will generate a wider customer base.
instigate a global campaign to push P&G products ahead of their surrounding competition.
We believe that P&G's main focus should be:
P&G's main source of competition comes from Unilever, a global company that also focus on health and well being products.
Recently Unilever have made a strong push towards sustainable products. This will help the overall push towards environmental sustainability, however this could have a negative impact on P&G's own eco labeled products.
To avoid losing out on this market, P&G's should take the initiative while this segment is still growing and create a campaign that will announce them as a true market leader in this industry, which we will discuss in our recommendations section.
Poor Global Economic environment
Consumer's have less disposable income to spend on expensive products
Eco Packaging and consumer uncertainty
Epa.gov. 2014. US Environmental Protection Agency. [online] Available at: http://www.epa.gov [Accessed: 24 Feb 2014].
Marketing magazine. 2013. The 3 pillars of Unilever’s marketing strategy for the connected age. [online] Available at: http://www.marketingmag.com.au/news/the-3-pillars-of-unilevers-marketing-strategy-for-the-connected-age-46433/#.UwsxK_l_u1U [Accessed: 24 Feb 2014].
Marketingweek.co.uk. 2014. Procter & Gamble Marketing Strategy & Marketing Campaigns | Marketing Week. [online] Available at: http://www.marketingweek.co.uk/brands/procter-gamble/ [Accessed: 24 Feb 2014].
Neff, J. 2012. P&G to Slash $10 Billion in Costs Over Five Years. [online] Available at: http://adage.com/article/cmo-strategy/p-g-slash-10-billion-costs-years/232914/ [Accessed: 24 Feb 2014].
Pg.com. 2014. PG.com Sustainability: environmental issues, supply chain. [online] Available at: http://www.pg.com/en_US/sustainability/index.shtml [Accessed: 24 Feb 2014].
Procter &Amp; Gamble Co, T. I. B. A. P. C. 2014. Procter & Gamble Company Profile - SWOT Analysis. [online] Available at: http://www.euromonitor.com/procter-and-gamble-co-the-in-beauty-and-personal-care/report [Accessed: 24 Feb 2014].
West, D. 2006. Strategic Marketing. 2nd ed. Oxford: Oxford.