Case Study 1-2

A NEXT-GENERATION CLEANER

Taking an Iroquois directive in our every deliberation, we must consider the impact of our decisions on the next seven generations the consumer product company Seventh Generation has applied a distinctly modern sensibility to derive a lone-term approach to the marketing environment. Although its mission statement might be focused on the future generations, its efforts to appeal to current consumers are always responsive to their immediate demands.

From its start in 1988, Seventh Generation has grown to become a national brand with over $200 million in revenues. Its growth has been sparked largely by consumers desires to buy more sustainable, environmentally safe green products. Approximately 71% of consumers in a recent survey indicated that they thought it was important to buy green offerings, and consumer demand for products in a wide range of categories continues to grow.

But even as more categories appear to offer promising green opportunities for marketers, the primary purchase area continues to be groceries and household products exactly the space that Seventh Generation dominates. As it has gained brand recognition and trust, it also has proactively altered its market. That is, Seventh Generation does not simply wait for customers to request options; it creates entirely new categories.

With a new line of detergents, Seventh Generation began promoting the idea that perhaps chemical brighteners common to virtually all commercially available detergents, even those that avoid dyes or fragrances are not necessary. The company took care not to suggest that these chemicals were dangerous. It just says they are unnecessary, and for consumers interested in environmental concerns, that may be enough.

Previously, household magazines such as Good Housekeeping or Real Simple might have ranked the best detergent, the best dishwashing soap, and the best surface cleaner. But the entry of companies such as Seventh Generation has created new categories: best green detergent, best green dishwashing soap, and best green cleaner. Seventh Generation products consistently emerge victorious in these new category contests.

In addition, to maintain its brand recognition, it uses extensive multimedia marketing initiatives. In print ads, it highlights the environmentally friendly contents of its laundry detergent. It provides free samples to active bloggers, along with blacklights, so these consumers can test their own clothes to see residues left by other detergents. Dozens have posted the results of their own in-home experiments.

Yet its products also cost more, which offers a significant challenge in the very price-competitive cleaning products market. Even as many consumer product companies increasingly tout their down-market brands, Seventh Generation introduced a 4x concentrated laundry detergent that costs significantly more. The new derivation avoids all volatile organic compounds and relies on enzymes to get clothes clean. It also introduced a new line of dishwasher detergent. Both product lines are formulated to work in either hot or cold water with low energy settings.

In 2013, Seventh Generation spent a significant sum to acquire Bobble, a company that produces reusable, self-filtering water bottles. Because many consumers worry about their environmentally unfriendly consumption of plastic water bottles, but also are not willing to trust unfiltered tap water, the new product provides an effective solution. More recently it introduced Presse by Bobble, a way for consumers to brew one cup of coffee at a time that avoids the waste that results from most single serve pod systems.

With these moves, Seventh Generation appears poised to extend our influence and spread our practices more broadly by acquiring innovative brands in the sustainability space, in the words of the company CEO. Its not surprising that the Better World Shopping Guide ranked the company as the best company on the planet five consecutive times.

Questions

1. What macroenvironmental factors and consumer trends does Seventh Generation respond to most effectively?

2. If it were to perform an environmental scan now, could you identify any factors or consumer trends it should consider?