BM.8 Generate ideas for the channels block

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OVERVIEW

This activity aims to generate ideas for how to address hotspots or strategic changes related to the channels block.

INPUT

Hotspots or strategic changes related to the customer segments block from the activities ST.7 Do a SWOT Analysis, BM.2 Gather additional data on the business model, and BM.3 Gather additional data on operational performance.

OUTPUT

Specific ideas for how to change the Customer Segments block to address the hotspots or strategic changes, used in the activities BM.4 Generate business model concepts at the big picture level – if taking a ‘Bottom-up’ approach, BM.15 Evaluate the benefits, and BM.16 Evaluate the costs and BM.17 Evaluate the risks.

TEMPLATE

HOW TO GO ABOUT IT

Marketing

The marketing function plays an important role in deciding how to market and sell the product. This is particularly important for eco- innovation because product marketing benefits can often be a key part of the business case for eco-innovation, through eco-labelling for example. However, capitalizing on these potential benefits can be tricky due to the challenge of quantifying sustainability benefits and the proliferation of eco-labels and green marketing claims, which have led to consumer scepticism in some markets. Also, making green marketing claims will often require a significant investment of time and money in order to demonstrate conformity with the requirements of an eco-label or to perform a detailed Life Cycle Assessment in order to obtain an Environmental Product Declaration. It is therefore important to establish the likely costs and benefits of pursuing green marketing claims before committing to specific marketing activities and campaigns.

Key questions to discuss with the company to support innovation in marketing are:

  • Are your customers interested in sustainability performance? Or are they simply interested in the potential financial or functional benefits of eco-innovative products such as reduced energy consumption?
  • If claims are made about the sustainability benefits of our products, can we back them up with solid (preferably quantitative) evidence?
  • Are there recognized eco-labels or sustainability standards that are relevant for our markets?
  • What are our competitors saying about the sustainability performance of their products?
  • Would there be business benefits from communicating our sustainability message to other stakeholders such as possible financiers, local governments or environmental lobby groups?

It is critical whenever making marketing claims about the environmental performance of a product to avoid ‘greenwash’ – confusing or misleading claims that attempt to highlight certain environmental aspects of a product whilst glossing over less flattering aspects. A variety of good sources of information now exists about eco-labels and the requirements for making a green marketing claim. These include the ITC Standards Map for eco-labels, an ISO standard (ISO 14020:2000) on ‘Environmental labels and declarations’ as well as information specifically on how to avoid greenwash.
These documents, and other sources of information that provide guidance on making green marketing claims listed in the ‘Background information’, can help you to avoid the mistake of greenwashing.

Sales

For most manufacturing companies the sales activity will not make a significant contribution to the company’s overall sustainability impact. It can of course have a significant impact in terms of the economic and social sustainability of the company. The main issue to consider is the opportunities for partnerships to build new sales channels in order to access markets that were previously inaccessible. For example, the Tasty Tuna Company could partner with charities that promote sustainable fishing, such as the Marine Conservation Society, in order to gain introductions to large retailers in Europe that are interested in sourcing more sustainable fish products.

Delivery

The delivery of physical goods can have a significant environmental impact and economic cost. These issues are often particularly important for relatively low value, high volume products such as food or construction materials. Opportunities for innovation may exist in the following areas:

Packaging – Reducing the mass of packaging reduces resource consumption and fuel consumed in transportation. The design of tertiary packaging for reuse vs single use (and recycling) is often a significant issue to be considered. A good example of packaging innovation for sustainability is provided by the Eco2Distrib case study described in the publication The Business Case for Eco- innovation (UN Environment, 2014).

Warehouse impacts – Heating or cooling systems and lighting at warehouse facilities can be a major source of energy use with significant scope for improvement.

Logistics optimization – Effective scheduling can reduce the distance that goods are transported leading to fuel savings. Opportunities for back-hauling, whereby the vehicle that has delivered a load from A to B is used to transport a different load back from B to A should also be investigated.

Product damage in transportation – Product damage or loss during transportation is sometimes accepted as a necessary overhead, but this need not be the case. Causes might include poor packaging, poor handling or poor temperature control (particularly for food products).

— Success story from Vietnam

How Eco-innovation Transformed a Vietnamese Tea Trader

Vietnamese company Hiep Thanh used to produce and trade dried… >> read more.