Green Marketing

In a recently announced action, Enterprise Rent-A-Car decided that they would begin renting hybrid automobiles to customers and would open "Green Branches" where nearly 60% of the fleet would by hybrid automobiles.

Green marketing is an extremely powerful and pervasive tool in todays marketplace. The environment is increasingly becoming an important issue to many consumers and companies, and we watch the effects of global warming on our climate and many of our natural resources. Because of this, many companies, including companies that deal primarily in the automotive industry are deciding to "go green" and introduce environmentally friendly initiatives.

In many ways, this is a very similar marketing strategy to cause marketing. Many companies use cause marketing to align their organizations with causes such as reducing breast cancer, AIDS awarness, etc. With green initiatives, companies are trying to align themselves with a more global cause, environmental protection. While green initiatives and cause marketing differ in that with green initiatives companies are generally not forming an alliance with a specific group or organization, it attempts to affect the consumers in a similar manner. By convincing the consumer that they believe in a cause (environmentalism) that is important to the consumer, they believe that they are more likely to gain business from that consumer.

According to the article:

"Those who are looking for a value in terms of dollar for dollar will absolutely not get hybrids," said Brian Chee, the head automotive analyst at MyRide.com. But he said there's a growing market that's willing to shell out an extra $40 for the hybrids during quick vacations.

That statement alone helps to show why green initiatives are so powerful. Simply having these cars, which would provide minimal cost savings for the consumer over such a short period of time, could gain the company an extra $40 per rental.

Starbucks

A company once thought of as being on the cutting edge of the coffee industry is taking a step back, to handle increased competition from unlikely rivals.

Recently, companies like McDonalds have noticed how much customers seem to enjoy "high profile" coffee blends such as the ones that they are used to buying from places like Starbucks. In response to this, McDonalds released their own premium blend of coffee, as did places like Dunkin' Donuts. This has spelled trouble for Starbucks. Whereas they used to be perceived as expensive but high quality, seeing the cheap high quality alternatives from places like Dunkin and McDonalds has started to erode their market share. People are choosing the convenience and price of places like McDonalds and Dunkin over the high quality, expensive coffee at Starbucks.

Faced with this competition, Starbucks recently announced that they would be adding a new blend, called "Pike Place Roast," that more closely mimics the McDonalds and Dunkin offerings. This, they hope, will bring back some of their customers that they have recently lost in the coffee wars to McDonalds and Dunkin. Interestingly, though, is going to be how customers will perceive the coffee blend being sold at Starbucks, and whether it will actually help their business. In the past, Starbucks blends have been considered a bit bitter and strong by their customers, but customers began to see this as a sign of quality. The Pike Place Roast is lighter in flavor, mimicking cheaper blends of coffee, which I believe will begin to erode Starbucks' image as the highest quality establishment. In the end, this could be a very risky move for the company, and one that could hurt their brand and long term profit potential.

Sonic: America's Drive-In

I was faced with an interesting situation today, which sheds light on a very interesting marketing issue that we have been studying. The setting is Sonic, at the Pittsburgh Mills out on Rt. 28. Sonic is a reasonably good fast food restaurant, serving burgers, chicken sandwiches, and delicious drinks in a "drive-in" motif. I have been to Sonic restaurants all around the country, and truly, the biggest reason to go to Sonic is the drinks. They offer fantastic fountain drinks, including my personal favorite, cherry limeade.

So here's the situation. I'm at Sonic, and I have made my order - this time, it was a breakfast burrito, an order of tater tots, mozzarella sticks, and my favorite, a cherry limeade. After making the order, I sit down to eat and begin enjoying what is normally pretty good food and a delicious fountain drink. Everything was fine, more or less, aside from the jalepenos that they put on my breakfast burrito. I finished up my cherry limeade, and look to one of the servers at the restaurant, and tell them that I would like a refill. "We don't do refills," she exclaims. Now, this was a huge surprise to me. I have been to Sonics all around the country - I'd estimate this was my 15th visit to a Sonic restaurant - and the free refills on the drinks is one of the primary reasons I go there.

Anyways, I try asking a few other workers if they would get me a refill, to see if I can skirt the system a little bit, but it doesn't work. Eventually, without my asking, the manager comes out and says "someone was asking about our refill policy?" I speak up, and explain to him that in all of my visits to Sonic, I had never been to one that doesn't offer free refills, and was clearly a bit upset by this. He continues to explain their policy, and how they're not allowed to do it because of a rule from the Allegheny Health Department (which I found curious, considering I have received free refills many times in Allegheny County), and eventually gives in and gets me a free refill.

Thinking about this from a marketing perspective, though, it raises a very interesting issue. I came into Sonic on this fateful Sunday with a perception about the restaurant - that I would be able to get a free refill. Now, despite the fact that my perception was wrong, it was very important that Sonic could handle it. Sonic is, in this case, in the business of managing customers perceptions of their chain and what they offer. No matter what a customer is expecting, if their expectations are not met, it is unlikely that they will come back. Had the manager not refilled my drink at the end of our argument, there is absolutely no chance I ever would have eaten there again. In order to better handle the perceptions of the customers, Sonic should post their policy on refills, which is clearly not in line with other restaurants in the chain, for customers to see. That way, after customers order, they will not have a perception that is different from the reality of the real situation. By doing this, they will create happier customers, and customers who are more likely to come back.