Unidentified subject!

[Dena Marchant <denam@fsr.com>]

http://www.coopamerica.org/Business/B44million.htm 

               Forty-Four Million
               Americans Can't
               Be Wrong

               The Market is Ready for
               Socially Responsible
               Business

       Several recently published studies
       document a large and growing market for
       the products and services of socially
       responsible businesses. These studies
       show that American consumers are
       increasingly integrating their social and
       environmental values into their purchasing
       and investing choices – and are seeking to
       support companies that deliver on their
       core values.

The studies show that between 40 and 50 million Americans -- about
 25% of the adult population -- are beginning to make these value-based
 choices in more and more product categories. Taken together, these
 studies show that when price and quality are comparable, socially
 responsible businesses have the advantage.

 If you own or work for a socially responsible business, these studies are
 a gold mine for understanding current social and marketing trends -- and
 developing strategies for taking advantage of the trends. The studies
 have data useful for marketing and business plans. And they underscore
 how important socially responsible businesses are to our society.

 Social Trends: Common Concerns

 Americans increasingly share common concerns about the future. Many
 leading polls, including a comprehensive study by the Harwood Group,
 show that the majority of Americans across all walks of life, name
 problems such as greed and selfishness, the deteriorating environment,
 increasing stress on families and communities, and the growing gap
 between 'have' and 'have nots' as major obstacles endangering
 America's future (see Figure 1).



 The Harwood Group study also shows that as Americans go about their
 everyday lives -- making decisions about work, purchases and
 investments -- they are seeking to reclaim core values such as
 relationships, meaningful work, economic security, personal safety,
 quality education for their children, thriving communities and a healthy
 planet.

 Social Trends: A New Worldview -- A New Mainstream

 If Americans share so many common concerns, why is there so much
 disagreement about how to solve our problems?

 A path-breaking study, The Integral Culture, by Paul Ray for the Institute
 for Noetic Sciences and the Fetzer Institute, set out to answer this
 question. If you read only one study this year to understand social and
 market trends for your business and your efforts to improve society -- this
 is the one.

 What Ray discovered is that there are three competing worldviews, or
 paradigms, in America today (see Figure 2). People's worldviews, the
 sum total of their assumptions and values, determine their beliefs and
 practices. 



     Figure 2: Key Worldview Segments

 These three contemporary worldviews all have long historical roots. What
 Ray calls the Traditionalist or Heartlander paradigm was the worldview
 that dominated in the early days of the United States, when Europeans
 first began to arrive here. A faith-based worldview, it has changed over
 the years and now includes many people who would identify themselves
 as part of the religious right. It is declining rapidly and now includes
about
 56 million Americans, about 29% of the adult population. Heartlanders
 propose to solve today's problems by returning to what worked earlier in
 this century.

 The Modernist worldview is what most people would call the mainstream.
 It includes about 88 million Americans, about 47% of the adult
 population. The Modernist worldview emerged with the industrial
 revolution and became the dominant paradigm early in this century. It
 grew rapidly throughout this century, but is now leveling off. Modernists
 believe that progress and the good life are defined by increasing
 material wealth. Modernists recognize that there are problem facing
 society but believe they can be fixed by adjusting the present system.
 Almost all of our contemporary political, business, media and religious
 leaders share this worldview.

 A new worldview, the Cultural Creatives, began to emerge and grow
 rapidly in the 1970s. It now includes about 44 million Americans, 24% of
 the adult population. The Cultural Creatives believe society faces
 significant problems and needs to reinvent its culture, institutions and
 practices to solve them and provide a future for our children. Cultural
 Creatives are seeking to reintegrate their values into their everyday lives
 and are ready to take action on a wide range of social, environmental
 and spiritual concerns.

 People come to the Cultural Creatives worldview from many different
 pathways and issues -- environmental, social justice, civil rights, health
 and healing, spiritual, new age. It's core values are ecological
 sustainability; civil rights for women and communities of color;
 self-actualization and spirituality; and social conscience and optimism.

 Interestingly, although Cultural Creatives are 44 million strong and
 growing rapidly, most Cultural Creatives think they represent a tiny,
 minority worldview -- maybe as small as themselves and their ten best
 friends. This happens for two reasons. First, because it is an emerging
 worldview and people have come to it from many pathways, the
 worldview is still highly fragmented. People within it don't yet share a
 common language or recognize people who come to this worldview from
 different pathways as allies.

 Second, one of the jobs of the dominant paradigm is to marginalize new
 ideas. So the feedback from the Modernist mainstream is that Cultural
 Creative thinking is a small, fringe worldview. Cultural Creatives don't
 see themselves reflected in the media or the institutions of our times, so
 it is easy to believe that there are not many people like them. This
 phenomenon causes many Cultural Creatives to lie low, expressing their
 values in their homes but not at work or other aspects of public life.
 Likewise, it may be causing many socially responsible businesses to
 see and act as if their market is much smaller than it really is.

 With 24% of the population and growing rapidly, the Cultural Creatives
 are beginning to define the new mainstream. 

 Market Trends: Cultural Creatives as Consumers 

 Socially responsible businesses will recognize the profile of the Cultural
 Creative as their customers: They are more likely to be women than men.
 Their median age is 42 and although they come from all walks of life,
 they are likely to be well educated and in the upper middle class (see
 Figure 3).

   Figure 3: Cultural Creatives’ Characteristics
     Women: 60%; Men: 40% 
     Median Age: 42 
     Median Family Income: $47,500 
     Upper Middle Class
     (46% are in the top quartile of the income distribution) 
     Ready to Take Action on Their Values 
     No Common Language 


 Cultural Creatives are information junkies. Their cognitive style is to scan
 the horizon for information, delve into their interests, and then put what
 they learn into the big picture. They are ready to take action on their
 values, and especially in their homes, are already beginning to integrate
 their values into their everyday decisions, purchases and investments.
 This integration will continue to be a guiding imperative for them -- and
 increasingly in the marketplace, at work and in other public arenas.

 Cultural Creatives are careful consumers -- and experiential consumers,
 they like to "kick the tires," learn from others, find out how and why others
 are using products and services. They want the whole story on products
 and services. They get their information from other people, print and
 radio, but are low TV users (they don't see people like themselves on
 TV). They desire integrity, authenticity and quality (see Figure 4). 

    Figure 4: Cultural Creatives as Consumers
     Information Junkies 
     Cognitive Style: Scan / Explore / Develop Big Picture 
     Print and Radio, not TV 
     Need Good Story 
     Careful Consumers 
     Technology Moderates 
     Home as a Nest 
     Desire for Authenticity 
     Experiential Consumers 
     Big Purchases (Home, Car) Symbolize Values 
     Holistic Everything 


 The key products Cultural Creatives seek reflect their core values and
 are the key products of socially responsible businesses -- natural food,
 natural body care products, eco-travel, wellness health care, education
 and workshops, arts and culture, values-based investments services
 (see Figure 5).

 Figure 5: Cultural Creatives’ Key Products
     Arts and Culture 
     Education and Workshops 
     Quality Food / Natural Food 
     Natural Body Care 
     Personalization of Home 
     Travel 
     Alternative Health Care 
     Wellness Health Care (e.g. Massage) 
     Psychotherapy and Counseling 
     Investment Services (Values Based) 


 Whole Foods is an example of a company that understands and reaches
 the Cultural Creative consumer. Compare a Whole Foods store to a
 mainstream grocery such as a Safeway, and you'll get an immediate
 experience of the difference between the Cultural Creative and
 Modernist paradigms in the business world.

 Market Trends: Growth Opportunities 

 Other recent market studies corroborate the Cultural Creatives trend.
 Kaagen Research Associates identified a segment of 50 million
 Americans as "socially responsible" in their purchasing and investing
 activities. In the food purchasing category, The Hartman Group found a
 "new green mainstream" of at least 45 million Americans. 

 The growth of key Cultural Creative products and consumer practices
 are showing up in other market surveys around the country. The sales of
 organic food are growing at 20 - 25% per year, while the food industry
 itself is growing at 3- 5% annually. The social investing market has more
 than doubled in two years, now representing over $1.2 trillion. At least
 84% of Americans would pay more for clothes made without sweatshop
 or child labor. (See Figure 6).

                     Figure 6: 
        Growth Opportunities Reflect Trends
     Organic food product sales growing at 20% per year.1 
     Social investing growth from $639 billion to 1.2 trillion in
     2 years.2 
     Hemp industry projected to double or triple in two years
     from $100 million.3 
     When price and quality are equal, 76% of consumers
     would switch brands or retailers if a company is
     associated with a good cause.4 
     59% of Americans would like to change their
     investments to support environmental concerns.5 
     84% of Americans would pay more for sweatshop-free
     and child labor-free clothing.6 


 Market Trends: Cautions

 These same studies also provide insight into what it takes to reach this
 market: A values-based approach is necessary but not sufficient.
 Businesses must still satisfy the Cultural Creative consumer's core
 purchase criteria.

 Indeed, several studies show that the social or environmental
 characteristics of the product are the most important purchasing criteria
 for only about 5 - 10% of this market. The Hartman Group calls these the
 "True Greens." The True Greens will pay more and go way out of their
 way to purchase responsible products from responsible companies.
 Many socially responsible businesses are limiting their market to the
 True Greens, when there is a much larger market out there -- the new
 mainstream of the Cultural Creatives.

 For the rest of the Cultural Creatives market, businesses must first reach
 them with the core purchasing criteria for the product (i.e. price, quality,
 appearance, taste, availability, convenience) and then include the social
 and environmental message.

 Furthermore, businesses must understand which social or environmental
 message works with which product. For example, the Hartman Group
 found that for many (but not all) food products, pesticide-free was the
 most important environmental message. Other environmental messages,
 such as chemical-free, risks to farm workers and soil erosion were less
 effective.

 In short, for the socially responsible business marketing to the Cultural
 Creatives, sales growth requires both satisfaction of the core purchasing
 criteria for the particular product and the communication of the social or
 environmental message.

 Market Trends: Lessons Learned

 It’s clear that these and other social trends are showing that the time for
 socially responsible business is now. Market trends show a growing
 market for socially responsible businesses and products.

 There is a growing segment of Americans, the Cultural Creatives, who
 now number between 40 - 50 million people and are ready to act on their
 social, environmental and spiritual values. They desire to integrate these
 values into their everyday decisions, purchases and investments.

 Socially responsible businesses are uniquely positioned to deliver on the
 core values of this segment of Americans. The Cultural Creatives are
 clearly the target customers for socially responsible businesses. 

 This market is larger and stronger than many socially responsible
 businesses have measured. Many socially responsible businesses are
 targeting just the "True Greens," which represent only about 5% - 10% of
 this market. The large and growing size of the entire Cultural Creatives
 market, the market's interest in integrating its values into purchasing
 decisions, and the relatively small market share of most socially
 responsible businesses and products mean that there is an enormous
 market potential for socially responsible businesses.

 However, the market is fragmented and does not yet share a common
 language or identity. Careful market segmentation and research is
 required to reach it successfully.

 Market success depends on satisfying consumers core purchase
 requirements and communicating the larger social and environmental
 message. No one message works -- there's no magic set of words.
 However, when price and quality are comparable socially responsible
 businesses will increasingly have the advantage.

 As Harvey Hartman, president of the Hartman Group put it: "The 'green'
 consumer is now mainstream. There is significant market potential for
 earth-sustainable products. It is not merely a market niche. It is a market
 that is here to stay and is still untapped."

 Sources

 1. American Demographics
 Ray, Paul H. "The Emerging Culture." American Demographics.
 February 1997.
 2. The Hartman Group. The Hartman Report, Food and the
 Environment: A Consumer's Perspective, Phase I. Bellevue, WA. 1996.
 3. The Harwood Group, prepared for the Merck Family Fund. Yearning
 for Balance - Views of Americans on Consumption, Materialism and
 the Environment. Takoma Park, MD. 1995.
 4. Ray, Paul H. The Integral Culture Survey: A Study of the Emergence
 of Transformational Values in America. Institute of Noetic Sciences,
 Sausalito, CA and Fetzer Institute, Kalamazoo, MI. 1996.
 5. Kaagan Research Associates. Survey. November 1996.
 6. Social Investment Forum. Report. November 1997.
 7. Cone/Roper
 8. Walker Research