Emergent Economies
Consumers Behavior
Change
Project
White Paper - Phase 1
Brazil
www.eightsustainability.com
Emergent Economies
Consumers Behavior
Change
Project
Text
Pablo Barros and Fátima Cardoso
Executive production
Alice Drummond
Graphic Design
Gérome Ibri
Translation
Mark Beresford
The views expressed are these from the authors and
do not necessarily reflect the views of all partners,
sponsor or supporters of this project.
© All rights reserved. No part of this publication may
be reproduced or transmitted, without permission, in
any form or by any means, including photocopying
and recording, or by any information storage and
retrieval system.
A Project by /
Partners
Sponsorship
Supporters
2
Emergent Economies Consumer Behavior Change - Brazil
We live in a time of major change, for the planet and for business. These
changes are both challenges and opportunities for companies and citizens who,
faced with limits to natural resources and the growing consumer base, need to
find new ways of producing and consuming, especially in emerging markets. If
they don’t, they will be faced with uncertainty in material prices and concerns
about security of supply. At the same time consumers are demanding products
and services that make their health, lives, communities and environments better,
not worse.
At the same time, while the necessary responses to these changes are often
formulated by institutions, it is of course people who carry them out. All of us are,
as well as being citizens, also consumers, parents, voters, managers, employees,
and investors, and hold countless other roles in society. For that reason, any
answer to face this challenge cannot be done without considering how to
influence decision making processes at the individual level.
A focus on influencing the behavior of people represents one of the strongest
possible responses to the challenges of today. In addition, companies, who also
depend on the behavior of individual people, have a huge range of opportunities
for influencing the behavior of their clients (either companies or end consumers),
employees, and other stakeholders.
We have decided to begin our approach to the behavior change issue by
looking at B2C companies and their relations to their consumers. We aspire to
be agents that help companies and brands improve their businesses and their
products and services, engage with their consumers and to be recognized for
this.
We believe that this project is only the start. We know what needs to be done
and are now working on the “how” – the business solutions. This is why we have
established Eight Sustainability Platform and set up this project: we believe that
business solutions in today’s world cannot be considered in an isolated way,
whether that is locally or globally.
We would like to extend our deep felt thanks to the partners in this project –
Futerra Sustainability Communications, CEBDS, Instituto Akatu and Sustainable
Brands – without whom we could not have begun even to start to design the
response that we are all looking for.
We would also like to thank our sponsor, Itaú, and the corporate supporters of
the project – Dow, Nestlé, Unilever, Invepar and Pepsico
Finally, big thanks to all those people who have encouraged this initiative and
believed in what we are doing.
Thanks everyone, and now to work!
introduction
Pablo Barros
Founder and Director
Eight Sustainability Platform
3
Emergent Economies Consumer Behavior Change - Brazil
summary
5
Consumer behavior change
A necessary challenge for sustainable companies and brands
7
Why do companies and brands need to work to influence
sustainable consumer behaviors and lifestyles?
9
The Brazilian consumer context
How Brazilians think the paradise of good intentions
How Brazilians act the gap between intentions and actions
11
Why is influencing and changing behavior so hard?
11
What behaviors are we talking about when we discuss the
relations of consumers to products and services?
Consumer goods
Retail
Electricity and electrical/electronic devices
Sustainable mobility
Banking and finance
17
What are the best methods for approaching and achieving
behavior change?
4Es/Defra model
Fostering Sustainable Behavior /
Community-Based Social Marketing
3Ps/ Futerra model
4
Emergent Economies Consumer Behavior Change - Brazil
Consumer behavior change
a necessary challenge for sustainable companies and brands
In the current context, companies face major challenges and opportunities
to perpetuate their businesses, markets and brands. At different levels and in
different sectors, companies now have to deal with such issues as the increased
cost of basic inputs and the direct impact of extreme climate phenomena on their
structures for supplies, production, distribution and services.
Businesses know that both in developed markets and major emerging markets
(such as Brazil) public opinion is also asking questions about the social and
environmental impact of a company’s activities all along its value chain. At the
same time, legislation is becoming tougher on a whole range of issues, including
waste management, water access and use and even communication with
consumers.
In this scenario, in which products, services and business models are being
rethought, there are various opportunities for companies and their brands to:
reduce costs, aim for leadership, incentivize innovation, access new markets and
investments, attract and retain clients and employees, and others.
For Business to Consumer (B2C) companies, relations with their consumers
are crucial. Engaging with consumers is essential to the consolidation of their
models for production and consumption and for the survival and expansion of
their businesses.
For several years now, non-governmental organizations, governments,
educational institutions and companies have sought to raise the awareness of
individuals and engage them in the search for more “sustainable” attitudes and
habits, including their habits of consumption. To date, these have mainly focused
on education actions and awareness campaigns. However, research1 has shown
that communication and education do not necessarily lead to changes in habits
and attitudes, and that having information and being aware of the impact of
5
Emergent Economies Consumer Behavior Change - Brazil
certain behavior is not in itself enough to change this behavior2. A lot of progress
has been made in raising awareness, but more work needs to be done to progress
in the practical responses and in changing the behavior of each individual.
Research has been undertaken in order to respond to these issues, especially
in the UK and the US, where behavior change research aims to understand the
factors that influence people’s attitudes and decisions, and to develop effective
ways of acting. This research has shown that the rational nature of decisions
and habits is very limited, especially for consumption habits, but that various
strategies can be created to impact and influence consumer habits and lifestyles.
In Brazil, where the consumer market is growing fast and many new consumers
are joining the market, this debate is of fundamental importance, in terms of
the challenges and opportunities involved. Particularly for B2C companies, it is
crucial that models and instruments are explored that go beyond the traditional
instruments of corporate communications and advertising and beyond the
traditional focus on the environment, which in general consumers do not
understand or respond to.
It is in response to these challenges and opportunities that the Emergent
Economies Consumer Behavior Change project is being undertaken. This project
is an initiative to develop understanding and tools that companies can employ
to influence the behavior of consumers and encourage sustainable consumption
and life styles, in emerging markets such as Brazil, South Africa, India and China.
Scope 1, in 2013, starts with the Brazilian market.
The aim of the project is to understand the challenges and opportunities
for B2C companies in terms of value proposition, access to markets and new
consumer profiles, sustainable branding and consumer relations.
The project aims to identify ways in which innovation and ways of influencing
consumers can be adapted to a new reality for Brazilian consumers, and how
brands, products, services and business models can be developed to respond to
these new challenges and opportunities.
6
Emergent Economies Consumer Behavior Change - Brazil
Why do companies and brands need to work
to influence sustainable consumer behaviors
and lifestyles ?
Influencing consumers to consume more sustainable products and services
and adopt sustainable habits in their daily lives is important for brands and
companies, because:
yy brands that endure deliver trusted value to people’s lives – to ignore issues of
sustainability is to undermine consumer trust;
yy proactive engagement on concerns as yet unrecognized by consumers can
lead to closer ties between companies and their consumers, building trust,
empathy and admiration at a time when brands and their channels are vulnerable
because of Web 2.0 (with its demands for radical transparency) and restrictions
on advertising (such as advertising to children);
yy despite the many inconsistencies in current “save the planet” campaigns and
green products, and surveys which show that consumers apparently do not care
about these issues, consumers do seem to be more inspired by other less explicit
characteristics of sustainable consumption, such as: care, family, trust, safety,
future, comfort, well-being, health etc;
yy consumers, as individuals, are not homogenous. They are guided in their
decisions in different ways and respond differently to contexts and stimuli. This is
also true to their reaction to any sustainable consumption appeal. Brands need
to understand and use this learning to their benefit to connect and engage their
consumers;
yy brands are uniquely equipped to create needs and can transform the need
for sustainable consumption and lifestyles into a benefit rather than a sacrifice;
7
Emergent Economies Consumer Behavior Change - Brazil
yy engaging with their consumers companies can create a path to address one
of their main areas of environmental impact and of costs, he use and post-use of
their products and services;
yy companies in various sectors are increasingly faced with rising prices for raw
materials, inputs and water, as well as more regulation and competition for these.
They will need to reduce their exposure to resource price rises by creating more
value with less materials. Working to shift consumer preferences can serve to
establish necessary demand for more resource efficient offerings;
yy companies can find innovative solutions for their products and services by
working with their consumers, who may be willing to help: open innovation,
crowd sourcing and offline interactions;
yy companies actions can also increase the motivation and engagement of
employees, inspiring them and make them feel proud of their companies;
yy companies can achieve competitive advantages: the first to move generally
improve their reputation and are able to position themselves before they are
forced to (self-regulation);
yy “sustainable” products and services do not need to be more expensive or
cost more to produce.. They need to be good products, based on traditional
measures of quality, usefulness, price, innovation, etc., that are desired by
consumers, but will also be sustainable.
yy these initiatives can increase sales and support a company’s growth: the issue
is not to sell less, but to do more with less (in the production process), and sales
of better, more sustainable products and services;
8
Emergent Economies Consumer Behavior Change - Brazil
The Brazilian consumer context
The Brazilian context
An analysis of the research carried out in Brazil and worldwide about consumption
and sustainability3 suggests that there has been an increase in the environmental
awareness of Brazilians, but that this has not been translated, at least on the same
scale or at the same pace, into sustainable consumption attitudes.
How Brazilians think – the paradise of good intentions
In the last 20 years, the awareness of Brazilians about environmental problems
has increased. In 1992, 47% of respondents were unable to identify environmental
problems. In 2012, only 10% were unaware of the issue
In international surveys about intentions and values (based on what the
interviewees say), Brazilians are always in the leading positions for environmental
awareness and are especially concerned for example by global warming and
pollution of air and water.
yy Brazilians are also in leading positions in terms of saying they are aware as
consumers, and for saying they are prepared to pay more for sustainable products
or buy products because of their social and environmental benefits.
yy Sophisticated concepts such as “sustainable development,” “sustainable
consumption,” or “biodiversity” are now familiar to many Brazilians. Nationwide,
an average of 34% now know what is meant by sustainable consumption
yy However, 66% do not know what sustainable consumption means. Of the third
who said they had heard of it, only half said they knew what it meant.
yy More recently, concerns with health/hospitals and violence/criminality have
increased, leaving the environment in sixth position in terms of top of mind
concerns.
9
Emergent Economies Consumer Behavior Change - Brazil
How Brazilians act – the gap between intentions and actions
yy Price, durability and brand are more important for consumers when choosing
products. Most people do not consider issues of sustainability, often because
consumers are confused by these issues.
yy Brazilians still have environmentally harmful habits, especially in the disposal of
various items in the post-consumption phase.
yy In the historic series from 2001 to 2012, Brazilians reacted positively to a product
whose label indicated its manufacturing was environmentally correct. In 2001, 81%
said they would be more motivated by this information. In 2006, the proportion fell
to 76% and went up to 85% in 2012. The same was true for consumer inclination
to buy organic products, which went from 73% in 2001 to 81% in 2012
yy In terms of sustainable consumption habits, most are seen by respondents as
easy to practice, especially “separating waste for recycling”, “reducing electricity
consumption,” and “eliminating the waste of water”.
yy High proportions of people say conscientious consumer habits are easy, reaching
96% for “turning off lights when not in use,” although it is difficult to say that all
people really practice this.
yy The fact that people are aware that a habit is easy to carry out does not imply
that they do this, but it does show that this represents a value shared by almost
all the group.
10
Emergent Economies Consumer Behavior Change - Brazil
Why is influencing and changing
behavior so hard?
Starting in the second half of the 20th century, research and experiments
have shown how human behavior4 is systematically irrational. Behavioral
economics aims to explain this behavior, based on insights from psychology.
Some of the main aspects of this approach can be summarized as follows:
Rational aspects are conditioned by experience (heuristic):
people do not use all the relevant information available when
making decisions, with the previous experiences of the individual
having major importance.
Loss aversion: people react more strongly to losses than to when
they achieve winnings.
Short term: short term costs and benefits are the dominant factors
in decision-making processes.
Procrastination: individuals reject decisions that involve complexity,
doubt, or are not convenient.
Overestimating small probabilities: people have a tendency to
overestimate unlikely situations and improbable consequences.
What behaviors are we talking about when
we discuss the relations of consumers to
products and services?
The identification and segmentation of behaviors to be changed is the
starting point for any behavior change strategy. It is important to know what
specific behaviors are to be promoted and which ones discouraged. It is not
possible to work on all behaviors at the same time, generically and with the
same approach for different groups of individuals.
In order to segment consumer behaviors and relate them to different
sectors, we are proposing the following initial and non-exhaustive list of
certain behaviors to be encouraged5. Likewise, as examples, we will describe
international case studies that have worked on one or more of these behaviors.
The behaviors have been separated into buying (behavior at point of sale) and
habit (use of the good or service).
11
Emergent Economies Consumer Behavior Change - Brazil
Consumer goods
Food and drink and durable goods/cleaning
Buying
yy avoid wasting food when buying (planning purchases; not buying too many
fresh products)
yy buying food with the lowest environmental impact, e.g. certified or organic
products
yy buying food with less packaging
yy prefer concentrated cleaning products
Habit
yy avoid waste in preparing, consuming and storing food (cooking only what
is necessary, avoiding leftovers; correct storage so that food does not go
off)
yy use laundry/dishwashing products more efficiently, not wasting water or
electricity
yy separate packaging for recycling
Unilever Turkey Case Study6
Unilever is one of the world’s largest consumer companies, focused on
cleaning products, personal hygiene and food. Its products are used by 2
billion people each day.
Objective: to encourage consumers to use their products more
sustainably, as a large part of greenhouse gas emissions and water
consumption occur during the consumption phase.
Actions: after assessing the environmental impact of the product and the
opportunity to innovate, it was observed that in Turkey consumers used to
pre-wash their clothes, using more water. Concentrated OMO detergent
was launched. Communications for the product emphasized: its quality and
the economies of using a concentrated product; environmental benefits
(less impact in manufacturing, transport and use) in campaigns with an
emotional edge; the practical benefits of no longer pre-washing.
Results: there was an increase in sales volume and OMO market share in
Turkey, and the number of consumers using pre-wash fell from 44% to 27%.
Learning: the action formed part of the Cleaner Planet Plan strategy and
Unilever’s global strategy Unilever Sustainable Living Plan; sustainability
comes as standard for product innovation; launch of the product coincided
with raised concern about water shortages in the country.
12
Emergent Economies Consumer Behavior Change - Brazil
Retail
Buying
yy choosing products with more sustainable characteristics
yy obtaining more information about products from labels,
such as ingredients and source
yy obtaining more information about products from
communications at the point of sale, e.g. origin and impacts
yy preferring products with less packaging
Habit
yy replacing disposable bags with alternatives such as reusable bags, boxes, other types of bag
yy plan shopping, avoiding waste, especially of perishable
food
B&Q Case Study8
The British DIY chain launched its “One Planet Home” strategy in 2007.
Objective: to help clients reduce the ecological footprint of their
residences by 10% by 2023, thanks to more sustainable products.
Actions: certification of new sustainable products; communication of
environmental benefits of the products; positioning their price close to that
of other products; creation of Eco Shops with only certified products.
Results: sustainable products represent 12% of total B&Q sales; the
company is a recognized leader in sustainability.
Learning: consumers are buying the sustainable products offered in the
Eco Shops because sustainability is the norm there, but it is not the criterion
when making a buying decision; the certification seal created by the store
confuses consumers, and it is better to work with existing certifications.
13
Emergent Economies Consumer Behavior Change - Brazil
Electricity and electrical/
electronic devices
Buying
yy buying energy efficient products (electric appliances and electronics with
the Procel seal)
yy use of clean and alternative energies when possible (e.g. solar power)
Habit
yy saving energy in daily life (turning off lights when leaving a room, not
leaving TVs or computers on if not necessary)
yy moderate and efficient use of air conditioning
yy efficient use of washing and drying machines (only use with a full load)
yy disposal of electric appliances and electronic devices
Opower Case Study9
The company designs energy saving solutions based on changing
consumer behavior. Via 75 electricity distributors in various countries,
including 8 of the 10 largest in the US, it reaches 15 million homes.
Objective: encourage consumers to use energy at home more efficiently
and reduce consumption.
Actions: the Behavioral Energy Efficiency program sends a monthly
report to consumers that compares their spending on energy with that of
their neighbors (the average and the most efficient homes). The report also
shows, with charts and emoticons, how well the consumer is changing their
consumption of electricity.
Results: the houses which received the reports had an average energy
saving of 2% to 3%. Programs which help consumers to save also position
the distributor as a partner of the consumers and help to build confidence
in the brand.
Learning: it is essential that consumers know how much they spend on
energy, but this information alone will not make them change their behavior;
the comparison with others (in this case, neighbors), is a powerful way of
influencing behavior change.
14
Emergent Economies Consumer Behavior Change - Brazil
Sustainable mobility
Buying
yy choosing more efficient vehicles that consume less
yy choosing biofuels (ethanol, biodiesel)
Habit
yy driving safely to save fuel
yy preferring public transport to cars
yy using bicycle or walking for small distance
Sustrans Case Study7
An NGO in the UK that incentivizes people to adopt alternative transport
to the car, such as walking, using a bicycle or public transport.
Actions: using the National Cycle Network to establish the best routes
for bicycles and for walking, partnering with the community and public
authorities; programmes in school to encourage walking and bicycling.
Results in 2011: a 15% increase in trips made on the National Cycle
Network; in an action with 340,000 school children, there was an 80%
increase in the number who regularly used to bicycle to school; 20,000
homes received customized information about alternative transport,
leading to a 21% increase in walking, 31% in bicycle use and 25% in use of
public transport, as well as an 11% fall in car use.
15
Emergent Economies Consumer Behavior Change - Brazil
Banking and finance
yy Financial education: strategies for clients to not fall into debt and balance
their budget
yy Careful use of credit: actions so that clients do not take out loans or use
credit lines they will not be able to pay
yy Sustainable innovations: incentivize clients to invest in a portfolio of
sustainable companies
yy Saving paper: incentivize clients to cancel statements on paper, receiving
them by email or checking them on the Internet
Case TD Bank Case Study10
A Canadian bank with operations in Canada and the US.
Objective: to reduce paper use by 20% by 2015, equivalent to an annual
reduction of 300 million sheets of paper; support forest conservation
projects.
Actions: the TD Forest program was launched, with four lines of action:
1 - Reduce - replace paper use with electronic banking transactions
(by computer or smart phone) and receive documents by
email;
2 - Cultivate - support forest conservation projects;
3 - Be responsible - incentivize customers to reduce their use
of paper at home or in the office and to separate it for
recycling;
4 - Get Involved - publicise actions on social networks.
Results: by the start of 2013 the area of forest protected was equivalent
to over 700 football fields.
16
Emergent Economies Consumer Behavior Change - Brazil
What are the best methods for approaching
and achieving behavior change?
Working on behavior change is nothing new. Various institutions, especially
governments, have sought to influence individuals to change their behavior,
in areas such as health, transport, family planning, etc. It is also not new for
companies and brands to influence behaviors and needs, using traditional
marketing. What is new is the use by companies of more complex methods for
influencing individuals, especially consumers and employees.
A number of models for changing behavior have been developed and
adapted to the reality of companies and brands. They highlight different aspects
and represent different approaches to the complex challenge of influencing
behavior, whether that influence is exercised by governments, companies, nongovernmental organizations or others. Some of these models include:
4Es/Defra model
Developed over years of research by the Department for Environment, Food
and Rural Affairs in the UK (DEFRA), this model11 is based on 4 e’s (Engage, Enable,
Exemplify and Encourage), adapted to different profiles of groups of individuals
and constantly reassessed for effectiveness. This model could be adapted to the
reality of Brazil and of companies in Brazil:
Enable
“Making it easier”
Exemplify
Engage
“My peer does”
“Get people envolved”
Encourage
“Give the right signals”
17
Emergent Economies Consumer Behavior Change - Brazil
Fostering Sustainable Behavior/Community-Based Social Marketing
Developed by Dr. Doug McKenzie-Mohr, this model12 is a pragmatic and
effective step by step approach to planning, designing and monitoring programs
that aim to influence behavior in areas such as energy saving, incentivizing re-use
and recycling, the use of alternative transport, and many others.
For a successful program to influence behavior, a total of 5 steps are selected:
1. Selection of the behaviors to be encouraged;
2. Identification of the barriers and benefits associated with these
behaviors;
3. Design of strategies for managing these barriers and benefits;
4. Implementation of a pilot program with a small representative group of
the community where the work will be carried out;
5. Re-assessment of the program for implementation on a wider scale.
3Ps/Futerra model
Developed by our partner Futerra, this model13 is an appropriate match for this
project’s focus on methods and on correlations with branding opportunities,
access to markets and business models and we’ve chosen it to work deeply on
the project workshop with the companies’ representatives. It is based on the “3
new Ps of Marketing”: Product, Placement and Persuasion.
Persuasion Brands are extraordinary persuaders. Compelling
behavior change messages can work in packaging, advertising, social
media, point of sale, across touch points and campaigns, and through
employee advocates. This is the most common form of behavioral
marketing. It is about matching your marketing skills with new behavioral
research and sustainability expertise to make a real impact.
Placement Advertisers have been placing products in mass-market
entertainment for almost as long as the industry has been around.
Behavioural placement is a more recent trend. Placement shows
sustainable behaviours in mainstream communication. It relies on
peripheral rather than central processing. The goal is to influence the
audience, but in a way that they don't notice. How can your brand
"model" the sustainable behaviour you're promoting? Showing positive
behaviours in product advertising is a great way to start.
Product The guaranteed way to change habits is to "build in"
behavior change. Understanding the full lifecycle impact of your
products comes first. Then things get creative. Brands are designing
in sustainable behaviors, like Levi's 511 range, created specifically to
be better for cycling in. Can you build in reuse? Minimise the water,
energy and resources your consumer needs to use your product? Build
in health? Innovate wellbeing?
18
Emergent Economies Consumer Behavior Change - Brazil
References
19
1
Hernanzez (2000) Thinking about Behavior. In: Environmental Education and
Communication for a Sustainable World, Handbook for International Practitioners,
2000, (Washington DC: Academy for Educational Development).
2
McKenzie-Mohr, D. (2011) Fostering Sustainable behavior: an introduction to
community-based social marketing, 3rd ed., New Society Publishers, Gabriola
Island.
3
Barômetro ambiental, Market Analysis, 2011.
Consumo Sustentável, Ibope/WWF, 2011.
National Geographic Greendex, National Geographic Society e GlobeScan, 2012.
Re: Thinking Consumption, BBMG, GlobeScan e SustainAbility.
RSE e Percepção do consumidor brasileiro, Instituto Akatu e Instituto Ethos, 2010.
4
Social Research and Evaluation, Department for Transport Division United Kingdom
(2011), Behavioural Insights Toolkit, Department for Transport United Kingdom,
London.
5
Defra (2010) Understanding and influencing behavior: a review of social research,
economics and policy making in Defra, DEFRA, London.
6
Business in the Community (2011) Influencing Consumer Behavior, a Guide for
Sustainable Marketing, Business in the Community, London.
7
Sustrans (2011) Sustrans Annual Review 2011, Sustrans, Bristol.
8
Business in the Community (2011) Influencing Consumer Behavior, a Guide for
Sustainable Marketing, Business in the Community, London.
9
Navigant Consulting (2011), Evaluation Report: OPower Smud Pilot Year 2, Navigant
Consulting, Chicago.
10
TD Forests, website do TD Bank Financial Group, disponível em: <http://www.td.com/
corporate-responsibility/tdforests.jsp>.
11
Defra (2010) Understanding and influencing behavior: a review of social research,
economics and policy making in Defra, DEFRA, London.
12
McKenzie-Mohr, D. (2011) Fostering Sustainable behavior: an introduction to
community-based social marketing. 3rd ed., New Society Publishers, Gabriola
Island.
13
Futerra Sustainability Communications (2012) Planet Brands, Which brands have the
power to change consumer behavior?, Futerra Sustainability Communications,
London.
Emergent Economies Consumer Behavior Change - Brazil