The other day I came across an article that spoke of a new residential development on the outskirts of Melbourne’s CBD. Located in Yarra Bend, this 16.46Ha development will be home to 2,500 new residences upon completion. The homes would range in price from $1.48M to $2.1M and will be constructed by the developer Glenvill. Apart from being discouraged on ever being able afford a family home close to the city, the thing that caught my eye was the “Green Marketing”.
As an environmental engineer working in the development Industry, I wanted to find out if this was an authentic green development or if Glenvill were conducting some sort of “Greenwashing”. Greenwashing is defined as the act of making consumers perceive an organisation as being environmentally sustainable without actually being so. It is something that happens all too common in the world these days and it really irritates me to put it in a nice way. Examples include Coco-Cola green can, BP logo re-design, clean coal and many more.
The Green Customer
Environmental issues have been of greater concern to consumers since the 1990s – the decade of the environment (Jenkins Kähler 2015). These consumers want to do the right thing and make purchases that are environmentally sustainable. Segmenting to this customer is a form of psychological segmentation.
Let’s face it, unless you have been living behind a rock like Tony Abott, the “Green” consumer is only growing in volume, presence and stature. Firms that do not produce green products and services will risk losing credibility in the eyes of many consumers. On the other hand, firms that do use green marketing strategies will be able to take advantage of environmental consumerism (Finisterra do Paço, Barata Raposo & Filho 2016 p17-25).
Market research shows that half of consumers are willing to pay a premium for “Green” products (Jenkins Kähler 2015). There has also been many other successful sell out of other green developments such as the Commons, Nightingale and Mullum Creek. Furthermore, corporations discovered that they could create loyal customer bases by exceeding regulatory compliance and becoming environmentally proactive (Jenkins Kähler 2015).
Targeting Green Consumers
Based on the above, it was clear that Glenvill have decided to target the high end, “green consumer” segment of the market. They have attained this via numerous Green aspects to this development as listed below:
- Low energy lighting and appliances
- Solar panels with Tesla Powerwall batteries.
- Rainwater tanks for re-use
- Water efficient appliances and fittings
- Compost bins
- Interconnected bike paths
- Charging stations for electric cars
- Brownfields development, i.e. building over an existing development. Thus it’s not being built over an existing forest or grassland and destroying natural habitats.
The above will result in water reduction of 43%, landfill reduced 80% and the potential to reduce energy use by 34%. Based on this an independent body, the UDIA has marked it as the most environmentally sustainable development in Australia; rewarding it the highest possible rating under the EnviroDevelopment Scheme.
Green Product Leader
Thus Glenvill’s have positioned their Yarra Bend development and themselves as a Product Leader. A company that prides themselves on quality and innovation (Iacobucci 2014). This is also evident from the fact that the houses being sold in this development are priced at $1.48M to $2.1M compared to its surrounding area where house values are on average $1.285M. This positioning also stands true to their corporate vision as follows: “Glenvill Homes create inspired homes that are defined by their aesthetic sensibility, quality of finish and purity of vision”
Alternative marketing strategy such as one that lead to a positioning of customer intimacy could have worked well for them. This is one where the company tailors their product to particular customer needs. Thus customers could have chosen to have the sustainable items listed above or not. Another option would have been operational excellence, however this would not have been an ideal positioning for the company. This is because the it does not line up with the company vision, nor the high end suburb profile.
Time will tell as to how successful this development actually is with regards to positioning themselves in this manner. In the past, some developments achieved high ratings in design stages, however a lack of follow through during construction meant many fell short. Hopefully Glenville can follow through, otherwise they could face monetary penalties let alone a hit to their reputation.
Published By: Raj Chandrakaran (212530654) for MPK732 – Deakin University
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