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  • 1. Emergent EconomiesConsumers BehaviorChange ProjectWhite Paper - Phase
  • 2. Emergent Economies Consumer Behavior Change - Brazil2TextPablo Barros and Fátima CardosoExecutive productionAlice DrummondGraphic DesignGérome IbriTranslationMark Beresford© All rights reserved. No part of this publication maybe reproduced or transmitted, without permission, inany form or by any means, including photocopyingand recording, or by any information storage andretrieval system.The views expressed are these from the authors anddo not necessarily reflect the views of all partners,sponsor or supporters of this project.Emergent EconomiesConsumers BehaviorChange ProjectSponsorshipA Project by /PartnersSupporters
  • 3. Emergent Economies Consumer Behavior Change - Brazil3We live in a time of major change, for the planet and for business. Thesechanges are both challenges and opportunities for companies and citizens who,faced with limits to natural resources and the growing consumer base, need tofind new ways of producing and consuming, especially in emerging markets. Ifthey don’t, they will be faced with uncertainty in material prices and concernsabout security of supply. At the same time consumers are demanding productsand services that make their health, lives, communities and environments better,not worse.At the same time, while the necessary responses to these changes are oftenformulated 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, anyanswer to face this challenge cannot be done without considering how toinfluence decision making processes at the individual level.A focus on influencing the behavior of people represents one of the strongestpossible responses to the challenges of today. In addition, companies, who alsodepend on the behavior of individual people, have a huge range of opportunitiesfor 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 bylooking at B2C companies and their relations to their consumers. We aspire tobe agents that help companies and brands improve their businesses and theirproducts and services, engage with their consumers and to be recognized forthis.We believe that this project is only the start. We know what needs to be doneand are now working on the “how” – the business solutions. This is why we haveestablished Eight Sustainability Platform and set up this project: we believe thatbusiness 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 SustainableBrands – without whom we could not have begun even to start to design theresponse that we are all looking for.We would also like to thank our sponsor, Itaú, and the corporate supporters ofthe project – Dow, Nestlé, Unilever, Invepar and PepsicoFinally, big thanks to all those people who have encouraged this initiative andbelieved in what we are doing.Thanks everyone, and now to work!introductionPablo BarrosFounder and DirectorEight Sustainability Platform
  • 4. Emergent Economies Consumer Behavior Change - Brazil4Consumer behavior changeA necessary challenge for sustainable companies and brandsWhy do companies and brands need to work to influencesustainable consumer behaviors and lifestyles?The Brazilian consumer contextHow Brazilians think -the paradise of good intentionsHow Brazilians act -the gap between intentions and actionsWhy is influencing and changing behavior so hard?What behaviors are we talking about when we discuss therelations of consumers to products and services?Consumer goodsRetailElectricity and electrical/electronic devicesSustainable mobilityBanking and financeWhat are the best methods for approaching and achievingbehavior change?4Es/Defra modelFostering Sustainable Behavior /Community-Based Social Marketing3Ps/ Futerra model579111117summary
  • 5. Emergent Economies Consumer Behavior Change - Brazil5Consumer behavior changea necessary challenge for sustainable companies and brandsIn the current context, companies face major challenges and opportunitiesto perpetuate their businesses, markets and brands. At different levels and indifferent sectors, companies now have to deal with such issues as the increasedcost of basic inputs and the direct impact of extreme climate phenomena on theirstructures 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 andenvironmental impact of a company’s activities all along its value chain. At thesame time, legislation is becoming tougher on a whole range of issues, includingwaste management, water access and use and even communication withconsumers.In this scenario, in which products, services and business models are beingrethought, there are various opportunities for companies and their brands to:reduce costs, aim for leadership, incentivize innovation, access new markets andinvestments, attract and retain clients and employees, and others.For Business to Consumer (B2C) companies, relations with their consumersare crucial. Engaging with consumers is essential to the consolidation of theirmodels for production and consumption and for the survival and expansion oftheir businesses.For several years now, non-governmental organizations, governments,educational institutions and companies have sought to raise the awareness ofindividuals and engage them in the search for more “sustainable” attitudes andhabits, including their habits of consumption. To date, these have mainly focusedon education actions and awareness campaigns. However, research1has shownthat communication and education do not necessarily lead to changes in habitsand attitudes, and that having information and being aware of the impact of
  • 6. Emergent Economies Consumer Behavior Change - Brazil6certain behavior is not in itself enough to change this behavior2. A lot of progresshas been made in raising awareness, but more work needs to be done to progressin the practical responses and in changing the behavior of each individual.Research has been undertaken in order to respond to these issues, especiallyin the UK and the US, where behavior change research aims to understand thefactors that influence people’s attitudes and decisions, and to develop effectiveways of acting. This research has shown that the rational nature of decisionsand habits is very limited, especially for consumption habits, but that variousstrategies can be created to impact and influence consumer habits and lifestyles.In Brazil, where the consumer market is growing fast and many new consumersare joining the market, this debate is of fundamental importance, in terms ofthe challenges and opportunities involved. Particularly for B2C companies, it iscrucial that models and instruments are explored that go beyond the traditionalinstruments of corporate communications and advertising and beyond thetraditional focus on the environment, which in general consumers do notunderstand or respond to.It is in response to these challenges and opportunities that the EmergentEconomies Consumer Behavior Change project is being undertaken. This projectis an initiative to develop understanding and tools that companies can employto influence the behavior of consumers and encourage sustainable consumptionand 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 opportunitiesfor B2C companies in terms of value proposition, access to markets and newconsumer profiles, sustainable branding and consumer relations.The project aims to identify ways in which innovation and ways of influencingconsumers can be adapted to a new reality for Brazilian consumers, and howbrands, products, services and business models can be developed to respond tothese new challenges and opportunities.
  • 7. Emergent Economies Consumer Behavior Change - Brazil7Why do companies and brands need to workto influence sustainable consumer behaviorsand lifestyles ?Influencing consumers to consume more sustainable products and servicesand adopt sustainable habits in their daily lives is important for brands andcompanies, because:yy brands that endure deliver trusted value to people’s lives – to ignore issues ofsustainability is to undermine consumer trust;yy proactive engagement on concerns as yet unrecognized by consumers canlead to closer ties between companies and their consumers, building trust,empathy and admiration at a time when brands and their channels are vulnerablebecause of Web 2.0 (with its demands for radical transparency) and restrictionson advertising (such as advertising to children);yy despite the many inconsistencies in current “save the planet” campaigns andgreen products, and surveys which show that consumers apparently do not careabout these issues, consumers do seem to be more inspired by other less explicitcharacteristics 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 theirdecisions in different ways and respond differently to contexts and stimuli. This isalso true to their reaction to any sustainable consumption appeal. Brands needto understand and use this learning to their benefit to connect and engage theirconsumers;yy brands are uniquely equipped to create needs and can transform the needfor sustainable consumption and lifestyles into a benefit rather than a sacrifice;
  • 8. Emergent Economies Consumer Behavior Change - Brazil8yy engaging with their consumers companies can create a path to address oneof their main areas of environmental impact and of costs, he use and post-use oftheir products and services;yy companies in various sectors are increasingly faced with rising prices for rawmaterials, 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 morevalue with less materials. Working to shift consumer preferences can serve toestablish necessary demand for more resource efficient offerings;yy companies can find innovative solutions for their products and services byworking 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 ofemployees, inspiring them and make them feel proud of their companies;yy companies can achieve competitive advantages: the first to move generallyimprove their reputation and are able to position themselves before they areforced to (self-regulation);yy “sustainable” products and services do not need to be more expensive orcost more to produce.. They need to be good products, based on traditionalmeasures of quality, usefulness, price, innovation, etc., that are desired byconsumers, but will also be sustainable.yy these initiatives can increase sales and support a company’s growth: the issueis not to sell less, but to do more with less (in the production process), and salesof better, more sustainable products and services;
  • 9. Emergent Economies Consumer Behavior Change - Brazil9The Brazilian consumer contextThe Brazilian contextAnanalysisoftheresearchcarriedoutinBrazilandworldwideaboutconsumptionand sustainability3suggests that there has been an increase in the environmentalawareness of Brazilians, but that this has not been translated, at least on the samescale or at the same pace, into sustainable consumption attitudes.How Brazilians think – the paradise of good intentionsIn the last 20 years, the awareness of Brazilians about environmental problemshas increased. In 1992, 47% of respondents were unable to identify environmentalproblems. In 2012, only 10% were unaware of the issueIn international surveys about intentions and values (based on what theinterviewees say), Brazilians are always in the leading positions for environmentalawareness and are especially concerned for example by global warming andpollution of air and water.yy Brazilians are also in leading positions in terms of saying they are aware asconsumers, and for saying they are prepared to pay more for sustainable productsor buy products because of their social and environmental benefits.yy Sophisticated concepts such as “sustainable development,” “sustainableconsumption,” or “biodiversity” are now familiar to many Brazilians. Nationwide,an average of 34% now know what is meant by sustainable consumptionyy However, 66% do not know what sustainable consumption means. Of the thirdwho said they had heard of it, only half said they knew what it meant.yy More recently, concerns with health/hospitals and violence/criminality haveincreased, leaving the environment in sixth position in terms of top of mindconcerns.
  • 10. Emergent Economies Consumer Behavior Change - Brazil10How Brazilians act – the gap between intentions and actionsyy Price, durability and brand are more important for consumers when choosingproducts. Most people do not consider issues of sustainability, often becauseconsumers are confused by these issues.yy Brazilians still have environmentally harmful habits, especially in the disposal ofvarious items in the post-consumption phase.yy In the historic series from 2001 to 2012, Brazilians reacted positively to a productwhose label indicated its manufacturing was environmentally correct. In 2001, 81%said they would be more motivated by this information. In 2006, the proportion fellto 76% and went up to 85% in 2012. The same was true for consumer inclinationto buy organic products, which went from 73% in 2001 to 81% in 2012yy In terms of sustainable consumption habits, most are seen by respondents aseasy to practice, especially “separating waste for recycling”, “reducing electricityconsumption,” and “eliminating the waste of water”.yy High proportions of people say conscientious consumer habits are easy, reaching96% for “turning off lights when not in use,” although it is difficult to say that allpeople really practice this.yy The fact that people are aware that a habit is easy to carry out does not implythat they do this, but it does show that this represents a value shared by almostall the group.
  • 11. Emergent Economies Consumer Behavior Change - Brazil11Rational aspects are conditioned by experience (heuristic):people do not use all the relevant information available whenmaking decisions, with the previous experiences of the individualhaving major importance.Loss aversion: people react more strongly to losses than to whenthey achieve winnings.Short term: short term costs and benefits are the dominant factorsin decision-making processes.Procrastination: individuals reject decisions that involve complexity,doubt, or are not convenient.Overestimating small probabilities: people have a tendency tooverestimate unlikely situations and improbable consequences.Why is influencing and changingbehavior so hard?Starting in the second half of the 20th century, research and experimentshave shown how human behavior4is systematically irrational. Behavioraleconomics aims to explain this behavior, based on insights from psychology.Some of the main aspects of this approach can be summarized as follows:What behaviors are we talking about whenwe discuss the relations of consumers toproducts and services?The identification and segmentation of behaviors to be changed is thestarting point for any behavior change strategy. It is important to know whatspecific behaviors are to be promoted and which ones discouraged. It is notpossible to work on all behaviors at the same time, generically and with thesame approach for different groups of individuals.In order to segment consumer behaviors and relate them to differentsectors, we are proposing the following initial and non-exhaustive list ofcertain behaviors to be encouraged5. Likewise, as examples, we will describeinternational case studies that have worked on one or more of these behaviors.The behaviors have been separated into buying (behavior at point of sale) andhabit (use of the good or service).
  • 12. Emergent Economies Consumer Behavior Change - Brazil12yy avoid wasting food when buying (planning purchases; not buying too manyfresh products)yy buying food with the lowest environmental impact, e.g. certified or organicproductsyy buying food with less packagingyy prefer concentrated cleaning productsyy avoid waste in preparing, consuming and storing food (cooking only whatis necessary, avoiding leftovers; correct storage so that food does not gooff)yy use laundry/dishwashing products more efficiently, not wasting water orelectricityyy separate packaging for recyclingBuyingHabitConsumer goodsFood and drink and durable goods/cleaningUnilever Turkey Case Study6Unilever is one of the world’s largest consumer companies, focused oncleaning products, personal hygiene and food. Its products are used by 2billion people each day.Objective: to encourage consumers to use their products moresustainably, as a large part of greenhouse gas emissions and waterconsumption occur during the consumption phase.Actions: after assessing the environmental impact of the product and theopportunity to innovate, it was observed that in Turkey consumers used topre-wash their clothes, using more water. Concentrated OMO detergentwas launched. Communications for the product emphasized: its quality andthe economies of using a concentrated product; environmental benefits(less impact in manufacturing, transport and use) in campaigns with anemotional edge; the practical benefits of no longer pre-washing.Results: there was an increase in sales volume and OMO market share inTurkey, and the number of consumers using pre-wash fell from 44% to 27%.Learning: the action formed part of the Cleaner Planet Plan strategy andUnilever’s global strategy Unilever Sustainable Living Plan; sustainabilitycomes as standard for product innovation; launch of the product coincidedwith raised concern about water shortages in the country.
  • 13. Emergent Economies Consumer Behavior Change - Brazil13yy choosing products with more sustainable characteristicsyy obtaining more information about products from labels,such as ingredients and sourceyy obtaining more information about products fromcommunications at the point of sale, e.g. origin and impactsyy preferring products with less packagingyy replacing disposable bags with alternatives such as re-usable bags, boxes, other types of bagyy plan shopping, avoiding waste, especially of perishablefoodBuyingHabitRetailB&Q Case Study8The British DIY chain launched its “One Planet Home” strategy in 2007.Objective: to help clients reduce the ecological footprint of theirresidences by 10% by 2023, thanks to more sustainable products.Actions: certification of new sustainable products; communication ofenvironmental benefits of the products; positioning their price close to thatof other products; creation of Eco Shops with only certified products.Results: sustainable products represent 12% of total B&Q sales; thecompany is a recognized leader in sustainability.Learning: consumers are buying the sustainable products offered in theEco Shops because sustainability is the norm there, but it is not the criterionwhen making a buying decision; the certification seal created by the storeconfuses consumers, and it is better to work with existing certifications.
  • 14. Emergent Economies Consumer Behavior Change - Brazil14yy buying energy efficient products (electric appliances and electronics withthe Procel seal)yy use of clean and alternative energies when possible (e.g. solar power)yy saving energy in daily life (turning off lights when leaving a room, notleaving TVs or computers on if not necessary)yy moderate and efficient use of air conditioningyy efficient use of washing and drying machines (only use with a full load)yy disposal of electric appliances and electronic devicesBuyingHabitElectricity and electrical/electronic devicesOpower Case Study9The company designs energy saving solutions based on changingconsumer 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 efficientlyand reduce consumption.Actions: the Behavioral Energy Efficiency program sends a monthlyreport to consumers that compares their spending on energy with that oftheir neighbors (the average and the most efficient homes). The report alsoshows, with charts and emoticons, how well the consumer is changing theirconsumption of electricity.Results: the houses which received the reports had an average energysaving of 2% to 3%. Programs which help consumers to save also positionthe distributor as a partner of the consumers and help to build confidencein the brand.Learning: it is essential that consumers know how much they spend onenergy, but this information alone will not make them change their behavior;the comparison with others (in this case, neighbors), is a powerful way ofinfluencing behavior change.
  • 15. Emergent Economies Consumer Behavior Change - Brazil15yy choosing more efficient vehicles that consume lessyy choosing biofuels (ethanol, biodiesel)yy driving safely to save fuelyy preferring public transport to carsyy using bicycle or walking for small distanceBuyingHabitSustainable mobilitySustrans Case Study7An NGO in the UK that incentivizes people to adopt alternative transportto the car, such as walking, using a bicycle or public transport.Actions: using the National Cycle Network to establish the best routesfor bicycles and for walking, partnering with the community and publicauthorities; programmes in school to encourage walking and bicycling.Results in 2011: a 15% increase in trips made on the National CycleNetwork; in an action with 340,000 school children, there was an 80%increase in the number who regularly used to bicycle to school; 20,000homes received customized information about alternative transport,leading to a 21% increase in walking, 31% in bicycle use and 25% in use ofpublic transport, as well as an 11% fall in car use.
  • 16. Emergent Economies Consumer Behavior Change - Brazil16yy Financial education: strategies for clients to not fall into debt and balancetheir budgetyy Careful use of credit: actions so that clients do not take out loans or usecredit lines they will not be able to payyy Sustainable innovations: incentivize clients to invest in a portfolio ofsustainable companiesyy Saving paper: incentivize clients to cancel statements on paper, receivingthem by email or checking them on the InternetBanking and financeCase TD Bank Case Study10A Canadian bank with operations in Canada and the US.Objective: to reduce paper use by 20% by 2015, equivalent to an annualreduction of 300 million sheets of paper; support forest conservationprojects.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 byemail;2 - Cultivate - support forest conservation projects;3 - Be responsible - incentivize customers to reduce their useof paper at home or in the office and to separate it forrecycling;4 - Get Involved - publicise actions on social networks.Results: by the start of 2013 the area of forest protected was equivalentto over 700 football fields.
  • 17. Emergent Economies Consumer Behavior Change - Brazil17What are the best methods for approachingand achieving behavior change?Working on behavior change is nothing new. Various institutions, especiallygovernments, have sought to influence individuals to change their behavior,in areas such as health, transport, family planning, etc. It is also not new forcompanies and brands to influence behaviors and needs, using traditionalmarketing. What is new is the use by companies of more complex methods forinfluencing individuals, especially consumers and employees.A number of models for changing behavior have been developed andadapted to the reality of companies and brands. They highlight different aspectsand represent different approaches to the complex challenge of influencingbehavior, whether that influence is exercised by governments, companies, non-governmental organizations or others. Some of these models include:4Es/Defra modelDeveloped over years of research by the Department for Environment, Foodand Rural Affairs in the UK (DEFRA), this model11is based on 4 e’s (Engage, Enable,Exemplify and Encourage), adapted to different profiles of groups of individualsand constantly reassessed for effectiveness. This model could be adapted to thereality of Brazil and of companies in Brazil:Enable“Making it easier”Encourage“Give the right signals”Engage“Get people envolved”Exemplify“My peer does”
  • 18. Emergent Economies Consumer Behavior Change - Brazil18Fostering Sustainable Behavior/Community-Based Social MarketingDeveloped by Dr. Doug McKenzie-Mohr, this model12is a pragmatic andeffective step by step approach to planning, designing and monitoring programsthat aim to influence behavior in areas such as energy saving, incentivizing re-useand 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 thesebehaviors;3. Design of strategies for managing these barriers and benefits;4. Implementation of a pilot program with a small representative group ofthe community where the work will be carried out;5. Re-assessment of the program for implementation on a wider scale.3Ps/Futerra modelDeveloped by our partner Futerra, this model13is an appropriate match for thisproject’s focus on methods and on correlations with branding opportunities,access to markets and business models and we’ve chosen it to work deeply onthe project workshop with the companies’ representatives. It is based on the “3new Ps of Marketing”: Product, Placement and Persuasion.Persuasion Brands are extraordinary persuaders. Compellingbehavior change messages can work in packaging, advertising, socialmedia, point of sale, across touch points and campaigns, and throughemployee advocates. This is the most common form of behavioralmarketing. It is about matching your marketing skills with new behavioralresearch and sustainability expertise to make a real impact.Placement Advertisers have been placing products in mass-marketentertainment for almost as long as the industry has been around.Behavioural placement is a more recent trend. Placement showssustainable behaviours in mainstream communication. It relies onperipheral rather than central processing. The goal is to influence theaudience, but in a way that they dont notice. How can your brand"model" the sustainable behaviour youre promoting? Showing positivebehaviours 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 yourproducts comes first. Then things get creative. Brands are designingin sustainable behaviors, like Levis 511 range, created specifically tobe better for cycling in. Can you build in reuse? Minimise the water,energy and resources your consumer needs to use your product? Buildin health? Innovate wellbeing?
  • 19. Emergent Economies Consumer Behavior Change - Brazil19References1Hernanzez (2000) Thinking about Behavior. In: Environmental Education andCommunication for a Sustainable World, Handbook for International Practitioners,2000, (Washington DC: Academy for Educational Development).2McKenzie-Mohr, D. (2011) Fostering Sustainable behavior: an introduction tocommunity-based social marketing, 3rd ed., New Society Publishers, GabriolaIsland.3Barômetro 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, 2010.4Social Research and Evaluation, Department for Transport Division United Kingdom(2011), Behavioural Insights Toolkit, Department for Transport United Kingdom,London.5Defra (2010) Understanding and influencing behavior: a review of social research,economics and policy making in Defra, DEFRA, London.6Business in the Community (2011) Influencing Consumer Behavior, a Guide forSustainable Marketing, Business in the Community, London.7Sustrans (2011) Sustrans Annual Review 2011, Sustrans, Bristol.8Business in the Community (2011) Influencing Consumer Behavior, a Guide forSustainable Marketing, Business in the Community, London.9Navigant Consulting (2011), Evaluation Report: OPower Smud Pilot Year 2, NavigantConsulting, Chicago.10TD Forests, website do TD Bank Financial Group, disponível em: <>.11Defra (2010) Understanding and influencing behavior: a review of social research,economics and policy making in Defra, DEFRA, London.12McKenzie-Mohr, D. (2011) Fostering Sustainable behavior: an introduction tocommunity-based social marketing. 3rd ed., New Society Publishers, GabriolaIsland.13Futerra Sustainability Communications (2012) Planet Brands, Which brands have thepower to change consumer behavior?, Futerra Sustainability Communications,London.