THE RESPONSIBLE TRAVELER: SEGMENTATION OF THE AMERICAN (U.S.A.) MARKET SUMMARY ....................................................................................................................................... 2 METHODOLOGY & ASSUMPTIONS .............................................................................................. 3 ETHICAL CONSUMERISM IN AMERICA ....................................................................................... 4 I. Statistics Show Ethical Consumerism is on the Rise ...................................................... 4 II. Research Also Reveals Ethical Reporting Gap & Discontent .................................. 6 III. Social Media Provides Insight for Consumers’ Ethical Priorities ............................... 9 THE SEGMENTATION FRAMEWORK......................................................................................... 11 RESPONSIBLE TRAVEL IN AMERICA ......................................................................................... 18 RELEVANT SEGMENTATION FOR MARKETING SOUTH AFRICA ........................................... 23 BEHAVIOR CHANGE TACTICS ................................................................................................... 29 BEHAVIOR CHANGE PROCESS MODEL..................................................................................... 32 SECONDARY DATA ANALYSIS ................................................................................................... 33 I. Demand for South Africa as a Destination .................................................................. 33 II. Additional Marketing Recommendation for the Conscious Consumer .............. 35 III. Real Life Examples of Successful Marketing Tactics for the Ethical Consumer ... 36 BIBLIOGRAPHY............................................................................................................................ 41 February, 2015 1|Page SUMMARY Within the United States of America (herein referred to as “America”), the market for ethical, responsible and fair trade products is growing. For example, in 2006, the Lifestyles of Health and Sustainability (LOHAS) consumer comprised 16 percent of all American adults (nearly 35 million people) whereas in 2014, LOHAS consumers grew to 21 percent of all American adults. The typical LOHAS consumer is a female with high disposable income and who resides in a metropolitan area of the United States. This group continues to show tremendous leadership in their attitudes toward the environment, society and socially responsible businesses. Their usage of ethical, responsible or fair trade products exceeds most other segments and they are continually demanding greater sensitivity to these issues across numerous corporate activities. In addition, when product transparency (i.e. Fair Trade Certified) is clearly delineated within the product offering, the LOHAS consumer is willing to pay a slight premium (anywhere from 4% to 15% more) assuming that the product is the same or higher quality as the next best offering. Specific to South Africa, this report defines the Mature Responsible and Trendy Family segments as ones with high potential for marketing South African fair travel packages keeping in mind that the most successful ethical or fair trade products are those marketed in ways that personalize the benefits to the consumer. Unless benefits are tangible to these consumers, the ethical or fair trade product’s claims are met with skepticism and borderline ennui. In addition, these consumers will not buy an ethical or fair trade product that does not offer the highest functionality available. Hence, a product with better features will trump the more ethical product. One of the most successful ways to communicate transparency, quality and ethics to this market segment is by uniting style, social status, influence, and sustainable values that, in effect, redefines consumption. February, 2015 2|Page METHODOLOGY & ASSUMPTIONS The aim of this study is to establish clear target segments and behavior change techniques that can assist tour operators and travel agents (as well as Fair Trade Tourism clients in South Africa) to sell Fair Trade Tourism in the American market. Combining secondary data on ethical and fair trade consumerism with consumer segmentation research from the Natural Marketing Institute and recent responsible tourism studies, the study analyzed resources and identified target segments for Fair Trade Tourism in America. The Lifestyles of Health and Sustainability (LOHAS) model was used as a framework to segment American consumers. A number of assumptions were made for this study: segmentation is based on attitudinal differentiation and not demographics; key attitudinal differentiation is the degree of social consciousness that the person possesses and how it converts to buying behavior; education is seen as a determinant for social consciousness; and segments that have no history whatsoever of ethical consumption were excluded. February, 2015 3|Page ETHICAL CONSUMERISM IN AMERICA I. Statistics Show Ethical Consumerism is on the Rise According to a 2011 GlobeScan Ethical Consumerism report, American, Canadian and Australian consumers are among the most active and empowered ethical consumers in the world. (GlobeScan Foundation, 2011) This has been partly driven by a wave of concern about the conduct and governance of business in the wake of scandals such as Enron, Global Crossing and Parmalat. It also partly reflects a growing interest amongst consumers, policy makers and businesses themselves, to understand which specific production and consumption techniques define businesses that are more sustainable and ethically oriented. (Johannes Brinkmann, 2008) "You see this rapidly growing desire for people to know where their stuff came from," says CEO of Fair Trade USA Paul Rice. "I think this rising consciousness is leading to a phenomenon that we call the Conscious Consumer. Depending on whose data you read, that consumer segment is anywhere from 15% to 40% of American adult shoppers." This is a group that is looking for socially and environmentally responsible products on a daily basis - and they’re willing to pay a little bit more (a five to 10 cent premium) for a product that makes them feel good. (Schwartz, 2011) According to a 2013 survey conducted by Ohio State University, respondents generally purchase fair trade products in order to make a difference in the world and to ensure that workers are paid a fair wage for their work. The majority of the respondents either “strongly agreed” or “agreed” that they encountered knowledgeable sales associates (62%), information about the fair trade products (79%), and found fair trade stores to be fun places to shop (68%). (Kelley, 2013) However, while there is a mainstreaming of the fair trade concept in the United States, the focus of consumer attention has been the commodity product, such as coffee, cocoa and produce, as depicted in the graphic on the next page. (Fair Trade USA, 2011) February, 2015 4|Page (Fair Trade USA, 2011) The United States is a major importer and exporter of organic foods, and started organic certification in the 1980s as a result of questionable agricultural practices, including genetic modification, pesticide use and unequal terms of trade. America has the world’s largest organic food and beverage market, with retail sales valued at $19 billion in 2007 and a market growth rate of 25 percent per year. (Long, 2010) Recent studies report that 88% of Americans identify themselves as “conscious consumers” and “socially responsible”. Ethical consumption is prevalent in America where consumers engage in ethical consumption for personal, political and collective reasons. Additionally, given that America is the world’s largest producer of organic foods (with land devoted to organic agriculture increasing approximately 30 percent per year), consumption of organics is widespread as 69 percent of American consumers buy organic products, with approximately 25 percent purchasing these items weekly. (Long, 2010) Three—quarters of Americans say sustainability is a priority when making food purchasing decisions. More than 8 out of 10 Americans (83%) consider sustainability when buying food and would like to see more options that protect the environment (81%). Their motivations for doing so span from altruism to self- February, 2015 5|Page serving, including preserving the environment, believing that the quality is better, supporting companies that are doing the right thing is better and believing the products are healthier. (Cone Communications, 2014) A 2011 MIT, Harvard and London School of Economics study found that the Fair Trade Certified label alone has a large positive impact on sales. By adding the Fair Trade Certified label to a product, the result was a sales increase of about 10 percent. (Jens Hainmueller, 2011) Other studies by both Cone and Globescan revealed that a majority of consumers agree that the best way to verify a product’s social or environmental claims is through independent third party certification. A substantial segment of consumers were found to be willing to pay five to ten percent more for a product bearing the Fair Trade Certified label. Additionally, Cone Communications showed that an overwhelming 94 percent of consumers are likely to switch brands, assuming price and quality are similar, to one that is associated with a good cause. (Fair Trade USA, 2012) In research spanning the past decade, GlobeScan has also found that the proportion of American consumers saying that they have rewarded a company for being socially responsible has increased by 13 percent (from 46% in 1999 to 59% in 2009), a trend mirrored in other developed countries. Further, the 2008 economic crisis did not halt this trend as there was a significant increase in the proportion of American consumers rewarding fair trade companies (up 11 points in 2008 from 2007). (Fair Trade USA, 2009) II. Research Also Reveals Ethical Reporting Gap & Discontent While there is a body of research that affirms the rise in ethical consumption, there is still other research pointing to a gap between what people say and their actual ethical purchasing behavior. In general, research has shown that green consumers: are sincere in their intentions, with a growing commitment to greener lifestyles; almost always judge their environmental practices as inadequate; do not expect companies to be perfect in order to be considered 'green'; February, 2015 6|Page look for companies that are taking substantive steps and have made a commitment to improve their sustainable operations. (International Institute for Sustainable Development, 2013) However, green consumers also: tend to overstate their green behavior, including the number of green products they actually use; want environmental protection to be easy, and not to entail major sacrifices; tend to distrust companies' environmental claims, unless they have been independently verified; lack knowledge about environmental issues, and tend not to trust themselves to evaluate scientific information about environmental impacts. However, at the same time they are eager to learn, and this means that consumer education is one of the most effective strategies that businesses (and entrepreneurs) can use. The best green customers are people with more money to spend. As a result, the most promising products for 'greening' tend to be at the higher end of the market. The most promising outlets for green products are retail stores frequented by better-off shoppers. In the US, children and teens are generally more concerned than adults about the environment, and are more knowledgeable about green alternatives. Increasingly, they influence their parents' purchasing decisions. Equally importantly, millions of them will reach adulthood in the next decade, and gain purchasing power of their own. (International Institute for Sustainable Development, 2013) Some reports indicate that 20-50% of consumers give priority to the environmentally-related issues of the products they purchase. However, consumers are often found to overestimate their use of product-related environmental information, citing the difficulties in being ethical consumers. “Because the environmental issue is such a big political issue in the United States, I always suspect that there is business and politics behind it to make money and I don’t know exactly the truth and don’t trust it.” (Başgöze, 2012) There is also a segment of the American population who feels that fair trade is not my concern and the cited barriers were lack of knowledge, availability, and February, 2015 7|Page accessibility as well as unclear labeling and high prices. (Keene State College, 2012) Survey participants know a great deal about the issues, and agree that good practices involving labor, the environment, and intellectual property are important to society. But, most did not consider such issues to be relevant to them personally given that there are foundations and multinational organizations that are devoted to issues such as climate change and poverty. Indeed, they often stated that someone other than the individual consumer should be responsible including: the law (“the government should protect the environment”), the competitive market (“it’s too bad, but all sneaker companies do this”), the companies themselves (“advertising should let us know about this”), or the overall system (“I cannot do anything, so why bother thinking about it?”). Another key finding that refutes conventional wisdom on this topic is that most people will not sacrifice product function for ethics. When faced with a choice of good ethical positioning and bad product functionality or good product functionality and bad ethical positioning, individuals overwhelmingly chose the latter. They revealed a reluctance to consider ethical product features as anything but secondary to their primary reasons for purchasing the products in question. “It would take some kind of catastrophe to make me care,” said one respondent. For ethical consumption to take hold, consumers need to be offered more tangible, reliable information about the health, social, and environmental benefits of their products and services in the context of the many choices they have to make on a daily basis. (Timothy Devinney, 2011) In addition, GlobeScan studies indicate that while a sense of global citizenship on the rise in many emerging economies across Asia, Africa, and Latin America, the ongoing economic downturn affecting the G7, the lack of progress on a new global free trade agreement, and the rekindling of doubts about the future viability of the global free market system may be among the factors that are depressing citizens' sense of belonging to the global community. (GlobeScan, 2011) February, 2015 8|Page III. Social Media Provides Insight for Consumers’ Ethical Priorities Effectively two-thirds (66%) of consumers around the world say they prefer to buy products and services from companies that have implemented programs to give back to society. That preference extends to preferring to work for these companies (62%) and investing in these companies (59%). A smaller share, but still nearly half (46%) say they are willing to pay extra for products and services from these companies. (Nielsen, 2012) Other surveys have revealed that consumers not only want transparency through clear product labels (i.e. explaining a certain company’s production footprint, packaging techniques, or ingredients) – verified by independent sources, they want information that is easily accessibility through websites or social media, conceivably through a shopper’s smartphone. (Timothy Devinney, 2011) While the research may indicate a disparity of purchasing motivations, conscious consumers do consult social media when making purchase decisions and appear to be most concerned about environmental, educational and hunger causes, as depicted in the graphic on the next page. (Nielsen, 2012) February, 2015 9|Page (Nielsen, 2012) February, 2015 10 | P a g e THE SEGMENTATION FRAMEWORK As a result of conducting a survey of American adults in 2013, the Natural Marketing Institute (NMI) developed a proprietary sustainability segmentation model that quantified what attracts people to sustainable products. (Natural Marketing Institute, 2013) Sustainability Segmentation Model (Natural Marketing Institute, 2013) The segmentation model indicates that not only does the LOHAS consumer remain the primary target for environmentally conscious, socially responsible, and healthy products, but the NATURALITES are also considered a top tier segment. Driven by the mainstreaming of the marketplace across various products and services, the two “middle” segments (DRIFTERS and CONVENTIONALS) are each drawn to different elements of the broader LOHAS marketplace. (Rogers, 2010) February, 2015 11 | P a g e Based on this segmentation, the LOHAS consumer comprises 21% of the American population translating to 50 million adult consumers (also representing an increase of 5% from 2006). (Natural Marketing Institute, 2013) This group continues to show tremendous leadership in their attitudes toward the environment, society and socially responsible business; their usage of LOHAS products exceeds most other segments; and they are continually demanding greater sensitivity to these issues across numerous corporate activities. (Rogers, 2010) NMI further outlined their demographic, psychographic, and purchasing characteristics as well as marketing preferences of the LOHAS segment, as depicted below. (Natural Marketing Institute, 2013) LOHAS Segment (Natural Marketing Institute, 2013) Consumers within the passionate, vigorous LOHAS segment continue to be early adopters, influential over friends and family, less price sensitive, and more brand loyal. In essence, their social structure and internalized values form the basis for making them an attractive consumer target across a host of strategic marketing activities, including marketing fair trade travel options. (Rogers, 2010) February, 2015 12 | P a g e (Natural Marketing Institute, 2013) The NATURALITES segment (depicted on page 14) constitutes approximately 20% of U.S. adults. They are zealous about their own personal health, and use many healthy and natural consumer packaged goods. In other words, their belief systems are manifested in the ethical consumption of consumables, but they are not highly driven to durables. Therefore, while they are less committed to the notions of “holistic sustainability,” they are also a primary target for many companies, or for companies with a more mainstream proposition that have a strategic desire to appeal to a larger segment of the American population. (Rogers, 2010) NATURALITES are also highly attracted to mind / body / spirit philosophies. They are the most likely segment to pray (three-quarters do regularly), and the second most likely segment to meditate (27 percent). It is clearly evident that their view of health includes not just their physical health, but their mental and spiritual dimensionalities, as well. (Rogers, 2010) February, 2015 13 | P a g e Naturalites Segment (Natural Marketing Institute, 2013) While an interesting segment, there are two detractors that do not make NATURALITES a viable one for marketing travel to South Africa. First, this segment is focused on purchasing household products that fit their lifestyles and second, this segment has lower levels of education and income as compared to others. Therefore, the potential for being able to afford long-haul travel packages remains low. February, 2015 14 | P a g e Drifters Segment (Natural Marketing Institute, 2013) While DRIFTERS (depicted above), at 24% percent of American adults, are attitudinally aligned with some dimensions of the LOHAS market, their behavior lags behind that of the “average” American adult. They are a younger segment, have more financial barriers, and have not yet fully formed their optimal values structure and ethical consumption standards. (Rogers, 2010) While nearly half wish they did more for the environment, they are more likely to: want to choose environmentally-friendly products, but often choose ones that aren’t; want to do more to protect the environment, but don’t know how; believe that considering the environmental impact of their purchase decisions is too difficult; and think they personally cannot make a difference. DRIFTERS are in need of some guidance, inspiration and education—an inherent opportunity to capitalize on for fair trade travel. They represent nearly 57 million consumers, and transferring their attitudes into purchase behavior could translate into even more momentum in the LOHAS market. (Rogers, 2010) February, 2015 15 | P a g e Conventionals Segment (Natural Marketing Institute, 2013) CONVENTIONALS, 18 percent of the U.S. population, seem to also represent an attractive target for some companies, particularly those with a fiscallyresponsible product like energy-efficient electronics and appliances or green building products. This segment shows predisposition to various “practical” LOHAS products and activities. In some cases, they are more behaviorally engaged than NATURALITES (though not as much as LOHAS consumers). For example, CONVENTIONALS are significantly more likely than NATURALITES to: donate money to an environmental group; encourage elected officials to pass laws to protect the environment; recycle; and for marketers with a product/service that has a health-related and financial benefit (even over the long term), CONVENTIONALS may be part of a successful marketing strategy. (Rogers, 2010) With respect to South Africa, CONVENTIONALS may represent an interesting long-term marketing prospect. However, given that marketing strategies will have to focus on fair trade education and heartland values-driven consumption, the tie back to long-haul travel may be too cumbersome. February, 2015 16 | P a g e Unconcerned Segment (Natural Marketing Institute, 2013) Finally, NMI delineated the characteristics of the UNCONCERNED segment (depicted above), representing 18% of Americans. However, they do not represent a viable market for fair trade products. (Natural Marketing Institute, 2013) February, 2015 17 | P a g e RESPONSIBLE TRAVEL IN AMERICA A variety of market studies in recent years have documented sustained interest among consumers in tourism products and services that protect the environment and respect local cultures: more than 90% of U.S. travelers surveyed by the online travel publisher TravelZoo in 2010 said that they would choose a green, environmentally conscious hotel if the price and amenities were comparable to those at a non-sustainable, non-green hotel; American consumers who are focused on health and fitness, the environment, personal development, sustainable living and social justice (known as conscientious consumers and potentially conscientious travelers) number 41 million people; about half the U.S. states have voluntary ‘green’ lodging certification programs, most focused on environmental efficiencies. In several states, including Florida and California, state employers are encouraged to use certified hotels when on state business; ( (Center for Responsible Travel, 2014) more than half (53%) of the American tourists surveyed agree that they have a better travel experience when they learn as much as possible about their destination’s “customs, geography, and culture.” Over half (62%) of American tourists surveyed in 2003 say that it is important that they learn about other cultures when they travel; (Chafe, 2004) more than three-quarters of American travelers “feel it is important their visits not damage the environment,” according to a 2003 study. This study estimates that 17 million American travelers consider environmental factors first when deciding which travel companies to patronize; (Chafe, 2004) eighty percent of American travelers believe it is important that hotels take steps to preserve and protect the environment, but only 14% asked the hotels they use if they have an environmental policy; and (Chafe, 2004) February, 2015 18 | P a g e sixty-one percent of American tourists surveyed felt that travel experiences are better when the destination is a well-preserved natural, historical, or cultural site. One in three American travelers is influenced by a travel company’s efforts to preserve the environment, history, or culture of the destinations it visits. Nearly 91 million US travelers (59%) support controlling access to, and / or more careful regulation of, national parks and public lands in order to preserve and protect the environment. (Chafe, 2004) In addition, some noteworthy research for South Africa revealed the demographics of those American tourists who choose to add national park visits to their vacation itinerary. National park travelers are male (56%), white (82%), baby boomers born between 1946 and 1964 (46%), and have at least a college degree (64%). (YPartnership / Harrison Group LLC, 2010) National Park travelers with a household income of $125,000 or more take an average of 4.6 leisure trips a year and spend more than $3,600 on leisure travel services. However, National Park travelers are concerned about the effects of the recession (cutting back on discretionary spending) and feel as though they don’t have enough time (41%) to do everything they want to do. So, they plan vacations around a “life event” (81%) and travel with more people in their party. (YPartnership / Harrison Group LLC, 2010) This has resulted in a new purchasing behavior where they wait for sales, compare prices online (i.e. Expedia, Orbitz), take speed vacations (“hurry up and relax”) that are shorter (long weekend trips, convenient travel times) and fulfill specific niches, as depicted in the graphic on the next page. (YPartnership / Harrison Group LLC, 2010) February, 2015 19 | P a g e (YPartnership / Harrison Group LLC, 2010) According to TripAdvisor, 57 percent of travelers said they "often" make ecofriendly travel decisions, such as their choice of hotel, transportation, or food source. In addition, twenty percent of respondents said they would consider an ecotourism trip but 17 percent said they are unfamiliar with such trips. (TripAdvisor, 2012) Sustainability is ranked as 8th among the most important factors that influence the typical American’s decision to book a vacation. The more important factors were 1) price, 2) weather / climate, 3) accessibility to and from the destination, 4) local culture, 5) landscape, 6) food, and 7) local activities (sports, excursions). (Roger Wehrli, 2011) In addition, 18.2% of American respondents were aware of sustainable tourism products in 2011, which was below the average over all countries at the time. Therefore, since most are not aware of a sustainable product, America is below average for the share of travelers who have already booked a sustainable tourism product, with only 9.4% already having booked such a product. Americans assess ecological attributes more critically with “preservation of February, 2015 20 | P a g e biodiversity” and “CO2 compensation” having lower rates of agreement, as depicted below. (Roger Wehrli, 2011) (Roger Wehrli, 2011) February, 2015 21 | P a g e Outbound international travelers tend to be from urban areas of America. The 2002 UNWTO report on ecotourism found that the average age of 84 ecotourists was between 35-54 years old. Because American international travelers tend to be better educated than the general population, their average annual household income in 2003, was higher as well: $62,720 for international travelers vs. $57,047 for the general population. (SNV Netherlands Development Organisation, 2009) American tourists, being time-starved, tend to prefer the convenience in travel arrangements offered by pre-packaged tours. However, a considerable proportion of responsible tourists prefer making independent travel arrangements. In fact, the popularity of customized trips is increasing while prepackaged trips have declined since 2004. (SNV Netherlands Development Organisation, 2009) American consumers tend to plan their long-haul leisure trips about six to nine months prior to departure. Long-haul ecotourism trips tend to be longer (12 nights) compared to the average international air traveler (9 nights). American ecotourists prefer to stay in good quality accommodations and relatively few book with budget accommodations. (SNV Netherlands Development Organisation, 2009) February, 2015 22 | P a g e RELEVANT SEGMENTATION FOR MARKETING SOUTH AFRICA A 2010 analysis by the South African Tourism Board identified two pertinent marketing segments, namely Next Stop South Africa and Family Explorers, of American consumers that based on their attitudes and behavioral traits would be productive for targeted promotion of South Africa as a destination. As depicted in the portrait below, the Next Stop South Africa segment represents the post-World War II baby boomer demographic. They are well educated, very worldly, and more than half have entered retirement (indicating plenty of vacation time). This segment is not only interested in traveling, but their primary motivation is to travel for educational and cultural experiences. Also, cost is not a factor in their destination choice. (South Africa Tourism Board, 2010) February, 2015 23 | P a g e Upon closer study, the Next Stop South Africa segment was found to share some common characteristics with the aforementioned LOHAS segment. The resulting overlay, as graphed below, allowed for the defining of a new marketing segment, Mature Responsible. The Mature Responsible (MR) segment size is estimated to be in the range of 600,000 to 1,500,000 Americans. They are well educated inferring that this segment is at least minimally aware of the challenges and potential for ethical or fair trade travel. The Mature Responsible segment is retiring with enough disposable income for long-haul travel. More importantly for the South African Tourism Board, this segment is open to experiences that educate, entertain, and inspire, and they want to “give back” and “pay it forward” with their lifestyle choices. Given that Mature Responsibles are not cost sensitive, we can infer that they are willing to pay a slight premium for the unique and ethical product assuming transparency about the product’s fair trade status and the product’s superior features. In addition, while the Mature Responsible segment is committed to worthwhile causes, they do gather information from many credible resources before making decisions. February, 2015 24 | P a g e Some recommendations for marketing to the Mature Responsible segment are: Appealing to their altruistic traits by emphasizing the personal importance of visiting the “Cradle of Humankind” during this time of global social, economic and environmental change, Providing, through travel experiences, examples and exposure to South Africans who are living the equivalent LOHAS lifestyle, Including stylish, boutique, socially and environmentally conscious accommodations as part of a travel package, Incorporating culturally conscious activities such as bicycle township tours and musical performances that are not only unique but allow for spontaneous interaction with local people, Developing social media platforms that allow this segment to share their authentic South Africa with their peers The second segment (depicted on the next page), Family Explorers, represent the older Generation X demographic (born from the early 1960s to the early 1980s). Like the Next Stop South Africa segment, Family Explorers are highly educated, holding at least a college degree with many earning post-graduate degrees. While the adults in the Family Explorers group are well-traveled, having children has slowed down overseas travel experiences. In addition, Family Explorers are disposable income-rich, but time-poor given hectic family schedules with work, school, and sports commitments. At any point, they have less than 14 days of time available for a vacation. Hence, their vacation destination choices, while planned by “Mom”, are decided by family members based on ease of travel to the destination, hasslefree and activity-rich travel package options, and safety (including food allergy awareness). February, 2015 25 | P a g e (South Africa Tourism Board, 2010) Upon closer study, the Family Explorers segment was found to share some common characteristics with the aforementioned DRIFTERS segment. The resulting overlay, as graphed on the next page, allowed for the defining of a new marketing segment, Trendy Families. The Trendy Families segment is estimated to be a minimum of 925,000 Americans. They are families with young children and like the Mature Responsible segment, they are highly educated. However, because of the time commitment associated with raising children, they may not be immediately aware of the choices for ethical or fair trade travel. The Trendy Families segment is generally disposable income rich, but quite time poor necessitating the desire for vacation destinations that are easy to reach, hassle free, and offer a variety of activities that would please each member of the family. February, 2015 26 | P a g e More importantly for the South African Tourism Board, this segment is desperate for travel experiences that are fun and unique with the added bonus of being educational and meaningful. It can be inferred that whether they are bragging to their neighbors and friends, or preparing their children’s college resumes, this segment enjoys being on the “right side” of a trend. Like the Mature Responsibles, we can infer that Trendy Families are willing to pay a premium for the green product and will gather information from “friends and family” before making travel destination decisions. Some recommendations for marketing to the Trendy Family segment are: Appealing to their hedonistic traits by emphasizing the educational importance of visiting the “Cradle of Humankind” during this time of global social, economic and environmental change, Emphasizing the lack of a language barrier, safety and variety of family activities (safari, beach, history, etc.) available in South Africa, Providing wildlife conservation experiences that allow families to “adopt” an endangered species and keep up with its care via social media, February, 2015 27 | P a g e Including stylish, boutique, socially and environmentally conscious accommodations as part of a travel package, Developing social media platforms that allow this segment to easily share their awesome vacation in South Africa with their peers. February, 2015 28 | P a g e BEHAVIOR CHANGE TACTICS For both the Mature Responsible and the Trendy Families segments, some specific marketing efforts will need to be developed to increase awareness for responsible, ethical, fair trade travel in South Africa. With that, the South African Tourism Board may be able to leverage some lifestyle trends that are favoring responsible travel. These trends include generational shifts (multigenerational travel), urbanization, the need to connect with nature, experiential tourism, demand for authenticity, going green, and search for fulfillment. In addition, the South African Tourism Board could leverage some trends that are countering responsible tourism including escapism / fantasy, time constraints / traveler frustrations and the “don’t fly” movement. (SNV Netherlands Development Organisation, 2009) Over the years, motivational theories have been used to interpret tourist behaviors. In 1987, Krippendorf placed Maslow's 'hierarchy of needs' in the context of responsible tourism, arguing that there are a growing number of tourists seeking emotional recreation, satisfaction of social needs, and selfrealization and fulfillment through travel. (SNV Netherlands Development Organisation, 2009) The figure on the next page outlines travel motivations based on Maslow's pyramid and offers a schematic of where certain tourism product segments might fit. Conscientious holidaymakers, such as Mature Responsibles and Trendy Families, who are trying to satisfy a combination of emotional, recreational, and social needs, may be inclined to choose a vacation that offers opportunities to learn and explore such as nature-based, adventure, or cultural holidays. (SNV Netherlands Development Organisation, 2009) February, 2015 29 | P a g e (SNV Netherlands Development Organisation, 2009) Also, ethical travelers, such as Mature Responsibles, indeed are looking for experiences that allow them to give back to the destination through cultural exchange, service, stewardship or philanthropy. According to a study on traveling with a purpose, consumers of responsible tourism products want a vacation that provides an opportunity to re-evaluate and discover more about themselves and to act in ways that modify or improve their behaviors. (SNV Netherlands Development Organisation, 2009) The South African Tourism Board would do well to incorporate the key elements of the responsible traveler including some of the interactive, socialenvironmental consciousness and experiential elements, described in the graphic on the next page, into a travel package. February, 2015 30 | P a g e Lastly, both the Mature Responsible and Trendy Families segments have expressed a willingness to pay a premium to companies involved in protecting environmentally sensitive areas. Moreover, that market would only expand given the results of a 2003 TIA survey that found that some 58.5 million U.S. travelers would “pay more” to use travel companies that strive to protect and preserve the environment. Of these, 61% say they would pay 5% - 10% more to use such companies. (SNV Netherlands Development Organisation, 2009) February, 2015 31 | P a g e BEHAVIOR CHANGE PROCESS MODEL The model in Exhibit 1 (below) suggests that for the consumer marketer seeking to promote responsible forms of consumer behavior (such as encouraging fair trade purchases), there are several potential alternatives to explore beyond simply making relatively ethical products, or at least ethical product attributes, available. (Johannes Brinkmann, 2008) Electronic Journal of Business Ethics and Organization Studies (Johannes Brinkmann, 2008) It is suggested that consumers can be encouraged to adopt more ethically orientated lifestyles, to recognize the moral intensity of particular types of purchase (particularly agricultural commodities) or to consider the moral dimensions of a particular purchases within their decision making process. Marketers can also work to develop a purchase context within which ethical products are easily available to provide purchase opportunities and in which social pressures encourage consumers to consider and purchase ethical products. (Johannes Brinkmann, 2008) In other words, rather than emphasizing the identification, segmentation and understanding of “the ethical consumer” or “the Fair Trade consumer”, marketers might better try to understand the variations in strength, motivation and focus of the ethical concerns of consumers. (Johannes Brinkmann, 2008) February, 2015 32 | P a g e SECONDARY DATA ANALYSIS I. Demand for South Africa as a Destination South Africa’s second-largest tourism source market, the American market grew by 16.3% for the first six months of 2012 with 155,522 arrivals recorded. (South Africa Tourism, 2012). More so, the American market is considered to be still in the growth phase for South African tourism. (South Africa Tourism Board, 2010) (South Africa Tourism Board, 2010) However, while Americans have the highest per capita disposable income in the world and 85% of the population goes on vacations, less than 5% of Americans travel internationally. (South Africa Tourism Board, 2010) February, 2015 33 | P a g e Euromonitor International (South Africa Tourism Board, 2010) In addition, approximately 63% of Americans prefer to go on short trips (0-3 days). For those who travel over 7 days (estimated to be 12% of American vacation goers), the top 5 outbound destinations in 2007 (comprising 39% of travelers) were the United Kingdom, France, Italy, Germany and China. Among long-haul destinations, South Africa attracted 1% of American travelers. (South Africa Tourism Board, 2010). The average length of stay of American travelers to South Africa is from 14 to 18 days with the average pre-paid spend of 29,000 South African Rand and an average in country spend per trip of 16,000 South African Rand. For those American travelers who have taken more than one trip to South Africa, those who visit 2-3 times spend the most per trip and per day among all other visitors and the average number of provinces visited are the highest among all repeat visitor categories. Prior to the economic downturn, American arrivals to South Africa increased at a rate of approximately 7% per year during 2005-2008. (South Africa Tourism Board, 2010) February, 2015 34 | P a g e II. Additional Marketing Recommendation for the Conscious Consumer In a world of green clutter, conscious consumers expect companies to do more than make eco-friendly claims. They demand transparency and accountability across every level of business practice. (Bemporad, 2007) The five core values driving Americans more socially minded consumers are Health and Safety, Honesty, Convenience, Relationships and Doing Good: Health and Safety. Conscious consumers seek natural, organic and unmodified products that meet their essential health and nutrition needs. They avoid chemicals or pesticides that can harm their health or the planet. They are looking for standards and safeguards to ensure the quality of the products they consume. Honesty. Conscious consumers insist that companies reliably and accurately detail product features and benefits. They will reward companies that are honest about processes and practices, authentic about products and accountable for their impact on the environment and larger society. Making unsubstantiated green claims or over promising benefits risks breeding cynicism and distrust. Convenience. Faced with increasing constraints on their time and household budgets, conscious consumers are practical about purchasing decisions, balancing price with needs and desires and demanding quality. These consumers want to do what’s easy, what’s essential for getting by and make decisions that fit their lifestyles and budget. Relationships. Who made it? Where does it come from? Am I getting back what I put into it? These consumers want more meaningful relationships with the brands in their lives. They seek out opportunities to support the local economy when given the chance, want to know the source of the products they buy and desire more personal interactions when doing business. Doing Good. Finally, conscious consumers are concerned about the world and want to do their part to make it a better place. From seeking out environmentally-friendly products to rewarding companies’ fair trade and labor practices, they are making purchasing choices that can help others. February, 2015 35 | P a g e These consumers want to make a difference, and they want brands to do the same. (Bemporad, 2007) There is also a trend toward ‘self-centered consciousness,’ whereby consumers want companies to meet their personal needs and positively impact society. The most important issues are the most personal – water, clean air, cures for diseases whereas global warming was lower on the list. (Bemporad, 2007) III. Real Life Examples of Successful Marketing Tactics for the Ethical Consumer To close the green gap, Ogilvy & Mather proposed to stop trying to get the masses to see things “our way” and instead get better at seeing things “their way”. They suggested making green normal, personal, tangible, easy to navigate and eliminating the sustainability tax. Further, companies should focus on making better products, losing the “crunch”, and turning eco-friendly into male ego-friendly by tapping into hedonism over altruism. (Bennett, 2011) Be Honest & Transparent. As mentioned, for ethical consumption to take hold, consumers need to be offered more tangible, reliable information about the health, social, and environmental benefits of their products and services in the context of the many choices consumers have to make. (Timothy Devinney, 2011) A Globescan study conducted in 2010 revealed that 75 percent of consumers said fair trade certification makes them feel “very positive” or “positive” about products; 30 percent said fair trade is “likely to increase their purchase interest;” and over half said “independent third-party certification is the best way to verify” a product’s social and environmental claims. (Fair Trade USA, 2011) Research has shown that when informed about the environmental impact of different types of food, consumers tend to shift their intentions toward more sustainable food choices. Businesses need to inform, engage and empower consumers to help them translate their values into more sustainable consumer habits. (Malmqvist, 2014) February, 2015 36 | P a g e When the outdoor clothier, Patagonia, unveiled Footprint Chronicles, which was an online portal where consumers could trace the impact of some of their Patagonia gear, a “ripple of admiring shock” went through the retail industry. With source material hailing from all over the world, Patagonia knew that not every product it profiled would have a sterling supply chain—though some would. But, it trusted its consumers would value the no-holds-barred information. So, Patagonia divulged “the bad” along with “the good” and asked consumers to weigh in. This fulldisclosure dialogue about where products come from, how they are made and why they will get better has propelled Patagonia from backcountry gear specialist to an industry leader. (Ogilvy Earth, 2011) Link Sustainability with Personal Health. Eating ethically produced food translates to being an ethical consumer and an ethical person. For the beef industry, that has translated to personalizing the industry by engaging experienced ranchers and livestock veterinarians to “tell the beef story” thereby putting a credible face on the industry. (McCarty, 2012) Research suggests that consumers are more receptive to information about making more sustainable food choices when this information is linked to their own health and provided by sources with medical or scientific credibility. However, other GlobeScan research also indicates that scientists are far more trusted by the public than other institutional authorities, including government or business. (Malmqvist, 2014) Provide Value for Money. In a recent study by Brandweek, it was found that despite the current recession, consumers are still seeking value over price in their purchasing decisions, which includes products perceived as having superior value. While this may not necessarily indicate loyal sales of green products during the recession, this importance of value with consumers may be a key factor in retaining sales of green products throughout the weakened economy. (Wallace, 2013) While 16% of travelers interested in visiting National Parks are willing to pay higher rates or fares to patronize tourism businesses that demonstrate environmental responsibility, 37% of those travelers would pay a 10-14% premium while 35% would pay a 5-9% premium and 13% would pay less than a 5% premium. (YPartnership / Harrison Group LLC, 2010) February, 2015 37 | P a g e Convey People, Purpose & Philanthropy. Hotels with strong sustainability commitments should employ both functional and emotional green images to attract green guests. In terms of functional images, green consumers will look for tangible demonstrations of the hotel’s commitment toward green operational practices, such as a recycling program or those with LEED certification. On the emotional side, they will look for actions that are evidence of a hotel’s commitment to the environment and sustainability, such as providing hotel guests with the opportunity to dine on food supplied by local farmers. (King, 2012) By using resources thoughtfully and conveying environmental sustainability, Hyatt’s global corporate philanthropy program, Ready to Thrive, has focused on literacy and career readiness, including: o investing $750,000 in career readiness programs in Brazil; o building 11 libraries and supporting reading and writing programs in 30 schools (and impacting 30,000 students) in India; o donating 35,000 books to kids in need across the globe through We Give Books and Room to Read; o donating more than 100,000 volunteer hours in 2013 — a 69 percent increase from 2012; o recycling at least one or more waste streams in more than 80 percent of Hyatt hotels; o reducing 20 percent of its greenhouse gas emissions including 13 percent of its energy use and 15 percent of its water use in each of Hyatt’s three regions compared to 2006; and o requiring more than 40,000 of its global associates to complete Human Trafficking Prevention Training. (Sustainable Brands, 2014) Reward Loyalty & Peer-to-Peer Engagement. Analysis indicates that the strongest driver of change for most consumer segments is encouragement by friends to consume more sustainably, and also the act of encouraging others to do the same. Results suggest that peer-to-peer encouragement is statistically the most effective motivator for consumers to change their habits. (Malmqvist, 2014) In 2014, Cone Communications found that half of American adults (52%) use social media to discuss issues they care about – and they believe their February, 2015 38 | P a g e online voice makes a meaningful difference. Fifty-eight percent of Americans believe “tweeting” or posting information about social or environmental initiatives is an effective form of advocacy. Such actions shouldn’t be overlooked because once Americans use online channels to become educated about issues they are even more likely to take action. Nearly two-thirds (63%) say after learning of an issue online, they are more inclined to donate or support that issue in other ways. (Cone Communications, 2014) For example, "Share My Namibia" uses innovative Facebook applications and the National Geographic Geostories platform to highlight Namibia's iconic destinations through the eyes of local Namibians. At the core of the campaign are 11 storytellers, artists, adventurers, and community leaders that provide in-depth discovery of their home and why it is a mustsee attraction. These rich narratives are complemented by great images from photographer Paul Van Schalkwyk that are intended to inspire travelers about Namibia's cultural diversity and its breathtaking natural assets. (Namibia Tourism Board, 2013) Creating and distributing the right content is critical for awareness. Between 140-character tweets or six-second videos, many organizations don’t know where to start or how to prioritize. Unfortunately, there is not one type of content that really stands apart. Americans want to be both educated and entertained. Nearly half (48%) prefer written articles or stories when seeking out social or environmental content, and more than two-in-five look for videos (44%) and pictures (42%) from organizations. Preferred content also varies significantly by age. Millennials seek out more diverse content, with a particular desire to have fun, while learning about issues. This demographic is more likely to be drawn to games or quizzes than older generations (29% vs. 7% ages 55+). (Cone Communications, 2014) Unite Substance & Style. Consumers who define themselves in part through brands and yet they believe they have a responsibility to purchase products that are good for the environment and society, represent more than one-third of consumers globally (38 percent) and are defined by their love of shopping (93 percent), desire for responsible consumption (95 percent) and their trust in brands to act in the best interest of society (50 percent). (Whan, 2014) February, 2015 39 | P a g e They unite style, social status and influence, and sustainability values to redefine consumption. They are also more likely than any other segment to "share" information and "upcycle" products as alternatives to buying something new. (BBMG, GlobeScan and SustainAbility, 2012) Successful, fashion-forward clothing brands like ZADY, Warby Parker, Master&Muse and Helpsy are at the forefront of a growing movement in retail that involves baking corporate social responsibility into the company mission from day one. 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