By Janet Martin
When starting a new company, there are many things an entrepreneur needs to consider. Aside from the obvious—product, location and distribution to name a few—companies must also consider the type of image they hope to portray. According to the Small Business Notes website, “a company image is the combination of the thoughts, feelings, beliefs, opinions and visions people have about you, your products and services, or your company.”
Generating and maintaining a certain image is by no means a bad idea because it helps maintain a constant focus and creates guidelines for employees and employers alike. The problem arises when a business becomes so intent on maintaining a certain image that they start to move away from an appearance they legitimately promote and move toward something empty and flat- out false. One image that many companies are creating without a sound base is organic or eco-friendly.
What is Greenwashing?
Many companies are trying to portray the image that their products are safe for the environment in at-home use and in-factory production. The environmental marketing firm TerraChoice calls this act “greenwashing,” which is the practice of disingenuously spinning a product, service or policy as greener than it actually is. In a recent study, TerraChoice found some form of greenwashing in 98 percent of the more than 2,219 products with environmental claims that it surveyed. The Pittsburgh Post-Gazette published an article revealing that in February 2011 the Federal Trade Commission warned 78 retailers, including Wal-Mart, Target and Kmart, to stop labeling and advertising rayon textile products as “bamboo,” which is considered an eco-friendly fiber, when they contained no bamboo at all. The article also mentions a company that hoped to appear eco-friendly by putting a picture of Mother Earth on their plastic water bottles. Nothing about the product, however, was biodegradable, all-natural or anything particularly different from countless other bottled waters. Once again, companies care more about appearing a certain way to consumers than actually living up to a specific image.
How Cosmetic Products Obtain the Organic Label
An article in the September 2011 Redbook magazine claims that 70 percent of Americans buy organic food on occasion and the popularity of organic food is on the rise. With this growth has come an increase in organic cosmetics, shampoos and even dog foods. A smart business owner would see this trend and try to capitalize on it by beginning to introduce their own chain of organic products. However, rather than take the time, and more importantly money, to create something truly organic, many companies choose to cut corners and manipulate loopholes in order to cash in on an organic image without putting in any real effort.
Hair care products are the worst. In relation to cosmetic products, the U.S. Department of Agriculture officially defines “organic” as one of three different categories:
- “100 percent organic”—product must contain, excluding water and salt, only organically-produced ingredients.
- “Organic”—product must contain at least 95 percent organically produced ingredients, excluding water and salt.
- “Made with organic ingredients”—products contain at least 70 percent organic ingredients and product label can list up to three of the organic ingredients or “food” groups on the principal display panel.
Cosmetics containing organic ingredients that total less than 70 percent of the product’s total contents cannot use the term organic anywhere on the principal display panel. The key to this recent regulation is the “excluding salt and water” clause. Before these rules were put into place, most companies would use water as their claim to an organic and all-natural label. One company, according to an article on the Nature Purity website, went so far as to claim their shampoo was 90 percent organic based solely on the amount of water in the product because, after all, water is organic.
Other companies hope to maintain an organic image by selling their products in health food stores, hoping that most customers will assume the products are organic just because of where they are sold. Companies do not actually concern themselves with creating new products that really are organic, but instead, they simply hope to promote a popular image by manipulating the system and using clever marketing to cash in on the results.
How the FTC will Combat Greenwashing
In an attempt to combat greenwashing practices, the FTC recently revamped the rules and regulations regarding the use of green labels on products. For example, a claim of “biodegradable” must mean that the product will biodegrade in less than a year and can’t be placed on a product destined for the landfill because there it most likely will not biodegrade. A claim of compostable must mean that the product is proven to completely compost in the time that it takes other refuse to compost in a regular compost bin. Furthermore, the FTC is authorized to “bring law enforcement actions against false or misleading marketing claims.” Although the commission’s Green Guides are intended as guidelines for voluntary compliance and do not themselves have “the force and effect of law,” the FTC can bring action against a company if the commission believes it has violated prohibitions against unfair or deceptive practices. The process for filing a complaint against a company is fairly simple, straightforward and shouldn’t take more than five minutes.
“Your business image determines how your company is perceived,” according to the Tried and Tested Marketing website. “This perception will happen whether you like it or not and rather than let it happen by accident, you should take control of it. It’s important to decide how you would like your company to be perceived and take the necessary steps to achieve it.” The power of a good public image is openly acknowledged, and companies should take action to determine the image they want to portray to their consumers. It is when that control turns into stretched truths and flat-out lies that things have gone too far. Companies should not create an image based on manipulations, loopholes and suggestive marketing because when the truth comes out, they run the risk of completely destroying the image they worked so carefully to create.
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