Jaap-Orr Newsletter :: December 2008

As we prepared a report on the importance of a “green” strategy, we got sidetracked by the current economy. Probably since we have several years experience in the financial markets we get questions on our current opinions. Last week we noted our forecast that recession will be over by mid-summer. Two banking friends fell over with laughter.

We reviewed our thoughts and came up with the same conclusion. There are two major reasons: The president elect is one key. Politics aside, he and his staff understand herd psyche. He is methodically taking on issues and keeping pressure on negativism by using the media to regularly present milestones with the reassurance he is working on a plan.

It seems to have helped with early holiday consumer spending. As marketers, we think he’s doing it right.

As far as our call on the recession’s end, it is predicated on some type of agreement to keep the U.S. auto industry working. Yes, they need strings; yes, we need them and their suppliers to survive.

The news will get worse over the next three or four months as the already announced moves take hold.

We think another key is the world’s central banks force-feeding their economies. Positive change should take hold by mid-year. The U.S. will end up spending $5-7T, Europe $2T and China may get to $1T. That much new money should be able to jump-start the dead.

We think all the changes will drive our banking friends crazy. The derivative folks deserve it. All banks will get regulations and oversight in more areas, but also more competition in the consumer market will force out of the box thinking from a group whose heritage is boxes.

Since we started to write about “green” marketing, we will end with a few “green” thoughts. In 3-4 years many consumer and business purchasers will know the environmental impact of each purchase. Examples: Toothpaste A is $3.00 and producing it put 5 pounds of carbon in the air. Toothpaste B is $2.85 and put 10 pounds of carbon in the air. Car A put in 1 ton, and car B put in 10 tons. Consumers can vote “green” with their choices.

No one will be able to hide from their environmental impact because suppliers will submit their numbers and it will be part of corporate purchase decisions. It will impact where plants are located.




We know a number of international companies are laying the groundwork. McKinsey has teams helping clients leverage future opportunities with “green”. Those who start now should win big in share gains.