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Captivating the

Next Generation

Prepared by ECO Consulting, Inc.

Presented to ____________________________________

Kate Heiny

Manager of Sustainability Target Corporation

Prepared by ____________________________________

Ryan Mirow

Laura Summers Lauren Halpern Steven Gorski

Leslie Irwin Jason Hsu

December 3, 2008

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Transmittal Letter

ECO Consulting Wells Library, Fifth Floor 1320 East Tenth Street Bloomington, IN 47406 December 3, 2008

Kate Heiny Target Corporation 1000 Nicllet Mall Minneapolis, MN 55403 Dear Ms. Heiny: Submitted for your approval is a detailed plan describing how a partnership with the gDiapers company would serve to increase Target’s sustainability. After an evaluation of the current market, research has concluded that consumer preference has shifted towards products that do not harm the environment. This emerging market is still new ground for many retailers, and while Target is currently working towards sustainability in some categories, a partnership with one of the premiere infant and toddler supply companies would serve to give Target an edge in this new market. Our information was collected through extensive research utilizing independent market data, trade journals, corporate publications, public media, and privately maintained websites. Using a variety of sources allowed ECO Consulting to gain an understanding of the sustainability movement from corporate, small business, and individual perspectives. We believe that analyzing and approaching sustainability from multiple angles has enabled us to create a complete report and proposal for Target. ECO Consulting thanks you for providing the opportunity to research and design a plan to help address your sustainability goals. If you have any further questions, please contact our team at consult@ECO.com.

Sincerely, Ryan E. Mirow ECO Consulting

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Table of Contents

List of Figures ...................................................................................................................................... iii Executive Summary ............................................................................................................................ iv Introduction ......................................................................................................................................... 1 Sustainability ....................................................................................................................................... 2 Growing Environmental Concerns ...................................................................................................... 2 Sustainability in General ..................................................................................................................... 2 Sustainability at Other Organizations ................................................................................................. 3 Sustainability at Target ........................................................................................................................ 3 Sustainability Recap ............................................................................................................................ 4 The Next Generation ............................................................................................................................ 5 “Eco-Shoppers” in the Growing Market .............................................................................................. 5 Who Will Care ..................................................................................................................................... 5 Importance of Eco-Friendly Products at Target .................................................................................. 5 Spreading the Word ............................................................................................................................ 6 Where to Focus ................................................................................................................................... 6 Importance of the Next Generation .................................................................................................... 6

Problems with Current Diapers ............................................................................................................ 7 Disposable Diapers and the Environment ........................................................................................... 7 Disposable Diapers and Health Issues ................................................................................................. 8 Cloth Diapers and the Environment .................................................................................................... 9 Inconvenience of Cloth Diapers .......................................................................................................... 9 Current Eco-friendly and Biodegradable Diapers ............................................................................... 9 Insufficiency of Current Products ........................................................................................................ 9

Introducing a New Product: gDiapers ................................................................................................. 10 Introducing gDiapers ......................................................................................................................... 10 gDiapers’ Sustainability Efforts Thus Far ........................................................................................... 10 gDiapers’ Partnerships to Benefit the Next Generation ................................................................... 11 Benefits of gDiapers at Target ........................................................................................................... 11 Bringing gDiapers to Target ............................................................................................................... 12 gDiapers Review ................................................................................................................................ 12

Implementing the Partnership ........................................................................................................... 13 A Shared Set of Values ...................................................................................................................... 13 Supplying the Product at Test Sites ................................................................................................... 13 Costs Involved ................................................................................................................................... 14 Importance of Implementation ......................................................................................................... 14

Marketing the Promotion .................................................................................................................. 15 Appealing to the “Green” Consumer ................................................................................................ 15 Promotional Signs In-Store................................................................................................................ 15 Media and Print Advertising ............................................................................................................. 16 Credit Cards ....................................................................................................................................... 16 Team Member Training ..................................................................................................................... 17 Continued Implementation ............................................................................................................... 17

Conclusion ......................................................................................................................................... 18 Works Cited ....................................................................................................................................... 19

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List of Figures

Figure 1 Comparison of Waste Produced ................................................................................................ 2 Figure 2 Companies Reporting Corporate Responsibility Data ............................................................... 3 Figure 3 Natural/Organic Personal Care Market ..................................................................................... 5 Figure 4 Decomposition Rates of Various Garbage Items ....................................................................... 7 Figure 5 Babies Suffering from Diaper Rash with Cotton and Disposable Diapers ................................. 8 Figure 6 Cost Comparison of gDiapers and Competing Disposable Diapers ........................................ 11 Figure 7a In-store Advertisement 1 ....................................................................................................... 15 Figure 7b In-Store Advertisement 2 ....................................................................................................... 15 Figure 8 New Target Credit Card .......................................................................................................... 16 Figure 9a Credit Card Screen 1 ............................................................................................................... 16 Figure 9b Credit Card Screen 2 ............................................................................................................... 16

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Executive Summary

The purpose of this report is to offer Target a plan to increase its sustainability efforts by partnering with a smaller company, gDiapers. This company can offer a new product to Target’s guests that will not only increase Target’s profits, but allow its guests to live a “greener” lifestyle. With the growing concern for protecting the environment, Target can become a frontrunner in this progression.

Sustainability

Twenty-five percent of Americans prefer environmentally conscious products. Target is known for both its innovation and ability to promote new products through its popular

marketing strategies. Target has the power to not only raise awareness of environmental issues, but also enable guests to fulfill their part in sustainability by purchasing the eco-friendly products that Target offers.

The Next Generation

The increase in the natural and organic personal care product market is projected to increase from $6 to $8 billion from 2006 to 2012.

Mothers are making efforts to inform each other about dangers of current baby care products. The mothers of the green market are calling for a solution to many baby personal care product

issues, as there are many health risks involved with these products. Word is spreading of the hazards of baby care products. By introducing a product that solves some of these problems, Target will gain a larger share in the green market and increase its bottom line.

Current Diapers

The diaper market has no available products that meet the current needs of consumers. Disposable diapers have numerous consequences in the environment and to babies’ health. Cloth diapers are more efficient in terms of health and the environment, but they are extremely

inconvenient, causing consumers to ignore their benefits. Target can flourish in this market by introducing a product that has the convenience of disposable diapers and the eco-friendliness of cloth diapers.

A New Product and Partnership: gDiapers

The gDiaper flushable liner is septic and compost safe, meaning parents can easily dispose of

soiled diapers through their plumbing or their backyard compost pile. This smaller liner, when thrown away in a traditional trash receptacle, takes up significantly less

space than the standard disposable diaper in landfills. Target carrying gDiapers will expand its share in the $6.1 billion baby care supplies market, thus

presenting the company with increased financial opportunities. As more consumers develop interest and loyalty to Target’s sustainable merchandise, the

gDiapers company will experience tremendous economic gains.

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Target and gDiapers both stand to benefit greatly from this partnership. Target, in its efforts to further communicate its dedication to sustainability, will now carry an environmentally friendly diaper that is also competitively priced. The associations that gDiapers currently have with other environmental-conscious organizations will also connect with Target, drawing eco-mindful guests to its stores. This economic opportunity will enable gDiapers to better execute its company goal of increasing sensitivity towards the Earth and its future.

Implementing the Program

It would be wise to first introduce the product gradually in well-known sustainable cities across

the country. Current products would not be entirely removed from Target’s shelves; space would just be

made to supply the gDiapers. Together, Target and gDiapers can work to provide a more sustainable diaper for new mothers and babies.

Marketing the Product

Target should promote the products in a way that highlights the convenience, environmental

benefits, and competitive prices relative to current diaper offerings. By introducing a campaign to directly involve guests in preserving the environment through a

revised REDcard system, Target’s guests can choose where their 5% goes, and see their donations accumulate with each Target shopping experience.

These marketing methods will lead to an increase in popularity for Target, as the concern for sustainability is becoming more important than ever before.

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Introduction

Problem

Due to the rising concern over the well-being of the environment, consumers are seeking more products that help protect the environment. Disposable diapers damage the environment due to the lengthy amount of time needed for them to decompose in landfills. Also, both disposable and cloth diapers can have negative effects on children because of the dangerous chemicals that they contain, which can cause children to break out in rashes. Therefore, efforts should be made to sell a new type of diaper that benefits both the child and the environment.

Purpose and Scope

This report will examine the benefits of a partnership between Target and the developing company gDiapers. The importance of sustainability will be discussed, as well as the importance of focusing on the next generation. In order to understand the insufficiency of current products, the dangers of traditional diapers will be revealed. Following this will be an explanation of the advantages of gDiapers due to their comparable costs to other diapers and their environmental and health benefits. After this, implementation and marketing techniques will be explained so that Target and gDiapers can form a mutually beneficial partnership.

Assumptions

While it is uncertain as to whether gDiapers would actually have an interest in partnering with Target, this report assumes that this relatively new company would seize this opportunity for a partnership. Because its products are not commonly known, the exposure that Target could provide could significantly increase the profits of both gDiapers and Target. Also, gDiapers currently has partnerships with other small companies, but could benefit greatly from partnering with an established Fortune 500 Company.

Limitations

Because gDiapers is an upcoming organization, it has not released a significant amount of financial information to the public with regards to income statements or balance sheets. Therefore, specific numbers pertaining to its revenue and net income could not be located. However, due to the nature of its eco- and child-friendly products, extensive marketing of these products will allow consumers to realize the numerous advantages of purchasing these products and create a demand for an alternative form of diapers.

In order to further establish Target’s reputation as a leader in innovation as well as increase corporate profits, partnerships with other environmentally conscious organizations should be established. Specifically, the formation of a partnership with gDiapers will provide the growing number of eco-friendly consumers with an alternative to the traditional form of diapers.

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Sustainability

Growing Environmental Concerns

With the rapidly increasing global population and growing number of environmentally detrimental industrial methods, the earth is becoming less capable of supporting its inhabitants. Due to the 6.7 billion people on the planet and the rising consumption of natural resources, 1.3 ‘Earths’ are now needed to support the population’s current living habits. The consequences of gross over-utilization of resources include climate change, extinctions of varying species, water shortages, and a dramatic decrease in the amount of natural environments, such as forests and jungles (McMichael 2008). According to the Global Footprint Network, all of the resources that the earth was able to produce for 2008 had been consumed by September 23. For the remaining three months of the year, humans are in “ecological debt” and living beyond their means. Furthermore, the amount of waste produced every year damages the environment, as landfills are overflowing and additional places for garbage disposal are greatly needed. Every American uses a staggering 20 tons of raw materials every year, and the amount of America’s total annual waste “would fill a convoy of garbage trucks long enough to reach half-way to the moon” (“What Is It?”). Continual consumption and depletion of resources means more waste, and thus the gradual destruction of the earth to the point that it can no longer sustain life. Therefore, it is imperative for every individual and every corporation to do its part to ameliorate this situation.

Figure 1 – Comparison of Waste Produced Information from “What Is It?” 1995-2008

Sustainability in General

Sustainability was first defined in the 1987 United Nations “Our Common Future” report as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Olson 1996). Within the past two decades, this term has gained increasing popularity with the public and consequently become a core value for businesses to follow. A study by the National Purchase Diary (NPD) Group, which is a leader in global market research, revealed that the number of consumers who desire products that are more beneficial to the environment and to their health has increased 13% since 2000. According to Packaged Facts, which publishes information on market research, eco-friendly consumers comprise 25% of the American population (Natural and Organic Personal Care). Clearly, sustaining the environment for the health of individuals and the health of the world has become a priority for many consumers.

While Target has been developing practices and selling products that offer both environmental and socio-economic benefits, further emphasis in this area will not only improve Target’s reputation and profits, but also preserve the world for future generations.

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Sustainability at Other Organizations

Numerous companies across the world have recognized the importance of eco-friendly products and practices. In an analysis by KPMG, the number of U.S. companies releasing sustainability reports regarding the environment, society, and government has doubled since 2005. The analysis stated that

74% of the top revenue-generating American companies and 80% of The Global Fortune 250 are publishing corporate responsibility data. Also, 61% of the U.S. companies also included a formal strategy for sustainability. Even the United States government has become a part of the sustainability movement, as Congress introduced almost 200 bills involving environmental issues (Hurson).

Figure 2 – Companies Reporting Corporate Responsibility Data Information from “KPMG Analysis”October 27, 2008

Both established and upcoming companies have developed sustainability practices. The Wal-Mart website emphasizes the following three goals: “to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain our resources and the environment.” Wal-Mart also experiments with solar power through its two testing sites in California and Hawaii and has created a “High Efficiency” store in Illinois that is 25% more energy efficient than its other stores. Like Target, Kroger focuses both on the environment and society and recently held a contest for customers to create a reusable bag for their stores, thus creating a more interactive approach to saving the environment (“The Kroger Company”). Companies that revolve around environmental awareness have seen tremendous increases in profits due to the sustainability movement. Specializing in eco-friendly baby products, Seventh Generation has seen a 45% increase in sales for 2007, as stated on its website. While other organizations have realized the importance of sustainability, Target has also implemented its own sustainable practices.

Sustainability at Target

It is clear that Target realizes the importance of both environmental and socio-economic sustainability and works to improve its efforts in this area. According to the Target website, 70% of its materials are reused, recycled, or rethought, and campaigns such as “Target today. Target tomorrow” demonstrate that environmental concern remains a top priority for the corporation. Target implements eco-friendly designs and practices in its stores through the 700 organic foods that it sells, its efforts to conserve water, and its lighting methods that reduce energy costs. However, these strategies do not simply preserve natural resources—they also benefit communities and society. Through transforming forty acres of wetlands in Ohio into a natural habitat for wildlife, Target demonstrated its concern for maintaining natural environments. By giving 5% of its income to charity, it demonstrates its concern for the improvement of local communities. Target prides itself on its innovation and emphasis on affordable quality products and is striving to improve in these areas by becoming more environmentally friendly. Michael Russo, a management

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professor at the University of Oregon, conducted a study of 243 companies in the late 1990s which revealed that “Greener companies tend to promote innovation, conserve valuable resources in their production systems and enhance their reputation for both prospective employees and potential customers. They go beyond the minimum required by law, and their shareholders reap the rewards” (Priesnitz). Target has seen the truth in this analysis, as Fortune Magazine ranked Target as one of “America’s Most Admired Companies,” and Business Week ranked Target as 24th in the World’s Most Innovative Companies in 2008 (“Corporate Recognition Awards”). However, further actions must be taken.

According to the Bureau of Labor Statistics, Americans work an average of 7.6 hours per day (“American Time Use”). They often realize the importance of being more environmentally aware, but feel that they do not have the time to make a difference. However, by offering more sustainable products, individuals can help protect the environment simply by shopping. In order to maintain and exceed the high standards that it has set, Target must continue to develop eco-friendly methods and products in order to become a leader in the sustainability movement. In doing so, Target will not only fulfill its core company values, but it will also improve profits, customer satisfaction and the world as a whole.

Sustainability Recap

Sustainability continues to become an increasingly important concept for businesses to follow. While Target has prioritized this idea and proven it through its practices and products, it has the opportunity to become a leader in this area by exceeding current efforts in order to benefit society, the environment, and the Target Corporation. By analyzing market trends and the Target consumer base, Target can develop a new strategy to improve its sustainability.

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The Next Generation

“Eco-Shoppers” in the Growing Market

As new research on the hazards of current products emerges, the demand for green and sustainable personal care products increases every year. Packaged Facts, a major market research publisher, stated that there were almost 55 million consumers who could be considered an “Eco-Shopper.” All shared the same preference of “buying products that used recycled paper, banning pollution, paying more for environmentally friendly products, and looking for natural and organic foods when shopping.” The natural and organic personal care product market alone saw an increase from $3.9 to $6 billion

from 2003 to 2006, and the market is projected to increase to $8 billion by 2012 (Packaged Facts 38). Despite the size of the new market, many companies struggle to reach its members. However, the recent overlap of the green market and the mass retail market opened the door for companies to expand their appeal. Since big retailers have introduced green products, Eco-Shoppers are more interested in the efforts of larger corporations to expand their appeal. Since big retailers have introduced green products, Eco-Shoppers are more interested in the efforts of larger corporations.

Figure 3: Natural/Organic Personal Care Market Information from Packaged Facts 2008

Who Will Care

In the same Packaged Facts publication, half of those 55 million Eco-Shoppers were women. Because the majority of Target’s guests are female, this would be an ideal market upon which to focus. Several studies conducted to find mother’s opinions on sustainability and protecting the environment concluded that mothers demand more eco-friendly products in hopes of preserving the environment for their children. In fact, one study done by Time Magazine stated that 91% of mothers recycle to improve their children’s future. Today’s actions can greatly impact the next generation. Giving them new means to preserve the environment for their children without straining their budget will further excite the market, drawing them to Target and increasing Target’s sales.

Importance of Eco-Friendly Products at Target

Rashes, infections, infertility and developmental issues are only a few of the many problems associated with the baby personal care products in the current mass retail market. Mothers are eager to adopt a solution to these problems when they are informed with the information on the hazards of these products, and they would like to find solutions in the same place they buy the rest of their products. Since Target carries a wide range of products, guests know that they will be able to find everything that

The current market for sustainable and green products is growing, and Target must find who within the market will be most willing to purchase its products. After analyzing the current market, focusing on the next generation will be most beneficial to Target.

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they need, and they hope that these products will solve these issues. The Target website claims, “From pregnancy to caring for a new addition, Target provides parents with everything needed for this exciting stage in their lives.” Although typical retailers carry the basics for baby care, the natural and sustainable products are often left off the shelves. The addition of new eco- and child-friendly products to the few available now (Aveeno, California Baby, etc.) would give Target a competitive edge (Target).

Spreading the Word

As studies are released on the dangers of baby personal care products, an increasing number of sources have been diligently spreading the word. There are thousands of websites promoting the use of greener and more natural products and informing parents of the potential hazards to which they are exposing their children. Small-scale organizations like Healthy Child Healthy World post lists of what products to use and which to avoid, and mothers heed the advice given, hoping to raise a healthier baby. Of all the forms of product awareness, personal online blogs are the most common and often most effective. The mother’s goal is to spread her message about green issues from her own perspective through sites such as MothersGoingGreen, and GreenandCleanMom—and others are listening. Marketing VOX conducted a survey in 2006 designed to discover how shoppers decide which products to buy. It is evident that consumers are being influenced by each other, as 91% said that they prefer brands that other moms recommend (“Word of Mouth”). BIGresearch organized a similar survey that revealed 91% of consumers search for suggestions from other consumers before purchasing a product (Furtado). Since word of mouth is the best form of advertisement, mothers post their parenting stories daily with detailed reasons for what they do and don’t do—and readers follow the advice religiously.

Where to Focus

Mothers are clearly aware of the consequences of their current purchasing habits. In many ways, the modern mother’s goal is to be as green as possible while raising her children. She should be able to raise her children using materials that will not adversely impact her goal. The easiest way to accomplish this is by using eco-friendly baby products, preferably one that claims a large portion of the baby personal care market. Packaged Facts analyzed the baby personal care market and weighed diapers as claiming 65% of the $6.8 billion (and rising) market. Unfortunately, there have only been two options for diapers in the past—reusable cloth or disposable. Neither has a desirable effect on the environment, as they litter landfills and are made from harmful materials. However, if Target offered an alternative—one that eliminated health risks to children and could be beneficial to the environment—all of the Eco-Shoppers would be satisfied and there would be no need to create a new market. Similarly, new mothers would not have previous diaper purchasing habits, and habits are easier to pick up than change. Target can give mothers a chance to make a difference in their children’s future.

Importance of the Next Generation

Opening sustainable and eco-friendly markets invite many new additions to the green industry. Given the demand for green products by millions of shoppers and the recent success of companies introducing green products, Target should expand its green product line to establish itself as a leader in the movement. It should focus on the next generation, since research has concluded that mothers are the most dedicated shoppers in the eco-friendly market. Once the dangers of baby care products become public, the demand for all-natural and organic products will increase. Target’s solution to the diaper problem will be a beneficial investment, since diapers are the dominate product in this market.

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Problems with Current Diapers

Disposable Diapers and the Environment

According to the gDiapers website, disposable diapers hold 90-95% of the current diaper market for babies and toddlers. A range of 18 to 23 billion diapers are bought annually by this consumer group, which consists mainly of mothers. Over the years, disposable diapers have become a problem for the environment and for sustainability in general because they take a very long time to decompose. They are the third greatest consumer waste in America’s waste system. Disposables can sit in a landfill for up to 500 years. Figure 4 shows a comparison of different garbage items and the time each takes to decompose. Note that disposable diapers take the longest of these examples. To put it into perspective, the diapers of today would not fully decompose in a landfill for 20 generations.

Figure 4 – Decomposition Rates of Various Garbage Items

Information taken from “Evans Library Displays present Recycling Reality” October 1, 2006 - January 15, 2007

Diapers have two other significant environmental impacts. They account for an estimated 2.8 billion pounds of human waste are thrown into landfills every year. In addition to the contamination of the landfills and water, diapers also use numerous available resources. For instance, it takes 82,000 tons of plastic and 250,000 trees each year to produce disposable diapers (“The Diaper Decision”). Diapers also consume large amounts of natural resources to produce. As reported in The Diaper Pin, a website dedicated to informing consumers about the environmental hazards in current diapers, it takes one cup of crude oil per disposable diaper to make the plastic. Also, 200-400 kilograms of cotton are necessary to supply one baby with disposable diapers for a year. This is a large misuse of natural resources. Although the effects on the environment alone could be enough to describe the harms of diapers, there are many other issues in regards to health.

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After realizing the benefits of targeting the next generation, baby products were examined to discover if and where there is a need in the market. It is clear that there is a need for new products in the diaper industry due to the limited amount of choices and the excessive amount of harm done to the environment and babies.

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Disposable Diapers and Health Issues

In addition to the numerous consequences of disposable diapers on the environment, a link exists between babies and multiple health problems. For instance, as stated in The New Parents Guide, “according to the Journal of Pediatrics, 54% of one-month old babies using disposable diapers had rashes, 16% having severe rashes.” The high correlation between disposable diapers and rashes is a result of the super absorbency in a disposable diaper causing less frequent changes. To further examine this correlation, in 1955, 100% of babies wore cotton diapers, and only 7.1% of babies suffered from diaper rash. On the other hand, in 1991, 90% of babies wore disposable diapers, and the percentage of babies that experienced diaper rash increased to 78% (“Your Baby’s Bottom Line”).

Figure 5 – Babies Suffering from Diaper Rash with Cotton and Disposable Diapers Information taken from Your Baby's Bottom Line "Wreaking havoc."

Additionally, plastic diapers may be the cause of the large increase in infertility rates over the past 30 years. Due to the plastic in the disposable diapers, babies’ temperatures remain alarmingly high throughout the diapering period. Also, disposable diapers contain various chemicals which can cause severe consequences to a baby’s health. One of these dangerous chemicals is Dioxin, which is the chemical by-product of the paper bleaching process. Research confirms that Dioxin causes skin and liver diseases, lowers the immune system, increases the likelihood of miscarriage, and other health defects. Although exposure to Dioxin can cause many of these problems, it is most known for its strong link to cancer. In fact, the Environmental Protection Agency has deemed Dioxin to be one of the most toxic cancer-linked chemicals (“Dioxin”). Similarly, Sodium Polyacrylate is also used in the production of disposable diapers in order to make the diaper extremely absorbent. As stated in The Diaper Pin, some of the numerous side effects that can result from exposure to this chemical are fever, vomiting, bleeding from tissues, and severe skin irritations. Additionally, Sodium Polyacrylate has been banned from being used in the production of tampons due to its high connection to Toxic Shock Syndrome. While mothers are protected from this chemical, their children are still being exposed to its effects. Dioxin and Sodium Polyacrylate are just two of the dozens of chemicals used in the making of plastic diapers.

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Cloth Diapers and the Environment

Even though the negative effects that cloth diapers have on the environment are very different from those of disposable diapers, they are still a problem that should be addressed. Each baby who wears cloth diapers will use about 30 pounds of cotton during the diapering period (gDiapers). Harvesting this material can have harmful effects, as this process is responsible for 25% of the herbicides used around the world and 25% of the pesticides in the United States alone. Once produced, cloth diapers need multiple washes on a daily basis. In fact, each baby wearing cloth diapers during the diapering period will require 10,000-20,000 gallons of water, depending on the washer (gDiapers). In an attempt to dispute this fact, many argue that utilizing laundry services will decrease the amount of water consumed. However, laundry services require extra energy and gas due to the need for transportation. Also, according to an online survey conducted by The Green Guide Institution, it was found that over 70% of cloth diaper owners used their own washers and dryers. In addition to the amount of water used, cleaning cloth diapers involves time, detergent, and the energy.

Inconvenience of Cloth Diapers

Between energy, raw materials, and water, cloth diapers produce 60 times less waste than disposable diapers (“A Tale of Two Diapers”). Despite this fact, consumers still feel that the hassle and inconvenience of maintaining clean cloths outweigh the increase in environmental benefits. The average child will need 6,000-8,000 diaper changes throughout this approximate two-and-a-half year diapering period, translating to thousands of washes for cloth diapers. In other words, using cloth diapers entails washing seven diapers a day on average. Cloth diapers are also impractical outside one’s own home. For example, many day care centers only allow children to come with disposable diapers. Because of this rule, the parents of babies who use cloth diapers would need to purchase both types of diapers if they wish to use day care. Cloth diapers would also be difficult to clean while traveling, and would result in more frequent leakages since they are not as absorbent as disposable diapers.

Current Eco-friendly and Biodegradable Diapers

The environmental and health issues resulting from disposable diapers and the inconvenience of cloth diapers have promoted research for new products. Many companies have tried to create a new type of disposable diapers. Some of the features of these diapers include latex-free and non-chlorine-bleached wood pulp. Although these features do resolve some health issues created by disposable diapers, there has yet to be a substantial difference in environmental sustainability (gDiapers). Biodegradable diapers are another alternative that attempt to meet the desires of eco-friendly consumers. However, while these diapers are technically biodegradable, they require sun and air in order to decompose, and nothing below the surface of landfills receives these resources. Thus, in practice there is no considerable environmental difference between these biodegradable diapers and traditional disposable diapers.

Insufficiency of Current Products

With a growing concern in the market for more sustainable products, many companies have attempted, but failed, to produce efficient diaper products that fulfill the desires of consumers. Therefore, Target has the opportunity to thrive in this market by implementing a new brand of eco-friendly diapers that do not share the same risks and hazards as current products. With the right product, Target can excel in a market that sells 18-23 billion diapers annually.

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Introducing a New Product: gDiapers®

Introducing gDiapers

While the gDiapers company was first introduced in Australia in 1991, Jason and Kimberly Graham-Nye brought the company to America in 2004 and established their headquarters in Portland, Oregon. A relatively new company in America, gDiapers has been environmentally conscious from its start. The Graham-Nye’s choice to operate out of Portland stemmed from its reputation as the most sustainable city in America (SustainLane). With children of their own, they wanted to benefit their kids as well as others all over the country. Target now has the opportunity to present this sustainable and socio-economical company and product to an even wider audience.

Picture from gDiapers.com

Combining the best of both worlds, this innovative company has created an alternative to both cloth diapers and disposable diapers. This substitute is necessary because of all of the water used in washing the cloth diapers and all of the waste created by the disposable diapers. This new product introduces the use of a flushable liner within “little g” pants. According to the gDiapers website, the Flushables are made of all natural fiber that is completely biodegradable and can simply be flushed down the toilet once soiled. These Flushables are safe for septic systems as well. The liners themselves can be easily rinsed out if necessary, and the “little g” pants are made of a cotton. These gDiapers do not need to be disposed of in landfills, and liquid soiled diapers can actually help the earth through composting in home gardens.

gDiapers’ Sustainability Efforts Thus Far

The sustainability of gDiapers is apparent in its product offerings. The two parts of the gDiapers, the Flushable and the “little g” pants, are both made from natural resources. Specifically, the gDiapers Flushable is made from “cellulose fibers from sustainably harvested trees.” Another benefit of this resource is the fact that cellulose is “the building block of all life and is the most abundant form of living biomass.” The outer layer of the Flushable is made from cellulose rayon. Using these cellulose resources is not only advantageous because of its abundance, but it reduces use of plastics that can be found in disposable diapers. A gDiapers Flushable contains no perfume, chlorine, and latex, which is another advantage over disposable diapers (gDiapers). The elements that comprise gDiapers and gDiapers’ business operations have earned this company a Gold Cradle-to-Cradle certification. According to the Cradle-to-Cradle website, this award is certified by the founders of MBDC, a “product and process design firm dedicated to revolutionizing the design of products and services worldwide.” This certification “provides a company with a means to tangibly, credibly measure achievement in environmentally-intelligent design and helps customers purchase and

A new option for diapers has recently become available. Never before has there been a third option; it has been 40 years of either disposable diapers or cloth diapers. Not only do gDiapers offer benefits to the environment, they will heighten Target’s reputation as a leading sustainable company.

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specify products that are pursuing a broader definition of quality.” In fact, it is the very first consumer packaged product to receive this award. The gDiapers website states that every Flushable can be completely “re-absorbed into the eco-system in a neutral or beneficial way.” With these results, Target’s environmentally conscious guests will take interest in this product.

gDiapers’ Partnerships to Benefit the Next Generation

Already, gDiapers has several partnerships that demonstrate its strong desire to support a healthy environment for generations to come. As an example, it is partnered with the non-profit organization Healthy Child Healthy World that works to protect children from a harmful environment. According to its website, Healthy Child Healthy World, which was established in 1991, has become “the nation's leading organization of its kind.” Healthy Child Healthy World actively involves itself in improving the environment in order to protect By partnering with gDiapers, Target would also benefit from an association with Healthy Child Healthy World. The greater the connection of dedication to helping the environment, the more dedicated Target will appear to its guests, thus deepening their trust in this company. This association can also further Target’s reputation as a sustainable company.

Benefits of gDiapers at Target

The cost of gDiapers is comparable to traditional disposable diapers. This gives Target’s guests more incentive to purchase this new product in addition to the added benefit of helping the environment. As shown in the graph below, the price per diaper for its guests is only five cents more for the small size in comparison to Pampers (sizes 2-3), and is actually six cents cheaper for the larger size in comparison to Huggies (size 6).

Figure 6 : Cost Comparison of gDiapers and Competing Disposable Diapers

Information taken from gDiapers.com and Target.com

As stated earlier, disposable diaper sales compose 65% of the $6.1 billion baby care supplies market (Packaged Facts). Therefore, expanding Target’s merchandise offerings through gDiapers will increase its shares and profits in this market. Furthermore, this partnership requires few additional resources on Target’s part. With its competitive prices, gDiapers will complement other diaper brands, and the unique and stylish packaging lends to Target’s styling and design themes.

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Bringing gDiapers to Target

Introducing gDiapers to the Target merchandise catalog communicates Target’s movement towards promoting sustainable efforts to its guests. Target has the opportunity to be the first large-scale retailer to offer this environmentally friendly product. While gDiapers is a relatively small company, its impact on the environment would be heightened by Target’s guests and their loyalty to its stores. Currently, gDiapers are only available in select natural retail stores across America and Canada and stands to benefit tremendously from the partnership. Target offers gDiapers sales opportunities exceeding those of its current limited online distributors and specialty shops. By partnering with gDiapers, not only would Target increase the popularity of this product, but its reputation as a sustainable company would gain even more credibility. In other words, both companies stand to profit while also increasing awareness of sustainable and environmentally friendly living among customers.

gDiapers Review

The gDiapers company represents an innovative approach towards developing sustainability in the baby care supplies market. Its unique product design presents mothers with an affordable opportunity to help improve the Earth for their children’s future. As a retailer aiming to communicate its dedication to sustainability to current and future guests, the partnership with gDiapers strengthens Target’s foothold in the $6 billion market.

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Implementing the Partnership

A Shared Set of Values

Target and gDiapers share similar marketing qualities and designs, allowing gDiapers to be easily incorporated into Target stores. For instance, Target's atmosphere and products are filled with high quality and bright colors that give guests an enjoyable and positive experience. Target’s website states, “More than just creating an easy-to-shop environment, our focus on design means creating products and displays that make our guests feel welcome. Over the years, it has also become an important way Target stores attract and keep loyal shoppers.” Similarly, the gDiapers company practices the same values when creating their products. The “little g” pants come in numerous vibrant colors and designs, as they focus on keeping their high quality products stylish. The slogan for their gDiaper is “100% fashionable, 100% functional, natural diapers” (gDiapers). As demonstrated through their websites, both companies emphasize fashionable and quality products at an affordable price. Like their parallel designs, both companies also have comparable values. Target and gDiapers place a strong emphasis on sustainability. Minneapolis, Minnesota, the location of Target’s headquarters, is the seventh most sustainable city in America (SustainLane). Centering operations in a city that understands the importance of sustainability further demonstrates Target’s concern with protecting the environment for the future. Likewise, gDiapers’ headquarters is located in Portland, Oregon, which is the nation’s most sustainable city (SustainLane). In addition to each company prioritizing sustainability, they also each focus highly on customer service and satisfaction, affecting every aspect in which they do business. Numerous similarities exist within the mission statements of Target and gDiapers. “Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience and consistently fulfilling our Expect More. Pay Less.® brand promise”(Target). Similarly gDiapers’ mission statement states, “Fair Dinkum is an Australian expression that means being genuine and real with everyone you encounter. Well put. That is our philosophy toward our business, our people and the planet” (gDiapers). Both mission statements demonstrate each company’s emphasis on customer satisfaction through customer service and the quality of products. Target and gDiapers’ shared goals will enable both companies’ success through selling the gDiaper product.

Supplying the Product at Test Sites

To determine if gDiapers will be a popular item among Target guests, it will be wise to begin selling them in specific test sites across the country. Sustainable cities are most desirable to start this testing process as the members of these communities are already in the mindset of shopping “green.” Target should begin selling gDiapers at stores in Portland, Oregon; Chicago, Illinois; Minneapolis, Minnesota; Boston, Massachusetts and other highly sustainable cities in which Target is a proven success. These are advantageous test sites because they span the country, introducing guests in every region to the product. The introduction of gDiapers to select areas will show how responsive guests are to the

Choosing locations based on Target’s local success and the sustainability reputation of the community would serve as a proving ground for the success of this new product. This limited launch would benefit Target and gDiapers since it would maximize speed and ease while minimizing costs to both parties.

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product and moreover, alleviates manufacturing pressure on gDiapers. This limited release of gDiapers among specific stores means that the gDiapers company will not have to immediately expand their manufacturing facilities to supply every Target store with gDiapers products. As gDiapers’ sales expand with their presence at Target, the gDiapers company can determine the best way to increase their production and meet the increased demand for gDiapers.

Costs Involved

During the testing period, the amount of shelf space that other diaper brands currently receive will be reduced. However, all current diapers will still be offered, and employees should be instructed to frequently check the stock of these products. As a result, customers will still be able to purchase the old brand of diapers, while also having the option of buying the gDiapers. The demand for eco-friendly products has been clearly established, and outweighs Target’s initial risk of receiving inadequate returns from gDiaper sales. Based on gDiapers’ performance at various Target locations, further expansion of gDiapers distribution locations can be determined. In addition, partnering with an existing company will cost significantly less than the complicated process of developing a Target brand of environmentally beneficial diapers. Despite initial costs, Target will be able to better establish itself as an environmental leader and provide its guests a wider variety of quality, affordable through its merchandise offerings.

Importance of Implementation

With Target and gDiapers sharing similar marketing methods, the two companies would prosper from this partnership. Target’s interest in improving sustainability, coupled with gDiapers’ products, will provide a way for guests to see how they can make a difference in the environment. By introducing gDiapers gradually to specific Target stores, Target can identify the demand for this new product. It would not be necessary for Target to create a new section for these gDiapers; it would only need to reduce the quantity of traditional disposable diapers on the shelves.

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Marketing the Promotion

Appealing to the “Green” Consumer

In current economic times, retailers are forced to deal with a difficult dilemma: overcoming the growing tension between sustainability and cost. For Target to succeed in this era full of new wants, needs, and economic constraints, it must be able of offer its guests sustainable products that offer an equal or greater amount of value than current offerings. However, “price” and “value” are two different concepts. To quote billionaire Warren Buffett: "Price is what you pay. Value is what you get" (Marketing Week 26). Offering guests gDiapers will provide a solution that benefits the environment by reducing waste without substantially increasing retail prices. While gDiapers require an initial investment for consumers, this cost is justified by practicality, long-term savings, and environmental benefits – in other words, value.

Promotional Signs In-Store

While introducing this new product, sales of these eco-friendly diapers would increase from having signs placed in the aisles that highlight their environmental and financial advantages. The current “Temporary Price Cut” signs could be replaced with the signs advertising the eco-friendliness and sale prices of the

new products. In contrast to the current signs, these displays inform the customer about a sale, while simultaneously offering two incentives to buy – saving money and benefitting the environment. These signs can serve to alleviate some of the fear that most customers have of paying a premium for these environmentally-friendly items. Especially with these items being new to Target stores, an initial incentive to boost sales numbers would be beneficial to this product line.

Figure 7a – In-store Advertisement 1 Figure 7b – In-store Advertisement 2

Also, signs could be hung from the ceilings of the store to simply promote the items – sale or not. Because Target will be carrying a new line of diapers, increased exposure through in-store advertising, in conjunction with sale promotions, would raise awareness about the benefits and availability of these new items. These posters would be a mix of emotional and logical appeal to the general public. These products are not overly expensive, do not require constant washing, and can be easily disposed of by simply flushing them down the toilet. The more familiar guests are with these practical benefits and positive environmental effects, the more likely they will be to purchase the items.

To succeed, Target must show its guests the value in gDiapers through promotional signs, advertising, and team member training. Involving guests in the environmental process will increase how much they care, and foster their continued involvement in Target’s environmental efforts.

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Media and Print Advertising

Target’s new promotional campaign would serve two distinct purposes: to promote the specific diapers available for purchase, and also to highlight Target’s general “green” effort. If the launch of this new product can help Target build a reputation of being an eco-friendly company, then future “green” products would likely share similar success. This campaign is not just about introducing a new product; it introduces a newer mindset with consumers and starts a trend that traces all the way back to a person’s infancy. It is about helping the environment and community, as well as increasing “green” awareness and offering consumers a new choice to give back to the environment and preserve the planet for future generations. In addition to in-store sales, Target’s website could help in advertising and distributing the product. The special advertisements on the homepage would have minimal costs to Target and create another outlet to promote this new product, as well as inform consumers as to the benefits of these gDiapers. Studies have shown that 92.5% of adults said they research products online before buying them in a store. 90% of those surveyed say they have a better overall shopping experience when they research products online before shopping in-store (BazaarVoice). The Target website could be a great first impression for consumers who are aware of, but not very knowledgeable in the eco-friendly diapers category.

Credit Cards

Currently, 5% of purchases made with the Target REDcard supports the community. But what if guests had a more active involvement in the allocation of their money? As stated above, enabling Target’s guests to take an active role in protecting the environment will increase their environmental awareness

and provide more incentive to shop at Target stores. On the computerized screen where your guests insert their credit cards, a simple choice could be given: to benefit local environmental efforts or to go to the general charitable funds already in place. The employees should verbalize this choice to Target’s guests using the REDcard, and even use it as an opportunity to promote applications. A possible design for the card is shown to the left, and the card-reading machine could display the following:

Figure 8 – New Target Credit Card Figure 9a – Credit Card Screen 1 Figure 9b – Credit Card Screen 2

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Team Member Training

To provide Target guests the easiest shopping experience possible, Target’s team members should be knowledgeable and helpful with the new procedures. In everything from suggesting the new products to guests as an alternative to the traditional diapers, to promoting a new credit card system, Target’s team members can help encourage future green efforts. By identifying mothers as the prime candidates for the new product and credit card system, Target can start the new product and system in an environment where there is a high likelihood of success.

Continued Implementation

After identifying today’s new “green consumer,” it is important that Target gives guests as much information and incentive as possible to switch to and continue to support its new product. The primary consumers of gDiapers are new parents who care about their children as well as the environment. However, they also do not have much room in their budget to pay more than the price of traditional disposable diapers. By appealing to their emotions by protecting the environment and appealing to their logic by offering a convenient and affordable product, Target can expect these customers to welcome this alternative. Through employee suggestions, word-of-mouth, and advertisements both in-store and online, Target can effectively promote this product to rapidly increase awareness of gDiapers. Then, through continued support via Target’s new credit card system, guests will feel the direct contributions they are making by protecting the earth for future generations.

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Conclusion Currently, the environment is a primary concern among Americans, and there is no better time to introduce a product that will address these growing concerns. Target has recognized the increasing importance and necessity of sustainable action and has the opportunity to become a leader in this prosperous market. The best way to accomplish this goal is by drawing on a significant proportion of the eco-conscious population—mothers. Changing habits is more challenging than creating new ones, thus Target can benefit from marketing towards new mothers, as they will be developing new purchasing habits. A mother’s primary concern is the improvement of her child’s health and environment. Diapers dominate the baby product market, as their demand is inelastic because every child goes through the diapering period. There is a clear need for change in the current market due to problems with the current options for diapers, and offering gDiapers in Target stores will provide guests with a healthier alternative. By creating a partnership with gDiapers, Target will be able to accomplish this goal of becoming a leader in offering sustainable baby products.

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