Product demarketing and deselection: How to ban products without the use of regulations
Part 1: Product demarketing
Kotler and Levy (1971) define the concept of demarketing as “that aspect of marketing that deals with discouraging customers in general or a certain class of customer in particular on either a temporary or permanent basis” (p. 75). Used within its original context, demarketing was mainly a tool used by for profit companies to change demand in very specialized circumstances. However, Kotler and Levy (1971) did provide an example where demarketing was utilized in the realm of ecotourism and sustainability. Demarketing has evolved more into being associated as a tool within the context of social marketing. Kotler (1972) noted this change in a paper published after his seminal work. Wall (2005) now defines demarketing mean changing consumer behaviors and habits with the aspirations of lessening their environmental impact.
Product demarketing has evolved from a concept that companies utilize to control demand of a product into a tool that various governmental entities have utilized to control the demand of products and services (Armstrong & Kern, 2011; Beeton & Benfield, 2002; Beeton & Pinge, 2003; Groff, 1998; Medway, Warnaby, & Dharni, 2010; Shiu, Hassan, & Walsh, 2009; Sodhi, 2011; Wall, 2005). With the change in context, the users of demarketing has also changed. Governmental entities and non-governmental organizations (NGOs) have used this tool to change product/service demands or attitudes such as smoking, gun control, alcohol and changing behaviors and attitudes to be more accepting of sustainable environmental attitudes (Gundlach, Bradford, & Wilkie, 2010; Wall, 2005).
In examples from the Great Lakes Coal Tar PAH Reduction Project, product demarketing utilized biased messages in order to purposely damage the product coal tar based pavement sealer. Al Innis from Minnesota Pollution Control Agency (MPCA) stated that “they” have found that product bans are often difficult to get passed at any level of government (Innes, 2013).
Examples from Great Lakes Coal Tar Sealcoat PAH Reduction Project
University of Wisconsin Cooperative Extension-Solid and Hazardous Waste Education Center (UW SHWEC)
UW SHWEC many examples of demarketing coal tar based pavement sealer. What make this demarketing even more severe is that SHWEC was selectively utilizing the studies that gave the largest negative impact. Since these were produced in an academic setting, this would be an example of citation and selection biases (Liebl, 2012; University of Wisconsin Cooperative Extension-Solid and Hazardous Waste Education Center, 2012a, 2012b, 2012c). In no way was SHWEC utilizing the body of literature that shows that disproves theories advanced by USGS, MPCA and others.
UW SHWEC contacted over three hundred sealer applicators in December 2012 and relayed the following points to customers:
●”toxic chemicals” in the sealer;
●”contains chemicals that can cause cancer”;
●”We encourage you to stop using coal tar containing products immediately”;
●”The Solid and Hazardous Waste Education Center is dedicated to enhancing Wisconsin’s economy and environment though education to business and communities”(University of Wisconsin Cooperative Extension-Solid and Hazardous Waste Education Center, 2013).
In the examples given, UW SHWEC clearly utilized product demarketing in order to promote their biased agenda.
Minnesota Pollution Control Agency-MPCA
Between the MPCA and Great Lakes Coal Tar Sealcoat PAH Reduction Project, there is no question that MPCA is engaging in demarketing activity. Examples include:
● “Phase-out and replacement of coal tar-based sealcoats with safer alternatives and practices will reduce loading of polycyclic aromatic hydrocarbons (PAHs) to surface waters and sediments in Great Lakes states and provinces, and reduce hazards to children and vulnerable adults playing, living or working near coal tar-sealed surfaces like drives, parking lots, and playgrounds”(Minnesota Pollution Control Agency, 2013b);
●” To aid in the transition to safer alternatives, project partners asked sealcoating suppliers and contractors to pledge that they will not sell or apply sealcoats containing coal tar. The companies on this map have all made this pledge, reducing the release of potentially-harmful chemicals into our environment”(Minnesota Pollution Control Agency, 2013a) and;
●”The safer alternatives typically work best in a narrower range of surface condition, temperature, and humidity than is needed for coal tar, so the experience of these early-adopting companies could produce better results for pavement owners. However, the final decision on choice of safer alternative and provider rests with the owner, so be sure to ask the questions suggested in the Choosing alternatives to coal tar-based pavement sealcoats guidance and research thoroughly before making your decisions”(Minnesota Pollution Control Agency, 2013a). The odd thing about this statement is MPCA wants the consumer to make a “choice” when purchasing sealer, however, MPCA will give you a biased story so the consumer cannot make an informed decision. In addition, Minnesota took the right of consumer choice away from its citizens when they banned coal tar based sealer earlier in 2014.
In part 2, we will examine a second tool know as product deselection or substitution principle which the purpose is to take away a citizen’s right to choose.
Beeton, S., & Benfield, R. (2002). Demand Control: The Case for Demarketing as a Visitor and Environmental Management Tool. Journal of Sustainable Tourism, 10(6), 497-513. doi: 10.1080/09669580208667184
Innes, A. (2013, November 20,). Great Lakes Coal Tar Sealcoat PAH Reduction Project Webinar 2: State/Provincial Programs. from https://sites.google.com/site/greatlakespahreduction/home/fall-2013-webinar-materials
Liebl, D. (2012). Toxic Driveway Sealants=Public Health Hazard. from http://fyi.uwex.edu/shwec/2012/07/09/toxic-driveway-sealants-public-health-hazard/
Minnesota Pollution Control Agency. (2013b). Great Lakes Coal Tar Sealcoat PAH Reduction Project. from http://www.pca.state.mn.us/index.php/water/water-types-and-programs/stormwater/stormwater-management/great-lakes-coal-tar-sealcoat-pah-reduction-project/index.html
Shiu, E., Hassan, L. M., & Walsh, G. (2009). Demarketing tobacco through governmental policies – The 4Ps revisited. Journal of Business Research, 62(2), 269-278. doi: http://dx.doi.org/10.1016/j.jbusres.2008.01.034
University of Wisconsin Cooperative Extension-Solid and Hazardous Waste Education Center. (2012a). Beware of toxic driveway sealants. from https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxncmVhdGxha2VzcGFocmVkdWN0aW9ufGd4OjVhZWMyNjIzMDdmMzNjYTg
University of Wisconsin Cooperative Extension-Solid and Hazardous Waste Education Center. (2012b). Coal Tar-Based Asphalt Sealcoats-A Health and Environmental Hazard. from https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxncmVhdGxha2VzcGFocmVkdWN0aW9ufGd4Ojc1MzEwNDE5ZjRmMDRkY2U
University of Wisconsin Cooperative Extension-Solid and Hazardous Waste Education Center. (2012c). Identifying Coal Tar Based Asphalt Sealcoats-A Guide for Applicators. from https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxncmVhdGxha2VzcGFocmVkdWN0aW9ufGd4OjFjMmJlMWJkZDk5MTlhNGY
University of Wisconsin Cooperative Extension-Solid and Hazardous Waste Education Center. (2013). Applicator’s Contact Letter. from https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxncmVhdGxha2VzcGFocmVkdWN0aW9ufGd4OjMwNTY1NTYwZmNjMjMwOWU
What is Pollution Prevention?
Pollution Prevention (P2) is just one of many elements of sustainable development. The Brundtland Commission, formally known as the World Commission on Environment and Development (WCED) defined sustainability as “humanity has the ability to make development sustainable – to ensure that it meets the needs of the present without compromising the ability of future generations to meet their needs”(World Commission On Environment and Development, 1987, p. 8). Figure 1 shows this concept in a graphical form.
Figure 1-The Three Spheres of Sustainability
In this discussion, we will be examining the environmental sphere and how it affects the environmental sphere.
Defining source reduction and pollution prevention
The notion of Pollution Prevention in the United States was created by the Pollution Prevention Act of 1990 (Habicht, 1992). On the surface, the concept is simple enough, prevent pollution from entering into the environment. First glances could be deceiving, especially considering how this concept is defined.
In order to define pollution prevention, one must understand how source reduction is defined. Habicht (1992) states the Pollution Prevention Act of 1990 defines pollution prevention as source reduction which is defined by the act as follows:
●”increased efficiency in the use of raw materials, energy, water, or other resources, or protection of natural resources by conservation” (p. 3);
●”reduces the amount of any hazardous substance, pollutant, or contamination entering any waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment or disposal” (p. 3);
●”reduces the hazards to public health and the environment associated with the release of such substances, pollutants, or contaminants” (p. 3).
As one can plainly see, the concepts of source reduction and pollution prevention can be defined within sustainability.
US EPA and the Pollution Prevention Act of 1990 states the following goals for pollution prevention:
●pollution should be prevented or reduced at the source whenever feasible (Habicht, 1992);
●pollution that cannot be prevented should be recycled in an environmentally safe manner whenever feasible (Habicht, 1992);
●pollution that cannot be prevented or recycled should be treated in an environmentally safe manner whenever feasible (Habicht, 1992); and
●disposal or other release into the environment should be employed only as a last resort and should be conducted in an environmentally safe manner (Habicht, 1992).
Figure 2-Pollution Prevention Hierarchy (US Army IMCOM Installation Management Command-European Region: Directorate of Public Works, n.d.)
Problems associated with pollution prevention
Who defines what is a pollutant or contaminant?
Simple questions require a simple answer. US EPA and other federal level agencies, state-level environmental agencies, county and local level governments, and environmental non-governmental organization (ENGO). Using the example of coal tar based pavement sealer (CTS), advocate scientists performed a risk assessment that this product increased the risk of cancer, especially to children (Williams, Mahler, & Van Metre, 2012). Industry’s response was that the USGS risk assessment was grossly overstated especially considering that coal tar topical solutions have been cleared by USFDA as safe and that the author’s claims were based upon assumptions that were statistically insignificant (Magee & Keating-Connolly, 2013). The question must be asked why USGS was performing risk assessments, which they are not chartered to perform. Another question is why two USGS hydrologist were involved with a risk assessment, neither scientists is remotely qualified to perform.
Pollution Prevention is vaguely defined
Another major issue associated with Pollution Prevention is that it is vaguely defined. The theoretical framework and definitions are all loosely defined. There are several reasons why this is done. First, any activity that is vaguely defined eludes oversight. It is much like telling a business person to “make money” but not giving them direction if they mean make a profit or make a sale. Another reason for vague definitions is that it allows agencies using P2 programs a wide path for decision-making in terms of products to demarket and deselect from the market place. These decisions are made under the guise of being environmentally unsustainable. This is eluded to by Habicht (1992) acknowledges this fact when he wrote “While the concept of pollution prevention is broadly applicable–a tool to accomplish many environmental tasks…”. Another example is given with Browner (1993) when she states “At the same time, we must acknowledge that the fundamental nature of our base programs must evolve to create a more hospitable environment for the transition from “end of pipe” treatment to pollution prevention”.
Pollution Prevention is not based on objective science
Another problem with this concept is that it is value-based, meaning that decision-making utilizing science will be bias toward public policy preferences. This can be illustrated in Browner (1993) where pollution prevention is referred to as “the new environmental ethic” (p. 1). Another example is shown in Habicht (1992) states that “EPA is seeking to integrate pollution prevention as an ethic throughout its activities…:” Finally, pollution prevention requires a “culture change”(Habicht, 1992). In the case of coal tar based pavement sealer, this is illustrated in several ways. First, the scientific stance that the Minnesota Pollution Control Agency (MPCA) is that the “science is settled” and not open to discussion. This stance is telling since there is a body of work that refutes the advocate’s claims and Minnesota passed it ban based on the precautionary principle (as per email amongst MPCA personnel). Another example of this value-based decision-making is that MPCA actively solicits schools and school districts (targeting children) about their findings about the dangers of coal tar based sealer. This is an illustration of the demarketing and deselection process in order to ban this product.
Economic benefits? Really?
EPA has made various claims regarding to benefits derived from pollution prevention by “regulation is less than effective as reducing pollution, pollution may shift from one source to another, economic benefits such as reduction or elimination (or minimization) of waste management or cleanup costs, more efficient manufacturing, strengthening economic competitiveness and sustainability of raw material use” (Browner, 1993). These claims would be really nice if they were true. The literature show that there are many factors that dictates if cost are reduced, wastes reduced or strengthens economic competitiveness. In addition, prior studies show that there is no consensus with regard to these savings or benefits associated with pollution control activities (Ambec, Cohen, Elgie, & Lanoie, 2013; Lanoie, Laurent-Lucchetti, Johnstone, & Ambec, 2011).
EPA grants in exchange for favorable state legislation?
In the case of Minnesota and their ban of coal tar based pavement sealer, Minnesota started their product ban program by providing grants to cities that ban the product(Legislature of the State of Minnesota, 2009). This is truly an example of a product with a price on its head. Browner (1993) states that P2 programs “will require flexibility in grants to states, and improved working relationships with other federal agencies that have a profound influence on the environment through their own behavior or policies”. MPCA provides an example of this relationship by its choosing to “phase-out” or ban the product via demarket and deselect processes, paid for by EPA grants (U.S. EPA-Greal Lakes Retoration Initative 2012; U.S. EPA-Pollution Prevention, 2013).
Ambec, S., Cohen, M. A., Elgie, S., & Lanoie, P. (2013). The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? Review of Environmental Economics and Policy, 7(1), 2-22. doi: 10.1093/reep/res016
Browner, C. M. (1993). Pollution Prevention Policy Statement: New directions for environmental protection. from http://infohouse.p2ric.org/ref/34/33485.pdf
Habicht, F. H. (1992). EPA Definition of Pollution Prevention. from http://www.epa.gov/p2/pubs/docs/pollprev.pdf
Lanoie, P., Laurent-Lucchetti, J., Johnstone, N., & Ambec, S. (2011). Environmental Policy, Innovation and Performance: New Insights on the Porter Hypothesis. Journal of Economics & Management Strategy, 20(3), 803-842. doi: 10.1111/j.1530-9134.2011.00301.x
Magee, B., & Keating-Connolly, J. (2013). Comment on “Cancer Risk from Incidental Ingestion Exposures to PAHs Associated with Coal-Tar-Sealed Pavement”. Environmental Science & Technology, 48(1), 868-869. doi: 10.1021/es404184q
U.S. EPA-Greal Lakes Retoration Initative (2012). 2011 grants. from http://www.epa.gov/greatlakes/glri/2011grants.html
U.S. EPA-Pollution Prevention. (2013). Fiscal year 2012 pollution prevention grant summaries. from http://www.epa.gov/p2/pubs/grants/ppis/p2sum2012.html
US Army IMCOM Installation Management Command-European Region: Directorate of Public Works. (n.d.). Pollution Prevention-Legal Requirements. from http://www.grafenwoehr.army.mil/usag_dpw/environmental/p2/env_p2_legal.asp
UV, V. U. S. (2014). The Three Spheres of Sustainability. from http://www.vanderbilt.edu/sustainvu/cms/files/sustainability_spheres.png
Williams, E. S., Mahler, B. J., & Van Metre, P. C. (2012). Cancer Risk from Incidental Ingestion Exposures to PAHs Associated with Coal-Tar-Sealed Pavement. Environmental Science & Technology, 47(2), 1101-1109. doi: 10.1021/es303371t
ALEXANDRIA, Virginia, Jan. 22, 2014 –EPA awarded a grant which established the Great Lakes Coal Tar Sealcoat PAH Reduction Project (“Project”). The stated goal of the Project was for the grantees to step in and convince the marketplace that refined tar-based pavement sealcoat (RTS) should be “voluntarily” phased-out and replaced with other products. There was no hearing, no solicitation of comments from industry, and no draft proposal. With the usual avenues for comment and interaction with government agencies thus closed, PavementCouncil.org submitted unsolicited comments to EPA Region 5, collaborating agencies and the public at large as part of an ongoing effort to provide a more balanced, accurate and scientifically supportable approach to the issues at hand. The letter was submitted on January 21, 2014
Currently, the Project is led by the Minnesota Pollution Control Agency (MPCA) in collaboration with the Michigan Department of Environmental Quality, the University of Wisconsin-Extension Solid and Hazardous Waste Education Center, the Great Lakes Regional Pollution Prevention Roundtable (which is affiliated with the University of Illinois), and the U.S. EPA Great Lakes Program Office. Over the past year, the Project has used a multimedia program to accomplish its goal of eliminating the use of RTS throughout the Midwest. In addition to the creation of a website which provides numerous links to articles and publications that support the phase-out of RTS, the Project has also engaged the marketplace with widespread email, direct mail and telephone campaigns to “educate” consumers, municipalities, contractors and other states about the alleged environmental, ecological and human hazards of RTS, and of the alleged need to transition to asphalt sealants. These efforts have culminated with Project participants, many of whom are cloaked with the appearance of governmental authority, pressuring contractors and consumers to sign statements in which they agree not to use RTS in the future. The results of these efforts are then posted on the Project website.
The campaign described above has been carried out without any reference to or citation of peer reviewed research that has called into question the very foundation of the conclusions offered by the Project. Thus, while using the language of “educating consumers and the public about RTS,” the Project actually is an example of unwarranted product deselection and advocacy conducted at taxpayer expense. The Project primarily relies upon chemical fingerprint modeling conducted by the United States Geological Survey (USGS) – modeling that has been shown to be flawed in identifying RTS as an important source of polycyclic aromatic hydrocarbons (PAHs) in the environment. PavementCouncil.org has challenged the USGS’ findings by laying out the facts in Data Quality Act (DQA) filings, available via this link; by funding research published in peer-reviewed science journals, available via this link; and by directly informing government agencies and the public of the facts via presentations and comment letters such as that just provided to the Project, available here.
Based on the current state-of-the-science, PavementCouncil.org recommends that the Project be shut down or, at the least, suspended. If organizations participating in the Project are unable or not permitted to discontinue the Project, the Project must provide accurate and balanced information rather than incomplete and flawed science.
One vocal ban activist is city employee E. who works for the City of Austin, TX. E’s blog, Coal Tar Free America, promotes banning CTS pavement sealer. As to the accuracy of the claim made on E’s blog, let’s just say there are too many errors to mention in just this one posting.
There are several facts about E. that most people do not know about:
-City employee E. is a co-author of one of the USGS paper published in Environmental Science and Technology. If you notice in the author section, E is listed under Designs4Earth, Inc. It seems that E. and former city employee B. were owners/employees of this small company. If you refer to the supplementary information section of this study, you will find the method how different types of sealants were distinguished. This method (referred to as the coffee/tea test) had a patent pending at the time, which was held by Designs4Earth, Inc (see bottom of page one).
-E. also works for the City of Austin, TX. From information gather from multiple sources, E worked as a paid ban activist (by the city) to encourage bans in other cities and towns. These same sources confirmed that E. acted as a conduit for ban activities for other scientists. The USGS scientists acknowledged the role that E. played and referred various individuals to E. so that it is not apparent that USGS were acting as ban advocates. E. activist activities were not a secret to the major actors within MPCA, EPA, University of New Hampshire, and Washington District Department of the Environment (and others) as E. was frequently involved in the talk of bans in locations other than Austin.
-E.admitted to MPCA employees that as of 2011, the City of Austin was not paying him to continue his activist activities. It would appear that is when his blog, Coal Tar Free America appeared. E. still continues to act as a ban activist.
Several questions come to mind:
-How did City of Austin decide that paying an employee to act as an activist was a good use of tax dollars? Especially considering most of this activity was outside the city.
-USGS management knew about E’s activist activities and that Designs4Earth owned the test method that was used in the USGS studies. There are two obvious conflicts of interests that are apparent in this case. What did USGS do to mitigate this bias and conflict of interest? USGS failed to disclose to the journal of the financial interest E. had in the test method held by his company.