Monday, 16 December 2013

Eco conscious consumers value the environment over price

Research published in the Sustainability Accounting, Management and Policy Journal has once again emphasised that eco conscious consumers are willing to pay a premium for environmentally friendly goods and services. Under the title Framing the Green Alternative for Environmentally Conscious Consumers, the researchers used a series of experiments to show that focusing on the advantages of green products creates a positive impression in the minds of consumers. Whilst this has little impact on price-sensitive consumers with little awareness of environmental impacts, it does increase the purchase likelihood for eco conscious consumers.
We can conclude from these findings that companies who specialise in selling green and fair trade products should not try to compete with generic sellers on a race to the bottom price basis. Instead, green companies should extol the virtues of their products and promote their eco friendly credentials. Eco conscious consumers and general consumers are essentially two different and distinct groups. The latter will always opt for lower prices regardless of the environmental benefits, particularly in times of economic hardship. Green companies, especially those operating in niche markets such as eco friendly insurance, should therefore not try to compete on price alone but should instead seek to appeal to the core group of eco conscious consumers who are actively looking for environmentally friendly alternatives.

For eco conscious consumers, helping to protect the rainforests, foster fair trade, saving endangered species, stabilising population growth and reducing climate change are noble pursuits which sit above purely price considerations.

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