Attract Green Consumers by Showing They Make a Difference

While some consumers are willing to pay more for environmentally friendly products, companies must consider to whom they market these products and how. 
Lauren Rakowski September 26, 2017
Which consumers are willing to pay more for green products and which market strategies will attract them?

Three-quarters of consumers are undecided as to whether they will pay more for green products. Those consumers willing to pay more are more likely to be female and married, with at least one child living at home. To encourage consumers to pay price premiums, marketers can 1) educate consumers about how green products help the environment, 2) use ad campaigns that show how individuals can make a difference to the environment, and 3) provide feedback to show that individual consumers are making a difference.

Background

While some consumers are willing to pay up to 40 per cent more for environmentally friendly products, companies must be cautious to whom they market these products and how. For example, consumers who claim to recycle and to buy green products are not always those willing to pay premiums. This study helps marketers develop strategies to target those already willing to pay premiums and convince others to do so.

Findings

Implications for Managers

Target consumers already willing to pay premiums on green products and convince others to do so.

Implications for Researchers

Future research can identify additional factors that influence green purchasing decisions and willingness to pay price premiums—experiments are preferable to surveys. To determine these factors, research can be expanded to specific industries (e.g. cosmetics), to different types of clientele (e.g. businesses) and to different countries.

Methods

This study used data from 907 questionnaires in 17 municipalities from a large North American city. The questionnaires had five parts: eco-literacy, behaviour, environmental attitude, values and demographics.
Laroche, Michel, Bergeron, Jasmin, & Barbaro-Forleo, Guido. (2001). Targeting consumers who are willing to pay more for environmentally friendly products. Journal of Consumer Marketing, 18(6): 503-520.

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