Educate and Entice Consumers

What drives sustainable consumption?

Creating good.

People are more than twice as likely to choose a responsible product when marketing messages appeal to their sense of right rather than wrong.

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In a study of 50 participants in a retail setting, marketing professor and NBS Topic Editor John Peloza found people are more likely to buy an ethical product when marketing heightened their own sense of right and wrong – as opposed to making them feel guilty about the less ethical alternative.

Subjects were more than twice as likely to choose Fair Trade versus non-certified teas when marketing messages promoted good. For example: “Our fair trade teas contribute to equitable conditions for workers.” Guilt-inducing messages bashing the other teas, such as: “How can you enjoy a cup of tea knowing the people who produce it are not being treated fairly?” – were not as successful at selling the Fair Trade teas.

Takeaway
Don’t guilt your customers into buying sustainable products. Make buyers feel good about their choices and use subtle messaging that evokes thoughts of right and wrong.
Source: Peloza J, White K, & Shang J. 2013. Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes. Journal of Marketing. 77: 104-119.
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Case Study

Eco Options: Empowering the Customer with Environmentally Preferable Choices

The Home Depot Canada

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“We know that 84% of our consumers care about sustainability,” explains Jamieson Saab, Manager of Environmental Programs at The Home Depot Canada.

For The Home Depot Canada, this is an opportunity to help customers identify home improvement products and solutions that have a sustainable focus. Through its Eco Options assortment, the company offers more than 2,500 environmentally preferable products. These products help customers conserve water and energy, reduce waste or improve indoor air quality.
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Will consumers pay more for responsible products?

Yes.

Consumers will pay up to 5 to 10% more for sustainable products, assuming product features and quality stay the same.

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NBS’s review of 91 articles over 30 years showed people are willing to pay up to 10% more for a responsible product as long as it offers the same attributes and quality as its less responsible counterpart.

For coffee, the story is even more pronounced. Researchers found consumers were willing to pay 16% more per pound for Fair Trade certified beans. Endorsement from a credible third party contributes to this willingness to pay more.

Takeaway
Focus first on the features and quality that your customers value, then find out what environmental or social issues matter most to your target audiences. Get third-party certification from a credible organization that supports your product’s sustainable credentials; this will boost consumer willingness to pay.
Cotte, J., & Trudel, R. 2009. Socially Conscious Consumerism: A Systematic Review. Network for Business Sustainability.

Trudel, R., & Cotte, J. 2009. Is it really worth it? Consumer response to ethical and unethical practices. MIT/ Sloan Management Review, 50(2): 61-68.
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... or they’ll expect an “unethical” discount.

Consumers expect a discount for unethical products that is 40% greater than the premium they’ll pay for sustainable products.

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A study on bottom line impact of ethical practices found consumers expected a discount on a premium coffee brand when they knew the company used unethical practices such as exploiting foreign workers.

The study showed unethical activities had more impact than positive activities on coffee buyers’ willingness to pay. Consumers reported they were willing to pay an extra $1.40 per pound as a reward for Fair Trade practices, but the punishment – or expected discount – for unethical practices was $2.40 per pound.

Takeaway
It pays to invest in responsible sourcing practices, so be proactive.
Source: Trudel, R., & Cotte, J. 2009. Is it really worth it? Consumer response to ethical and unethical practices. MIT/ Sloan Management Review, 50(2): 61-68.
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Framework

Use the Socially-Conscious Consumerism framework to close the attitude-intention-behaviour gap with consumers.

How do consumers relate sustainability and luxury?

Green luxury remains an oxymoron.

Green, ethical, sustainable…luxurious? Consumers aren’t buying it.

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In a survey of 279 people, researcher Carlos Torelli and colleagues examined whether CSR adds more value to some brands than others. They found that linking sustainability to luxury brands can reduce the value that consumers associate with these products. In the short-term, it appears that CSR or sustainability detracts from the pursuit of “perfection” that is characteristic of luxury brands, such as Rolex or Lexus, leading to negative business outcomes.

Researchers indicate that the negative short-term effects of CSR observed in this study need to be considered within a longer time frame.

Takeaway
Every brand has the potential to benefit from sustainability efforts, but framing is key. Ensure your sustainable activities are communicated in a way that is consistent with the brand that your customers love.
Source: Torelli, C.J., Monga, A.B., & Kaikati, A.M. 2012. Doing poorly by doing good: Corporate social responsibility and brand concepts. Journal of Consumer Research, 38(5): 948—963.
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Does cause-related marketing increase what people will pay?

Yes, if you pay it forward.

People will pay the most for products when at least 10% of the purchase price goes to charity.

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In a study of cause-related marketing, customers were willing to pay more for products if they knew 10% of the purchase price – as opposed to five per cent – was going to a charitable cause. Researchers found that this was most effective when the products were practical, everyday items such as paper towels or toilet paper, as opposed to hedonistic products like cologne, cosmetics or jewelry.

Takeaway
If you are donating proceeds to a charitable fund, choose utilitarian goods and allot a higher percentage to your designated charity to promote a win-win situation. Commit a high percentage of product sales to the cause, so customers will know you are sincere.
Source: Koschate-Fischer, N., Stefan, I., & Hoyer, W. 2012. Willingness to pay for cause-related marketing: the impact of donation amount and moderating effects. Journal of Marketing Research, 49: 910—927.
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