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Framing the “Green” alternative for environmentally conscious consumers

Framing the “Green” alternative for environmentally conscious consumers Purpose – Many market examples show that consumers are willing to pay a premium for “green” products and services. The purpose of this paper is to gain some insight into how consumers respond to green alternatives, and examine how managers can best position their green products to maximize the premium consumers are willing to pay. Design/methodology/approach – A series of behavioral experiments was conducted to demonstrate how the green product's characteristics are framed significantly affects the size of the “green premium” consumers are willing to pay. Findings – The results show that positive framing (focusing on the advantages of the green product) works best for environmentally conscious consumers while negative framing (focusing on avoiding the disadvantages of the non‐green product) works best for less environmentally conscious consumers. Additionally, subtractive price framing which focuses on the discount consumers would pay for the non‐green product alternative results in a higher green premium than additive price framing which focuses on the additional price consumers would pay for the green choice, and especially so for less environmentally conscious consumers. Research limitations/implications – Overall, the results suggest that green firms can maximize the green‐pricing premium by careful targeting of consumers and framing their products appropriately. Originality/value – This paper explores how the difference between the green versus non‐green alternative can be framed in different ways, and interact with the consumer's level of environmental consciousness, to influence the “green premium,”, i.e. how much more consumers are willing to pay for the green alternative relative to a comparable non‐green alternative. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Sustainability Accounting, Management and Policy Journal Emerald Publishing

Framing the “Green” alternative for environmentally conscious consumers

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Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
2040-8021
DOI
10.1108/20408021011089257
Publisher site
See Article on Publisher Site

Abstract

Purpose – Many market examples show that consumers are willing to pay a premium for “green” products and services. The purpose of this paper is to gain some insight into how consumers respond to green alternatives, and examine how managers can best position their green products to maximize the premium consumers are willing to pay. Design/methodology/approach – A series of behavioral experiments was conducted to demonstrate how the green product's characteristics are framed significantly affects the size of the “green premium” consumers are willing to pay. Findings – The results show that positive framing (focusing on the advantages of the green product) works best for environmentally conscious consumers while negative framing (focusing on avoiding the disadvantages of the non‐green product) works best for less environmentally conscious consumers. Additionally, subtractive price framing which focuses on the discount consumers would pay for the non‐green product alternative results in a higher green premium than additive price framing which focuses on the additional price consumers would pay for the green choice, and especially so for less environmentally conscious consumers. Research limitations/implications – Overall, the results suggest that green firms can maximize the green‐pricing premium by careful targeting of consumers and framing their products appropriately. Originality/value – This paper explores how the difference between the green versus non‐green alternative can be framed in different ways, and interact with the consumer's level of environmental consciousness, to influence the “green premium,”, i.e. how much more consumers are willing to pay for the green alternative relative to a comparable non‐green alternative.

Journal

Sustainability Accounting, Management and Policy JournalEmerald Publishing

Published: Oct 28, 2010

Keywords: Green marketing; Product positioning; Consumer behaviour; Decision making; Premium pricing

References