Do People Still Buy Greener Product?
As time goes, society more into what's called an “eco-friendly” product. This sometimes requires buyers to pay more. How they become so eager and willing to pay the premium for the same functionality they get?
What is Green Product?
Green and eco are often used interchangeably. It's a term coined within the marketing field back in the 1990s. It became quite fashionable due to its coincidence with the environmental awakening of customers.
“Go green!” who never heard about this jargon? It is such a common ad for environmental saving campaigns nowadays.
Green is a product (tangible or intangible) that minimizes its environmental impact (direct and indirect) during its whole life-cycle, subject to the present technological and scientific status.
You might know the reusable straw, right? The no-straw campaign is viral since 2018. You probably also notice that the majority of fast-food restaurants already banned plastic straw. They will not give you any other than a paper cup filled with soda.
Why “green” cost more
From a business point of view, green products often lead to a higher cost of production. If we compare a sustainable product from the conventional ones.
Green ingredients/materials needed to produce their product may themselves be expensive. These materials may be hard to find, difficult to produce, and very costly to purchase — this will drive up production costs and lead to higher prices.
Next, environmental certifications are expensive. For example, for acquiring USDA organic certification, the farm facilities must comply with sustainable standards. It requires facilities to be modified. These certifications also come with an annual inspection fee, which can begin at $400 to $2000 a year — this makes the fixed cost soar.
A quick survey by seastainable suggests that green products will be more expensive 2–7x than its conventional product price.
The green concept might equal profit.
Green products will indeed cost consumers more. It can also lead to good marketing tools, as the customer sees a “greener” value offered in the product advertisement.
A research study found a positive correlation between customer willingness to buy with the green value of the product. It takes a case in hotel services where the operations follow the green standards. The customer is giving more positive feedback to the hotel.
Another study stated that 68% of millennials bought a product with a social or environmental benefit in the past 12 months, and 92% will be more likely to trust a company that supports social or environmental issues.
Customers want to feel they are helping the environment by buying green products. The producer should see this as an opportunity to secure the market.
We want to create products that deliver real benefits while doing minimal harm to the environment.
- The Body Shop Brand Value
The body shop is one example of a product that values the environment the most. Over the years, they have run campaigns against human rights abuses, protecting animals and the environment. They also show a commitment to campaigning on social issues, protecting the planet, and supporting fair community trade.
Having this brand value, The body shop gains 805 million GBP revenue in 2019 (about 1.2 billion USD).
That huge revenue is so much caused by their strong image value. 83% of The Body Shop’s loyal and regular customers say they choose retailers who take social and environmental issues seriously.
The Future of Green Product
As the world aged, the planet’s average surface temperature has risen about 1.18 degrees Celsius since the late 19th century, a change driven largely by increased carbon dioxide emissions into the atmosphere and other human activities.
This condition will worsen in the future. As warming ocean, shrinking ice sheet, glacial retreat, decreased snow cover, sea-level rise, and another extreme event already happened.
Even Bill Gates is aware of this issue. In the BBC news interview, he said that solving climate change would be “the most amazing thing humanity has ever done.” It indicates that climate change is such a hard and urgent problem that needs to be treated as soon as possible.
“We(government) need to have price signals to tell the private sector that we want green products,” Bill said.
The conditions will lead to regulation. We already see this once in the Covid-19 pandemic where physical distancing regulation issued due to urgent needs. It will force all manufacturers and companies to use any green means for their production.
Sooner or later, it will make green concept to be implemented in all over areas, including products and services.
If all the product available become a green product, what will happen?
There will be no terms such as “green” because it is imbued within the concept of manufacturing and delivering products. The concept will shift, the green products will become a “normal” product in the future.
When all of that things happen, the green premium will inevitably lead to product acceptance on a massive scale.
Do you buy green products as well? If yes, what is your reason for doing so? Do you consider the premium agreeable while there is the same value you share with the product you buy?
