Chi Kwan Ng*
Finance, Economics and Marketing, La Trobe University, Australia
*Corresponding author: Chi Kwan Ng, Finance, Economics and Marketing, La Trobe University, Australia
Submission: November 12, 2020Published: March 16, 2021
ISSN:2770-6648Volume2 Issue3
Despite strong progress toward range of green products and competition, perceptions toward the financial responsibilities associated to green options have not been as progressive. This paper provides insight for the financial concerns and issues commonly associated to the purchase of green products and recommends the use of social media and popular culture as a method to initiate change of these beliefs.
Keywords:Willingness-to-pay; Competitive pricing; Greenwashing; Green products; Sustainability; Social media; Popular culture; Influencers
The range of environmentally friendly options, commonly referred to as ‘green’ products or practices, have become increasingly available at a wider range of places and prices over the years. This paper provides insight for prevalent financial stances toward green options, particularly those which are higher priced, and recommends that social media and popular culture be examined further to help increase the purchase of green products.
Industrialization throughout the years has both caused and amplified damage to the
earth’s environment. Pollution and greenhouse gases emitted through the use of fossil fuels
have inflicted deterioration of the earth’s protective ozone layer, resulting in harmful consequences
such as climate change and global warming, hence inspiring the creation of international
research communities and organizations which aim to restore the natural equilibria
of our planet [1,2]. Although the damage cannot be undone, and both technology and industrialization
continue to grow, more sustainable and environmentally friendly products, such
as renewable energy sources through solar and wind turbines, as well as the first all-electric
sports car by Porche, are available at a much broader range and stronger level of competition
to consumers [3]. Green products and practices are like any other product and service, in the
sense that adoption involves unavoidable costs which may include but are not restricted to,
financial monetary costs. However, green products have also been related to increased issues
regarding legitimacy and fairness of the product’s production and product itself, as well as
deceptive claims in its marketing, a practice commonly referred to as greenwashing [4,5]. Despite
different countries’ attempts to minimize financial pressures of green adoption through
strategies such as surcharge and subsides, the financial responsibility which comes with sustainable
and environmentally friendly practices still exists as a strong influential factor affecting
both the country and its individuals’ levels of enthusiasm and satisfaction in using green,
as well as the strategies acquired to encourage their transition [6-9].
Green consumers show commonalities in demographics which include female gender,
higher education levels, and a higher income [10,11]. Therefore, these more likely consumers
could also be considered as more “critical and well educated” Markard [6] individuals who
contain the skills to do their own research on the specific green product or service, and from
their analysis, draw their own conclusions as to what the product is worth, and how much
they are willing to pay. Willingness-to-pay has been another financial element which has
been studied, for which it has been emphasized that income itself only influences the amount
which is contributed, not the participation, and that a common objective of environmentally
conscious behavior was still to save money [12,13]. However, it has been implied that further research is only executed by the individual if the perception of
affordability exists, hence, personal opinions and decisions may
change over time, or be influenced by future government policies
such as providing a start-up incentive to support the development
of green electricity, and government subsidies or tax deductions,
which would assist in the overall set up costs and consumer prices,
but probably only if there was an initial belief that is was achievable
[14-17].
Competitive pricing is “influenced primarily by competitors’
prices” Pride [18], which is why competitive prices generally
become more apparent as the number of suppliers increases.
However, it may also be argued that more competition cannot be
incurred without first having the consumers who have the desire
to consume the product, an argument which can be approached
by many angles, including that “the green energy marketer needs
to create the market as well as sell the product.” Markard [6]
Considering that low participation rates for green electricity, for
example, has shown to generate low total revenue and therefore
higher prices, it can be assumed that greater involvement may
result in lower prices and higher levels of willingness-to-pay from
the customers [6,18, 19-23]. Hence, as suppliers try to increase their
own customer count by increasing customers’ satisfaction levels
in order to ideally prevent unsatisfied customers from leaving,
the increased competitors would increase consumer options, and
hence, consumers’ comparative analysis of the available product
options would also increase, comparing environmental as well as
non-environmental options [18,24]. It is, therefore, only reasonable
that the main concern toward environmentally friendly options is
the assumed accompaniment of higher prices with the main factor
of transition, hence, transition to environmentally friendly options
were induced simply by the availability of a lower-cost supplier,
which caused a realization that “some of the ‘green’ suppliers
offer(ed) prices that were actually competitive with the nongreen
products. Wiser [9] Especially for products requiring higher
financial costs, customers would contribute more time and greater
levels of consideration concerning the amount of long-term value
they receive, in an attempt to attain the greatest value for their
money, that is, more effort researching for the best quality results
at the cheapest price, prior to purchasing the product, as well as the
tangible and intangible benefits, for the self or others [21,25-28].
However, it is also these higher priced environmentally friendly
products, which potential customers are least likely to personally
test, experience and observe any relative advantages prior to the
purchase, all of which are core elements that contribute toward the
successful adoption of a product or behaviour [15].
In conclusion, despite the spread of environmentally friendly options and competition, the competitive prices of these suppliers for less triable products, are difficult to bring into general attention, especially if initial impressions exist. Hence, despite the loathe environmentalist critics are known to bare toward media and popular culture, it is recommended that social media and popular culture be considered as an effective method for spreading new beliefs about the affordability and benefits of environmentally friendly products which are less triable and currently less popular [29]. Social networking sites have already been effective in using medical social influencers to contribute toward healthier living, and already have millennials trending green products and practices, with research showing that effectiveness of social media use is mainly due to factors of trust and positive word of mouth, reaching a wide audience for a small cost [30-33]. Specifically how this could be executed for this type of green product, as well as its effectiveness, could be examined for future studies.
© 2021 Chi Kwan Ng. This is an open access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and build upon your work non-commercially.