The old cliché “Keeping up with the Joneses” typically has negative connotations. Visions of huge houses, gas-guzzling vehicles, exorbitant wardrobes and lavish vacations come to mind. Yet in today’s society, the meaning is slowly changing to have an increased focus in the opposite direction — to eco products.
A new study, “Social Responsibility and Product Innovation,” which will be published in Marketing Science, is demonstrating just how prominent it is for peer pressure to influence the decision to select eco products. Study authors Ganesh Iyer, a professor in the Marketing Group at UC Berkeley’s Haas School of Business, and David Soberman of the University of Toronto’s Rotman School of Management are dubbing this phenomenon “conspicuous conservation” and taking a look at how it might help companies shape their product innovation strategies, especially in certain product categories such as automotive.
How Does Conspicuous Conservation Work?
Let’s take a look at how this phenomenon might work, according to this new study. Let’s say you decide to purchase a Toyota Prius. It’s possible that you could have been driven by the desire to take care of the environment or to reduce your monthly gas expense. However, many people may also choose to buy sustainable eco products in order to make themselves appear as more socially responsible individuals to family, friends, co-workers and others in the community. Prior to deciding to make a purchase, these people take a look at how their choices will measure up against their peers’ decisions.
“The design of the Prius is easily noticed by other people on the road, and consumers care about that. The value that I get from driving a Prius may depend upon how many other people in my social circle are also driving environmentally friendly cars. The value is higher if I’m the only one,” Iyer says. “Conversely, if an individual is the only one in his or her social circle who is driving a gas-guzzler, there will be pressure to conform.”
Many people will refrain from purchasing a product that can cause harm to the environment simply because that decision can generate social value for them. The need for people to measure themselves up to their peers is called social comparison preference. Looking closely at this concept and how it’s applied in today’s society can provide marketers with valuable insights about how they can enhance the desirability of their products. This, in turn, can lead to the development of more environmentally conscious eco products available to us.
“We are trying to capture this issue of social comparison in markets, which is important for visible products like cars and clothing,” Iyer says. “Making a product better on a social or environmental dimension is not the same as simply improving its quality, it is about leveraging social comparison preferences.”
In the study, Iyer and Soberman developed a model that links the research and development decisions of companies with the way consumers use their social comparison preferences and how much they are willing to pay for said product. Their analysis demonstrates that the concept of social comparison can provide motivation for many companies to develop innovations in sustainability when their particular product category is mature and most people are already users in their category.
Take the Prius as a prime example for how this model works. Most people already drive a vehicle. So choosing a more eco-conscious vehicle is a decision many people will make in order to gain social credibility. It demonstrates how the success of the introduction of the Prius came to fruition.
In a society where we are constantly connected to media in some form, it makes sense that the media can influence or expedite social change. According to the research study, there are many examples of how increased media attention has helped eco products become more socially valuable. Take the palm oil phenomenon, for example. As the media began to place more and more attention on the effect that palm oil production has on deforestation and the orangutans, many consumer product companies began to produce palm oil–free products to meet consumer demand.
Other examples that the paper lists as examples of innovative products developed to respond to consumers’ social preferences are Clorox’s Green Works cleaners and Levi’s Water<Less jeans. While true green advocates probably wouldn’t purchase the Clorox Green Works cleaner line, it’s important to note that Clorox spent more than $20 million to produce this line of more eco-friendly cleaning products because they saw the demand. The fashion industry is often blasted for using too much water and too many chemicals in their production. After seeing the consumer demand was there, Levi’s spent three years to develop a process that allows them to create denim that requires less water and fewer chemicals in its production.
“The research study’s findings underscore the value for companies to understand their consumers’ preferences with respect to social responsibility and to use that understanding in determining long-term innovation and product strategies,” Iyer says.
Your Voice, Your Vote
This study clearly shows us that we do have a voice in the products that are produced for our consumption. If we tell companies loud and proud that we want more environmentally responsible choices and eco products, then they’ll make them. If they want to turn a profit, they will listen to consumer demand.
We can ensure our voices are heard by taking action in a variety of ways. Here are five examples:
- We can boycott the brands that don’t meet our standards.
- We can share our opinions on social media.
- We can write the companies directly and let them know what we’d like them to start producing and the changes we’d like them to make.
- We can engage with them on social media.
- We can open up conversations with our friends, family and co-workers.
If we work together collectively, we can make a difference. Companies do hear us when enough of us speak up.
What other examples of eco products would you like to see produced?
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