Abstract
This study examines the effect of market uncertainty and consumer rationality on product strategy when a company evaluates its entry into the green market. The risk in launching a green product is high because consumers may not be as environmentally conscious as they claim to be. This study develops a composite condition consisting of preference uncertainty, loss aversion, investment cost, and competition intensity to guide companies to react either conservatively or aggressively. An upgraded non-differentiation strategy is suggested for heterogeneous markets, loss-averse consumers, or high-quality reference when the indicator falls within the greenness range. Unlike conventional competitive analysis for non-green products, differentiation may not always be the best option to benefit the entire society and non-differentiation to green is favorable in the context of our analysis.
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