Research on Production Mode and Eco-Label Strategy Selection Considering Consumers’ Environmental Awareness

Abstract

This paper studies the enterprise’s selection of production mode and eco-label strategy. Using optimization methods, we find the optimal decisions of the enterprise, NGO, and government under different circumstances. We can obtain the following conclusions by analyzing and comparing the optimal decisions. No matter what kind of eco-label the enterprise adds, the mixed production mode is the best choice for the enterprise. When consumers’ environmental awareness is high, the production mode of only ordinary products is the worst choice. For the NGO and the government, the enterprise’s production mode of only eco-labeled products can bring the highest environmental benefits and social welfare. And the government label has a lower standard than the NGO label. By applying the government label, the enterprise can provide eco-label products at a lower price, thus gaining higher market share and profits.