Consumer Environmental Awareness Research Articles

Competitive pricing and innovation investment strategies of green products considering firms' farsightedness and myopia

AbstractWith the deterioration of ecological environment and the improvement of consumer environmental awareness, a number of firms are actively engaging in product innovation to enhance product greenness. In this paper, we develop a differential game involving two competing firms, each of which produces and sells one green product to end consumers. The two firms carry out innovation investments to improve customers' perceived product greenness and also determine their own retail prices. Each firm's demand is linearly dependent on its own retail price and innovation investment, the rival's retail price and innovation investment, and the customer perceived product greenness. The objective of our study is to examine the impacts of the competing firms' farsighted and myopic behaviors regarding the consumer perceived product greenness on their pricing and innovation investment strategies and profits. We find the following interesting results. First, when one firm is farsighted and the other is myopic, the latter obtains more profits than the former if one firm's innovation investment has a relatively small direct effect on the other's demand, that is, there is a free‐riding for the myopic firm. Second, when the intensity of competition regarding the two firms' innovation investments is not strong, competing with a farsighted rival can make a firm better off. Third, the scenario that the two firms adopt farsighted strategies can achieve an equilibrium, whereas acting myopic strategies can bring more profits for both of them under some conditions, which leads to a prisoner's dilemma. These results still hold under separable multiplicative demand between retail prices and innovation investments.

Balancing price and green quality in presence of consumer environmental awareness: a green supply chain coordination approach

This study analyses the green channel coordination problem in a two-echelon supply chain where demand is a function of the selling price and the product’s green quality. The retailer decides on the selling price while the manufacturer regulates the green quality of the product. To initiate the channel coordination and to establish a win-win outcome for both parties, a hybrid of ‘greening cost sharing’ and ‘revenue sharing’ contract (HGRS) is developed. This study contributes to the literature by providing an analytical approach to address the channel coordination and pricing issues in a green supply chain under the consumer environmental awareness while the manufacturer has the ability of enhancing, with investments, the product’s green quality. Our study reveals that: (a) the proposed HGRS contract is capable of achieving channel coordination while both supply chain members gain more profit than in decentralised decision making, (b) the new suggested contract enhances the product’s green quality, reduces the selling price, and stimulates the market demand, and (c) HGRS contract results in more satisfied customers (by offering low prices) as well as more sustainable operations (by increasing greenness level) at the same time.

Influence of Variables to Reduce the Intention and Behaviour Purchase Gaps in Eco-Label Food Products

Academic researchers have sought to examine the variables that affect purchasing behaviour and the development of models for ethical consumer behaviour due to the fact that consumers are increasingly aware of the impact that daily food products can have on the environment. As a result, the demand for environmentally friendly food has increased rapidly and the companies have created different eco-labels to encourage consumers to buy their products. However, there is still a large gap between the intent to purchase eco-labeled products and the actual purchasing behaviour. Thus, this paper explains and assesses the extrinsic and intrinsic variables that could reduce the gap between eco-label purchase intention and the actual purchase behaviour for eco-labelled food products based on the TRA theory. The qualitative findings show that product benefits consumer environmental knowledge, consumer environmental awareness and demographic aspects, all which influence or affect the purchase intention for ecolabelled food, while the eco-label type I has no relationship with the intention of purchase for food with eco-label attributes. This paper is very useful for Latin American food companies given that most of the current research has been focused on European countries.

Green Product Design Considering Consumer’s Income and Environmental Awareness

With the enhancement of consumer environmental awareness, many companies are paying more attention to developing green products with higher environmental quality. In this paper, we study how the consumer’s valuation towards product’s qualities and consumer demand affect manufacturer’s product design and pricing regimes. Assuming there is a monopolist who manufacture products with traditional and environmental qualities and the market is divided into four segments according to consumer’s income level and environmental awareness, we give the optimal closed form solutions of the qualities and prices of products in mass-market and segment-market strategies. Additionally, we discuss the impacts of consumers’ valuation towards products’ qualities and market segments’ size on the total environmental qualities. We find that (i) various parameters, especially consumers’ valuation towards products’ qualities and market share of each segment affect the firm’s choice on market strategies and consequent environmental performance; (ii) green product development does not always increase and may decrease the degree of environmentally friendliness.

Municipal solid waste management considering NGO’s role in consumer environmental awareness and government regulations for air pollution

PurposeThe purpose of this study is twofold: first, to examine the role of non-governmental organizations (NGOs) in increasing customer environmental awareness (CEA) to decrease the municipal solid waste (MSW), and secondly, to examine the effect of government policies in the amount of air pollution caused by transfer stations (TSs).Design/methodology/approachThis study proposes a mixed-integer nonlinear programming model. For solving this multi-objective problem, the authors use epsilon constraint method, which presented eight Pareto solutions. For selecting the best solution, the analytic hierarchy process approach is used. The presented model is applied on a real case study, and the results are discussed and sensitivity analysis is implemented on the parameters of the concern.FindingsThis study confirms the assumption that by allocating budget to NGOs for increasing CEA, the produced waste will be decreased.Research limitations/implicationsIn the present study, the authors only investigate air pollution caused by TS. Future studies can investigate other types of pollution. Furthermore, uncertainty in the amount of produced waste can be variable making the problem closer to the real environment. In this case, robust optimization may have better results.Practical implicationsBased on the results of sensitivity analysis, some implications obtain that can highlight by managers in the decision-making process. The operational costs of TS have a critical aspect in founding TS, so using new technology and high-tech machines for operational processes of TSs, can result in decreasing the running cost of TSs. Also, the determination of TS capacity is a remarkable issue in optimization, which should be paid special attention to this for the design of TSs in the planning phase of the system. Moreover, collaborating with NGOs has a good effect on increasing CEA that results in a decrease of MSW.Originality/valueThe role of NGOs and government simultaneity has been considered in a green supply chain. Moreover, the authors considered TS between source and disposal that reduce the time of transferring waste. Therefore, this study can be beneficial for the MSW management system, which faces the problems in the lack of capacity and transportation problems and environmental issues by proposing solutions in three studies including economic, environmental and social aspects.

Research on energy efficiency improvement in a supply chain with discontinuous market demand.

In many countries, products are divided into several grades according to their energy efficiencies by the government. It leads to the discontinuous market demand for the products with different governmental energy efficiency certifications and further influences the relevant strategies of firms. Considering both increasing consumer environmental awareness and strict governmental grading standard, this paper develops a Stackelberg differential game between a manufacturer and a retailer. The optimal pricing strategies and the energy efficiency efforts are studied, and the influences of discontinuous market demand on those optimal strategies are discussed. The results show that the governmental grading standard has an important boosting impact on the energy efficiency level of products. When the product's energy efficiency level is lower than the governmental standard, the manufacturer will make great efforts on energy efficiency improvement. It would be beneficial for both the manufacturer and the retailer to use penetration pricing strategy during this period. Once the governmental standard is met, the manufacturer will reduce his effort significantly. At this time, taking the skimming pricing strategy is beneficial for both the manufacturer and the retailer. Moreover, a higher governmental standard and a larger consumers' preference difference can motivate the manufacturer to work harder to improve energy efficiency. They also lead to a higher price after the product is certified as the high energy efficiency product by the government.

Price Competition and Product Differentiation Based on the Subjective and Social Effect of Consumers' Environmental Awareness.

Consumer environmental awareness (CEA) can affect green consumption decisions in different and confusing ways. In order to explain the reasons for these divergences, this study divides CEA into two main components: the subjective effect and the social effect. Then, we integrate the two effects into the classic Hotelling model to study the influence of CEA’s subjective effect and social effect on price competition and product differentiation strategy. It was found that the subjective and social effects of CEA have opposite impacts on price competition and product differentiation strategies. The subjective effect of CEA increases the price and profit level of enterprises, and enlarges the difference in the environmental friendliness of products. Meanwhile, the social effect of CEA reduces the enterprises’ price and profit level, and narrows the difference in the environmental quality of products. Therefore, we suggest that it is necessary for producers of green products to distinguish between these two effects. Numerical examples are provided to verify our findings. Finally, some possible suggestions regarding the competition of green products are put forward which take into consideration the subjective and social effects of CEA. The main contribution of this paper is to theoretically explain the opposite effects of the two different components of CEA on environmentally friendly product pricing and differentiation strategy; this presents a possible explanation as to why the behavior regarding CEA differs, and provides theoretical support for enterprises to price and differentiate green products.

Stavovi potrošača prema korišćenju peleta u funkciji energetske efikasnosti

Modern living conditions are characterized with concern for environmental protection and sustainable development, which implies an increase in environmental awareness of consumers and a continuous change in consumer attitudes with a goal to adopt behavior towards sustainable energy use. Consumer attitudes represent one of the key psychological variables that has a significant impact on energy-saving behavior. The purpose of the paper is to analyze consumer attitudes in the context of energy-saving behaviors and the increased use of renewable energy. The main objective of the paper is to identify, on the basis of the results of empirical research, consumer attitudes in the Republic of Serbia towards the use of pellets and compare consumer attitudes of different sociodemographic segments. Measurement of consumer attitudes towards the pellet was performed on the basis of the obtained scores on a five-point Likert scale, while independent samples ttest, one-way analysis of variance and Pearson correlation were used to compare respondents of different sociodemographic profiles. The results of the study show that attitudes towards pellet heating in the Republic of Serbia are positive, with the notion that the attitudes cannot be statistically significantly explained by the sociodemographic characteristics of the respondents. A specificity and originality of the work is in the study of the influence of consumer attitudes towards the use of pellets in comparison with the sociodemographic profile of consumers.

Modern Methods of Marketing Researches of Ecological Needs of Population in the Region

The economic damage from environmental pollution is significant; therefore, environmental protection has become an urgent problem in recent decades. The greening of the economy, the growing needs of a socio-biological nature form an environmental orientation of the interests of consumers, more and more people are aware of the importance of preserving the environment. The purpose of the article is to analyze the process of environmental awareness at the level of residents of the region, the influence of the level of development of environmental awareness of consumers on the formation and satisfaction of their environmental needs. The authors revealed the features of greening the needs of residents of the Omsk region, in the course of a marketing research, the structure of the environmental preferences of the population was determined. The choice of research methods is associated with the features of regional studies and environmental topics, to which, on the one hand, there is an increased interest among residents of the region, and on the other hand, there is a low involvement in the interviewing process.

On the introduction of green product to a market with environmentally conscious consumers

Facing environment-concern consumers, a conventional manufacturer who produces only brown product and sells the product through a downstream retailer is confronted with the problem of whether to introduce green product into the market and how to distribute the product. By analyzing the production cost and the launching cost of green product, we provide the optimal product choice and the dominant channel strategy for the manufacturer. We find that a high consumer environmental awareness will induce the manufacturer to produce green product, but a higher consumer environmental awareness does not guarantee a higher profit for the manufacturer. If the manufacturer distributes both brown and green products through the same retailer, the total market coverage will not change, which means that green product will cannibalize the market of brown product. However, if the manufacturer distributes different products through different retailers, the market cannibalization may disappear. Furthermore, the manufacturer can obtain a higher profit through strategic pricing without changing the product portfolio. In addition, managerial insights to promote the production of green product are provided from the perspective of the manufacturer and the government, respectively, based on the theoretical results.

The Optimal Green Product Design with Cost Constraint and Sustainable Policies for the Manufacturer

In this paper, we study how the manufacturer balances the investment between the green product and the ordinary product as consumer environmental awareness (CEA) increases. The green product and ordinary product have a basic commonality traditional quality but difference between the premium environmental quality and premium traditional quality. With the cost constraint, we present manufacturer’s optimal strategy: producing one product or two products and the optimal traditional quality of the ordinary product or the optimal environmental quality of the green product. Then, we further study the effect of government subsidy and tax on manufacturer’s strategies and analyze the effectiveness of the policies. Finally, we give some numerical examples and sensitivity analysis. The main findings are as follows: (1) manufacturer’s cost constraint affects product’s optimal quality but may not influence manufacturer’s optimal product strategy: the manufacturer may not produce two products even through the budget is sufficient large; (2) the government policy could induce the manufacturer to invest green product but may be inefficient; the subsidy and tax policies are mutual exclusion; and either subsidy or tax could play a role in changing manufacturer’s strategy. Some management insights are given.

Supply Chain Coordination in the Context of Green Marketing Efforts and Capacity Expansion

This paper focuses on coordination issues related to the green supply chain with capacity constraints and green marketing efforts. We build a two-stage green supply chain, in which the upstream manufacturer has a certain amount of installed capacity to produce green product, yet can expand its capacity through a Cloud Manufacturing (CM) Platform once its existing capacity becomes insufficient, while the downstream retailer expends green marketing effort to promote the green product. In particular, we analyze the interaction between the capacity expansion options of the manufacturer and the green marketing efforts of the retailer. Aiming to mitigate the inefficiency under a decentralized green supply chain, we design a contract that combines cost-sharing and revenue-sharing in green marketing in order to coordinate the supply chain. The results show that: (1) when the manufacturer’s existing capacity falls below a certain threshold, it will choose to expand its capacity. The threshold is related to existing capacity, capacity expansion cost coefficient, green marketing cost coefficient, and sensitivity coefficient of demand to green marketing. (2) Under low capacity, if the capacity expansion cost coefficient is large, a higher consumer environmental awareness or preference for green products will weaken the retailer’s motivation for expending green effort. (3) A contract for cost-sharing and revenue-sharing in green marketing can fully coordinate the green supply chain, whereby the two share proportions are equal and meet certain constraints.

Impact of Corporate Environmental Responsibility on Investment Efficiency: The Moderating Roles of the Institutional Environment and Consumer Environmental Awareness

The increasingly serious destruction of the natural environment represents a great threat to the sustainable development of human beings and the earth. Under pressure from the government and public opinion, companies must assume environmental responsibility; however, there is no conclusion on whether corporate environmental responsibility is beneficial to companies. From the perspective of investment efficiency, this paper collects panel data from Chinese listed companies from 2011 to 2016 to discuss the impact of corporate environmental responsibility on investment efficiency and the moderating role of the institutional environment and consumer environmental awareness. The results show that corporate environmental responsibility can significantly positively affect investment efficiency, but this effect is not a short-term effect; it needs time to play a role. Second, in regions with a good institutional environment, corporate environmental responsibility has a more significant impact on improving investment efficiency. Finally, with the improvement of consumer environmental awareness, companies that assume environmental responsibility can address underinvestment. The research in this paper supports stakeholder theory, indicating that corporate environmental responsibility is not “selfless dedication”. In addition, the research results of this paper are robust and not subject to endogenous influences.

Consumers preferences in purchasing recycled/refurbished products: An empirical investigation

In this paper, we empirically examine consumers' behaviour in purchasing products made of recycled material. The impact of three factors of discount, warranty, and money-back guarantee (return acceptance) on respondents' willingness to buy recycled/refurbished products are analysed by conducting a survey using a questionnaire on 150 respondents. Our survey examines how people with different levels of consumer environmental awareness (CEA) and perceived consumer effectiveness (PCE) behave while they buy various types of recycled/refurbished goods. To this aim, we categorise products into four sorts: 1) technology; 2) household; 3) personal; 4) luxury. Our findings reveal that recycled/refurbished technology products are more popular while there is a little interest in buying refurbished personal products. In addition, the results demonstrate that, although offering discount and warranty have a positive impact on the consumers' willingness to purchase recycled/refurbished products, more than half of the respondents prefer money-back guarantee when buying a recycled/refurbished product.

Selection of optimal coordination contract for sustainable supply chain under carbon tax

The purpose of this paper is to find an optimal coordinating contract on a two-echelon sustainable supply chain composed of a manufacturer and a retailer under carbon tax policy. Taking consumer environmental awareness (CEA) and manufacturer’s abatement investment cost into account, this study compares wholesale price contract, revenue-sharing contract and green cost-sharing contract, and finds that none of them can obtain coordination. Then, “Adjusted” contracts are introduced and proved that only adjusted revenue-sharing contract can coordinate the supply chain. Considering the profit redistribution proposition of the two-part tariff contract, the study introduces combined contracts, which are found capable of obtaining supply chain coordination as well as a win-win outcome.

Influence of Government Subsidy on Remanufacturing Decision under Different Market Models

This paper considers a remanufacturing closed-loop supply chain involving a manufacturer and an independent remanufacturer. First, it analyzes the decision-making changes under three market leadership (manufacturer leadership, remanufacturer leadership, and no leadership) models before and after government subsidies. Considering the government’s goal of maximizing social welfare, the study establishes a two-stage game model for the government’s optimal price subsidy. It also considers the effects of consumer environmental preferences on product prices, demand, profits, government subsidies, and social welfare under different market models. The study found that government subsidy effectively stimulates the demand for remanufactured products, reduces the price of both new and remanufactured products, and promotes the remanufacturing industry. Furthermore, improvement in consumer environmental awareness was found to enhance the government’s optimal subsidy.

Optimal strategies of improving energy efficiency for an energy-intensive manufacturer considering consumer environmental awareness

Motivated by the observation that many energy-intensive manufacturers are adopting energy efficiency to deal with rapidly increasing consumer environmental awareness (CEA), this paper is the first attempt that extends CEA into the energy-saving area using several mathematical models and investigates how an energy-intensive manufacturer, facing choices of self-saving, shared savings and guaranteed savings, determines the optimal strategies of improving energy efficiency when CEA is considered. When the actual savings per unit is deterministic (DU scenario), we derive the optimal strategies of improving energy efficiency for both the manufacturer and the energy service company (ESCO) under the two energy-saving modes: self-saving and shared savings. Our results show the following: (1) CEA always has positive impacts on the optimal predicted savings per unit and the optimal profits of both the manufacturer and the ESCO; (2) interestingly, the impact of CEA on the optimal choice between energy saving modes may not exist. Furthermore, when the actual savings per unit is stochastic (UU scenario), and if the energy-intensive manufacturer introduces guaranteed savings, we find that most of the optimal strategies under the UU scenario are similar to those under the DU scenario. Finally, through numerical studies, we demonstrate the important results.

Pricing, Green Degree and Coordination Decisions in a Green Supply Chain with Loss Aversion

The consumer environmental awareness promotes green manufacturing and the behavioral preferences of members become prevailing in supply chain management. To promote further development of green supply chains, a two-echelon green supply chain with a manufacturer and a retailer is considered, where the manufacturer is loss-averse and the retailer is risk-neutral. We use a Stackelberg game to investigate the impacts of loss aversion and green efficiency coefficient on retail price, wholesale price, green degree, profits of members, and profit of the green supply chain under the assumption that manufacturer’s reference point of loss aversion is equal to the subgame perfect equilibrium partition. It is shown that, in the centralized decision-making setting (CDS), green degree and profit of the green supply chain are higher than those in the decentralized decision-making setting (DDS), while in the decentralized decision-making setting with a loss-averse manufacturer (DDS-LAM) loss aversion of manufacturer further decreases green degree and profit of green supply chain. It is also found that profits of the manufacturer and the retailer decrease with levels of loss aversion of manufacturer. Furthermore, it is also shown that wholesale price and retail price in the three decision-making settings depend on the green efficiency coefficient. Wholesale price and retail price in DDS-LAM are always the lowest (highest) if the green efficiency coefficient is sufficiently high (low). Finally, executing a greening cost-sharing contract can improve chain members’ profits if the retailer shares an appropriate proportion with the loss-averse manufacturer.

Increasing purchasing intention of eco-efficient products: the role of the advertising communication strategy and the branding strategy

Eco-efficient products achieve a balance between resource efficiency and environmental responsibility, including economic, social, and ecological aspects. Due to increasing consumer environmental awareness, companies have been pushed to consider the environmental impact of their activities, in terms of production processes and the design of marketed products. To gauge the effects of different advertising strategies on the purchase intention of eco-efficient products for different brand strategies and different consumers, we conducted three experiments with 449 college students as subjects. The effects of different marketing strategies, the use of brand names, and the subjects’ regulatory foci (promotion and prevention) were manipulated and measured. First, the power of brand extension was demonstrated, as the purchase intention of an eco-efficient version of an existing product is higher than that of a new eco-efficient brand. Second, it was shown that using positive emotional advertising has a stronger effect than using informative advertising. Third, we detected a mild effect on purchase intention when using an informational approach in communication. Finally, the negative promotional communication strategy had the greatest effect on purchase intention for prevention-focused individuals, and the positive emotional strategy had the greatest effect for promotion-focused subjects. It was also evident that a new brand per se does not contribute to increasing the purchase intention of an eco-efficient product.

The Equilibrium Model for the Coexistence of Renewable Portfolio Standards and Emissions Trading: The Supply Chain Analysis

China will impose both renewable portfolio standards (RPS) and emissions trading (ET) on the electricity industry, but the product competition in the retail market and the influence of the supply chain network structure has not been investigated. This paper studies policy effects by comparing equilibrium results under different supply chain network structures, and we use the concept of consumer environmental awareness to capture a product’s substitutability. Results indicate that: (1) Both increases in the permit price and the rise of the quota obligation reduces the aggregate profits of the supply chain, but the former rather than the latter increases the profits of the renewable power generating company; (2) the differential pricing improves the retailer’s flexibility in the charged price when confronting increases in the permit price and the quota obligation; (3) higher consumer environmental awareness makes the supply chain less profitable and increases the costs of ET suffered by the consumer; (4) the cooperation between the thermal power generating company and the retailer significantly increases the aggregated profits of the supply chain, although the cooperative profit is sensitive to environmental awareness. Moreover, the consumer suffers the highest costs that the retailer passes on them, and may prefer to feel that the emission cost and compliance cost are less affordable. In contrast, the cooperation between power generating companies removes the influence of environmental awareness, but the aggregated profits of the supply chain are smaller than in the decentralized decision scenario.