Capitalizing on the power of consumer peer pressure to develop sustainable new products.
If you purchased a Toyota Prius or a Tesla you may have been driven by the desire to conserve. Conserve for the environment or to save yourself some money at the gas pump. But consumers may also choose to buy sustainable products. Products to make themselves appear socially responsible to others. Before making purchases, they evaluate how their decisions will stack up against their peers’. That’s according to a study.
The study called, “Social Responsibility and Product Innovation,” forthcoming in Marketing Science.
It examines how understanding this phenomenon, known as “conspicuous conservation,” may help leading companies shape their product innovation strategies. Especially in ubiquitous product categories such as cars.
The design of the Prius or the Tesla Frankly get noticed by other people on the road. Also, consumers care about what people see themselves in. It’s the value that I get from driving an electrified car. It 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,” says Ganesh Iyer, a professor in the Marketing Group at UC Berkeley’s Haas School of Business, and one of the study’s authors.
So if you or your social circle who is driving a gas-guzzler, there will be pressure to conform.
The paper is co-authored by David Soberman of the University of Toronto’s Rotman School of Management.
Refraining from buying a product that damages the environment can generate social value for consumers. This need by consumers to measure up to their peers. It’s a concept called social comparison preference. It can provide marketers with valuable insights. Insights about how they can enhance the desirability of their products.
“We are trying to capture this issue of social comparison in markets, which is important for visible products like cars and clothing,” says Iyer. “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.”