2023-05-09 14:37:34
Asst. Prof. Dr. Tassanee Simanont, Faculty of Economic Development National Institute of Development Administration (NIDA), ttonganupong@gmail.com
As all of you readers know, climate change is a major challenge. As a result, consumers around the world turn to products or production processes that care regarding the environment. They are willing to pay more for these products, which I refer to in this article as This willingness to pay more results in even though manufacturers have to invest in developing production processes. or develop new eco-friendly products but still maintain or increase profitability. On the other hand, manufacturers who ignore green products may lose competitiveness to competitors
Consumers are increasingly aware that climate change is affecting them. A Mintel global consumer survey found that 50% of consumers believe their country is affected by climate change. face the problem of water shortage This leads to food shortages, with 44 percent of consumers feeling that they may not have enough income to buy food in the future.1 Thai consumers pay attention to environmental problems as well. They were most aware of air quality problems (43%), followed by climate change (42%) and deforestation (28%).2 However, the problems caused by climate change, whether flooding or higher temperatures from that heat wave Encouraged the majority (72%) to protect the environment more, with 66% to recycle packaging and reduce waste. And one-third of consumers buy products that are certified to reduce environmental damage.2
From the above information, it can be seen that This period is suitable for manufacturers to adapt to environmentally friendly production processes, such as reducing water consumption. or using clean energy instead of using fossil fuels as well as developing products and services that are in line with the consumer’s tendency to focus on environmental preservation. This helps manufacturers reduce costs. While prices can be set higher as consumers pay more attention and are willing to pay for green products. Here, the author would like to give an example of research that studies the price premium that consumers pay for environmental protection as follows:
A study in Switzerland found that Rent for buildings built with environmental considerations, such as efficient use of water As a result, building rental rates are significantly higher.3 In addition, travelers to an island in Indonesia are willing to pay more for a hotel that has been certified locally to be eco-friendly to reduce waste management issues. and the problem of coral reefs being destroyed4
Studies in the United States also found that Beer consumers are willing to pay more for products that care regarding the environment. They are willing to pay the most for processes that reduce waste to landfill, such as investing in recycling programs, followed by carbon-reducing processes such as using wind energy. or the use of solar energy in factories And the third is the use of technology to reduce water consumption. and reduce the amount of wastewater5 In addition to the beer industry, there is a study that compiles food research from various countries that examines the willingness of consumers to pay for environmentally friendly food production. Consumers are willing to pay an average of 29.5 percent more for green food products. Asian and European consumers are similar and higher on average than North American consumers.6
The above information reflects that Consumers do not think that environmental problems are far-fetched. But they have a serious impact on our lives and are willing to pay more for eco-friendly products for a better environment. Businesses should study the cost-effectiveness of developing production processes to reduce energy, water or other production factors. including reducing emissions to the environment In the past, it may only benefit from reducing production costs. But nowadays and in the future, the benefits of producing eco-friendly products also help make their products different from competitors’ products. have a better image Including being able to set a higher price as well Therefore, there is a greater possibility that investment in producing green products is worthwhile. as well as communicating with consumers how their eco-friendly products promote the environment. This is another important factor that leads to success in selling eco-friendly products as well.
We have arrived in an era where the production of eco-friendly products make consumers love producers And manufacturers have an opportunity to increase profits already. Don’t miss the opportunity to make profits while restoring the environment for the next generation.
Reference
1 Global Outlook on Sustainability: A Consumer Study 2023. (2023). https://store.mintel.com/report/global-outlook-sustainability-consumer-study
2 So here’s where the Thai consumer is sustainability-wise. (2022, September 23). Bangkok Post. https://www.bangkokpost.com/thailand/pr/2398763/so-heres-where-the-thai-consumer-is-sustainability-wise
3 Feige, A., Mcallister, P., & Wallbaum, H. (2013). Rental price and sustainability ratings: Which sustainability criteria are really paying back? Construction Management and Economics, 31(4), 322–334. https://doi.org/10.1080/01446193.2013.769686
4 Nelson, K. M., Partelow, S., Stäbler, M., Graci, S., & Fujitani, M. (2021). Tourist willingness to pay for local green hotel certification. PLOS ONE, 16(2), e0245953. https://doi.org/10.1371/journal.pone.0245953
5 Staples, A. J., Reeling, C. J., Widmar, N. J. O., & Lusk, J. L. (2020). Consumer willingness to pay for sustainability attributes in beer: A choice experiment using eco-labels. Agribusiness, 36(4), 591–612. https://doi.org/10.1002/agr.21655
6 Li, S., & Kallas, Z. (2021). Meta-analysis of consumers’ willingness to pay for sustainable food products. Appetite, 163, 105239.
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