Market Barriers and Business Risks

Lesson Summary

Market Barriers to Sustainability Products

The three key barriers to sustainability products are price, performance, and behavioral change.

The premium price of sustainable products can put them out or reach or interest of the majority of consumers.

Reducing the sustainable price premium is a key factor in having a greater percentage average consumers purchase sustainable products.

In regards performance many consumers question the effectiveness of green products versus conventional alternatives.

Many sustainable practices require consumers to change their behavior in some way.


Market Barriers to Sustainability Products

When there is perceived consumer benefit most behavioral changes are readily adopted.

Highlighting the benefits and long-term cost savings of a product allows marketers to get consumers to adopt new behavior more quickly.

Business Risks of Sustainability Marketing

The three key sustainable marketing risks are market risks, operating risks, and corporate image risks.

Market risks associated with sustainability:
Weakness in consumer appeal, particularly related to value, convenience, and effectiveness.
Lack of understanding and appreciation of sustainability’s benefits among consumer groups.

Operating risks associated with sustainability:
Loss in profitability
Loss of focus

Business Risks of Sustainability Marketing

Loss of profitability can occur if a company uses more financial and human resources than competitors without gaining a proportional benefit.

Adding sustainability to the marketing mix can lead to a loss of focus on the primary objective: economic profitability and economic sustainability.

Corporate image risks associated with sustainability:
Negative greenwashing image
Magnified negative impact of an inconsistent action

Greenwashing is the use of green marketing to give the incorrect impression that the company’s strategy, operations, and products are designed to be beneficial to the environment.

Business Risks of Sustainability Marketing

A company that has demonstrated its commitment to sustainability is still vulnerable to as misstep in its sustainability initiatives and action.

Marketers must be aware of the importance in maintaining consistency and effective execution in its approach and commitment to sustainability marketing.


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