Work

Optimal pricing strategy for green products under salience theory

Year: 2021

Type: article

Abstract: Environmental pressures and people's demands for green consumption have prompted manufacturers to engage in the research and development of green products. Manufacturers need to consider the price and greenness of products when making production decisions. This paper analyzes the level of greenness and price competition of duopoly manufacturers in the consumer market in which both green-sensitive consumers (salience to greenness) and price-sensitive consumers (salience to price) exist simultaneously according to salience theory. We find that the regular manufacturer will enter the green market when all consumers’ average degree of price responsiveness is small or in a moderate part of the region. In addition, this paper also discusses the influence of salience on manufacturers’ level of greenness and pricing strategy choice. We find that the degree of salient thinking of consumers influences optimal pricing, optimal greenness and profits under the uniform pricing and price discrimination mechanisms.

Source: Economic Research-Ekonomska Istraživanja

DOI: 10.1080/1331677x.2021.1985572

Authors: Zhiyi Meng, Na Zhao, Bin Shen, Chang Zhai

Institutions: Sichuan University, Sichuan Police College, Michigan State University

Language: English

Topic: Environmental Sustainability in Business

Subfield: Marketing

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Responsible consumption and production

Open Access status: gold

Estimated APC paid: $944