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Consumers will pay a premium for environment friendly products: study

By afaqs! news bureau , afaqs!, Mumbai | In Media | October 16, 2008
According to a study conducted by Havas Media, 43 per cent of Indians are willing to pay a premium for environment friendly goods

According & #BANNER1 & # to a global study conducted by Havas Media, the global media network of the Havas Group, consumers are increasingly becoming environment conscious. They are calling on brands to take responsibility for reducing the impact of climatic changes as governments fail to make progress on the critical issue, says the study.

Based on interviews with more than 11,000 respondents in India, Brazil, China, France, Germany, Mexico, Spain, the UK and the US, the Havas Media study aims to unearth both local and global characteristics that develop the current theories on a number of widely debated issues. The objective of the research was to understand the impact of 'Climate Change' on business seen through the eyes of the consumers, and provide guidance on how brands and companies can address the issue.

In spite of the fact that the developed world is globally perceived to be the largest contributor to global warming, the report highlights a dramatic gulf between the attitudes of the richest countries and the developing world.

Brazil, China and India are among those who claim to be the most alarmed by climatic change, while respondents in the US, the UK and Germany demonstrate far lower levels of concern. Likewise, consumers in China, Brazil, Mexico and India were significantly more willing than their North American, British and German counterparts to spend extra on environmentally friendly products.

The survey revealed that 86 per cent of Indians would rather buy from companies that are trying to reduce their contribution to global warming. Further, 50 per cent of Indian respondents were more likely to buy environment friendly goods in the next 12 months if these had the same price and the standard of their usual brands. About 43 per cent will be willing to pay a little extra for those goods.

Interestingly, Indians believe that the oil and fuel sector is the most damaging of all economic sectors in terms of the environment, while banking is perceived to be the least damaging. About 57 per cent of Indian respondents also agree that their government is making a significant effort to combat climate change - the second highest proportion, behind only China.

In addition, 90 per cent of Indians agree that climate changes will affect them and their families and 88 per cent believe they can contribute to solving the problem, making India one of the most positive countries in the report in terms of its willingness to change. Further, 89 per cent of Indian respondents agree that tackling the issue of climate change means changing the way we live our lives.

Nearly 50 per cent of the Indian respondents can be classed as eco-absorbed. The eco-absorbed are those who are very focused on the issue of climate change and India has the third highest proportion in the world, behind Brazil (58 per cent) and Mexico (56 per cent), but far ahead of countries such as Germany (15 per cent) and the UK (17 per cent).

Only 12 per cent of Indians are eco-apathetic, compared to 34 per cent in the UK and the US, and 32 per cent in Germany. The eco-apathetic typically marginalise the issue of climate change, recognising the concept but sharing none of the responsibility.

Anita Nayyar, chief executive officer, Havas Media India, says, "The survey suggests that consumer awareness about the damage done by particular companies and sectors is growing increasingly sophisticated, and that companies which fail to act responsibly can no longer expect to hide behind generally positive perceptions of the sectors in which they operate."

She adds that consumers are becoming increasingly aware of who is credibly making changes and who is not, despite green stereotypes associated with different sectors. The result is that green marketing strategies and good environmental practices are no longer a "nice to have" for brands, but increasingly a "must have" in terms of not only maintaining brand image, but also in maintaining market share.

Globally, the findings revealed that 79 per cent of consumers said they would rather buy from companies doing their best to reduce the impact on the environment. Further, 89 per cent are likely to buy more green goods in the next 12 months and 35 per cent are willing to pay a premium for those goods.

When it comes to actually buying green, 80 per cent of respondents said they would buy more if more was on offer. The report concludes that companies should not make the mistake of confusing loyalty with a lack of consumer choice.