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Open AccessArticle

Green Product Development with Consumer Heterogeneity under Horizontal Competition

by 1, 1, 1,* and 2
1
School of Management, Nanchang University, Nanchang 330031, China
2
School of Business Administration, Nanchang Institute of Technology, Nanchang 330099, China
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(6), 1902; https://doi.org/10.3390/su10061902
Received: 10 May 2018 / Revised: 1 June 2018 / Accepted: 1 June 2018 / Published: 7 June 2018
(This article belongs to the Special Issue Marketing and Sustainability)
In this paper, we explore the pricing and greenness issues of two competitive firms without and with consumer heterogeneity. We derive and compare the optimal solutions and profits employed by firms under different scenarios. Then, we identify the effects of consumer heterogeneity under different competition intensities. The analytical results reveal that if market competition is at a relatively low level, we find that: (i) when the greenness sensitivity of consumers with no preference is sufficiently small, more consumers have high environmental awareness, and companies easily achieve their environmental goals as well as economic goals; (ii) when the greenness sensitivity of consumers with no preference is at a medium level, as the fraction of consumers with high environmental awareness increases, and the firm might achieve economic goals at the cost of reducing environmental goals; and (iii) when the greenness sensitivity of consumers with no preference is at a high level, the fraction of consumers with high environmental awareness increases, but firms might have more difficulty achieving their environmental and economic goals. On the other hand, if the market competition is at a relatively high level, the presence of consumer heterogeneity can help improve environmental goals, but make achievement of economic goals difficult. View Full-Text
Keywords: greenness; consumer heterogeneity; market competition; economic goals; environmental goals greenness; consumer heterogeneity; market competition; economic goals; environmental goals
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Xu, B.; Xu, Q.; Bo, Q.; Hu, Q. Green Product Development with Consumer Heterogeneity under Horizontal Competition. Sustainability 2018, 10, 1902.

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