Creative & Branded Content

Do Sustainability Claims Help New Products?

To address the issue of sustainable products being perceived as lower in quality, Jenny van Doorn, Hans Risselada and MSI Academic Fellow Peter C. Verhoef, analyzed a unique dataset combining household panel data, consumer survey data, expert panel survey data, and advertising spend, for 883 new product introductions of national brands over one year. They employed propensity score matching to account for endogeneity.

Researchers found that on average, sustainable new products receive lower sales. What’s more, familiarity does not necessarily lead to great acceptance. While most products find greater acceptance after the first year of introduction, sustainable products are an exception. What’s more, even though a brand may have a product already present in the sustainability category that does not affect the success or failure of a new sustainable product.

If you have a high reputation with CSR, it benefits the sales of new sustainable products. And I think that’s good news for the companies that have it in their DNA. — Jenny van Doorn, University of Groningen.

Are such products doomed to failure? No, says the research team. Instead, introducing a new, sustainable product as part of a firm’s overall commitment to corporate social responsibility (CSR) can raise that product’s profile. Moreover, product innovativeness and a lower price mitigate the negative effect of a sustainability claim on sales, while price promotions tend to aggravate it.

Find the working paper here.

To hear audio or read an interview with some of the study’s authors, click here.