Does It Pay to Be Good Harvard Case Solution & Analysis

This is a question that has long puzzled marketers who have heard from customers that they want to do business with the ethical basis of the company - defined as companies that manufacture products in a progressive stakeholder relations, advanced environmental practices and respect for human rights. Marketers have had no reason to doubt that the feelings, but they always wondered if consumers will be willing to pay a higher price for ethically produced goods (as they tend to be more expensive to create.) It turns out that a number of controlled experiments proved that consumers will in fact, to pay for ethical products. But perhaps of equal interest is the fact that they will be punished (requiring a lower price) companies that are not considered to be ethical. This ratio is not symmetric. Punishment required more than the premium customers are willing to pay. As you have to be ethical? Maybe not as much as you might think. The study shows that the low degree ethicalness "payback" It is not necessary for the company's products to be "100% pure" to receive a premium. This study is the first to discover that consumers use price to punish unethical companies more than they use price to encourage ethical company and that ethical behavior of the company is, in fact, is an important factor for consumers (as shown in their willingness to pay solutions ). "Hide
by Remi Trudel, June Cotte Source: MIT Sloan Management Review 10 pages. Publication Date: January 1, 2009. Prod. #: SMR304-PDF-ENG

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