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Marketing Gag or Value Creating Strategy: How does Sustainability Impact Store Choice in Retail?
Type
conference paper
Date Issued
2010-08-10
Author(s)
Abstract
Sustainability is getting more ground in the food retail industry. But empirical studies on sus-tainability strategies in retailing are rare, and even more when it comes to highlight the cus-tomers' perspective and their willingness to pay. This paper investigates the impact of sus-tainability initiatives on store choice and on consumers' willingness to pay by conducting a web-based conjoint experiment with customers from Austria, Germany and Switzerland. We report from 1,224 choice-decisions conducted between June and October 2009. We find that price is not of highest importance when it comes to store choice. If different sustainability aspects are fulfilled customers are prepared to pay a price premium. In particular we show that (1) if a meat-assortment of standard and organic products is complemented by products from the region, customers are ready to pay a price premium of €0.99, which constitutes a premium of 51 percent on the lowest price in our study; (2) if retailers decrease the distance to their customers from 2-5 km to below 2 km, customers are prepared to pay a premium of €0.88 (45 percent on the lowest price); (3) we find that if retailers switch their power mix from conventional power to mainly renewable power, customers are ready to pay a price pre-mium of €0.91, which equals a premium of 47 percent on the lowest price. Finally, we show that bad employee treatment can lead to a real discount of €1.67 (83 percent of the lowest price). We state important implications for retail management practice and further research.
Language
English
Keywords
Marketing
Sustainability
Retail
Store Choice
HSG Classification
not classified
Refereed
Yes
Book title
Dare to Care: Passion & Compassion in Management Practice & Research
Publisher
Academy of Management
Publisher place
New York
Start page
31
Event Title
70th Academy of Management Annual Meeting (AOM) 2010 "Dare to Care"
Event Location
Montréal, Canada
Event Date
06.-10.08.2010
Subject(s)
Division(s)
Eprints ID
62226