Media Releases

“Conspicuous conservation” a factor in socially responsible product innovation, shows Rotman study

March 31, 2016

Toron­to – Com­pa­nies may a big­ger incen­tive to invest in devel­op­ing social­ly respon­si­ble prod­ucts if it means those who even­tu­al­ly buy them can stand a lit­tle taller than those who don’t, says new research.

Con­sumers do not only lis­ten to their own con­science when mak­ing deci­sions around buy­ing envi­ron­men­tal­ly-friend­lier cars or sweat shop-free cloth­ing — they’re also con­sid­er­ing how those choic­es will make them stack up against oth­er peo­ple, says the study from the Uni­ver­si­ty of Toron­to’s Rot­man School of Man­age­ment.

Pre­vi­ous research cat­e­gor­i­cal­ly sug­gests that more social­ly respon­si­ble prod­ucts are more valu­able. In con­trast, this study uses a the­o­ret­i­cal mod­el to show that val­ue — and the incen­tive to spend mon­ey on devel­op­ing those prod­ucts — is dynam­ic.

“We’re try­ing to cap­ture this whole issue of social com­par­i­son,” says David Sober­man, who is a pro­fes­sor of mar­ket­ing at the Rot­man School and holds the Cana­di­an Nation­al Chair of Strate­gic Mar­ket­ing. This is espe­cial­ly impor­tant for prod­ucts that are con­sumed “pub­licly” like badge prod­ucts such as bev­er­ages and cloth­ing. He co-wrote the paper with Prof. Ganesh Iyer of the Uni­ver­si­ty of Cal­i­for­nia, Berke­ley.

Among their many find­ings, the researchers found that com­pa­nies have the great­est incen­tive to devel­op a more social­ly respon­si­ble prod­uct when the vast major­i­ty of poten­tial users are already cat­e­go­ry users (true of many mature cat­e­gories). Here, there is height­ened inter­est in the cat­e­go­ry’s social impact.  In addi­tion, greater media focus on the impact of palm oil pro­duc­tion on defor­esta­tion may cre­ate an even big­ger incen­tive to devel­op a palm oil-free soap.

In con­trast, devel­op­ment incen­tives are low­er when there is less con­sumer par­tic­i­pa­tion and less social con­cern attached to a cat­e­go­ry — think power­boats or sin­gle malt whiskey.  How­ev­er there may still be an incen­tive to inno­vate even in cat­e­gories with low con­sumer par­tic­i­pa­tion, so long as the inno­va­tion offers a poten­tial sta­tus bump for those who do buy it.

Gain­ing sta­tus through pur­chas­es of social­ly respon­si­ble prod­ucts, such as hybrid cars, has been dubbed “con­spic­u­ous con­ser­va­tion.”  Pre­vi­ous research has put the social sta­tus val­ue of buy­ing a Toy­ota Prius — a dis­tinc­tive­ly hybrid car — as high as $7000 U.S., even lead­ing to tan­gi­ble social advance­ment in regions where green con­scious­ness is high.

“The fruits of a firm’s labour to devel­op social­ly respon­si­ble prod­ucts are going to pay off the most when you are in a mar­ket that is ful­ly cov­ered and when the social com­par­i­son effects are strong,” says Prof. Sober­man.

The paper is forth­com­ing in Mar­ket­ing Sci­ence. Watch a video on the study at

For the lat­est think­ing on busi­ness, man­age­ment and eco­nom­ics from the Rot­man School of Man­age­ment, vis­it

The Rot­man School of Man­age­ment is locat­ed in the heart of Canada’s com­mer­cial and cul­tur­al cap­i­tal and is part of the Uni­ver­si­ty of Toron­to, one of the world’s top 20 research uni­ver­si­ties. The Rot­man School fos­ters a new way to think that enables our grad­u­ates to tack­le today’s glob­al busi­ness chal­lenges.  For more infor­ma­tion, vis­it


For more infor­ma­tion:

Ken McGuf­fin
Man­ag­er, Media Rela­tions
Rot­man School of Man­age­ment
Uni­ver­si­ty of Toron­to
Tel: 416.946.3818

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