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Using the Peer Pressure to Develop the Global, Socially Conscious Consumers to Your Business

Posted 8/8/2017

Some business practices have changed from meeting the customers’ needs to creating the customers’ needs. It was believed that in order to be long-term profitable, the business had to meet the needs of stakeholders, especially the primary stakeholder, customers. This concept drove the business to cater to consumers pursuing convenient lifestyle. However, the convenient lifestyle usually connects to the wasteful consuming behaviors. For instance, bringing your own shopping bags to the grocery stores, using your own coffee mug at a coffee shop will increase your inconvenience, since customers have to remember to bring, clean and/or store bags and coffee mugs.

However, recently we have seen some new business practices that giving consumers monetary incentive encourages consumers to give up their convenient lifestyle and to be environmentally friendly. For example, Target stores will give you 5 cents off for each reusable bag you present and use at checkout. Hotels offer gift cards to consumers who decline housekeeping services to save water and grocery stores give monetary rewards to shoppers who use reusable cloth bags to reduce plastic waste.

What is the rationale behind the businesses’ goodwill? Obviously, the goodwill will help business build up a good reputation. In addition, in the short term, this new practice may help the business increases its market share. In order to receive the monetary incentive, customers have to be environmentally friendly and have to shop at the business who have this new practice. In other words, this new practice will play a role as a "coupon" for shopping environmentally friendly at the certain business. In the long term, this new practice will create win-win-win situation. Customers shopping environmentally friendly due to the monetary incentive will generate peer pressure to other customers shopping at the same business, and the peer pressure may trigger more consumers shopping environmentally friendly, creating the snowball effects. Reducing the usage of the disposable product, such as plastic bags, disposable cups, will help reduce the cost for the business, which in turn results in the business to lower the product price winning the market share ( if it is a very competitive market). Lowering the product price will benefit the customers. Businesses, customers and the environment all gain the benefits from this new practice. I did more deep analysis in my theoretical research Jiang (2016). However, the social responsibility has been highly recognized in the business world, and the similar practice as discussed in this article may be a good start for the new business considering to strengthen its corporate citizenship and gain the stakeholder loyalty.

Reference:

Jiang, Jingze. "Peer Pressure in Voluntary Environmental Programs: a Case of the Bag Rewards Program." Journal of Industry, Competition and Trade 16, no. 2 (2016): 155-190.

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