CHAPTER 8

Sustainability in the Supply Chain

8.1 Selling Green Products: Environmental Product Differentiation

Environmental product differentiation refers to the idea of designing and marketing products that provide a lower environmental impact than competing products of similar functionality. Designing and manufacturing “green” products typically (but not always) increase a firm’s production costs, as discussed in Chapter 5; for example, the firm needs to use higher quality materials that can be upcycled at the end of a product’s use with consumers. As a result, for a green product to be economically sustainable to the firm marketing it, it needs to:

1. Increase the firm’s market share by attracting new customers who find the “green” attribute ...

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