Leopold Center for Sustainable Agriculture

Completed Competitive Grant

Company environmental and societal positions as sources of competitive advantage

Project ID: 2005-M07

Abstract

Smaller producers need to differentiate themselves from larger operations to ensure their economic survival. One way to do this is to market their products as being environmentally friendly and/or socially responsible.

Key Question: Do consumers and retailers (grocery and restaurant buyers) perceive value in producers who advocate a positive environmental and social position in the marketplace?

Findings: Apparently, yes. Project results suggest that agricultural firms could earn a relatively high return (in some cases up to 20 percent more) on investment from strategies that highlight their environmental policies. Our data also suggest subtle, but important differences between consumers and retailers with regard to social positioning. Retailers, as compared to consumers, appear to be more inclined to pay more for goods produced by socially responsible firms.

Lead investigator: Thomas DeCarlo, ISU Marketing, et al

Year of grant completion: 2006

This competitive grant project was part of the Leopold Center's Marketing Initiative.

Topics: Market research and feasibility studies