Marketers cannot assume that true costs will not be seen or considered in the purchasing decision.
What is the true cost of your company’s product? Behind the simple economic analysis of materials, labor, marketing and distribution lurks the more complicated question of your brand’s social and environmental impact. Does your brand kill polar bears, and if so how does that fact impact your reputation?
Stephanie Jue, a business, government and society lecturer at McCombs School of Business, says cost economics is just the starting point for determining the societal impact of your product.
“Consider a $1.25 bottle of water,” she says. “What the consumer wants is the water inside, but it has to be in the bottle. We assume the price includes all of the costs of the water and creating the bottle, but consumers don’t pay the full cost of eliminating the plastic and eventually discarding the plastic when it can no longer be recycled.”
If consumers remain oblivious to the added cost there is likely no impact on brand reputation (convenient, portable water is good!), but in today’s information rich world, consumers tend to wise up. Social advocates make sure of it.
Witness the gradual demonization of bottled water as an example of what can happen when true costs are not just revealed, but turned into a cause célèbre.
Is the brand impact a factor of cuteness?
How much consumers care about social and environmental impact, speaking from a pure brand perspective, may depend on the “cuteness” of the declared victim.
Jue notes that society is very worried about saving polar bears, for example, which seem to have minimal direct impact on the average person. Endangered honeybees, on the other hand, responsible for pollinating one third of the food crops in the U.S., receive much less concern.