Eco-Labels

Eco-Labels

Anitha Acharya (IBS Hyderabad, India)
DOI: 10.4018/978-1-5225-9558-8.ch010

Abstract

Eco-label products are very appealing. To increase sales most of the companies adopt eco-label strategy. On the other hand, the eco-labels often assure more than the products can in reality deliver. In particular, eco-labels may lead consumers to mechanically infer that the products are friendly to the environmentally friendly. The rising significance of corporate social responsibility provides strong motivation for companies to market unsustainable conventional products as environmentally friendly. Eco-labels are designed to inform consumers that the labeled product is more environmentally friendly than the competitors. Eco-labels are increasingly facilitating manufacturers, wholesalers, retailers, and consumers in their purchasing decisions. The chapter explains in detail the objectives of eco-labels, benefits of eco-labels, consequences of eco-labels, and different types of eco-labels. It also mentions the adoption process of eco-labels by the consumers. The chapter ends with examples of best practices.
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Introduction

Responsibility towards environmental is an important management function for the success of any business. Over the last few decades there has been a witness of major change in consumer preferences towards environmental friendly which is forcing marketers to introduce innovative products (Ottman, 1993; Brécard et al., 2009; Basu et al., 2003). This has resulted in more companies introducing environmental friendly products and also the demand for green products has also increased. At present it is the responsibility of the consumer to identify products which are environment friendly compared to others on the basis of their preferences. The question is how the consumers will identify environmental alternatives. The answer is product labels which provide information which helps consumer to make choices (Lavallée & Plouffe, 2004; Rashid, 2009; Blengini & Shields, 2010). Eco - labels are progressively being given importance as an important market tool for identification of green products.

One of the important tools in green marketing of environmental friendly products is using Eco - label (D'Souza, 2004; D'Souza et al., 2006). The Eco - labels are increasingly being utilized by marketers to promote the identification of green products (D’Souza et al., 2006; Mostafa, 2007a; Samarasinghe, 2012a; Brounen & Kok, 2011; Burnett, 2007). According to Almossawi (2014) eco - label acts as an important tool to allocated irregularity information between sellers and buyers. They also stated that labels are a signal which helps in two consumer function namely information function which refers to the information about intangible product individuality like product quality and functional values which provide significance in themselves. Moreover, Rex & Baumann (2007) define eco - labels as a tool for consumers to assist making decision for select environmentally - friendly products and also to enable them to know how products are manufactured.

Key Terms in this Chapter

Credibility: It refers to trustworthiness.

Certification: It is a seal of approval which shows that a product meets a certain eco-label standard.

Employee Retention: It refers to the ability of the firm to retain its employees.

Innovation: An idea that is new to the world.

Environment: It is the surrounding where human beings, animals, and plants live.

Engagement: It is an emotional commitment by the consumers towards to the firm.

Differentiation: It is defined as contrast among two things.

Eco-Label: It is a label which identifies services and products that have less environmental impact.

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