Resource-constrained product development: Implications for green marketing and green supply chains

a r t i c l e i n f o Keywords: Sustainability Jugaad Green marketing Frugal engineering New product development While academic debates and practical approaches to green marketing have matured over the past few decades , one central conundrum that has remained unresolved has been the trade-off between the higher prices of green products and the objectives of environmental sustainability. In general, it has been observed that green products are priced at a premium to account for their environmentally friendly consumption and use. We argue that resource-constrained product development approaches (alternatively labeled jugaad) that are observed in emerging countries such as China and India have the potential to change the traditional models of green product development. In addition to the competitive advantage that resource-constrained product development approaches provide, we suggest that these practices have sustainability and supply chain benefits. We show that the innovation process relies primarily on frugal engineering that reduces material use (thereby reducing burden on supply chain) and meets green marketing objectives at much lower, and therefore, more affordable prices. We draw out several implications for theory and practice. Current approaches to green marketing rely on the fact that there exists a segment of customers who would pay a premium for a product that is environmentally friendly, and thus " green " The prospects of a price premium also provide the motivation and the business logic for companies to develop green products and to engage in specific operations and marketing practices, such as recycling, reusing materials, and forming green supply chain alliances However, the basic premise of a premium for environmentally friendly products has seen several challenges in the recent economic downturn, with consumers cutting back on their green product preferences and returning to traditional low-priced items (Clifford & Martin, 2011). The discussion on green products and green marketing has also been quite muted in the context of business-to-business marketing. Trade-offs between price and environmentally sustainable objectives have been reported here as well, with studies reporting that organizational buyers view recycled products, such as paper, to be of lower quality (Polonsky, Brooks, & Henry, 1998), or think the products are more hype than they are actually green (Ginsberg & Bloom, 2004). Thus, for green marketing to enter the next phase, where green products are the standard to which other products are compared, industrial marketing needs to take a hard look at how to resolve the …