The timing of green product introduction in relation to technological evolution

Abstract

As a result of the rising awareness of environmental issues and increasingly stringent regulations, the ability of a business to manage environmentally friendly products represents an important competitive edge. This paper presents a study of the impacts of two types of technological solutions, namely, Zero Sum and Synergy, on strategies for timing the introduction of green products. We have developed mathematical models to determine the optimal price, traditional quality, and environmental quality required to maximize profit. In addition, we discuss how differentiation in environmental quality and customer patience impact the choice of product introduction strategies under the commitment and no-commitment scenarios. We also investigate how Zero Sum and Synergy interact with choice. The results show that a business tends to adopt a simultaneous introduction strategy when the differentiation in market condition for environmental quality is high, customer is patient, and/or the business employs the Synergy technology. In addition, we determine that this strategy change is less likely in the commitment scenario, when the technology changes from Zero Sum to Synergy.

Keywords:

• Environment
• green product
• pricing
• technology evolution
• timing of introduction