Paper info

A Framework for Measuring the Willingness to Pay of Industrial Buyers for Attributes That Constitute Sustainable Products

Carsten Reuter and Philipp Goebel

The paper was published at the 25th IMP-conference in Marseille, France in 2009.

 Companies experience increased pressure from various stakeholders to conduct businesses in a responsible and sustainable manner. These expectations go beyond the mere compliance with national or international laws and regulations which are taken for granted. They also go beyond the scope of the company itself. Companies are rather expected to ensure that their partners along the supply chain act accordingly. As various examples show, a single incident with one supplier may cause adverse publicity and ruin a company's reputation and brand image, even though the company itself applies high standards in terms of responsibility and sustainability. Industrial buyers find themselves in a conflicting situation of purchasing goods and services at the lowest competitive price while ensuring compliance with social and environmental standards. In this paper, we present a framework for assessing the willingness to pay (WTP) of industrial buyers for attributes that constitute sustainable products. Utilizing conjoint analysis the actual WTP will be assessed, while structured equation modelling techniques are employed to identify driving factors of WTP on a corporate and personal level.