Product innovation: eco-efficient value creation

The way towards sustainability requires a double aim in product innovation:
– lower eco-costs and at the same time
– higher value (a higher market price).
We call this: eco-efficient value creation. See Fig. 4.3a.

The reason we need value creation for eco-efficient products is threefold:

1. the higher price in the market is required to cover the higher production cost of green products (note that a higher price is only accepted by the consumer when the perceived value is higher, otherwise the consumer will not buy the product)

2. the higher price prevents the rebound effect (see page “design alternatives”)

3 . lowering the EVR appears the key to a sustainabie development at the level of countries (see FAQs, question 3.1)

Below,three examples are shown:

The first example is from the building industry: replacing a concrete slab floor by a wooden floor.
See Fig. 4.3b
The wooden floor has lower eco-costs, but is more expensive. So the wooden floor must have a higher perceived value. This can be achieved by marketing: the feel-good factor of wood must be emphasized (wood is “warm” and reminds you of mother nature).

The second example is the introduction of Senseo (see photo at the bottom of this page) by Saralee-DE and Philips. This is an perfect example of a design with the right EVR:
– the customer value has increased (it is easier to make a cup of coffee), which translates in a higher price in the market (to cover the extra production costs of the system)
– the eco-costs per cup of coffee is less than for the conventional coffee, since heating of water is done efficiently, and is done in the exact amount (not too much of hot water, which is not used afterwards).

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Figure 4.3a  The required double objective in design: lower eco-costs plus higher value