Product innovation linked to consumer status enhancement

Companies may give a bigger incentive to invest in developing socially responsible products if it means those who buy them can stand a little taller than those who don't, says new research. Consumers do not only listen to their own conscience when deciding on buying environment- friendly cars or sweat shop-free clothing - they also consider how those choices will make them stack up against others, says the study from the University of Toronto's Rotman School of Management. Previous research says that more socially responsible products are more valuable. In contrast, this study uses a theoretical model to show that value, and the incentive to spend money on developing those products, is dynamic. Researchers David Soberman, a professor of marketing at the Rotman School, and Prof. Ganesh Iyer of the University of California found that companies have the greatest incentive to develop a more socially responsible product when the vast majority of potential users are already category users.