Measuring Consumer Response to Environmental Pricing in the Automotive Industry

The target audience of this paper is assumed to be new product or marketing managers in automotive component supplier companies. In this paper the author presents a new economic valuation model that can be used for establishing and evaluating environmental pricing strategies in the automotive industry. The Environmental Economic Valuation Model (EEVM) concept presented for the first time in this paper will become one of the most important financial analytical tools to the auto industry for environmental “womb-to-tomb” assessments. This paper attempts to help new product managers understand, measure, and control key environmental issues; in product design, new product development, and total life cycle management. The intent of this paper is to help answer this challenging question: How can new product managers establish and evaluate profitable environmental pricing points throughout their product's total life cycle?