Sustainable value propositions

What is it about?

Advances in sustainable purchasing put pressure on firms to evaluate and demonstrate the sustainability of their products and services. In this paper, we coin the term sustainable value proposition, develop a process framework for building sustainable value propositions, and illustrate its application with two technology-intensive offerings. By integrating the literature on sustainable marketing and customer value propositions with life cycle assessment methodologies, we build a process framework that can be applied to demonstrate and evaluate the economic, environmental and social benefits of industrial products and services. The framework comprises 1) identification of potential impacts, 2) identification of key value creation mechanisms, 3) choosing key indicators, 4) life cycle modeling, and 5) life cycle value demonstration. Through two case studies, we examine the development of sustainable value propositions in two industry sectors: metallurgical and automotive. The results highlight the value provided to customers through the combination of direct economic benefits and derivative benefits of reduced environmental and social impacts. Our paper contributes to the growing field of sustainable marketing by offering guidelines on how to integrate sustainability with the marketing and purchasing of technology-intensive offerings. In addition, we offer guidelines for how to construct sustainable value propositions that resonate with customers.

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