Is climate change a marketing and advertising problem? Explain.

Consumers and governments all across the world are concerned about climate change's potential
repercussions. Dealing with these climatic difficulties is crucial for business profitability and, ultimately,
for the world's long-term sustainability.

Given customer concerns about climate change, we investigate a corporation that chooses its product's
carbon footprint and price (or service). First, enhancing efficiency by eliminating waste is the greatest
solution because lowering carbon footprint decreases unit cost. Green cost cutting is even more
tempting to a business if lowering carbon emissions not only lowers costs but also increases demand
due to the product's enhanced environmental performance.

Second, if lowering carbon footprint boosts unit cost, there may be a tradeoff between the cost and
demand effects. Clearly, reducing carbon emissions without a positive demand effect only raises prices,
making it inefficient. However, if customers respond positively to a product's better environmental
performance, it may be more cost-effective for the corporation to participate in cost-cutting
sustainability and produce a product with a lower carbon footprint.

As climate concerns develop, the demand effect and the desire to participate in cost-increasing
sustainability expand. The cost impact, on the other hand, motivates the business to raise its price,
resulting in decreasing demand. When these demand and supply-side effects are combined, the relative
profitability of changing carbon footprint and price is determined.

Surprisingly, we find that offering a greener product in response to rising climate concerns does not
always equate to a reduction in a company's overall carbon emissions. This occurs because the demand
effect of reduced carbon footprint can result in increased sales and, as a result, a larger organisational
footprint—a situation in which a greener product provider becomes a victim of its own success.

Submitted by- Akula Padma Priya, Sec B, PGP12101