In an effort to encourage ecologically sustainable forestry practices, an international organization started issuing certifications to wood companies that meet high ecological standards by conserving resources and recycling materials. Companies that receive this certification can attract customers by advertising their products as "ecocertified." Around the world, many wood companies have adopted new, ecologically friendly practices in order to receive ecocertification. However, it is unlikely that wood companies in the United States will do the same, for several reasons.
First, American consumers are exposed to so much advertising that they would not value or even pay attention to the ecocertification label. Because so many mediocre products are labeled "new" or "improved," American consumers do not place much trust in advertising claims in general.
Second, ecocertified wood will be more expensive than uncertified wood because in order to earn ecocertification, a wood company must pay to have its business examined by a certification agency. This additional cost gets passed on to consumers. American consumers tend to be strongly motivated by price, and therefore they are likely to choose cheaper uncertified wood products. Accordingly, American wood companies will prefer to keep their prices low rather than obtain ecocertification.
Third, although some people claim that it always makes good business sense for American companies to keep up with the developments in the rest of the world, this argument is not convincing. Pursuing certification would make sense for American wood companies only if they marketed most of their products abroad. But that is not the case—American wood businesses sell most of their products in the United States, catering to a very large customer base that is satisfied with the merchandise.
Narrator: Now listen to part of a lecture on the topic you just read about.
Professor Well, despite what many people say, there's good reason to think that many American wood companies will eventually seek ecocertification for their wood products. First off, consumers in the United States don't treat all advertising the same. They distinguish between advertising claims that companies make about their own products and claims made by independent certification agencies. Americans have a lot of confidence in independent consumer agencies. Thus, ecologically minded Americans are likely to react very favorably to wood products ecologically certified by an independent organization with an international reputation for trustworthiness.
Second point—of course it's true that American consumers care a lot about price—who doesn't? But studies of how consumers make decisions show that price alone determines consumers' decisions only when the price of one competing product is much higher or lower than another. When the price difference between two products is small—say, less than five percent, as is the case with certified wood— Americans often do choose on factors other than price. And Americans are becoming increasingly convinced of the value of preserving and protecting the environment.
And third, U.S. wood companies should definitely pay attention to what's going on in the wood business internationally, not because of foreign consumers, but because of foreign competition. As I just told you, there's a good chance that many American consumers will be interested in ecocertified products. And guess what, if American companies are slow capturing those customers, you can be sure that foreign companies will soon start crowding into the American market, offering ecocertified wood that domestic companies don't.
The lecture explains why American consumers would be open to buying "eco-certified" wood products. The passage preceding the lecture contains three reasons why American consumers won't buy those products, but the lecture provided further evidence which if true, can invalidate the argument presented by the passage.
The first reason provided by the passage is that Americans do not take advertisements seriously. The lecture challenges that statement by mentioning that is not the case for all advertisements. While people might not believe the advertisement claims made by the company itself, they seem to trust the claims made by international certification agencies. So, if Amerian wood companies obtained such eco-certifications, their consumers would believe the advertisements that claim the companies provide eco-friendly products.
The lecture also mentions that Americans might be willing to pay extra for eco-certified products. While it is true that American consumers are concerned about the price of a product, under certain circumstances, it is not the only factor they consider while purchasing products. According to the lecturer, when price difference is small (about 5% or so), the consumers consider other factors too. The additional price incurred due to obtaining eco-certification is a small increase. Also, these days, Americans are concerned about the environment. So, considering these factors, the author concludes that Americans might be willing to pay for environment-friendy products.
The last argument is about American wood companies and the international market. The passage says that American wood companies don't have to enter the international market as the domestic market is large enough. But, the professor argues that they need to enter the international market. He says so because he believes that to survive in the competitive market, international expansion is necessary. Moreover, if American companies don't adopt the eco-friendly policy, international companies may take over the domestic market.
In this way, the lecture opposes the points made in the passage.
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