PRIOR RESEARCH ON GREEN MARKETING AND GREEN MARKETING …5)/1.pdf · marketing concept (Punitha and...

Singaporean Journal of BuSineSS economicS, and management StudieS (SJBem) VOL. 5, NO. 5, 2016

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PRIOR RESEARCH ON GREEN MARKETING AND GREEN

MARKETING STRATEGY: CRITICAL ANALYSIS

Dr. Bilal Mohammad Eneizan Assoc. Prof. Dr. Kalsom Abd. Wahab

Dr. Zainon M.S Dr. TareqFayeqObaid

Faculty of Economics and Muamalat, Islamic Science University of Malaysia, Bandar BaruNilai, Negeri Sembilan, Malaysia

Email: [email protected]

ABSTRACT

The main objective of this study is to review the present green marketing and green marketing strategy applies particularly to the marketing. This study provides an idea to the researchers about the prior studies on green marketing and green marketing strategy. The critical analysis indicated that few studies on the green marketing strategy have been carried out in both developed and developing countries. In addition, few studies have been carried out on the relationship between green marketing strategy / strategies and firm performance (financial and non- financial performance). The future studies should be investigate the effect of green marketing strategy on firm performance in general and the effect of each strategy on firm performance.

INTRODUCTION Marketing Marketing is a function and a set of processes that enables the firm to create, communicate, and deliver value to its customers. By enabling organizations to deliver more valuable offerings, it constitutes a firm resource. Furthermore, when developed fully, it becomes a competence. Firms that develop a marketing competence are able to sustain the coordinated deployment of assets in a way that helps them achieve their goals. Marketing success then occurs when a firm's competence in marketing constitutes a firm resource (i.e., it contributes to enabling the firm to produce efficiently and/or effectively market offering that has value for some market segment(s) (Arnett and Wittmann, 2014). Marketing interest of practitioners and academics’ interest in the influence of environmental issues on marketing activities are growing. The interface among the natural environment and consumer behavior, public policy initiatives, strategy of marketing, and macro marketing are examined by a set of marketing contexts (Polonsky, 2011). Fisk (1974) associated the occurrences of environmental issues with marketing, claiming that marketing is found to be liable to causing detrimental environment harm due to excessive consumer’s consumption. Notwithstanding Fisk’s (1974) assertion, Sheth and Sisodia (2015) argued the opposites. Although the presence of environmental and social issues can be addressed through marketing (Sheth & Sisodia, 2015), this subject matter however has not been extensively researched in marketing studies. Instead of incorporating the environmental aspects for the purpose of improving marketing strategies, the environmental aspects are often viewed by strategy planner in the field of marketing as an additional aspect to leverage competitive advantages (Ginsberg & Bloom, 2004).


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Taking account of environmental aspects to shape marketing strategy consequently results in the application of green marketing. Various terms such as ecological marketing, environmental marketing and responsible marketing are synonymous to green marketing. While these terms may be used interchangeably, the terms are however epitomised by similar connotation. For example, the definitions of all those terms take into consideration the exchange process that is characterised by the option to choose and decide based on a common aspiration of minimising negative environmental impacts. The ultimate objectives of green marketing practices are however indefinite, with concern raised if the practice of green marketing is intended to benefit the environment or the human population. This suggests that regardless of what green marketing is defined as, the core of green marketing needs to take into account necessary transformation and changes that can ultimately benefit not only the larger human population, but also the environment. Unlike conventional marketing practices that centred on meeting the need of consumers, the practice of green marketing is distinctive in its own. The practice of green marketing that seeks not only to improve the quality of environment but also the quality of life make certain that the practice does not cause any form of negative environmental impact. Human beings including marketers are dependent on the environment and its resources to survive while the environment does not. Marketing and the environment are therefore co-reliant (Polonsky, 2011). Green Marketing Firms create, communicate, and deliver value to their customers through their adoption of marketing strategies. Therefore, the concept of marketing is considered an essential organizational resource that can be developed further to ensure the competence of firms. Marketing competence can also help firms achieve their goals by coordinating their deployment of assets. Firms are considered successful when they are able to use their marketing competence to produce valuable offerings for several market segments (Arnett and Wittmann, 2014). The green marketing explained how the green marketing strategy practices by the firms would affect the firm performance. The adopted a new strategy by the firm such as green marketing strategy will allow to the firms to use different products and qualities then entire a new market that will affect their performance (Robins, 2006). The development of green marketing practices occurred in several aspects in the 1990s. Considerable anticipation and rapid growth in the green marketing literature accompanied the intense activity at the beginning of the decade. However, the firm performance of green products has been relatively unsatisfactory despite significant improvements in the environmental focus of marketing (Crane, 2000). Marketing managers considered the consumer backlash in the mid-1990s as a critical factor of this low-level performance. This backlash against green marketing is arguably an element in the wide range of markets in industrialized countries (Wong et al., 1996). Moreover, marketers must broaden their activities, devise alternative means of presenting value and costs, alter the manner by which businesses discuss human interactions and the environment, and shift the focus of consumption from acquiring goods to ecologically achieving want satisfaction. Marketers (business, government, and consumers) can facilitate this process by identifying opportunities for redefining value within marketing and exchange. The world biosphere is sustainable; by contrast, the marketing of human consumption in its current structure may be unsustainable (Polonsky, 2011). Green marketing propose the development of the multi-dimensional measures of value, such as the triple bottom line (TBL) that includes social and environmental value in addition to financial value (Robins, 2006). Such changes arguably move beyond the traditional exchange-focused marketing; nevertheless, expanding the business understanding of the definition of marketing and how marketing interacts with the natural environment is critical in maintaining the relevance of


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marketers and assuming their role as agents of change. A minimum requirement for marketers is their capacity to successfully integrate environmental issues into marketing strategy, thereby expanding the thinking about marketing (Kotler and Levy, 1969). Definitions of Green Marketing Previous studies have generated three main definitions of green marketing. The first definition is that green marketing satisfies environment-conscious customers by promoting products that do not produce considerable harm to the environment. Some researchers define green marketing as “the need to distinguish the so-called ‘green consumers’ and to direct all marketing decisions toward meeting the expectations and demands of this consumer population.” (Banyte et al., 2010). Other studies test the efficiency of branding techniques in introducing new products to green markets (Muntean & Stremtan, 2010). It indicates that despite their preference for environment-friendly products, green consumers experience difficulty in distinguishing a green product from an ordinary product. These studies also observe the absence of relevant or engaging marketing strategies in the present market (Tureac et al., 2010). A second definition involves the triple bottom line objectives and is developed based on the classic marketing mix (i.e., traditional 4Ps, namely, product, price, promotion, and place) (Needle, 2010). A green strategy mix comprises six dimensions, namely, 5Ps + EE, denoting planning, process, product, promotion, people, and eco-efficiency proposed by (Violeta and Gheorghe, 2009). A third view is that green marketing does not merely connect the green customers with a green marketing mix. This concept also involves other corporate demand management aspects, such as predicting the demand of consumers for green, recycled, and re-manufactured products, increasing the demand for build-to-order products, and developing the competitive advantage and environmental priorities of firm (Sharma et al., 2010). This definition likewise demonstrates how green marketing strategies are incorporated into the other business processes in the forward and reverse supply chains (recycle and re-manufacturing). Given its several features, many alternative terms, such as environmental marketing, environmental marketing management, environmental product differentiation, and sustainability labeling schemes, have been generated to denote the green marketing concept (Liu et al., 2012). Broadly defined, green marketing is referred to as integrating environmental issues into strategic marketing processes (Chan et al., 2012). More specifically, (Liu et al. 2012) refer to three distinct green marketing approaches: satisfying green consumers with green products; adapting the marketing strategy to include reference to embedded environmental efficiencies; or achieving competitive advantage by adopting green values and benefits by understanding the market, managing demand for products that are sustainable in use and after use, and adopting processes that address environmental priorities. Meanwhile, Sharma et al. (2010) set out goals of a green marketing framework, in summary to reduce both surplus and reverse supply a strategy that requires a combination of market intelligence, demand management, product development and improved supply chain processes. The term green marketing describes a firm’s efforts at designing, promoting, pricing, and distributing products that will not harm the environment. On the other hand, green marketing defined as the management process responsible for identifying, anticipating, and satisfying the requirements of customers and society in a profitable and sustainable way (Chan, 2014). Ages of Green Marketing The development of the green marketing concept spans three different “ages.” The first age occurred in the 1970s, during which several ecological marketing programs that focused on environmental problems, such as air pollution, oil reserve depletion, and pesticide use, were implemented. The second age occurred in the following decade, during which clean technologies were advocated, green consumers were identified and targeted, a favorable socio-environmental


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performance was considered a potential basis of competitive advantage, and marketers were encouraged to adopt a physical, systematic perspective toward businesses. The third age is the present, during which several advocacies are directed toward sustainability. A sustainable economy incorporates the total environmental cost of the production and consumption behaviors of corporations and individuals (Hunt, 2011). Stages of Green Marketing The 1980s marked the first stage of green marketing, during which corporations were oriented with the then-unknown concept. The following decade marked the second stage of such concept, during which marketers faced backlash from environmental activists and consumers. These marketers gradually recognized that the purchasing behaviors of their consumers did not reflect their concern and positive attitudes toward the environment and the use of green products. The third stage of green marketing began in 2000, during which the implementation of highly advanced technologies, the execution of stricter government regulations, and the promotion of environmental awareness revived the interest of scholars and practitioners alike in the green marketing concept (Punitha and Rasdi, 2013). Green Marketing versus Traditional Marketing Figure 1 shows the green marketing philosophy and distinguishes traditional marketing from green marketing. Green marketing explains the commercial exchange relationship as well as the relationship of a firm with its society, including the environment. Green marketing must be practiced not only by the marketers, but also by people from the different functional areas of the firm, such as quality, design, production, and supplies. To minimize the harmful effects of their operations on the environment, firms must integrate green marketing practices into their entire process, including the planning, implementing, and controlling of policies on their products, services, prices, distribution, and promotion (Punitha and Rasdi, 2013). Many industries, such as automobile, apparel, food, furniture, and housing, have begun to adopt green marketing practices to promote the environment-friendly behaviors of their consumers. Although consumers demonstrate strong pro-environment attitudes and preferences for environmental products, their consumption level of green products remains insufficient to benefit the environment. Moreover, some of the most popular green products have relatively small market shares. For instance, only 3% and 2% of all food items and household cleaning products that were sold in 2006 were organic and environment-friendly. More than 2% of all vehicles sold in the United States in 2007 were hybrid cars. The limited success of these green products has been attributed to their limited availability, high cost, and ineffective marketing. Moreover, some consumers do not fully trust the green marketing practices of firms because they appear misleading. Studies on green marketing from the early 1990s reveal “firms significantly underperform in terms of upholding their green marketing practices” (Sheth et al., 2011).


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Fig. 1: Differences between Traditional Marketing and Green Marketing

Source: Punitha and Rasdi, 2013

Researchers and environmental activists believe that the quality of the environment can be significantly improved by the purchase of green products as well as the proper disposal of non-biodegradable garbage (Punitha and Rasdi, 2013). Challenges of Green Marketing Punitha and Rasdi (2013) identified the following strategies that could result in the unsuccessful implementation of green marketing practices: Green selling: Some firms merely describe their products as environment-friendly to boost their sales effectively. Green spinning: Some firms employ public relation officers to counterattack the criticisms that are fired toward them, specifically toward their business performance or adopted strategies. These people directly communicate with the media before addressing the public to achieve quick results. Green harvesting: Firms adopt green marketing approaches to reduce their operation or production expenses. Entrepreneur marketing: The green products of some firms fail to satisfy the demands of their customers because they fail to determine what their consumers demand from them in the first place. Compliance marketing: Firms dodge penalties from the government by complying with the implemented regulations and legislations. Reasons for Firms to Go Green Firms adopt green practices for the sake of competitiveness, legitimation, and ecological responsibility. Competitiveness involves the improvement of energy and waste management practices. Legitimation involves the compliance of firms with existing regulations as well as their adoption of other practices to achieve long-term sustainability, avoid penalties, and reduce risks. Ecological responsibility stems from the social obligations and values of a firm (Simula et al., 2009).


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Benefits and Challenges of Green Marketing to Firms, Environment, and Society Extant studies have identified several benefits of green marketing adoption for firms. First, the adoption of these practices will improve the image and reputation of firms among their target customers. Second, these practices may increase the revenue of the adopting firms by improving the efficiency of their resources, increasing their savings, reducing the amount of input that they utilize in their operations, and increase their profitability. Third, the adoption of green marketing strategies can reduce the pollution that a firm generates in their operations, which in turn helps enhance their competitive advantage over non-green firms, promote their social goodwill by forcing them to abide by the law, and improve their management practices. However, the firms that adopt these strategies may also suffer from several setbacks. First, additional marketing or investment costs may entail a scatter market approach. Second, a weak commitment toward green practices may drive consumers to lose their trust on a specific firm. Third, the inappropriate implementation of these strategies may place firms in a disadvantaged position in the market. Therefore, the firms that adopt green marketing strategies must continuously develop their practices to retain the promised benefits. Some studies have also demonstrated opposing views toward green marketing by stating that most investors do not hold this practice in high regard. These commendations and criticisms toward green marketing emphasize the complexity of the green marketing concept as well as its interrelation with the environmental issues that the world is currently facing (Song–Turner et al., 2012). Adoption of Green Marketing The perceived value and environmental risk of products may be enhanced and reduced, respectively, through the adoption of green marketing strategies. These effects, in turn, help enhance the competitive advantage of a firm. Green marketing continues to prosper as more firms begin to sell and as more consumers begin to support environment-friendly products. The development, differentiation, pricing, and promotion of products and services that do not harm the environment are among the several green activities that firms may consider incorporating into their practices. Green marketing may help newly “greened” firms forecast their sales of green products. Green firms are likewise provided with a differentiation strategy through which they can satisfy the environmental needs of their customers and reshape the market trends. Moreover, these green firms must project a trustworthy image to convince their consumers that their environmental products are free from risks. Given that this task becomes challenging when the firms or the marketers are unable to provide a sufficient amount of information to their extant and potential customers, firms must consider disclosing more information to the public to project a trustworthy image (Chen and Chang, 2013). The adoption of green marketing strategies may help firms achieve the following goals:

Utilize green opportunities; Boost their corporate stature; Increase the value of their products; Enhance their competitive advantage; and Follow environmental trends (Chen and Chang, 2013).

Rationale for the Implementation of Green Marketing Firms and consumers must be oriented regarding the threats and opportunities in their environment (Al-Salaymeh, 2013). These threats and opportunities include the following key trends: 1. Contradiction of raw materials: The following three types of raw materials can be extracted

from the environment: a. An unlimited air and water supply


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b. A limited supply of renewable resources, including forests and food c. A limited supply of non-renewable resources, including coal and iron

2. Increasing cost of energy: The success of a business relies on the supply of energy, and

products are priced based on the amount of energy that is used during their production. The energy prices have recently increased, which has seriously affected the processes of the firms. Consequentially, the products in the market are given steeper prices, whereas other countries begin to suffer from increasingly severe economic problems. These problems have prompted different organizations to search for viable, inexpensive alternative sources of energy, such as coal, sun, and wind.

3. High pollution level: The term “pollution” usually refers to unclean or filthy things. However, several studies have begun to use this term to denote the detrimental effects of human activities, either direct or indirect, on the environment. For instance, using pesticides in farming and mixing phosphate in household chemicals are among the leading causes of water pollution.

Objectives of Green Marketing Researchers widely consider green marketing as a vital opportunity for firms to enhance their innovativeness and competitiveness (Papadopoulos et al., 2010). Papadopoulos et al (2010) enumerated the following objectives of green marketing: 1.To reduce the amount of waste by manufacturing products that do not produce any waste

materials; 2.To reshape extant products into environment-friendly products; 3.To enhancing the value for money of products by pricing them according to their production

cost; and 4.To enhance profitability by setting operational objectives based on the environmental issues

that are widely observed in the market. Studies of Green Marketing

Table 1: Studies of green marketing

Author Year Description of Research Origin Sample Size Method

Leonidou et al. 2015 Explored the effects of green business strategy on competitive advantage and firm performance

Cyprus 153 Questionnaire

Ko et al. 2013 Explored the relationship among green marketing, corporate image, and purchase intentions in the retail setting from a consumer perspective

Korea 389 Questionnaire

Sambasivan et al. 2013 Investigated the impact of environmental proactivity on firm financial performance

Malaysia 988 Questionnaire

Leonidou et al. 2013A Effects of green marketing programs 4ps on competitive advantage and firm performance

UK 183 -

Leonidou et al. 2013B Developed a model of drivers and outcomes of environmentally friendly marketing strategies in the Greek hotel sector

Greece 152 Interviews

Chan 2013 Investigated the perceptions of Hong Kong hotel managers regarding the relative importance of green marketing strategies

Hong Kong 378 Questionnaire

Zhu et al. 2013 Examined the process of promoting green food consumption intention and, in the end, inducing real green food consumption behaviors

China 457 Questionnaire


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Rakhsha and Majidazar

2011 Evaluated the effects of the green marketing mix on customer satisfaction and loyalty

Iran 4,500 Questionnaire

Phitthayaphinant, and Nissapa

2011 Attempted to increase the understanding of consumer satisfaction on the marketing mix of biodiesel in major oil palm cultivation provinces

Thailand 1,977 Questionnaire

ELSamen et al. 2011 Examined the factors that affect the adoption of the green marketing concept among industrial manufacturers

Jordan 92

Questionnaire

Welling and Chavan 2010 Examined the feasibility of practicing green marketing in the case of small- and medium-scale manufacturers

India 114

Questionnaire

Rasyid and Hudrasyah

2012 Determined the current level of knowledge of consumers regarding green products and their purchasing motivations

North Bandung, Indonesia

221 Questionnaire

Rizwan et al. 2013 Explored the factors that affect purchase intention to determine the effect of three factors (green perceived value, green perceived risk, and trust) on purchase intention-based green marketing

Pakistan

150 Questionnaire

Cronin et al. 2011 Advanced the marketing discipline in investigations that address the concept of green marketing strategies

- - Review of 105 journals

Gopalakrishnan and Muruganandam

2013 Determined the inclination of respondents and the major influencing factor for preferring a green product, and identified the level of knowledge about green products and their impact

Tamil Nadu, India

1,000 Questionnaire

Rath 2013 Reported the most recent advances in green industrial marketing, given the sustainable supply chains and their interplay within a specific industrial branding, and explored future research directions

Asia 664 Questionnaire

Kim and Periyayya 2013 Explored how green branding toward beauty products can influence brand effect from the perspective Malaysian customers, and examined the component impact of green brand awareness, brand image, brand credibility, brand community, and brand engagement as well as the positive relationships among them.

Malaysia 200 Questionnaires and focus group discussions

Lee et al. 2013 Provided a conceptual framework on the adoption of the drivers of green practices for fast-food restaurants, using institutional theory as its underlying foundation

Malaysia - A Conceptual Framework

Ogunmokun et al. 2012 Investigated whether significant differences exist between small business firms with high versus low levels of green marketing on various aspects of business performance

Australia 301 Questionnaire

Lin et al. 2013 Examined how market demand affects green product innovation and firm performance

Vietnam 208 Questionnaire

Lee 2009 Investigated the gender differences among Hong Kong adolescent consumers in terms of environmental attitude, environmental concern, perceived seriousness of environmental problems, perceived environmental responsibility, peer influence, self-identity in environmental protection, and green purchasing behavior

Hong Kong 6,010 Questionnaire

Chen and Chai 2010 An exploratory paper that compared gender differences in the attitude toward the environment and green products, and investigated the relationship between attitude toward the environment and green products


Rahbar and Wahid 2011 Examined whether green marketing tools (i.e., environmental advertisement, eco-label, and eco-brand), as a variable, affect the actual purchasing behaviors of consumers in Penang (a state in Malaysia)


Chen and Chang 2012 Developed an original framework for exploring the effects of green perceived value and green perceived risk on green purchase intentions, and discussed the mediation role of green trust

Taiwan 800 Questionnaire


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The critical analysis above related to the research on green marketing; analysis results indicated the limited amount of studies on the green marketing strategy and firm performance. The numbers of the studies that conduct to investigate the impact of green marketing strategy on firm performance are limited based on the critical analysis above. Most of the studies were focusing on the other diminutions such as customer satisfaction, green purchase intentions, and the actual purchasing behaviors are all related to customer’s side. The literature of green marketing mentioned that, to study the firm level it is important to focus on firm performance specially the financial performance that affect their profitability and sales. On the other hand, the above critical analysis showed that most of the previous studies on green marketing have been conduct on developed countries and a few studies that have been carried out in developing countries. In this regard, the phenomenon of green marketing still unaware in developing countries. Most of the previous studies on green marketing have been used a quantitative approach by using a questionnaire to collect the data, and qualitative approach still weak. Thus, future research should be considered a qualitative approach to cover the green marketing area. 7Ps Marketing Strategy The marketing mix model has been viewed in a different light as various streams of marketing emerged (i.e., services marketing, business-to-business marketing, relational marketing, and macro marketing). Thus, an extended marketing mix comprising 7Ps (i.e., product, price, promotion, place, process, physical evidence, and people) has been put forward (Gordon, 2012). This marketing framework developed by Booms and Bitner (1981) extends the 4Ps theory by McCarthy (1960). Mohammed and Pervaiz (1995) conducted an exploratory survey that used the 7Ps marketing mix as a generic framework. Results of a survey involving participants to the U.K. Marketing Education Group Conference in Salford (1992) and the European Marketing Academy Conference in Aarhaus, Denmark (1992) indicated a high level of dissatisfaction with the 4Ps among European academics (Larashati et al., 2012). Marketing mix denotes the different means through which a company brings a product or a service to the market. Responsiveness toward environmental issues is required of the marketing mix within the green marketing context. Marketing mix in the service sector is known as the “extended marketing mix.” Marketing mix is commonly known as the “4Ps framework,” which consists of product, price, place, and promotion. In the extended marketing mix, however, three additional Ps comprise the framework, namely, people, physical evidence, and process; thus, the structure is termed as the 7Ps framework. As underscored by the green marketing philosophy, each element in the marketing mix must convey “greenness” at every step of the process from product development to product launch (Arseculeratne and Yazdanifard, 2014). Notwithstanding the high level of dissatisfaction with the 4Ps, their framework is considered the most significant for introductory and consumer marketing alike. Meanwhile, the 7Ps framework has been highly accepted as a generic marketing mix. Table 2 presents the strengths and weaknesses of both frameworks (Goi, 2009).


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TABLE 2: Strengths and weaknesses of the 7Ps and 4Ps frameworks 7Ps 4Ps

Strengths

More comprehensive More detailed More refined Broader perspective Includes participants/ people and process It is a model Standardization Signals marketing theory

Simplicity and case of understanding Easy of memories Good pedagogic tool, especially for introductory marketing Parsimony Useful conceptual framework Ability to adapt to various problems

Weaknesses

More complicated Extra elements can be incorporated in 4Ps Controllability of the three new elements

Too simple Lacking people, participants and process Physical marketing Service Lack of connection/integration between variables State nature of 4Ps

Source: Goi, 2009


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Studies of Green Marketing Strategy

TABLE 3: Studies of Green Marketing Strategy Author Year Objective Origin Sample

Size Methods Factors Issue Findings Weaknesses Strengths

Leonidou et al. 2013B To propose and test an integrated model of the drivers and outcomes of environmental marketing strategies pursued by hotels

Greece 152 Questionnaire (Environmental marketing strategy) includes product, price, promotion, distribution, people, atmosphere, and processes)

-Market performance -Financial performance

The adoption of such a strategy is conducive to obtain competitive advantage, which subsequently increases the potential to achieve superior market and financial performance.

-Failed to demonstrate the relationship between green marketing mix and performance

-Based on a theory of resource-based view-Used a green strategy rather than the traditional strategy in green marketing

Leonidou et al.

2013A To primarily develop a new model of green marketing programs and to present a rigorous empirical test of the model

United Kingdom

183 -Questionnaire -Interview

-Green product -Green pricing -Green distribution -Green promotion

-Product-market performance -ROA performance

Evidence of the significant performance payoffs is revealed. Green products and green distribution positively affect the product-market performance of firms, whereas green pricing and promotion practices are directly positively related to the ROA performance of firms.

-Disregarded the investigation of the effect of each element of the green marketing mix strategy -Lacking in a customer perspective

-Used stakeholder theory -Studied the marketing mix in the green concept -Used mixed methods

Hosseinzadeh and Azizpour

2013 To analyze the effects of green products and green promotion on customer loyalty to the brand of NaqsheJahan Sugar Co.

Iran 235 Questionnaire -Green product -Green promotion

Customer loyalty

Green products and green promotion affect customer loyalty. This finding implies that if the firm increases its number of green products and enhances green promotion, then customer loyalty increases.

Using only two variables (green product and green promotion) Lacking in a firm perspective

Focusing on green marketing mix


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Abzari et al. 2013 To study the effects of the green marketing mix on the increase in market share of manufacturing companies

Iran 159 Questionnaire -Green product -Green price -Green distribution -Green promotion

Market share A significant and positive relationship exists between the green marketing mix and increase in market share.

Focusing on ly on 4Ps green marketing mix

Using 4Ps in green concept

Larashati et al. 2012 To determine which attributes of 7Ps green marketing are perceived to be important and affect consumer willingness to purchase environmentally friendly beauty products.

Indonesia The Body Shop Indonesia

Questionnaire -Green product -Green price -Green distribution -Green promotion -Green people -Green physical evidence -Green process

Consumer willingness to purchase environmentally friendly beauty products

The “People” dimension of 7Ps green marketing is considered the most important and has the largest effect on the willingness of consumers to purchase. Moreover, a relationship exists between the importance levels of each dimension of the 7Ps and the degree of influence toward the willingness to purchase. A relationship likewise exists between the environmental knowledge of consumers and the importance level of each dimension of the 7Ps. The findings provide managers and producers with suggestion for generating a 7Ps green marketing strategy for their environmentally friendly beauty products.

Lacking in a firm perspective

Focusing on 7Ps green marketing mix

Hashem and Rifai

2011 To investigate the effects of applying the green marketing elements mix on the mental image of consumers

Jordan, Kuwait, Syria

450 Questionnaire -Green product -Green price -Green promotion -Green distribution

Mental image of consumers

The application of green marketing mix elements by the chemical industries companies in three countries on the mental image of consumers is significant (p < 0.05) according to country, gender, and age only.

-Focused only on the customer perspective -Focused on only one type of industry

-Focused on the green concept -Focused on three countries

Rakhsha and Majidazar

2011 To evaluate the effects of the green marketing mix on customer satisfaction and loyalty

Iran 4,500 Questionnaire

-Green product -Green price -Green promotion -Green distribution

Customer satisfaction and loyalty

The green marketing mix has a significant effect on consumer satisfaction.

-Lacking in the perspective of firms -Disregarded the investigation of the effect of each element of the green marketing strategy

-Focused on the green concept


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Fraj et al, 2011 Green marketing strategy and the firm's performance: the moderating role of environmental culture

European country

361

Questionnaire Green marketing strategy Organizational performance

Green marketing strategy led firms to improve their profitability by optimizing marketing performance and reducing costs

Disregarded the investigation of the effect of each element of the green marketing strategy

Studying the effect of GMS on different dimensions of organizational performance

LeCren and Ozanne

2011 A greater understanding of the consequences associated with successful corporate environmental (CE) organizations is needed

New Zealand

8 interviews Product/service Process

organizational performance

Cost minimization It should be studied the 7 green marketing strategies

Value of the results

Mathur and Mathur

2000 Effects of green marketing strategy on firm performance

USA 73 Event study methodology

Product Promotion

Firm performance

Better financial performance Critical analysis on the effect of green marketing strategy on financial performance

Studying the green marketing strategy in general


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The preceding analysis, shows that the 10 models focus on four factors, namely, green product, green price, green place, and green distribution. Leonidou et al. (2013A, 2013B) merely considered stakeholder theory and resource based view theory. Moreover, only a few studies focused on the aforementioned four factors. Other factors, such as green people, green process, green physical evidence, are lacking in investigation. Only four models have been studied the effect of green marketing strategy on firm performance, three studies have been studied the effect of green marketing strategy in general, and one study (Leonidou et al. 2013A) has been studied the four elements of green marketing strategy. It is possible to make some observations about existing studies of green marketing strategy through descriptive analysis of the articles. 1) Although the effects of green marketing strategy have been debated over the years, only a few

empirical studies have investigated how the adoption of such strategies can affect the performance of firms. These limited extant studies, which are published in several specialist journals, have adopted different approaches to investigate such effects. Therefore, managers are relatively unaware if the adoption of green marketing practices may benefit the strategic or financial performance of their firms; they also develop a limited understanding of the contingencies that may affect the answers to these questions (Leonidou et al., 2013A).

2) The extant studies in this area have merely investigated the elements of the green marketing strategy, such as green product, green price, green promotion, and green distribution. However, these studies have largely ignored the other elements, such as green people, green physical evidence, and green process.

3) In “‘Greening’ the marketing mix: Do firms do it and does it pay off?”, Leonidou et al. (2013A) selected firms from six different two-digit SIC industry groupings in the United Kingdom, but failed to generate results that could be generalized beyond such industries or in other countries. Studies on other industrial contexts and countries can help enhance the generalizability of these findings. Leonidou et al. likewise argued that studies might control a wider range of factors by parsimoniously measuring the effects of green marketing practices.

4) Understanding the causal relationships between green marketing strategy and their effects on firm performance can contribute to theory development in this domain. Managers can also effectively evaluate the “greenness” of their investments by investigating such relationships (Leonidou et al., 2013A).

5) More studies are needed to determine and thoroughly discuss the green marketing strategy that can provide the best value and benefit for firms to achieving superior firm performance.

6) Studies on green marketing and on the greening of industries are mostly conducted in developed countries and are relatively rare in rapidly developing Asian countries.

7) Instead of focusing on government policy as a moderating factor, previous empirical studies have merely focused on the industry environmental reputation (Leonidou et al., 2013A), competitive intensity, and market dynamism (Leonidou et al., 2013B).

8) The effects of firm characteristics and ownership must also be examined from the perspective of green marketing. Given that, the firm characteristics and ownership factors are supported by insufficient data.

In sum, it is apparent that green marketing strategy research has been somewhat limited to date. Professional and academic communities have been paying an increasing amount of attention


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toward the effect of green marketing strategy on firm performance, but there has been limited investigation to date on the effect of green marketing strategy on firm performance. Factors Related to the Existing Models for the Green Marketing Strategy

TABLE 4: Factors related to the existing models for the green marketing strategy

The Table 4 above is referring to the factors that used in the previous studies regarding to green marketing strategy and firm performance. The analysis showed that most of the studies were used only 4Ps and little studies that used 7Ps. On the other hand, there has been limited investigation to date on the effect of green marketing strategy on firm performance. Conclusion Despite the growing body of research addressing the green marketing issues, green marketing strategy / strategies have yet to become widely studied in the marketing journals . Importantly, the extant green marketing strategy literature is overwhelmingly conceptual in nature and provides little empirical insight into the critical managerial questions of whether (1) green marketing strategies (green product, green price, green distribution, green promotion, green people, green process, and green physical evidence) yield positive performance outcomes, (2) contextual conditions affect the green marketing strategy and strategies – firm performance (financial and non-financial performance) link. Addressing these questions should be studying in the future research.

Factors Leonidou et al. (2013B)

Leonidou et al. (2013A)

LeCren and Ozanne (2011)

Fraj et al. (2011)

Abzari et al. (2013)

Mathur and Mathur(2000)

Green marketing strategy

√ √ √ √ √ √

Green product

√ √ √ - √ √

Green price

√ √ - - √ -

Green promotion

√ √ - - √ √

Green distribution

√ √ - - √ -

Green people √ - - - - -

Green physical evidence

√ - - - - -

Green process √ - √ - - -


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In addition, it will be important to consider the effect of external factors such as government policy as a moderating variable on the relationship between green marketing strategy and firm performance. The resource based view of the firm is reflect the resources and capabilities of the firms, these resources and capabilities could be effect the adoption of green marketing strategy by the firms and achieving effective firm performance, but the stakeholder’s theory that reflect the importance of green stakeholder’s such as government is also impotent and it could help the firm to adopt the green marketing strategy and achieving effective firm performance. In short, the integration of resource based view theory and stakeholder’s theory will help the firms to adopt the green marketing strategy and achieving effective firm performance.

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