, Volume 41, Issue 2, pp 151-170

“Greening” the marketing mix: do firms do it and does it pay off?

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Abstract

Growing concern about the sustainability of the natural environment is rapidly transforming the competitive landscape and forcing companies to explore the costs and benefits of “greening” their marketing mix. We develop and test a theoretical model that predicts (1) the role of green marketing programs in influencing firm performance, (2) the impact of slack resources and top management risk aversion on the deployment of such programs, and (3) the conditioning effects that underpin these relationships. Our analyses show that green marketing programs are being implemented by firms, and we find evidence of significant performance payoffs. Specifically the results indicate that green product and distribution programs positively affect firms’ product-market performance, while green pricing and promotion practices are directly positively related to firms’ return on assets. In addition, industry-level environmental reputation moderates the links between green marketing program components and firms’ product-market and financial performance. Finally, we find that slack resources and top management risk aversion are independently conducive to the adoption of green marketing programs—but operate as substitutes for each other.