“Greening” the marketing mix: do firms do it and does it pay off?
- First Online:
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.
KeywordsGreen marketing Firm performance Stakeholder theory Slack resources Industry reputation Risk aversion Competitive intensity
- Bahadir, S. C., Bharadwaj, S. G., & Srivastava, R. K. (2008). Financial value of brands in mergers and acquisitions: Is value in the eye of the beholder? Journal of Marketing, 72, 49–64Google Scholar
- Banerjee, S. B., Gulas, C. S., & Iyer, E. S. (1995). Shades of green: a multidimensional analysis of environmental advertising. Journal of Advertising, 24, 21–31.Google Scholar
- Belz, F.-M., & Peattie, K. (2009). Sustainability marketing: A global perspective. West Sussex: Wiley.Google Scholar
- Dahlstrom, R. (2011). Green marketing management. International Edition, Australia: South-Western/Cengage Learning.Google Scholar
- DEFRA. (2008). Final report environmental protection expenditure by industry: 2006 UK Survey. London: Department of Environment, Food and Rural Affairs.Google Scholar
- E.On (2011). E.ON ÖkoStrom. https://www.eon.de/de/eonde/pk/produkteUndPreise/Strom/E.ON_OekoStrom/index.htm. Accessed 12 July 2012.
- Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21 st century business. Oxford: Capstone Publishing.Google Scholar
- Esty, D. C., & Winston, A. S. (2009). Green to gold. Hoboken: Wiley.Google Scholar
- Fuller, D. A. (1999). Sustainable marketing: Managerial-ecological issues. Thousand Oaks: Sage Publications.Google Scholar
- Godfrey, R. (1998). Ethical purchasing: Developing the supply chain beyond the environment. In T. Russel (Ed.), Greener purchasing: Opportunities and innovations (pp. 244–251). Sheffield: Greenleaf Publishing.Google Scholar
- Goldschmidt, B. (2011). Water works. Progressive Grocer Online, http://www.progressivegrocer.com/print/article/water-works/2271/. Accessed 12 July 2012.
- Gunther, M. (2006). Retailers clean up their paper trails. Fortune. http://money.cnn.com/2006/12/13/magazines/fortune/pluggedin_gunthercatalogs.fortune/index.htm. Accessed 12 July 2012.
- Hult, G. T. M., Mena, J. A., Ferrell, O. C., & Ferrell, L. (2011). Stakeholder marketing: a definition and conceptual model. Academy of Marketing Science Review, 1, 44–65.Google Scholar
- Hultman, M., Katsikeas, C. S., & Robson, M. J. (2011). Export promotion strategy and performance: the role of international experience. Journal of International Marketing, 19, 17–39.Google Scholar
- Hunt, C. B., & Auster, E. R. (1990). Proactive environmental management: avoiding the toxic trap. MIT Sloan Management Review, 31, 7–18.Google Scholar
- Jawahar, I., & McLaughlin, G. (2001). Toward a descriptive stakeholder theory: an organizational life cycle approach. The Academy of Management Review, 26, 397–414.Google Scholar
- Jennings, D. P., & Zandbergen, P. A. (1995). Ecologically sustainable organizations: an institutional approach. The Academy of Management Review, 20, 1015–1052.Google Scholar
- Martin, D., & Schouten, J. (2012). Sustainable marketing. Upper Saddle River: Prentice Hall/Pearson.Google Scholar
- Matthews, R. (2011). HP’s Sustainable innovation serves the planet and profits. Green Conduct, http://www.greenconduct.com/news/2011/04/20/hps-sustainable-innovation-serves-the-planet-and-profits/. Accessed 12 July 2012.
- Menon, A., Menon, A., Chowdhury, J., & Jankovich, J. (1999). Evolving paradigm for environmental sensitivity in marketing programs: a synthesis of theory and practice. Journal of Marketing Theory & Practice, 7, 1–15.Google Scholar
- Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: defining the principle of who and what really counts. The Academy of Management Review, 22, 853–886.Google Scholar
- Nidumolu, R., Prahalad, C. K., & Rangaswami, M. R. (2009). Why sustainability is now the key driver of innovation. Harvard Business Review, 78, 56–64.Google Scholar
- Ottman, J. A. (2011). The new rules of green marketing: Strategies, tools, and inspiration for sustainable branding. San Francisco: Greenleaf publishing.Google Scholar
- Spencer, J. (2007). Big firms to press suppliers on climate. Wall Street Journal, http://online.wsj.com/public/article/SB119186622895152448.html. Accessed 12 July 2012.
- Surroca, J., Tribo, J. A., & Waddock, S. (2010). Corporate responsibility and financial performance: the role of intangible resources. Strategic Management Journal, 31, 463–490.Google Scholar
- The Observer (2003). Let’s hear it for the boycott. The Observer, http://www.guardian.co.uk/business/2003/mar/02/globalisation.news. Accessed 12 July 2012
- Walls, J. L., Berrone, P., & Phan, P. H. (2012). Corporate governance and environmental performance: Is there really a link? Strategic Management Journal, advanced online publication.Google Scholar
- Wood, D. J. (1991). Corporate social performance revisited. The Academy of Management Review, 16, 691–718.Google Scholar
- World Commission on Environment and Development. (1987). Our common future. Oxford: Oxford University Press.Google Scholar