Environmental marketing strategy and firm performance: Effects on new product performance and market share

  • William E. Baker
  • James M. Sinkula

Abstract

Recent studies on marketing and the natural environment have called for research that links environmental marketing strategies to the performance of the firm. This research operationalizes the enviropreneurial marketing (EM) construct and examines its relationship with firm performance. It is the first empirical research to operationalize the EM construct. The new scale, albeit a first attempt, demonstrates encouraging psychometric properties. According to the resource-based view of the firm, a resource such as EM should directly influence firms’ capabilities (e.g., new product development success) but not competitive advantage (e.g., change in market share). A nationwide study of top-level marketing managers supports this perspective. In addition, although market turbulence also affects new product development success, it does not have an impact on EM. This suggests that EM formation is driven by internal rather than external forces.

Keywords

environmental marketing strategy enviropreneurial marketing corporate environmentalism new product success organizational performance 

References

  1. Aaker, David A. 1988.Strategic Market Management. 2d ed. New York: John Wiley.Google Scholar
  2. Anderson, James C. 1987. An Approach for Confirmatory Measurement and Structural Equation Modeling of Organizational Properties.Management Science 33 (April): 525–541.CrossRefGoogle Scholar
  3. Armstrong, J. Scott and Terry S. Overton. 1977. Estimating Nonresponse Bias in Mail Surveys.Journal of Marketing Research 14 (August): 396–402.CrossRefGoogle Scholar
  4. Bagozzi, Richard P. and Lynn W. Phillips. 1982. Representing and Testing Organizational Theories: A Holistic Construal.Administrative Science Quarterly 27 (September): 459–489.CrossRefGoogle Scholar
  5. Bain, Joe S. 1959.Industrial Organization. New York: John Wiley.Google Scholar
  6. Baker, William E. and James M. Sinkula. 1999. The Synergistic Effect of Market Orientation and Learning Orientation on Organizational Performance.Journal of the Academy of Marketing Science 27 (Fall): 411–427.CrossRefGoogle Scholar
  7. Baker, William E. and James M. Sinkula. Forthcoming. Market Orientation and the New Product Paradox.Journal of Product and Innovation Management.Google Scholar
  8. Banerjee, Subhabrata Bobby. 2002. Corporate Environmentalism: The Construct and Its Measurement.Journal of Business Research 55 (3): 177–191.CrossRefGoogle Scholar
  9. —, Easwar S. Iyer, and Rajiv K. Kashyap. 2003. Corporate Environmentalism: Antecedents and Influence of Industry Type.Journal of Marketing 67 (April): 106–122.CrossRefGoogle Scholar
  10. Barney, J. B. 1991. Firm Resources and Sustained Competitive Advantage.Journal of Management 17 (1): 99–120.CrossRefGoogle Scholar
  11. Bentler, Peter M. and Chih-Ping Cho. 1988. Practical Issues in Structural Modeling. InCommon Problems/Proper Solutions: Avoiding Error in Quantitative Research. Ed. J. Scott Long. Newbury Park, CA: Sage, 161–192.Google Scholar
  12. Brown, M. W. and R. Cudeck. 1993. Alternative Ways of Assessing Model Fit. InTesting Structural Equation Models. Eds. K. A. Bollen and J. S. Long. Newbury Park, CA: Sage, 136–162.Google Scholar
  13. Calantone, Roger, Rosanna Garcia, and Cornielia Droge. 2003. The Effects of Environmental Turbulence on New Product Development Strategy Planning.Journal of Product Innovation Management 20 (2): 90–103.CrossRefGoogle Scholar
  14. Churchill, Gilbert A., Jr. 1979. A Paradigm for Developing Better Measures of Marketing Constructs.Journal of Marketing Research 16 (February): 64–73.CrossRefGoogle Scholar
  15. Clark, Bruce H. 2000. Managerial Perceptions of Marketing Performance: Efficiency, Adaptability, Effectiveness and Satisfaction.Journal of Strategic Marketing 8 (March): 3–25.CrossRefGoogle Scholar
  16. Day, George S. 1984.Strategic Market Planning. New York: West.Google Scholar
  17. Dess, G. G. and R. B. Robinson. 1984. Measuring Organizational Performance in the Absence of Objective Measures: The Case of the Privately-Held Firm and Conglomerate Business Unit.Strategic Management Journal 5 (July/September): 265–273.CrossRefGoogle Scholar
  18. Dillman, D. A. 1978.Mail and Telephone Surveys. New York: John Wiley.Google Scholar
  19. Drumwright, Minette E. 1994. Socially Responsible Organizational Buying: Environmental Concern as a Noneconomic Buying Criterion.Journal of Marketing 58 (July): 1–19.CrossRefGoogle Scholar
  20. Fornell, Claes and David F. Larcker. 1981. Evaluating Structural Equation Models With Unobservable Variables and Measurement Error.Journal of Marketing Research 56 (January): 191–211.Google Scholar
  21. Gatignon, Hubert and Jean-Marc Xuereb. 1997. Strategic Orientation of the Firm and New Product Performance.Journal of Marketing Research 34 (February): 77–90.CrossRefGoogle Scholar
  22. Gerbing, David W. and James C. Anderson. 1988. An Updated Paradigm for Scale Development Incorporating Unidimensionality and Its Assessment.Journal of Marketing Research 25 (May): 186–192.CrossRefGoogle Scholar
  23. Gladwin, Thomas N., James J. Kennelly, and Tara-Shelomith Krause. 1995. Shifting Paradigms for Sustainable Development: Implications for Management Theory and Research.Academy of Management Review 20 (October): 874–907.CrossRefGoogle Scholar
  24. Graham, John W. and Wendy C. Havlick. 1999.Corporate Environmental Policies. London: Scarecrow Press.Google Scholar
  25. Han Jin K., Namwoon Kim, and Rajendra K. Srivastava. 1998. Market Orientation and Organizational Performance: Is Innovation the Missing Link?Journal of Marketing 62 (October): 30–45.CrossRefGoogle Scholar
  26. Hart, Stewart. 1995. A Natural-Resource-Based View of the Firm.Academy of Management Review 20 (October): 986–1014.CrossRefGoogle Scholar
  27. Henard, David H. and David M. Szymanski. 2001. Why Some New Products Are More Successful Than Others.Journal of Marketing Research 37 (August): 362–375.CrossRefGoogle Scholar
  28. Hoffman, Andrew J. 2000.Competitive Environmental Strategy. Washington, DC: Island Press.Google Scholar
  29. — and John R. Ehrenfeld. 1998. Corporate Environmentalism, Sustainability, and Management Studies. InSustainability Strategies for Industry. Ed. Nigel J. Roome. Washington, DC: Island Press, 55–73.Google Scholar
  30. Homburg, Christian and Christian Pflesser. 2000. A Multiple-Layer Model of Market-Oriented Organizational Culture: Measurement Issues and Performance Outcomes.Journal of Marketing Research 37 (November): 449–462.CrossRefGoogle Scholar
  31. Hope, Einar. 1988. Market Structure and Innovation. InInnovation: A Cross-Disciplinary Perspective. Eds. K. Gronhaug and G. Kaufmann. London: Norwegian University Press, 475–490.Google Scholar
  32. Jarvis, Cheryl Burke, Scott B. MacKenzie, and Philip M. Podsakoff. 2003. A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research.Journal of Consumer Research 30 (September): 199–214.CrossRefGoogle Scholar
  33. Jaworski, Bernard J. and Ajay K. Kohli. 1993. Market Orientation: Antecedents and Consequences.Journal of Marketing 57 (July): 53–70.CrossRefGoogle Scholar
  34. Jennings, P. Deveraux and Paul A. Zandbergen. 1995. Ecologically Sustainable Organizations: An Institutional Approach.Academy of Management Review 20 (October): 1015–1052.CrossRefGoogle Scholar
  35. Jreskog, Karl G. 1993. Testing Structural Equation Models. InStructural Equations Models. Eds. Kenneth A. Bollen and J. Scott Long. Newbury Park, CA: Sage.Google Scholar
  36. King, Andrew. 1995. Avoiding Ecological Surprise: Lessons From Long Standing Communities.Academy of Management Review 20 (October): 961–985.CrossRefGoogle Scholar
  37. Ledgerwood, Grant and Arlene Idol Broadhurst. 2000.Environment, Ethics and the Corporation. New York: St. Martins.Google Scholar
  38. March, James G. and Herbert A. Simon. 1958.Organizations. New York: John Wiley.Google Scholar
  39. Marsh, H. W., J. R. Balla, and R. P. McDonald. 1988. Goodness-of-Fit Indices in Confirmatory Factor Analysis: The Effect of Sample Size.Psychological Bulletin 103:391–410.CrossRefGoogle Scholar
  40. Mathur, Lynette Knowles and Ike Mathur. 2000. An Analysis of the Wealth Effects of Green Marketing Strategies.Journal of Business Research 50:193–200.CrossRefGoogle Scholar
  41. Menon, Ajay and Anil Menon. 1997. Enviropreneurial Marketing Strategy: The Emergence of Corporate Environmentalism as Market Strategy.Journal of Marketing 61 (January): 51–67.CrossRefGoogle Scholar
  42. Moorman, Christine and Anne S. Miner. 1998. The Convergence of Planning and Execution: Improvisation in New Product Development.Journal of Marketing 62 (July): 1–20.CrossRefGoogle Scholar
  43. Moorman, Christine and Roland Rust. 1999. The Role of Marketing.Journal of Marketing 63 (Special Issue): 180–197.CrossRefGoogle Scholar
  44. Narver, John C. and Stanley F. Slater. 1990. The Effect of a Market Orientation on Business Profitability.Journal of Marketing 54 (October): 20–35.CrossRefGoogle Scholar
  45. OCallaghan. 1996.Integrated Environmental Management Handbook. New York: John Wiley.Google Scholar
  46. Piasecki, Bruce W. 1995.Corporate Environmental Strategy. New York: John Wiley.Google Scholar
  47. Porter, Michael E. 1980.Competitive Strategy. New York: Free Press.Google Scholar
  48. Sharma, Sanjay and Harrie Vredenburg. 1998. Proactive Corporate Environmental Strategy and the Development of Competitively Valuable Organizational Capabilities.Strategic Management Journal 19 (December): 729–753.CrossRefGoogle Scholar
  49. Shrivastava, Paul. 1995. The Role of Corporations in Achieving Ecological Sustainability.Academy of Management Review 20 (October): 936–960.CrossRefGoogle Scholar
  50. Slater, Stanley F. and John C. Narver. 1994. Does Competitive Environment Moderate the Market Orientation-Performance Relationship?Journal of Marketing 58 (January): 46–55.CrossRefGoogle Scholar
  51. —. 1998. The Positive Effect of a Market Orientation on Business Profitability: A Balanced Replication.Journal of Business Research 48:69–73.CrossRefGoogle Scholar
  52. Stecklow, Steve and Erin White. 2004. At Some Retailers, Fair Trade Carries a Very High Cost.Wall Street Journal 243 (June 8): al, al0.Google Scholar
  53. Stone, Hilary and John Washington-Smith. 2002.Profit and the Environment. New York: John Wiley.Google Scholar
  54. Varadarajan, P. Rajan. 1992. Marketings Contribution to the Strategy Dialogue: The View From a Different Looking Glass.Journal of the Academy of Marketing Science 20 (Fall): 335–344.CrossRefGoogle Scholar
  55. Walker, Orville C. and Robert W. Ruekert. 1987. Marketings Role in the Implementation of Business Strategies: A Critical Review and Conceptual Framework.Journal of Marketing 51 (July): 15–33.CrossRefGoogle Scholar
  56. Wemerfelt, B. 1984. A Resource-Based View of the Firm.Strategic Management Journal 5 (2): 171 -180.CrossRefGoogle Scholar
  57. Zinkhan, George M. and Les Carlson. 1995. Green Advertising and the Reluctant Consumer.Journal of Advertising 24 (2): 1–6.Google Scholar
  58. — and F. Christian Zinkhan. 1997. The Interface Between Marketing and Finance: Integrated Management in and Unstable World.Managerial Finance 23 (10): 3–22.CrossRefGoogle Scholar

Copyright information

© Academy of Marketing Science 2005

Authors and Affiliations

  • William E. Baker
    • 1
  • James M. Sinkula
    • 2
  1. 1.San Diego State UniversitySan DiegoUSA
  2. 2.University of VermontUSA

Personalised recommendations