Table of Contents
Overcoming Obstacles to Sustainable Development Through Green Marketing. 3
Obstacles to Sustainable Marketing. 4
Overcoming Obstacles to Sustainable Development Through Green Marketing
Widespread concern of the environmental effects of production and consumption processes has become increasingly evident in recent decades and shaped the demands and desires of consumers around the globe. Heightened environmental awareness and depleting natural resources have placed attention on the concept of societal responsibility which argues that organizations have an obligation to both the preservation of the natural environment and the general public (Kerin & Hartley, 2023). In response to consumers’ growing environmental expectations, marketers have developed the practice of sustainable marketing, which aims to meet the economic, environmental and social needs of consumers without compromising the opportunity of future generations to do the same (Kerin & Hartley, 2023). As trends in consumer values continue to shift towards protecting the environment and regulators place tighter restrictions on unsustainable practices, sustainable marketing has become increasingly important to the survival and long-term profitability of organizations. Despite consumer and regulator demands and moral and ethical motivations for sustainability, many organizations have yet to make the transition to sustainable marketing; which begets the question, “Why?”.
Sustainable marketing encompasses a wide range of needs to be met and means of meeting those needs and thus, although many studies have been conducted, there are large gaps in existing knowledge. Much of the present literature addresses the effects of various aspects of consumer behavior on the success of sustainable marketing programs, but even this research is far from comprehensive. The present paper aims to identify obstacles which may deter organizations from sustainable marketing and review potential strategies for overcoming such obstacles.
Obstacles to Sustainable Marketing
Societal responsibility, from which sustainable marketing blossomed, acknowledges the need for organizations to simultaneously improve the state of people, the planet and profit (known as the triple-bottom-line) to achieve long-term sustainable growth (Kerin & Hartley, 2017). Although this concept seems just, obstacles of sustainable marketing can often be attributed to conflicting objectives of the triple bottom line (Pinelli & Maiolini, 2017).
Achieving the long-term benefits of sustainability typically requires some degree of short-term financial sacrifice by an organization. Development of green products requires extensive research and modification of production processes (Leonidou, Katsikeas & Morgan, 2013) resulting in increased production costs. Costs also frequently include expensive product campaigns to introduce and promote the sale of green products (Davari & Strutton, 2014). Additionally, these promotional expenses are generally higher amid intense competition (Leonidou et al., 2013).
Nohria and Gulati (1996) state that firms’ slack resources provide financial relief on short-term demands and allow managers to focus on long-term growth (as cited in Leonidou et al., 2013). A study by Leonidou et al. (2013) supported this observation, finding that the availability of slack resources is linked to managers’ discretionary choices relating to green marketing programs. This implies that top managers may view sustainable development as a long-term goal, but do not see it as an immediate concern, worth the financial risk. Leonidou et al. (2013) suggest that in the absence of slack resources, managers should present a failure to act on stakeholders’ pressures to green the firm as a larger risk than its financial counterpart to gain the support of top management for green marketing initiatives.
Creative marketing strategies may also help minimize the initial costs of green marketing programs and marketers may find opportunities for cost reduction in more efficient production processes. Although the associated costs are not ideal, organizations should acknowledge the growing number of reasons to reduce their environmental impacts and view these initial expenses as an investment in their long-term sustainable profitability.
Research overwhelmingly indicates that the biggest obstacle to sustainable marketing is a contrast between consumers’ stated desires to “go green” and their actual purchase behavior. Social scientists generally attribute the prevalence of the gap between consumer beliefs and behaviors to consumers’ inclination to make decisions based on self-interests (Davari & Strutton, 2014). Olson (2013) sought to further explain this inconsistency, which he referred to as the “value-action gap”, in a study of the effects of attribute trade-offs on green consumption. The study used conjoint analysis to simulate consumer decisions based on data collected through an online questionnaire on attribute preferences of car and TV buyers. The questionnaire was sent to randomly drawn customers/members of organizations from non-profit, financial, manufacturing and education sectors. After exclusions, data from 68 car and 66 TV participants was evaluated (Olson, 2013). Olson (2013) found that consumers strongly preferred green products when tradeoffs (e.g. size or performance) were not apparent. When actual attribute tradeoffs of green products were considered, consumer preferences significantly shifted to less green alternatives. Olson (2013) concluded that the value-action gap exists because consumers are unwilling to sacrifice product features to make environmentally friendly purchases. Other research suggests that consumers are also unwilling to make green purchases if product quality or price is compromised (Davari & Strutton 2014; Salgado-Beltran, Subira-Lobera & Beltran-Morales, 2014). Davari and Strutton (2014) suggest that organizations struggle to convince consumers that the benefits of green products are worth the attribute sacrifice, because these benefits are generally long-term and do not accrue to consumers who purchase them. If marketing strategies are not developed to minimize the value-action gap, its existence could prevent green products from replacing less sustainable alternatives and effectively limit the potential positive environmental impact of green marketing (Olson, 2013).
Green Products
Research suggests that targeting consumers who not only express concern about the environment, but also value and seek out green consumption opportunities, offers the best chance that sustainable marketing programs will be successful (Davari & Strutton, 2014). Undoubtedly, it is easiest to sell products to consumers who seek them, but many industries do not have a large green consumer base, and therefore must develop marketing programs that increase sustainability and appeal to their less green consumer base. As with marketing programs for any product, this is achieved through the elements of the marketing mix. Kerin and Hartley (2023) report that companies that practice sustainable marketing typically outperform those who do not in terms of financial performance. Leonidou et al. (2013) found that such performance outcomes are more strongly associated with firms’ specific green marketing program actions than their broader environmental strategies. Marketers should consider factors such as desired performance benefits, environmental reputation of their individual firm and of their industries and the level of environmental concern of current consumers when developing a green marketing mix (Leonidou et al., 2013). Because sustainable marketing takes many forms, the following review of marketing mix strategies focus on green marketing, a specific method of sustainable marketing. Kerin and Hartley (2023) define green marketing as marketing efforts to produce to promote and reclaim environmentally sensitive products.
Broadly, green products consist of those created through environmentally friendly processes as well as those products that are made to be more durable or less toxic (Davari & Strutton, 2014; Leonidou et al., 2013). Firms should examine their production processes for opportunities to reduce waste, such as packaging and labeling products in more environmentally sensitive ways. These adjustments are not only better for the environmental, but can improve the effectiveness of production processes in that the need for some raw materials are also reduced. Kerin and Hartley (2023) refer to such efforts by manufacturers to avoid creating waste as “precycling”. For manufacturers, “this includes decreasing the amount of packaging they use; and for consumers, it means buying products that last longer, avoiding products with excess packaging, and reusing as much as possible (Kerin and Hartley, 2023, p. 91). In contrast, firms might seek “end-of-pipe” solutions which refer to alternate uses or markets for waste materials and hazardous by-products. In this case, the firm’s waste often becomes raw materials for another firm as in the case of a company that sells its acidic water by-product to another company that neutralizes base materials (Mishra & Sharma, 2012). In addition to the environmental benefits of end-of-pipe waste management, this may also result in cost savings for firms that would otherwise incur expenses for waste disposal.
As previously mentioned, it is believed that the existence of the value-action gap is primarily due to the tradeoffs associated with green products. To create value to consumers, marketers should strive to develop green products of equivalent quality and performance to that of less green alternatives. If faced with unavoidable tradeoffs, research shows that compensating for a conventional attribute tradeoff with some other advantage can attract a broader spectrum of consumers (Olson, 2013).
Green Pricing
Green products are frequently offered at premium prices due to the extra costs associated with their production (Davari & Strutton, 2014). Studies have shown that green prices are strongly associated with the value-action gap, further supporting the notion that organizations have failed to convince consumers that green product price equates to green product value (Davari & Strutton, 2014; Salgado-Beltran et al., 2014). Davari & Strutton (2014) logically suggest that marketers must employ green pricing practices which either decrease prices of green products or enhance consumer-perceived value to justify premiums.
Price incentives may increase consumers’ willingness to purchase green products. Aside from directly reducing list prices, organizations might offer rebates for the return of recyclable packaging (Leonidou et al., 2013) or price discounts for consumers’ willing to forgo some component of the product (i.e. packaging). If price incentives are used as a strategy to increase sales, marketers should carefully identify which incentives their specific consumers are responsive to and be sure that offering those incentives does not hinder the organization’s profitability. Considering that reducing prices reduces revenue, marketers will likely attempt to increase consumers’ perceptions of the value of products in addition to or instead of reducing prices. Even so, marketers should not ignore the importance of price on consumers’ willingness to buy and should avoid charging premiums for their green products to the extent possible.
Green Promotions
Because consumer purchase intention is the most identified obstacle to green marketing, green promotion strategies are particularly important tools for minimizing the value-action gap. Kerin & Hartley (2023) assert that consumers’ wants can be clearly shaped and their purchase decisions influenced by effective marketing. Additionally, Mishra and Sharma (2012) advocate that it is marketers’ responsibility to educate consumers of the need for and benefits of green alternatives. Literature proposes that green promotions programs should inform consumers of organizations’ commitment to and efforts towards pro-environmental practices (Leonidou et al., 2013) and attempt to convince consumers that purchasing green products benefits the environment (Davari & Strutton, 2014). Research generally concedes that green promotions have not been successful in convincing consumers that the benefits of green products outweigh the attribute tradeoffs required to obtain and consume them.
Because consumers’ purchase decisions are often motivated by self-benefit, consumers may need to feel that a green product offers them direct benefit to choose the product over less green alternatives. Consumers are surprisingly unconcerned with the future consequences of their consumption activities and hence, are not typically swayed to purchase green products whose benefits are most often long-term in nature (Davari & Strutton, 2014). These findings led Davari and Strutton to propose that firms attempt to persuade consumers to buy green by cultivating a sense of greater short- and long-term value. Salgado-Beltran et al. (2014), conducted a study on the effectiveness of marketing strategies on sustainable buying intention. Group sessions were conducted to develop quantifying scales of marketing strategy and ecological buying intention. These scales were used to design a structured questionnaire in the five-point Likert scale format, which was used to gather information from 524 voluntary participants at sale points of business premises (Salgado-Beltran et al., 2014). The study contributed an important insight to marketers finding that green consumption, which has generally been attributed to its benefit to the environment, is strongly related to consumer health. Salgado-Beltran et al. (2014) found that eight out of ten consumers purchased green products primarily for health. The implication for green promotions is that organizations should consider the potential benefit of conveying the immediate health benefits of their products (e.g. cleaner air from pollution reduction).
Davari and Strutton (2014) found that green promotions failed to cultivate trust or perceived value in green brands, especially among consumers who were not overly concerned with environmental behaviors. Consumer commitment to environmental preservation, or the lack thereof, presents another challenge for green marketers. Consumers who are not environmentally aware do not understand the benefits of sustainable products and therefore assign them little value. The component of consumer education should be included in firms’ green promotional strategies to increase consumer awareness and effectively consumer concern. This would allow firms to convey the benefits of green products and promote a green lifestyle in a way that is understood and acted on by consumers, benefiting the consumer, the organization and the environment. Mishra and Sharma (2012) contribute that failing to educate consumers on why the sustainable practices of an organization matter results in “a case of ‘so what?’ for a significant portion of (its) target market” (p. 37). The act of educating consumers on environmental dangers could also establish a positive environmental reputation for the organization and foster brand trust. Additionally, once consumers are environmentally informed and concern is cultivated, marketers can appeal to that concern to promote its green products.
Consumer perception of the authenticity of organizations’ environmental efforts plays a crucial role in buying intention. Organization might consider obtaining certifications to validate its green efforts and reassure consumers. Certifications could reduce consumers’ perceived risk, but marketers should note that this is only as effective as it is distinguishable to consumers (Salgado-Beltran et al, 2014). Alternately, firms may engage in other sustainable initiatives (e.g. sponsorship or cause-related marketing) (Davari & Strutton, 2014) or strategic partnerships with environmentally reputable organizations to increase firm exposure and enhance consumer perceptions of the brand. Organizations should also look for internal ways to reduce the environmental impact of its communications efforts. Leonidou et al. (2013) provide an example of a firm that uses 50% recycled paper in its advertising catalogues.
Green Place (Distribution)
The fourth “P” of the marketing mix, after products, prices, and promotion, is “place”. This refers to a company’s distribution efforts, including “the individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users” (Kerin and Hartley, 2023, p. 418). Green place strategies require that organizations evaluate the environmental impacts related to the distribution of green products from start to finish. Literature recommends several strategies to lessen the environmental impact of distribution activities via arrangements between firms. These strategies include product reuse agreements and logistics arrangements, among others (Leonidou et al., 2013).
A second aspect of green place concerns green product availability. Salgado-Beltran et al. (2014) argue that limited availability of green products restricts green consumerism. Recent data supports this claim, finding that few consumers actively seek out green products simply out of environmental duty. Additionally, results show that green place (in terms of the point of purchase) influences the perceived quality of green products (Davari & Strutton, 2014). Marketers should consider the environmental reputation of retailers when developing green place strategies.
Conclusion
The findings of these studies have supported the benefit organizations could gain from investing in green marketing programs. One such benefit is positive performance impact evidencing that green product and place programs were effective in differentiation and perceived value (Leonidou et al., 2013) and that green product and communication programs had a significant positive effect on consumers’ buying intention (Salgado-Beltran et al., 2014). In addition, Leonidou et al. (2013) asserted that there was no indication of risks associated with green marketing programs in terms of negative links with firms’ subsequent product-market and return on assets performance. Other benefits organizations could gain from successful green marketing strategies could include increased employee morale, competitive advantage, cost reduction and enhanced consumer perception (Davari & Strutton, 2014: Kerin & Hartley, 2017; Mishra & Sharma, 2012). The transition to more environmentally careful practices is inevitable for organizations and consumers alike. Strategic green marketing programs can not only make that transition smoother for organizations, but could make organizations, consumers and the environment better off.
Future researchers should consider further evaluating the effect of attribute tradeoffs on consumers’ willingness to buy, perhaps considering other types of attributes and the types of compensatory advantages consumers consider acceptable. Researchers might also consider evaluating the effectiveness of educating consumers on environmental issues on changing sustainable buying intentions. Studies on common elements of green marketing programs that have been successful might also offer insight to marketers in designing their own strategies. Sustainability is as a vast subject offering endless opportunities for significant, useful research. Any aspect of green marketing or sustainability that might offer opportunity for reducing damage and degradation of the environment is worth exploring.
References
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