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A Study of Green Marketing Practices

in Indian Companies
Article · December 2014

DOI: 10.4018/ijamse.2014070104
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International Journal of Applied Management Sciences and Engineering, 1(2), 51-69, July-December 2014 51
A Study of Green Marketing

Practices in Indian Companies
Bhimrao M Ghodeswar, National Institute of Industrial Engineering, Mumbai, India
Prashant Kumar, National Institute of Industrial Engineering, Mumbai, India
ABSTRACT
The article aims to study green marketing practices and to identify what determines green marketing orientation
for a company. A questionnaire-based survey method was adopted for the data collection from 220 companies
in India. The data were analyzed using exploratory and confirmatory factor analyses. Further, the proposed
hypotheses were tested using structural equation modeling. Product design innovations, responsible sourcing,
recycling practices, price setting behaviour, ethical standards, responsible advertising, green communication
practices, building green product credibility and consumer engagement practices were identified as core green
marketing practices that determine green marketing orientation. Results of the study offer the elements of
green marketing mix and a broad understanding of green marketing orientation. The study is limited for not
making substantial inferences between different industries or specific company types. Results of the study
enable green marketers to understand the ways of developing environmental orientation of their marketing
activities aimed to produce profitable exchanges through increased levels of adaptation to the market. The
study makes significant contribution in developing multi-disciplinary approach for conceptual development
in green marketing and is one of its own kinds to study green marketing orientation.
Keywords: Green Marketing, Green Marketing Orientation, Green Products, India, Questionnaire
INTRODUCTION as shifting of marketing orientation towards

green marketing.
Since late 1980s, environmental consciousness Though natural environment has been
has become a matter of market competition an important issue in the marketing literature
and corporate environmental initiatives serve since many decades, it has either focused on
as a basis for sustainable competitive advan- theoretical development of green marketing
tage. So, companies choose to differentiate (Peattie & Crane, 2005; Kilboume, 1998),
themselves by meeting with stricter national or concentrated on stakeholders’ perspective
and international environmental regulations, of green marketing (Rivera-Camino, 2007;
and demands of environmentally-conscious D’Souza, 2004; Polonsky, 1995). It further lacks
consumers (Papadopoulos et al., 2010; Sharma significant conceptual and empirical develop-
et al., 2010; Banerjee et al., 2003). This is seen ment (Polonsky, 1994) that can elaborate upon
characteristics of green marketing to develop
and exploit the benefits of the concept. Kotler
DOI: 10.4018/ijamse.2014070104
Copyright © 2014, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
52 International Journal of Applied Management Sciences and Engineering, 1(2), 51-69, July-December 2014
(2011) has raised several important issues to company so as to maximize long-term profit-
be explored in green marketing such as factors ability and to develop environment-oriented
leading companies to compete on the basis of corporate culture. Thus, it is an organisational
sustainability, changes required in marketing philosophy leading the company to a new
practices and opportunities offered by the way of thinking in doing business. On the
concept of sustainability. This study addresses other hand, behavioural approach of green
the changes required in marketing practices by marketing orientation is related to companies’
exploring that develop green marketing orienta- responsiveness to the market by designing and
tion for a company. implementing strategies oriented towards the
environment. They integrate ecological values
in their organisational culture, modify their
CONCEPTUAL DEVELOPMENT business practices in all departments as per the
needs of the market, and develop strategies and
The concept of green marketing was introduced
plans favourable to the environment. Thus, the
in the late 80s (Peattie & Crane, 2005) and
philosophy believes in understanding customer
since then, academic developments in the do-
needs and expectations, and mobilizing the
main has resulted in integrating environmental
entire company towards satisfying consumers’
concerns in all domains of business operations
needs (Avlonitis & Gounaris, 1999) and design-
ranging from product design and sourcing to
ing consumer-oriented marketing strategies
manufacturing, supply chain, reverse logistics
(marketing mix) (Elliot, 1987).
and disposal (Zhu et al., 2010; Pujari et al.,
Business activities of green marketing-
2003; Pujari & Wright, 1996). At present, it
oriented companies reflect their responsibili-
has emerged as a business philosophy aimed
ties towards the natural environment and their
to satisfy needs of environmentally-conscious
focus on reducing environmental impact of
consumers and to meet companies’ economic
their activities. They intend to control their
objectives with minimal environmental dam-
inter-functional resources to reach common
age (Ko et al., 2013; Fraj-Andres et al., 2009).
marketing goals which increase their adapt-
Since green marketing entails a fundamentally
ability to their markets, cater to present and
different way of looking at the world and mar-
future needs of consumers, address concerns of
keting’s place in it, an expansion of the limits
regulatory organisations, and increase the prob-
of marketing inquiry is required.
ability of outperforming market competitors.
Green Marketing Orientation In other words, they find new ways to manage
their relationships with the natural environment
Green marketing orientation is described as an as well as markets (Fraj-Andres et al., 2009).
extension of marketing orientation in an envi- From the literature, a number of corporate-level
ronmental context (Stone & Wakefield, 2000). environmental practices are identified that are
It is embraced by the companies who realize conceptualized for their relationship with green
their responsibilities towards the natural envi- marketing orientation.
ronment (Miles & Munilla, 1993). Extending
the conceptualization of marketing orientation Product Design Innovations
in environmental context, green marketing
Environmentally-conscious companies op-
orientation can be described as company at-
timize efficient use of resources, improve
titude (Deshpande & Webster, 1989; Houston,
productivity of resources and lower volume of
1986) and company behaviour (Canning, 1989;
waste (Polonsky et al., 1998). Innovations in
Elliot, 1987). As an attitudinal concept, it in-
product design identify alternative methods to
dicates an innovative way of doing business
reduce the environmental impact of products (in
that integrates all the marketing activities with
usage and post-usage) and processes (in produc-
activities of other functional departments in a
tion and transportation) (Eltayeb et al., 2011; tification (Darnall et al., 2008). They provide
Polonsky & Rosenberger III, 2001). They are design specifications with environmental
related to substituting hazardous substances for requirements for purchased items to their sup-
environmentally-friendly components (Pujari & pliers and conduct their environmental audits
Wright, 1996), energy consumption and pollu- (Darnall et al., 2008; Zhu et al., 2005). They
tion prevention such as using materials those also engage in cooperating with suppliers for
produce least pollution (Huang and Wu, 2010), achieving environmental objectives, collaborat-
consume less amount of energy (Zhu & Liu, ing with them to develop materials, equipment,
2010), using recyclable or recycled materials parts and services that support environmental
(Gonzalez et al., 2008; Pun, 2006), using materi- goals, and educating and training them on
als from renewable sources (Pujari & Wright, environmental issues (Hu & Hsu, 2010). This
1996), and easy to recycle (Pun, 2006; Rao, originates innovations from suppliers’ side to
2004; Pujari & Wright, 1996), easy to decom- reduce development costs, quality, and time to
pose (Sakao, 2009), designed for disassembly market (Eltayeb et al., 2011). Thus, sourcing raw
and reuse (Gonzalez et al., 2008; Pun, 2006; materials those fulfill environmental guidelines
Rao, 2004) and designed for remanufacturing enable the companies to achieve efficient eco-
(Sarkis, 2001). Further, packaging-related performance and effective market performance
design innovations include practices to reduce for green products. Thus, following hypothesis
environmental impact of packaging at product is proposed:
transportation (for reduced energy consumption,
pollution prevention, and reduced weight and H2: Responsible sourcing practices are sig-
volume) and at the disposal stage (for waste nificantly related to green marketing
reduction), and to promote the use of recycled orientation.
materials, natural and biodegradable materials
(Nunes & Bennett, 2010; Mandaraka & Kor- Recycling
mentza, 2000). The companies also focus upon
improving environmental performance of their Environmentally-conscious companies aim at
production processes such as reducing waste waste minimization, and resource and invest-
(thus, improving efficiency) and reprocessing ment recovery (Kapetanopoulou & Tagaras,
waste (Polonsky & Rosenberger III, 2001). 2011). They establish cooperation via local or
These practices result in cost cutting, differ- more extended networks, and collaborate with
entiating green products, increasing product local recycling organisations and same sector
marketability and gain competitive advantage industries (Hu & Hsu, 2010). They provide
for the company. Hence, following hypothesis product disassembly manuals to workers so
is proposed: that non-destructive components can be de-
tached and re-use can be facilitated with little
H1: Product design innovations for green or no advancement. Also, appropriate disposal
products are significantly related to green at consumers’ end is facilitated by educating
marketing orientation. them about recycling and recovery options
as well as proper disposal methods. For this,
Responsible Sourcing companies also specify the roles of dealers and
distributors in the product recovery network.
For sourcing environmentally-friendly raw This way, they extend their environmental
materials, companies develop environmental practices to distributors, retailers and customers.
standards and guidelines for purchase of input Companies also avoid bad practices of disposal
materials (Hu & Hsu, 2010; Darnall et al., such as landfilling and have been developing
2008). They ensure that their suppliers have new processes to increase the recycling rate
an environmental policy and ISO 14001 cer- (Wu & Dunn, 1995). These practices result in
improving their environmental performance and demands of consumers. Hence, following

by complying with environmental standards hypothesis is proposed:
and conserving resources, and thus building
their environmentally-friendly image in the H4: Price setting behaviour for green products
market (Eltayeb et al., 2011). Hence, following is significantly related to green marketing
hypothesis is proposed: orientation.
H3: Recycling practices for used products is Ethical Standards

significantly related to green marketing
orientation. Ethics in green marketing describes the moral
basis of companies’ responsibilities toward
Price Setting Behaviour the environment (Bourdeau, 2004). Promoting
higher standard of living (than higher standards
Price setting behaviour is described as a set of of consumption), fair pricing, advertising,
managerial activities to make pricing decisions product safety, environmental protection and
(Ingenbleek & Lans, 2013). It requires a detailed maintaining nature’s infrastructure are raised as
understanding of total cost of product, analysis ethical issues in green marketing (Chakraborty,
of information related to the customer value and 1997). So, companies develop and follow ethical
competition (Raab et al., 2009). Price skim- guidelines related to the environment (Cleek &
ming, experience curve pricing, and penetration Leonard, 1998; Robin & Reidenbach, 1987). It
pricing strategies are generally used for pricing includes codes related to protection and safety
of new products (Ingenbleek & Lans, 2013). of the environment i.e. careful and responsible
Price skimming engages companies in value- usage of natural resources, measures to ensure
informed pricing and experience curve pricing least impact of manufacturing operations and
engages them in setting prices at competitive products on the environment, not creating
levels. And, penetration pricing engages them hazards to human health, and adhering to
in varying price levels over time from a low all environmental standards and regulations
cost-informed price to a high value-informed (Schlegelmilch & Houston, 1989). It promotes
price. So, green products can be priced to follow ethical conduct in business activities, and pro-
or match the traditional product prices in case vides them guidance to recognize and deal with
of high competition and new entrants may use ethical issues (Clegg et al., 2007). In result, it
aggressive penetration pricing to create initial prevents the loss of competitive advantages.
demand for their products in the market. Further, Hence, following hypothesis is proposed:
green products are generally perceived to be
priced higher than their traditional substitutes. H5: Ethical standards in marketing practices
It is justified by high costs of new product com- are significantly related to green market-
mercialization, the pressure on companies to ing orientation.
recoup product-development and additional cost
of verification procedures (Wong et al., 1996). Responsible Advertising
Higher prices of green products are also reflected
by the added costs of modifying the production Responsible advertising is related to commu-
process, the packaging or the disposal process, nicating organisational commitment towards
and the perception that consumers would pay sustainability, environmental initiatives of com-
more for green products (Lampe & Gazda, panies and green product attributes in market
1995). Thus, price-setting behaviour based (D’Souza, 2004). It disseminates information
on market oriented factors enable companies related to green products, and company’s envi-
to compete in the market on the basis of their ronmental philosophies and initiatives (Zeghal
ability to innovate and to better meet the needs & Ahmed, 1990). It includes environmental
vision, mission and values, social dialogue, al., 2000). Vague words and absence of proof
development of the local economy, environ- are main causes for consumers’ skepticism
ment, market relations, and ethics (Birth et al., about environmental claims (D’Souza, 2004).
2008). It is aimed to convey direct usefulness So, environmentally-conscious companies
and advantage provided to the consumers by develop a sustainability strategy that ensures
green products compared to the conventional product claims as a part of a credible corpo-
ones. It exhibits environmental commitment of rate approach. Morsing and Schultz (2006)
companies which enables them to compete in proposed ways of building credibility such as
the market (Rolland & Bazzoni, 2009; D’Souza, informing green product-related information
2005). Hence, following hypothesis is proposed: in an objective manner, demonstrating green
products in an indirect manner using endorsed
H6: Responsible advertising practices are communication, and by stating green product-
significantly related to green marketing related facts instead of providing impression-
orientation. istic descriptions. Also, advertising protected
by reputed government bodies, independent
Green Communication organisations and consumers’ organisations
increases consumer confidence in green prod-
Green communication practices aim at raising ucts (Swaen & Vanhamme, 2005; Carlson et al.,
public awareness related to companies’ envi- 1996). Thus, implicit ways of communication,
ronmental, social, and ethical records, and to endorsed communication and very factual lan-
increase consumer knowledge about green prod- guage styles are identified as ways of building
ucts (Romenti, 2010). Strategically, they attempt credibility (Schmeltz, 2012; Morsing et al.,
to inform, persuade and remind consumers 2008; Morsing & Schultz, 2006). This ensures
about green products (Kotler & Keller, 2006). differentiating green products from those of
This is facilitated though print ads, broadcast competitors and meeting consumer demands
ads, word-of-mouth, workshops, discussion of information clarity and transparency. The
groups, mass media, tailored information and following hypothesis is proposed:
experimental tasks (Pickett-Baker & Ozaki,
2008). They communicate companies’ sustain- H8: Building green product credibility is
ability actions, their environmental initiatives significantly related to green marketing
and their green product attributes to highlight orientation.
that companies are addressing environmental
issues in their business operations, and meeting Consumer Engagement
regulatory requirements. This serves as basis
for companies to compete in the market and Amaeshi and Crane (2006) define engagement
to influence consumers’ purchase decisions as an act of managing relationship between the
(Benoit-Moreau & Parguel, 2011). Thus, fol- company and different stakeholders in order
lowing hypothesis is proposed: to enhance the effectiveness of the company’s
decisions and strategies. Consumer engagement
H7: Green communication practices are with products has an influential role in advertis-
significantly related to green marketing ing processing and effectiveness (Laczniak et
orientation. al., 1989; Petty et al., 1983). It is related to a
notion of desire for exploration and addresses
Building Green Product Credibility experiential aspects of consumption. This has
motivated marketers to develop green product
Consumers’ perceptions of environmental advertising campaigns using sales promotions
claims to be truthful and believable determine tactics that promote various levels of participa-
the credibility for green products (Goldsmith et tion to improve consumers’ product knowledge
(Swinyard, 1993). It arouses consumers’ inter- companies were included in the survey who were
est, attracts their attention towards green prod- found engaged in green marketing practices.
ucts, influences their predispositions (Bauer et To identify this, website of each company in
al., 2006; Odekerken-Schroder et al., 2003). It the database (Maharashtra Industrial Directory,
further influences perceived value offered by https://www.maharashtradirectory.com) was
green products and strengthen their relationship accessed to find out whether they contained
with consumers (Papista & Krystallis, 2013). information related to their green products.
In result, it enables companies to understand Companies qualifying this criterion were con-
market demands to accordingly alter their green tacted for the survey. Data was collected from
product offerings. Thus, following hypothesis companies located in western part of India
is proposed: (Mumbai, Pune, Nasik, Surat & Ahmedabad).
Top and middle level marketing professionals
H9: Consumer engagement practices for green for green products were selected as respondents
products are significantly related to green for the survey. To collect the data, respondents
marketing orientation. from each company in the sampling frame
were contacted using telephone and/or email.
These variables are empirically validated The questionnaire was mailed to them by post
and the proposed hypotheses are tested using as this method has a significant advantage of
a standard methodological design which is allowing time to the respondents to compile the
explained in the following section. information sought in the questionnaire (Han-
sen, 1980). The respondents were reminded by
follow-up emails and telephonic conversation.
METHODOLOGY The data was analyzed using factor analyses
to examine structure and reliability of the fac-
Following a quantitative approach, a 50-items tors, and using structural equation modeling to
questionnaire was developed in two parts. test proposed hypotheses.
First part contained items adopted from the
literature for each variable (Hu & Hsu, 2010;
Darnall et al., 2008; D’Souza et al., 2006; DATA ANALYSIS AND FINDINGS
Rao, 2004; Pujari et al., 2003; Mandaraka &
Kormentza, 2000; Beamon, 1999; Avlonitis & A total of 220 valid responses (response rate
Gounaris, 1997; Wong et al., 1996). The scale = 20.8%) were collected from the companies
was broadly guided by Leonidou et al. (2013). with characteristics mentioned in Table 1. Using
All measurements in the study were subjec- SPSS 20.0, reliability analysis was conducted
tive assessments by the respondents using a which revealed Cronbach’s Alpha value as
five-point Likert-type scale (with end-points 1 0.837. The scale was factor analyzed using
strongly disagree and 5 strongly agree). Second Principal component analysis and Varimax
part captured information related to company rotation. The result for Bartlett’s test of sphe-
characteristics such as number of employees, ricity was 0.000 and the KMO value 0.708,
annual turnover, and age of the company, and meeting the assumption for factorability. The
respondent characteristics such as name and variables were grouped in ten factors (Table 2)
designation of the respondent. and all together accounted for 73.024 per cent
The sampling frame consists of Indian com- of the total variance. Cronbach’s Alpha of the
panies engaged in manufacturing and marketing factors identified exceeded the recommended
of oil lubricants, diesel additives, multi-purpose level of 0.5.
grease, lubricating sprays, white goods, kitchen
appliances, consumer electronics, and home
care and personal care products. Only those
Table 1. Sample characteristics of companies
Number of Employees No. of Companies Annual Turnover (Rs. Crore) No. of Companies
0-50 16 0-150 31
51-100 54 151-300 39
101-150 44 301-450 40
151-200 40 451-600 38
201-250 47 601-750 37
>250 19 >750 35
Age of the Company No. of Companies Respondent Level No. of Companies

0-15 77 Middle 79
16-30 89 Senior 127
>30 54 Top management 14
ensuring all average variance extracted values

greater than 0.5 (Anderson & Gerbing, 1988;
Confirmatory Factor Analysis Fornell & Larcker, 1981). All standardized
factor loadings were significant at the level of
To test the stability of the scale, confirmatory 0.001. Significantly lower value of χ2 for the
factor analysis was employed on the sample unconstrained model than the χ2 of each con-
using structural equation modeling. A measure- strained model ensured discriminant validity
ment model was developed using AMOS V20.0 (Gerbing & Anderson, 1988).
and Maximum Likelihood method was chosen The variables identified from the literature
for confirmatory factor analysis. A range of hold support in the empirical analysis. Table
indices were used to assess the model fit. The 4 shows correlation matrix and descriptive
analysis demonstrated broadly satisfactory statistics for the factors. First factor, recycling
levels of fit (Browne & Cudeck, 1993) as CFI practices, elaborates upon company practices
was obtained 0.963; the RMSEA was obtained for collection of used products and packaging,
0.04 (Table 3). The ten factor model had the recovery of usable product components, and
best overall fit to the data with a χ2 statistic of disposal and reprocessing of waste. Second
733.164, degree of freedom (DF) of 544, χ2/ factor, responsible sourcing practices, describes
DF as 1.348, goodness of fit index (GFI) of company practices for developing criteria for
0.855, and an adjusted goodness of fit index suppliers’ selection and collaborating with them
(AGFI) of 0.822. to reduce environmental impact of green prod-
ucts. Third factor, product design innovation,
Composite Reliability and explains company practices for product design
Construct Validity changes such as environmentally-friendly mate-
rial selection, energy saving, waste reduction,
Composite reliabilities of all the factors var-
labeling of recyclable components, and recy-
ied between 0.72 to 0.88 which exceeded the
clability. Fourth factor, responsible advertising
recommended level of 0.6 and confirmed their
practices, is related to environmental advertising
internal consistencies (Fornell & Larcker,
messages for communicating company’s values
1981). Construct validity of the scale was also
and mission regarding impact on environment,
assessed. Convergent validity was checked by
benefits of green products, life cycle analysis,
Table 2. Exploratory factor analysis for green marketing practices
Items Factor Loading
F1. Recycling practices (ά = 0.899)
v11. We ask our suppliers to use recyclable packaging materials when they deliver supplies to us. 0.863
v12. We are engaged in recovering packaging materials from consumers. 0.855
v13. We inform our consumers about life –expectancy of our products. 0.844
v14. We are engaged in recovering used products from consumers. 0.840
v15. We inform our consumers about appropriate disposal of our products. 0.771
v16. We work in collaboration with companies in the same industry sector for product recycling. 0.690
v17. We practice having recycling and waste disposal activities as an inherent part of supply chain. 0.521
F2. Responsible sourcing (ά = 0.899)
v21. We demand our suppliers to have ISO 14001 quality standards. 0.863
v23. We work with suppliers to reduce environmental impact of our activities. 0.850
v23. We set environmental criteria that our suppliers must meet. 0.828
v24. We communicate to our suppliers our ethical criteria for goods and services we buy. 0.828
v25. We have a formal policy on green purchasing. 0.773
v26. We provide design specifications to our suppliers that include environmental requirements for purchase items. 0.735
v27. We carry out environmental audit of our suppliers. 0.536
F3. Product design innovations (ά = 0.853)
v31. We choose materials in product design that produce least amount of pollution in its usage. 0.786
v32. We use technology to make savings in energy consumed in manufacturing of our products. 0.778
v33. We practice labeling of components for recycling in a product. 0.774
v34. We substitute environmentally questionable materials in our product design. 0.765
v35. We use technology to reduce the waste generated in manufacturing of our products. 0.763
v36. In product design, we focus on increasing the percentage of recyclable materials available at the end of product life. 0.681
v37. We focus on reducing the energy consumption of newly developed products in its usage. 0.675
F4. Responsible advertising (ά = 0.883)
v41. Our messages on sustainability focus on environmental impact of the products. 0.870
v42. Our messages on sustainability focus on environmental benefits of the products. 0.845
v43. Our messages on sustainability intend to encourage environmentally responsible behaviour among consumers. 0.840
v44. Our messages on sustainability focus on company’s values regarding impact on environment. 0.749
v45. Our messages on sustainability focus on company’s mission regarding impact on environment. 0.742
v46. We make environmental claims based on life expectancy of products (e.g. raw material production, manufacturing,
0.605
transport to market, disposal).
F5. Green communication practices (ά = 0.857)
v51. We use brochures for publicizing our green products. 0.895
v52. We use banners for publicizing our green products. 0.863
v53. We use leaflets for publicizing our green products. 0.837
v54. Our retailers demonstrate our green products to educate the customers. 0.835
v55. We provide advertisements in newspapers and magazines for our green products. 0.521
F6. Building green product credibility (ά = 0.820)
v61. We partner with grass-root NGOs for campaign of our green products. 0.878
Items Factor Loading
v62. Our green products are endorsed by environmental groups. 0.864
v63. For our green products, we use certifications awarded by an independent body or a third party. 0.862
v64. We provide information on our green products through our website. 0.854
F7. Price setting behaviour (ά = 0.869)
v71. We adopt higher pricing strategy for green products as its overall cost is high. 0.903
v72. We use aggressive penetration-pricing methods to stimulate initial demand for green products. 0.895
v73. We adopt higher pricing strategy for green products so as to justify its green attributes. 0.767
v74. Pricing of our green product tends to follow or match traditional product prices. 0.580
F8. Customer engagement practices (ά = 0.762)
v81. We demonstrate our green products in awareness raising events like trade shows etc. 0.931
v82. We engage our customers through our advertisements broadcast through televisions and other electronic media. 0.907
v83. Our advertisements for green products intend to engage the consumers with the product, rather than just to
0.808
appear as a message in front of them.
F9. Green marketing orientation (ά = 0.574)
v91. Green marketing is about adapting to changing market conditions. 0.839
v92. Green marketing is about building an environmentally friendly image for our products. 0.811
v93. Green marketing is a philosophy leading our company. 0.780
F10. Ethical standards (ά = 0.892)
v01. We ask our distributors to have code of ethics for their customers. 0.679
v02. In our company, we have code of ethics to solve moral dilemma in everyday marketing activities. 0.572
Table 3. Measurement model fit indices
Indices χ2 DF χ2/DF CFI GFI AGFI RMSEA

Values 733.164 544 1.348 0.963 0.855 0.822 0.04
Table 4. Correlation matrix and descriptive statistics
F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 Mean SD
F1 1 3.29 0.91
F2 -0.073 1 3.19 0.85
F3 -0.049 0.066 1 3.17 0.97
F4 -0.137 -0.075 -0.160 1 3.14 0.96
F5 -0.108 -0.101 -0.011 0.101 1 3.16 0.92
F6 -0.042 0.091 -0.048 0.022 0.001 1 3.23 0.86
F7 -0.085 0.050 0.188 0.193 0.002 -0.095 1 3.10 0.96
F8 0.047 -0.141 -0.034 0.004 0.085 0.065 0.008 1 3.19 0.95
F9 -0.152 -0.111 -0.062 0.040 -0.013 0.031 -0.059 -0.066 1 3.22 0.99
F10 -0.456 0.047 0.024 0.329 0.048 0.110 0.055 0.020 0.111 1 3.62 1.23
Table 5. Results of hypotheses testing for green marketing orientation
S.
Hypotheses Findings
No.
Product design innovations for green products are significantly related with green Supported
H1
marketing orientation. (p<0.05)
Responsible sourcing for green products is significantly related with green marketing Supported
H2
orientation. (p<0.01)
Recycling practices for used products is significantly related with green marketing Supported
H3
Price setting behaviour for green products is significantly related with green marketing Supported
H4
Ethical standards in marketing practices are significantly related with green marketing Supported
H5
Supported
H6 Responsible advertising is significantly related with green marketing orientation.
(p<0.001)
Supported
H7 Green communication practices are significantly related with green marketing orientation.
(p<0.001)
Supported
H8 Building green product credibility is significantly related with green marketing orientation.
(p<0.05)
Consumer engagement practices for green products are significantly related with green Supported
H9
marketing orientation. (p<0.05)
and encouraging environmentally responsible Hypotheses Testing

behaviour among consumers. Fifth factor, green
communication practices, is related to commu- To test proposed hypotheses, the measurement
nicating and educating consumers about green model was converted to structural model in
products through brochure, banner, leaflet, AMOS. The regression weight table witnessed
newspaper, magazine, and demonstration at path coefficients of each path to be more than
retail stores. Sixth factor, building green prod- 0.1 and absolute values of critical ratios more
uct credibility, describes company practices to than 1.96. Thus, the results show that all the
ensure credibility of environmental claims for hypotheses were found supported (Table 5).
green products. Seventh factor, price setting be- Thus, green marketing orientation (F9) is signif-
haviour, explains company practices for making icantly determined by recycling practices (F1),
green product pricing decisions. Eighth factor, responsible sourcing practices (F2), product
consumer engagement practices, describes design innovation (F3), responsible advertising
company practices to engage consumers with practices (F4), green communication practices
green products. Ninth factor, green marketing (F5), building green product credibility (F6),
orientation, is explained as a philosophy guid- price setting behaviour (F7), consumer engage-
ing the company to adapt to changing market ment practices (F8), and ethical standards (F10)
conditions and to build an environmentally resulting in an R2=0.74. In other words, the fac-
friendly image for its products. Tenth factor, tors identified explained 74% of the variance
ethical standards, elaborates upon company of green marketing orientation.
practices based on moral decisions guided by Findings of the study are in line with those
code of ethics. of Wong et al. (1996) who studied pricing
policies, active promotion of green products,
communication tools, need of green product in-
novations and retail innovations for developing competitive advantage in the market. Further,
green marketing strategies for environmentally- translating customer needs and demands, and
conscious consumer products. The findings re- market environment to tactical actions is the
semble those of LeCren and Ozanne (2011) who core objective of green marketing orientation.
identified energy efficiency, waste recycling, So, company resources should be organized for
reuse, elimination of environmentally hazardous effectively and efficiently meeting the needs of
components used in the manufacturing process, the market. Also, marketing department should
minimisation of hazardous substances used in be allotted strategic and tactical roles in green
the product, clear product labeling providing marketing-oriented companies that lead to
information on environment-related statistics, development of the company’s strategic plans
product disposal instructions, and affiliation and relevant processes. For example, an effec-
with environmental networks integral to cor- tive green product strategy demands productive
porate environmental marketing strategies. interactions of marketing department with
This confirms the findings of Bezawada and research and development department so that
Pauwels (2013) and Leonidou et al. (2013) actual needs of the market can be incorporated
on greening the elements of marketing mix. in a feasible manner. Thus, marketing now has
Similarly, Biloslavo and Trnavcevic (2009) a greater role to integrate with other corporate
identified that waste treatment, reduction of functions so as to serve as a differentiating fac-
pollution in production processes, preservation tor and to achieve green marketing objectives.
of resources (e.g. the reduced consumption of Further, green marketing orientation re-
electricity), use of clean technologies, and use quires redesigning of marketing mix strategies.
of recycled materials in products and packaging Green marketing mix is fine-tuned according
are important in developing green image of a to the market conditions faced by a green
company. Also, results of the study empirically marketing-oriented company. It aims at using
support the conceptualization of green market- innovative media to provide better products with
ing by Lampe and Gazdat (1995), Polonsky better quality through innovative distribution
and Rosenberger III (2001), Kotler (2011) and channels at better price (Sroufe, 2003). It has
Polonsky (2011). product quality and reduced environmental
impact over product lifecycle as two key fo-
cus of green product mix. Expected changes
DISCUSSION AND in company behaviour in this regard include
IMPLICATIONS incremental innovation, product line extensions
and new product development, depending upon
The study identifies what determines green
what caters to the needs and demands of the
marketing orientation of a company. It signifies
market. They intend to reconcile environmental
that green marketing orientation comprises of
and other (functional and social) benefits of
significant efforts for sustaining the company’s
green products with the expectations of the
degree of adaptation to the market. Green mar-
target market. To improve the likelihood of
keting orientation in practice can be perceived
market success for green products, they cor-
as a sequence of necessary practices that guides
relate unique product benefits with the ideas
the behaviour of a green marketing-oriented
of how green products serve consumers better
company to revise traditional marketing prac-
and satisfy their needs.
tices and to design strategies for meeting needs
Green price mix aims at delivering superior
of the market. Green marketing-oriented com-
value and greater benefits to price ratio guided
panies develop an organisational vision for the
by creative pricing techniques. Pricing is de-
environment and a long-term focus that enable
termined by the objectives of green marketing-
them to create customer value, to strategically
oriented companies rather than factors determin-
manage their customer relations and to gain
ing sales. For example, high quality standards
can be promoted for high-priced green products information about green products, processes and
while more value for money can be promoted practices, and their environmental significance.
for low-priced green products. Findings of the Green marketers link green product-related
study indicate that pricing decisions for green information with corporate activities to educate
products are about making a choice between consumers about green products and to enable
skimming and penetration pricing. This choice them making effective purchase decisions. They
depends upon several factors such as stage of also apply several tactics to engage consumers
product in diffusion curve and extent of unique- with green products that improve comprehen-
ness of product (first mover, early ‘me-too’ and sion about the products, and motivate them to
‘me-too’, etc.). Initial high prices are appropriate understand their needs, compare them with
for highly innovative green products with clear green products available in retail stores, believe
consumer benefits until the rise of competition on the environmental claims and select suitable
in the market. Since most of the green consumer choice of green products. This enables market-
products in the market are generally conven- ers to capture altering consumer expectations
tional products with environmental benefits, and demands, and to develop relationships
they generally face competition from other with consumers to maximize the likelihood of
green products as well as conventional products. information sharing, mutual understanding and
This raises the necessity of adapting to market informed decision-making.
changes (affordability of consumers and price Thus, the new ideas and concepts of green
changes in competitors’ products) in pricing marketing have led to a paradigm shift in mar-
green products. In such cases, penetration keting theory and practice. Shifting from tradi-
pricing is recommended to hinder competitive tional 4Ps of marketing (product, price, place,
product llaunches and to retrieve benefits from and promotion) to interaction and relationship,
economic of scale (Hart & Tzokas, 2000). Thus, green marketing orientation offers marketers
pricing decisions intends to reflect competitive opportunities to achieve the overall objective
positioning of green products. of creating and providing value for companies
Further, green retailing focuses upon as well as consumers. Contrary to static nature
offering repeated green product exposure to of traditional marketing mix (Constantinides,
consumers so that it improves consumers’ ability 2006), green marketing mix takes into ac-
to recognize and recall green products. Green count the new media and integrated marketing
marketing mix considers retailers as leading strategies so as to cater to new and constantly
actors in the green marketing process who changing consumer needs. Its strength lies in
share the responsibilities of providing facilities encouraging long-term strategic and rational
to consumers to make trials of green products thinking that lays greater emphasis upon manag-
which are intended to provide personal product- ing their marketing relationship and interactions
related experiences and, in turn, to improve with suppliers and distributors, and ensures
their familiarity with green products. This way, long-term transactions between marketers and
retailers are expected to develop proactive ap- consumers. This enables green marketers to
proaches to build long-term relationships with make a consistent commitment of resources
consumers. Also, the behaviour of distributors for green product development, to establish
is guide by the code of conduct while they are grounds for the stages from product develop-
expected to ensure availability of green products ment to product launch in the market, and to
in the market, to develop and maintain quality design marketing plans and strategies for the
of distribution, and to offer product-related launch of the product. This delivers consistent
services to the consumers. performance of green products by maintaining
Green promotion mix effectively com- their functional excellence and upgrading their
municates the value in a company’s green performance (Bezawada & Pauwels, 2013).
product offerings in forms of environmental This way, green marketers ought to assess
their competitiveness based on their relative their traditional substitutes because altering the
contribution to creating customer value over product composition changes their performance.
lifecycle of the product. Further, setting prices inversely proportional
to environmental impact of green products
Managerial Implications is another significant approach for pricing of
green products. For example, refrigerators can
Marketers willing to re-orientate themselves be priced differently for different levels of sav-
towards green marketing should cultivate an ings offered in energy consumption. Similarly,
environmentally-friendly corporate culture lubricants and grease can be priced differently
in their companies in which green marketing for different levels of improvement in engine
activities are supported at all strategic levels. efficiency, fuel efficiency and reduction in
They need to direct their efforts in such a waste, and personal care products can be priced
manner that each marketing activity has an differently for different levels of their impact on
environmental orientation that produces prof- human health. These approaches enable green
itable exchanges through increased levels of marketers to cater to different segments of the
satisfaction for customers. Green marketers in consumers based on their affordability. They
consumer goods companies need to focus on should also develop distinct ways of retailing
interaction of all parts of a product system with and distribution for green products which may
the environment. They should demonstrate their reduce cost of operations and further reducing
commitment towards environmental protection the prices of green products.
by waste reduction, pollution prevention and Green marketing communication has
energy conservation. It comprises of material to take a different direction towards more
and energy flows throughout the ‘life cycle’ of environmentally oriented that will intend to
the product, including raw material extraction, satisfy different consumer needs and to foster
suppliers’ plants, manufacturers’ plants, trans- environmentally-friendly corporate image.
port and distribution networks, waste treatment Green marketers for consumer products need
and disposal. Green marketers may develop to so advertise green products that consumers
guidelines and policies that promote the use of develop rich knowledge base for environmental
materials with national and international envi- features of the products and value for money.
ronmental standards, and recycled/recyclable They are suggested to relate company’s innova-
materials, and ban the use of environmentally tive green practices with their environmental
harmful ingredients in manufacturing of green performance such as longer life, low power
products. Similarly, they may collaborate with consumption, and lesser weight for consumer
their suppliers to develop packaging technolo- electronics products, and improved perfor-
gies and environmentally-friendly manufactur- mance of engine for lubricants. They should
ing processes. Packaging changes in products also advertise code of conduct, certifications,
are important to make them stand out on shelves honours and awards for their environmental
in retail stores. It also allows green marketers performance, and membership and affiliations
to make environmentally-friendly changes in to environmental organisations. Further, they
distribution and transportation, storage facilities should engage consumers by facilitating them
and shelf-life of products. to write reviews, comments and feedback. They
In pricing of green products, green market- should also discuss with consumers about green
ers may adopt benefit-based positioning and products through several modes such as discus-
offer comparative analysis for a green product sion board, group chats, moderated group chats
against their substitutes for prices, features, (moderated by green marketers), and interactive
technical specifications, pictures and reviews. platforms on social networking websites. This
They should also effectively communicate that will enable them to gauge the potential existence
green products may not perform as equally as of market segments based on several criteria
such as product environmental features and more macro in focus and multi-disciplinary,
value for money. These practices help green and more diverse in methodology.
marketers to improve their competitiveness in Certain limitations were identified in the
the market. study. Owing to the broad nature of the study,
it was not possible to make substantial infer-
ences between different industries or specific
CONCLUSION AND company types. Findings identify green mar-
LIMITATIONS keting practices of companies but are unclear
on whether or not practices are significantly
The study contributes to green marketing litera-
different based on their types.
ture by exploring companies’ green marketing
practices and identifying factors determining
green marketing orientation. The conceptual
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Bhimrao M. Ghodeswar is currently working as Professor of Marketing in the National Institute of Industrial
Engineering, Mumbai, India. Dr Ghodeswar has an MBA and PhD in Marketing from Osmania University,
Hyderabad, India. Dr Ghodeswar has published papers in reputed journals including paper presentations in
prestigious international conferences. He is actively engaged in research in customer relationship manage-
ment, strategic marketing, service quality, and brand management.
Prashant Kumar is a research scholar currently pursuing his fellowship at National Institute of Industrial
Engineering, Mumbai. He holds an MBA from Thapar University, Patiala and Bachelor in Electrical Engi-
neering from Maharana Pratap Engineering College, Kanpur. His research papers are accepted in reputed
international journals for publication and he has presented papers in prestigious international conferences.
He is actively engaged in research in green marketing and branding.
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A Study of Green Marketing Practices

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A Study of Green Marketing

INTRODUCTION as shifting of marketing orientation towards

improving their environmental performance and demands of consumers. Hence, following

H3: Recycling practices for used products is Ethical Standards

Table 1. Sample characteristics of companies

Age of the Company No. of Companies Respondent Level No. of Companies

ensuring all average variance extracted values

Table 2. Exploratory factor analysis for green marketing practices

Items Factor Loading

F1. Recycling practices (ά = 0.899)

v12. We are engaged in recovering packaging materials from consumers. 0.855

v14. We are engaged in recovering used products from consumers. 0.840

F2. Responsible sourcing (ά = 0.899)

v25. We have a formal policy on green purchasing. 0.773

v27. We carry out environmental audit of our suppliers. 0.536

F3. Product design innovations (ά = 0.853)

v33. We practice labeling of components for recycling in a product. 0.774

v34. We substitute environmentally questionable materials in our product design. 0.765

F4. Responsible advertising (ά = 0.883)

F5. Green communication practices (ά = 0.857)

v51. We use brochures for publicizing our green products. 0.895

v52. We use banners for publicizing our green products. 0.863

v53. We use leaflets for publicizing our green products. 0.837

F6. Building green product credibility (ά = 0.820)

Items Factor Loading

v62. Our green products are endorsed by environmental groups. 0.864

F7. Price setting behaviour (ά = 0.869)

F8. Customer engagement practices (ά = 0.762)

F9. Green marketing orientation (ά = 0.574)

v91. Green marketing is about adapting to changing market conditions. 0.839

v93. Green marketing is a philosophy leading our company. 0.780

F10. Ethical standards (ά = 0.892)

Table 3. Measurement model fit indices

Indices χ2 DF χ2/DF CFI GFI AGFI RMSEA

Table 4. Correlation matrix and descriptive statistics

Table 5. Results of hypotheses testing for green marketing orientation

and encouraging environmentally responsible Hypotheses Testing

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