1. Introduction to Management Problem
Environmental or green marketing is a relatively new focus in business endeavors, a
strategic marketing approach that began to reach prominence in the last quarter of the 20th
century (Ottman 1998). While several notable companies have utilized environmental
marketing strategies as a linchpin to business success, for instance The Body Shop
toiletries and Patagonia sportswear (Henriques and Sadorsky 1999, Piasecki et al 1999),
the overall business success of an environmental marketing focus has been somewhat
sporadic (Buchholz 1998). Indeed, some firms may have come to regard green marketing
concerns as a minor strategic focus or even as a niche approach to the market (Fuller
1999, Peattie 1999).
OIKOS PHD SUMMER ACADEMY 2001
“ENVIRONMENTAL MANAGEMENT & POLICY
AND RELATED ASPECTS OF SUSTAINABILITY”
Green Ps: Understanding Consumer Preferences Across Environmental
Marketing Mix Variations
A Research Proposal
Michael Byrne
PhD Candidate
School of Management
University of Newcastle
Supervisors
Dr. Robert Rugimbana
School of Management
University of Newcastle
However, this approach fails to credit the continuing public concern with environmental
issues (Buchholz 1998, Hawken et al 1999, Straughan and Roberts 1998, Vlosky et al
1999) and the potential for the development of competitive advantage available to merge
environmental concerns into overall business strategy. One example of this competitive
differentiation is the “dolphin safe” labelling on canned tuna fish by several producers,
indicating that continued consumer goods production need not be at the expense of
unrelated biomes. If in fact environmental issues (non-pollution, species protection,
recyclability) are of importance to consumers when choosing products, and if one firm
stands out in a particular market as the only offerer of an environmental marketing mix
amongst competitors, than a strategic competitive advantage is in the offing (Cravens et al
2000, Straughan and Roberts 1998). As well, an increasing focus on environmental
issues by public policy makers, such as punitive fines levied upon those responsible for
oil spills, can be seen as another indication that environmental concerns are an area of
potential strategic concern for businesses (Menon and Menon 1997).
The management problem, then, appears to be lack of information in relation to an overall
picture of how consumers respond to environmental foci within the marketing mix. A
better understanding of consumer preferences in this instance should allow businesses a
more market-applicable approach to the competitive market, and fuller comprehension of
the impact of public policy on strategic business success.
Dr. Michael Jay Polonsky
School of Hospitality, Tourism and Marketing
Victoria University
Abstract
2. Purpose of Project
This study represents the beginning of a research endeavour designed to model consumer
preferences for varying environmental marketing mixes. It encompasses previous
literature in the field, identifies the lack of overall cohesion, and proposes a research
design that takes multiple potential variables into account in an effort to provide a valid
mix preference model. This model will be of value to consumers, businesses, public
policy makers, NGOs and other stakeholders by facilitating mutual understanding of the
strategic indications of an environmental marketing mix.
The purpose of this thesis is to develop a consumer response framework to environmental
marketing mix variations, taking into consideration a range of moderating factors. This
will afford businesses as well as public policy makers a coherent understanding of
consumer preferences of various environmental marketing approaches, and present a
possible approach to the introduction of product offerings that are perceived by
consumers as more environmentally preferable. The aim is not to describe the “greenest”
product, but rather to elicit an understanding of green preferences or utility trade-off by
consumers amongst the marketing mix factors (i.e., product, price, place, promotion).
This can encourage businesses to envision environmental friendliness as but one more
strategic marketing imperative, according to consumer preference.
An important caveat to this analysis is the focus on consumer preferences rather than on
actual buying behaviour, as well as ‘overall market’ versus ‘green market’ indices. Each
consideration is an attempt to expand the potential target market segment, from the
‘green’ consumer to ‘any’ consumer. This competitively-rationalised approach to
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environmental marketing of goods can therefore encompass a larger range/number of
potential consumers.
Given this objective, the specific research problem within the context of the study is the
identification of generalisable consumer preferences for environmental emphases (‘green’
as opposed to ‘not green’) within each component of the marketing mix- product, price,
place, promotion- for a selected range of products. As these marketing mix variables do
not exist as entirely separate and distinct determinants of market success, the
interrelationship of the mix needs also be examined in terms of consumer preference and
utility tradeoff (Haaijer et al 2000, Petty 2000).
In addition, as green product preferences are not universally objective but also depend on
perceived environmental impact of a good, level of consumer involvement in the purchase
decision, and individual consumer characteristics involving variations in demographics,
environmental knowledge, and environmental commitment, these variables will also be
taken into account and incorporated into the research design as moderating factors (Chan
and Lau 2000, Haaijer et al 2000).
The research problem- understanding consumer preferences for various green marketing
approaches- can be answered with validity via a research design which takes into account
previous literature as well as preference-moderating factors (see above). In the former
case, consumer response to previous environmental marketing approaches, business
success with environmental marketing strategies, and public policy
acceptance/encouragement of environmental marketing are applicable. In the latter,
response comparisons and variable weightings will help provide the sought-after
overview, or generalisable understanding, of consumer preference for green-marketed
products. The resultant framework will have implications for each stakeholder groupincluding but not limited to consumers, businesses, public policy makers, and NGOswithin the environmental marketing milieu.
3. Background to the Proposal
There is a growing body of evidence that indicates that environmental issues remain at the
forefront of public concerns, at least as a social and public policy issue (Carson 1961,
Hawken et al 1999, Kaufman 1999, Ottman 1998, Polonsky 1998). The ability of the
marketeer to successfully respond to this concern in a marketing thrust can therefore be
seen as a potential source of competitive advantage, not just in niche market strategy but
as an integral component of overall organisational or mainstream market approach
(Ottman 1998).
range of factors including perception of a goods’ environmental impact, consumer
involvement in the purchase of a good, consumer environmental knowledge and
orientation, and demographic variables (Brown and Wahlers 1998, Chan and Lau 2000,
Maronick and Andrews 1999, Ottman 1998, Piasecki et al 1997, Polonsky 2000, Pujari
and Wright 1999, Stern 1999, Straughan and Roberts 1999) and as such these factors need
to be examined in some detail within the context of this thesis.
The Role of Tradeoffs in Consumer Preference Patterns
Consumer preferences for goods are affected by various combinations of
environmentally-oriented and non-green components of the marketing mix. For instance,
in the case of product usage convenience, an alternative fuel vehicle with reduced
emissions may be preferred only if the alternative fuel is readily available. Thus,
variation of individual mix attributes will impact on demand, based on how consumers
value each attribute and tradeoff in relation to the overall bundle of value offered (Kimery
and Rinehart 1998, Miller 1997). For example, in a ‘green’ versus ‘non-green’
framework, a product such as dishwashing liquid may be made of recycled packaging
materials and non-polluting contents, or have neither characteristic. It may be priced
based on principles of lifetime value to the consumer and the environment, or priced
solely on a competitive low-cost basis irrespective of environmental impact. The
packaging may be able to be conveniently recycled, or designed for discard. It may be
promoted as provably environmentally friendly, or this promotional aspect may be
ignored in its entirety. Variation of each and all of these marketing mix components, or
of the marketing mix in general, will impact on consumer decision making, resulting in
tradeoffs depending on individual prioritization (Christopher and McDonald 1995).
In addition to marketing mix variation impacts upon consumer preference, the level of
purchase involvement may affect the perceived utility of an environmentally-marketed
product (Kimery and Rinehart 1998, Miller 1997). For instance, a higher level of
consumer involvement would be expected while contemplating the purchase of an
automobile as opposed to a relatively low-involvement product such as paper towels.
Similarly, evaluation of marketing mix characteristics is modified by consumer
perception of the level of environmental impact of a good (McIntyre et al 1999). If a
good such as milk is perceived as having relatively little environmental life-cycle impact
from production to consumption to disposal (though milk may in fact have a relatively
high environmental impact), emphasis on environmental marketing mix attributes may be
of less importance when evaluating different brands of milk than may be the case with a
good of higher perceived environmental impact, such as timber products (Vlosky et al
1999).
Preliminary research suggests that while past work in the field of environmental
marketing has examined a diverse range of issues, there has not been one integrated
approach to evaluation of consumer decision making in relation to environmental
marketing mix characteristics (Ackerstein and Lemon1999, Hawken et al 1999, Kilbourne
and Beckmann 1999, Ottman 1998). The existing single-faceted research has identified
that organisations and governments have approached environmental marketing from a
number of divergent perspectives, from feel-good eco-responsibility to enforced
emissions limitations, all of which can encourage consumers to adopt goods with varying
levels of green characteristics from a variety of marketing mix approaches (Hawken et al
1999, Kalafatis et al 1999, Ottman 1998). However, consumer preferences take into
account the interrelationship of marketing mix characteristics and also vary according to a
A number of other factors impact on consumer evaluation of environmentally-marketed
products. Demographic variables such as age, income level, education level, even place
of residence have been identified as important moderators (Brown and Wahlers 1998,
Ottman 1998, Piasecki et al 1997). For example, some studies have found that those with
higher levels of education may tend to be more aware of current environmental issues
than lesser-educated individuals, which will affect the green product evaluation process
(Chan and Lau 2000). Indeed, the literature suggests that consumer behaviour will vary
based on the individual level of environmental knowledge as well as the level of
environmental orientation or commitment (Henriques and Sadorsky 1998, Ottman 1998,
Schuwerk and Lefkoff-Hagins 1995, Straughan and Roberts 1999, Synodinos 1990). For
instance, in the case of environmental knowledge, a consumer who is aware of the
environmental impacts associated with the generation of electricity may tend to more
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closely evaluate the credibility of green promotional claims by energy providers than
would a less-knowledgeable consumer. In the same vein, a consumer who is not
environmentally oriented, who might describe themselves as “brown” rather than “green,”
may value convenience over environmental sensitivity when choosing between
competitive products (Schuwerk and Lefkoff-Hagins 1995). Whilst there is some
ambiguity within the research as to which of these factors, environmental knowledge or
orientation, is the more decisive in terms of consumer purchase decisions, most
researchers do agree that both act as moderators. Thus, it is important to consider the
interaction and relative impact of each on consumer preference for environmentallymarketed goods.
Much valuable work has been accomplished in each of the above disciplines and
considerations with regard to environmental marketing, and has led to a fuller and clearer
understanding of various aspects within the field. An example might be the identification
of a particular age/income target market segment which is currently searching for more
environmentally-friendly product alternatives, thus affording a potential new customer
base for an enterprising business. As yet, though, one integrated overall approach
combining and contrasting each contributing factor towards consumer preference of
environmentally-marketed goods has not been realised. Whilst certain attempts have
been made to view the overall marketing mix from an environmental perspective (Menon
et al 1999), others have looked at individual mix components (Clift and Wright 2000,
Kozloff and Shah 1998, Newell et al 1998, Pujari and Wright 1999). This study is an
attempt at synthesis of the contributing factors as identified (Kilbourne and Beckmann
1999).
It should be noted that a number of other factors, such as a sudden rise or fall in personal
income, may also have significant impact (Widaman and Reise 1997). To wit, should a
consumer experience a sudden decrease in income, they may no longer be able or willing
to pay an environmental pricing premium as accustomed and instead prefer goods
marketed with a low-price focus. In the quest to provide a generalisable framework or
understanding, such unexpected behaviour influences due to unforeseen circumstance will
remain outside the scope of this thesis, while certainly remaining an area of potential
future research interest.
Given the gaps identified in the review of the literature- an overview of the
interrelationship between environmental marketing mix characteristics and other
mitigating factors such as perceived environmental impact of the good, level of purchase
involvement, environmental knowledge and orientation, and demographic variables- in
the field of environmental marketing, this thesis will attempt to provide an overall
understanding of the factors affecting consumer preferences for environmentallymarketed products.
4.1 Qualitative Approaches
The first step of the qualitative portion of the research involves an in-depth study and
review of the extant literature and techniques applicable to the specific research problem.
These areas include, as basic to the study, operationalisation of environmental issues
within the marketing mix. This embraces review of works on green products, green
pricing, green promotion, and green placement or distribution. As well, green marketing
mix overviews, incorporation of environmental issues into consumer decision making,
and consumer tradeoffs bear examination. Further, the impact of various moderating
factors on environmental behaviour attitudes, such as demographic variations,
environmental knowledge/orientation differences, perceptions of product environmental
impact, and levels of consumer involvement will be evaluated. The objective is to fully
understand the relationships of these variables and to discern their relative impact on
consumer preferences.
The second step of the qualitative research will involve several focus groups, with the
objective of identifying consumer perception of various goods in terms of their
environmental impact (i.e. high or low) and consumer purchase involvement (high or
low). The resultant information will be integrated into the quantitative phase of the
research. These focus groups will serve to generate a list of products and marketing mix
descriptors to be utilised during the major phase of the quantitative research, as below.
Focus group participants will be drawn from a demographically representative crosssection of the Newcastle/Hunter Valley region of New South Wales (NSW), Australia.
This area has been selected for discrete density of population as well as regional history
as a product test market (Baker et al 1998). Participants will be asked to identify, from a
predetermined list supplied by the researcher, four separate products which best represent
each of the following general descriptions, in order to provide an overview of product
types within the context of this thesis:
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High Consumer Involvement/High Environmental Impact
High Consumer Involvement/Low Environmental Impact
Low Consumer Involvement/High Environmental Impact
Low Consumer Involvement/Low Environmental Impact
These products will be identified according to the perceptions and may not accurately
reflect, for example, the true environmental impact of a particular product, but instead
will reflect the viewpoint of a representative consumer (see the example of milk, above).
These products, once identified, will be used as the research stimuli within the draft
instrument.
4. Proposed Methodology
In order to evaluate the interrelationships of the various factors, identified above, that
contribute to consumer preferences for environmentally-marketed goods or products, this
thesis will utilise a multi-phase research design incorporating both qualitative and
quantitative research techniques.
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The results of the qualitative research will enable the development of draft descriptions of
each good, for effective presentation of the draft instrument. Once each good has been
identified, it will be described in terms of relative environmental emphasis for each of the
four basic marketing mix components. Additionally, multi-dimensional scales will be
developed and/or adapted from the literature for demographic characteristics,
environmental knowledge, and environmental orientation variables as suggested by
Churchill (1979), and recently followed in Mexico by Corral-Verdugo and Armendariz
(2000). Thus, the qualitative research phase will help provide directional focus for the
quantitative portion of the research, as below.
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four survey groups for purposes of consistency when analysing this section of respondent
data.
4.2 Quantitative Approaches
The main thrust of the quantitative research will involve several distributions of the draft
instrument, as developed via literature and technique review as well as focus group input,
to a stratified sample of NSW residents. The first quantitative stage is to refine the survey
and test for reliability and validity of the constructs, from input elicited from focus groups
and the literature. These tests will allow for trait measurement through agreement of
similar measurement methods while avoiding distortions potentially caused by unclear
descriptions of goods or presentation of marketing mix variations (Churchill 1979,
Kinnear and Taylor 1991).
While the overall data analysis will involve conjoint analysis (see below) of each of the
four selected products in terms of consumer tradeoff of environmental marketing mix
characteristics, each respondent will only be asked to evaluate one of the four goods.
This will limit sequence bias and minimise the length of time necessary to complete the
survey in an effort to maximise response rates, allowing for a larger sample size and thus
data pool (Churchill 1979).
Clearly, valid and reliable draft descriptions of each of the four goods will be vital in
extracting usable information for analysis. Thus, the survey or draft instrument will be
distributed in two phases. The first phase will be to send the survey to 400 NSW
residents, 100 for each of the four goods or products, with both initial and follow-up
contacts to maximise response rate. The results received will enable pre-testing of the
instrument for reliability and validity, allow assessment of response rates, and provide a
framework for modification of the draft instrument, including redistribution, if necessary.
The second phase will expand to 4000 survey mail-outs, 1000 for each of the four goods,
to a similar NSW populace cross-section. The results of this survey will form the basis
for project implications as well as an understanding of consumer preferences across
environmental marketing mix characteristics.
4.2.1 Data Analysis Techniques
Thus, there will be four response groups. Each group will be asked to evaluate the
respective good, for instance a high-involvement/high environmental impact good like an
automobile, for purchase preference across variations of the marketing mix. As there are
four basic components to the marketing mix- product, price, place/distribution, and
promotion- there are 4x4 or 16 possible combinations of mix characteristics. To utilise
the above example of the automobile with respect to environmental mix descriptions
derived from focus groups, above, the first two mix variations would be:
1. Product: The automobile has lesser greenhouse gas emissions than its competitors;
Price: The automobile has a price which includes environmental valuation
components such as fuel savings over time;
Place: The automobile is widely available through standard outlets;
Promotion: The greenness of the automobile is a focus in the promotional campaign.
2. Product: The automobile does not have provably less greenhouse gas emissions than
its competitors;
Price: The automobile has a price which includes environmental valuation
components such as fuel savings over time;
Place: The automobile is widely available through standard outlets;
Promotion: The greenness of the automobile is a focus in the promotional campaign.
This simplified presentation of each of the sixteen mix variations (in each of the four
cells) in a binomial ‘green’/’not green’ format will allow for direct comparisons of
consumer preference of each mix variation. The respondents will be asked to rank the
variations for preference, from most preferred to least preferred, and these numerical
indications of preference will be used in the conjoint analysis to estimate the marketing
mix variation that provides the greatest perceived utility to consumers (Haaijer et al 2000,
Hair et al 1995, Kinnear and Taylor 1991, Petty 2000).
Each survey group will also be asked to respond to a set of multi-dimensional questions,
as above, in order to evaluate demographic characteristics, environmental knowledge, and
environmental orientation, using questions and modified Likert scales (Chan and Lau
2000, Winzer and Johnson 2001). This portion of the survey will be identical across all
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Several techniques will be utilised in order to more completely understand and evaluate
green marketing mix preferences, which in turn can be used in a discussion of marketing
implications of the thesis. Simple comparisons of early, late, and non-respondents will
help to minimise non-respondent error (Mathiowetz 1999, Mishra 2000). Factor analysis
will help determine the reliability of environmental orientation and knowledge scales, as
well as mix evaluation, by focusing on the whole set of interdependent yet equallyweighted variables (Alhemoud and Metwally 1999, Kamakura and Wedel 2000, O’Cass
2000, Pound et al 2000). Variations across moderating factors such as environmental
knowledge, environmental orientation, product purchase involvement, and perceived
environmental impact will be examined via multivariate analysis of variance (MANOVA)
and cross-tabulation to allow for simultaneous consideration of variable influences.
Conjoint analysis will aid in developing response scales for various marketing mix
variations in order to compare relative perceived utilities for consumers (Haaijer et al
2000, Petty 2000, Winzer and Johnson 2001). The quantitative data will be interpreted by
means of conjoint analysis. Conjoint analysis is an accepted method of comprehending
consumer preferences given the presentation of several varying choice sets of
interdependent impact (Louviere and Kaciak 1989, Mishra et al 1989, Tscheulin and
Helmig 1998). In this study, conjoint analysis will be used to analyse survey data to
determine the “importance that consumers are attaching to those (sic) attributes” (Keller
1998), where ‘those attributes’ refer to varying presentations of environmental marketing
mixes. To illustrate, a consumer may attach greater comparative utility to a green or
environmental marketing mix which places more emphasis on the ‘greenness’ of the
Product, also Promoted as green, whilst being relatively less affected by ‘not green’ Place
and Price characteristics.
Such conjoint simulation studies have been previously used to describe consumer
preferences of product profile/attribute combinations. The use of conjoint analysis in this
case will aid in identifying consumer preferences of ‘green’ versus ‘not green’ utility
tradeoffs of marketing mix variations (Haaijer et al 2001, Hu and Hiemstra 1996, Keller
1998, Petty 2000, Ulengin 1998).
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Thus, several analytical approaches will be utilised to identify the relationship across all
variables as identified above, in order to develop a quantified understanding of consumer
preferences for environmental marketing mix characteristics (Churchill 1979, Hair et al
1997, Kinnear and Taylor 1991).
indicate that the promotional aspect of a green marketing mix is of vital utility to
consumers provided that it is credible and genuine, public policy makers might be
encouraged to enact and enforce truth in advertising legislation in response to consumer
mandate.
The utilisation of a variety of techniques in analysis of the data collected from the survey
will allow the central research problem, the understanding of consumer preferences across
environmental marketing mix variations, to be approached from a variety of perspectives
in order to be most effectively answered. Once this understanding has been assimilated
from qualitative and quantitative viewpoints, it may then be possible to project several
marketing implications from the findings that may be of use to academics, businesses,
NGOs, and public policy makers in evaluating the potential effectiveness of
environmental marketing mix characteristics.
NGOs will benefit from the results of the study by being able to better understand
consumer preference, and thus redirect or redefine advocacy positions in line with
consumer values, heightening the opportunity for acceptance of organisational ideals.
5. Expected Outcomes and Implications
The implications gleaned from the analysis of the results of data gathered during this
study are various and will impact on a number of fronts. The nature of these impacts will
be dependent on the ability of the study to successfully describe and understand consumer
preference across environmental marketing mix variation. The goods themselves
represent a basic spectrum of consumer purchase involvement and perceived
environmental impact, while consumer bias is taken into account in terms of basic
demographics, environmental knowledge, and environmental orientation. The overall
objective of the thesis is to provide an overall understanding, or description of consumerperceived environmental marketing mix drivers which may be of benefit to a number of
groups, for example, academics, businesses, public policy makers, NGOs, and consumers
themselves.
Consumers themselves will be the true victors if this study achieves any sort of true
reflection of consumer preferences across environmental marketing mix variations. If
businesses are persuaded that consumer utility tradeoffs are more effectively satisfied by
a certain environmental marketing approach, consumers may more easily discern the
benefits of environmentally-marketed products. Consumer choice may in fact be
simplified if offered in a manner which reflects consumer perceptions (Christopher and
McDonald 1995). Additionally, the implied environmental benefit of a green product
could be seen to add value to consumer purchase decisions by reducing the environmental
footprint of consumerism (Hartman and Stafford 1998).
The true benefit of the successful realisation of this study, a workable synthesis of theory
and practice, will aid in the comprehension of consumer preferences across environmental
marketing mix characteristics. The resultant understanding will serve to better fulfill the
needs of consumers, of business, of NGOs, and of public policy makers in the field of
green or environmental marketing.
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The study will benefit the field of academic business research by providing a basis for
further in-depth studies into an overview or descriptor of consumer environmental
marketing. As the background material utilised transcends nationalities and borders, there
exists the potential for global research. And, as the study does not claim to provide any
final solutions but rather to lay a foundation based on current consumer preferences, the
potential for further research, or even refutation, is not limited to narrow fields but may be
applicable to a variety of disciplines.
The business world will also gain from the results of the study, and be able to utilise the
findings as a template from which to market environmental characteristics of goods to
consumers. While the results may not be immediately generalisable to all product types,
the goods examined represent a fairly broad cross-section of product types, yielding at
least a starting point for marketing mix design. Though the research is to be conducted in
NSW, Australia, the potential applicability of the research to other, bigger markets does
exist. If the precept that the United States is the single largest consumer market in the
world is accepted, and its potential to influence world business trends is also taken as a
given, then the similarity of cultural values between Australia and the United States as
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Public policy makers, too, will benefit from the results of the study by more closely
understanding consumer preferences for the marketing of environmental or green
products. This will allow for mutually beneficial policy approaches which apply to, and
are accepted by both consumers and businesses. As an example, should the study results
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