Download - Conceptual Paper Marketing Final
Green Marketing: Proactive & Innovative Tool of CSR to gain Competitive Excellence
Abstract:
Purpose– In the recent times the business marketplace is moving closer towards being a
comprehensive social experience, the onus falls upon brands to be more defined in terms of what
they stand for, their core values and how they communicate them to their community of
customers. Not only this, stakeholders demand these brands to be more eco-friendly even if they
are higher in price. Thus the businesses operate in ever-changing environment be it economically
or ecologically, the purpose of this paper would be to investigate how green marketing strategies
is being used as an effective tool of corporate social responsibility in order to get economic,
social as well as ecological sustainability.
Design– This conceptual paper has been designed to discuss about the concept of green
marketing strategies, and how it could be used as an effective tool for CSR to gain the
competitive advantage. It also includes that how diffusion of innovation theory can be related to
green marketing in a new way. This paper begins with the literature review of corporate social
responsibility and green marketing strategies and it also adds value to the paper by including the
innovation theory to address the gap in the literature. Then the paper discusses about the various
strategies which a business could employ in order to act to the changes in the external
environment. The businesses can use both reactive as well as proactive approach in order to
addresses the external demands. This paper is then discussing about the degrees of innovation
required while employing the different strategies and also throws light on the diffusion theory
and develops the propositions. Then, a new model is presented on green marketing innovation
strategies and competitive advantage. Next, a conceptual analysis is presented using a diffusion
of innovation characteristics framework to show relationships of the innovation characteristics
with proactive green marketing strategies and competitive advantage.
Findings – This paper has developed a total of six propositions which are developed to reflect
the relationship of green marketing strategies with types of innovations and competitive
advantage. In addition, a conceptual analysis found seven areas of proactive green marketing
strategies related to the diffusion of innovation characteristics. Also this paper has proven that
green marketing strategies can be used as an effective tool for CSR due to the concerns of
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consumers towards the environment. Findings also showed diffusion characteristics are
associated with 11 key benefits of sustainable green marketing competitive advantage.
Research limitations/implications – This paper also discusses about the limitations of this
research. There is still a corner to be filled in this field and lot of research needs to be done. In
addition the paper also includes some of the managerial implications which can be used
effectively. Also, this paper suggests recommendations related to diffusion of innovation
characteristics in future research.
The Source and Methods of Data Collection All research material used has been sourced from
accredited authors. The Central Library UIA Gombak, Internet Public Library and National
Library of Australia were utilized to source the material. Apart from online Libraries various
articles whose references are provided at the end were also reviewed. A total of thirty six
references were used.
Practical implications – This paper has serious implications in the current era as it provides a
diffusion of innovation characteristics framework to test the effectiveness of green marketing
strategies and to help generate competitive advantages in an ecologically-sustainable way. As the
stakeholders are putting pressure on corporations to become more environment friendly, this
paper has provided some details for managers on how organizations can achieve successful
competitive advantage while contributing to environmental sustainability for the common good
of society.
Originality/value – This paper has addressed a gap in the literature on environmental/green
marketing by being the first study to expand the CSR category of instrumental theories to include
diffusion of innovation theory. As the literature review found that there is still a gap in green
marketing concepts thus diffusion of innovation theory needs to be reviewed as it is directly
related to green marketing. Diffusion theory is applicable to green marketing because it includes
new innovations (products, services, processes, etc.). This paper also suggests how diffusion of
innovation theory can be related to proactive green marketing strategies so that the businesses
can increase the rate of adoption of green products, services, and processes to create a
competitive advantage, and at the same time, help move the world toward greater ecological
sustainability.
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Paper type Conceptual paper
Introduction:
Due to the change in overall environment, people all around the globe are concerned about the
environment and future of our planet. This has awakened the industrialized nations to be more
concerned and to pursue environmental or green marketing. This concern has put more pressure
on corporations to be more environments friendly and undertake only those operations which are
safe for the environment. This is where green marketing began to gain impetus among the
stakeholders of the businesses. Here the question arises what is green marketing or how can
marketing become green, According to the American Marketing Association, green marketing is
the marketing of products that are presumed to be environmentally safe. Thus green marketing
incorporates a broad range of activities, including product modification, changes to the
production process, packaging changes, as well as modifying advertising. According to Prakash
(2002), (p. 294). ‘‘Green marketing subsumes greening products as well as greening firms. . .
Managers need to identify what ought to be greened: systems, processes or products?’’
Green marketing refers to any activity taken by the businesses in concern to the environment. It
is a process of selling products and/or services based on their environmental benefits. Such a
product or service may be environmentally friendly in it-self or produced and/or packaged in an
environmentally friendly way.
Corporations undertake such activities in order to gain competitive advantage and also to be
profitable in the long term. Thus obvious assumption of green marketing is that potential
consumers will view a product or service's "greenness" as a benefit and base their buying
decision accordingly. The not-so-obvious assumption of green marketing is that consumers will
be willing to pay more for green products than they would for a less-green comparable
alternative product - an assumption that, in my opinion, has not been proven conclusively.
Lately green marketing has been seen important through the eyes of consumers as many
researchers have shown that customers are even willing to pay more for environment friendly
products. While green marketing is growing greatly as increasing numbers of consumers are
willing to back their environmental consciousnesses with their dollars, it can be dangerous. The
public tends to be skeptical of green claims to begin with and companies can seriously damage
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their brands and their sales if a green claim is discovered to be false or contradicted by a
company's other products or practices. Presenting a product or service as green when it's not is
called green washing.
Green Marketing includes wide range of activities which include: product design, the
manufacturing process, service delivery processes, packaging, construction and renovation of
buildings, recycling, and other areas such as marketing communications. In addition to all this
we could see that there has been a serious advancement in terms of technology like in the area of
marketing communications. With the use of internet, businesses can become more eco friendly
by using services like online marketing, email, e-newsletters, webinars, online communities, etc.)
and mobile marketing (e.g. M-Commerce, M-CRM, SMS, etc.), the companies can promote their
products or services in a more eco friendly way which can be broadcasted to general public in a
prompt and inexpensive manner. (DiFrangia, 2008a; Standing et al., 2007).
The research was conducted in European countries to find the concerns of consumers about
environment and it was found that more than ninety two percent people have changed their
products to address green concerns. Another Research report showed that 84 per cent of the
organizations produce more environmental friendly or socially responsible products or they
produce the products which are energy efficient, recyclable, made with renewable materials or
Fair Trade. The organizations main objectives behind their green marketing strategies are:
product differentiation to create a competitive advantage, to become a global leader, and cost
savings (Greenerdesign.com, 2009).
We could see from the above implications that how green marketing is gaining impetus in
today’s business environment so the main objective of this study will be to determine how
innovative theory can be used to develop green marketing strategies in order to meet the
customer expectations and overall obligations towards the environment. The strategies will not
only help the corporations to become greener but it will also meet there bottom line of becoming
economically, socially as well as ecologically sustainable. At first, the overview of corporate
social responsibility CSR theories relevant to green marketing is provided. Next, a discussion is
included on reactive and proactive green marketing strategies that can be utilized in businesses,
and their relationship to degrees of innovation. Further, a review is provided on diffusion of
innovation theory and its relationship to business research. Also, five propositions are developed,
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and a new conceptual model is presented on green marketing innovation strategies and
competitive advantage. Furthermore, an analysis is presented on the relationship of diffusion of
innovation characteristics to green marketing strategies, and the benefits associated with
competitive advantage for organizations. Limitations and managerial implications are discussed,
and recommendations are provided for future research.
Theoretical background
Corporate Social Responsibility (CSR):
Corporate Social Responsibility or simply CSR came into common use in the late 1960s and
early 1970s after many multinational corporations formed the term stakeholder, meaning those
on whom an organization's activities have an impact. It was used to describe corporate owners
beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic
management: a stakeholder approach in 1984. Corporate social responsibility (CSR, also called
corporate conscience, corporate citizenship, social performance, or sustainable responsible
business) is a form of corporate self-regulation integrated into a business model. CSR policy
functions as a built-in, self-regulating mechanism whereby business monitors and ensures its
active compliance with the spirit of the law, ethical standards, and international norms. The goal
of CSR is to embrace responsibility for the company's actions and encourage a positive impact
through its activities on the environment, consumers, employees, communities, stakeholders and
all other members of the public sphere.
Proponents argue that corporations make more long term profits by operating with a perspective,
while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is
merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over
powerful multinational corporations.
CSR is titled to aid an organization's mission as well as a guide to what the company stands for
and will uphold to its consumers. Development business ethics is one of the forms of applied
ethics that examines ethical principles and moral or ethical problems that can arise in a business
environment. ISO 26000 is the recognized international standard for CSR. Public sector
organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is
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widely accepted that CSR adheres to similar principles but with no formal act of legislation. The
UN has developed the Principles for Responsible Investment as guidelines for investing entities.
Green marketing is one of the important tools of CSR which can increase both profitability as
well as the competitive advantage for any business. However green marketing must be genuine
and it must reflect the concern of businesses towards their society in particular and overall
environment in general. Green marketing can be a very powerful marketing strategy though
when it's done right. For green marketing to be effective, you have to do three things; be
genuine, educate your customers, and give them the opportunity to participate.
1) Being Genuine
a) By being genuine, it means that you are actually doing it for a cause. Apart from the
profitability concern you must take care for your environment and do exactly what you are
claiming to be doing in your green marketing campaign.
b) Secondly it is not only your green marketing strategies but the rest of your business policies
must reflect your concern for the environment. Both these conditions have to be met for your
business to establish the kind of environmental credentials that will allow a green marketing
campaign to succeed.
2) Educating your customers in order to be effective green marketer you must let your
customers to know about your concern to environment. They must be educated about whatever
you're doing to protect the environment. You must also convey your ideas about green marketing
in a manner that it must reflect why it matters. Otherwise, for a significant portion of your target
market, it's a case of "So what?" and your green marketing campaign goes nowhere.
3) Giving your customers an opportunity to participate it is not only about the top
management to decide about the environmentally friendly actions but you must personalize the
activities, normally through letting the customer take part in positive environmental action.
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Green marketing, CSR theories and innovation theory
Garriga and Mele´ (2004) developed four groups of theories based on CSR, they include:
instrumental theories, political theories, integrative theories, and ethical theories. Garriga and
Mele´ argued that the corporations while adopting the instrumental strategies are basically
achieving competitive advantage by making profits and they also help in social causes such as:
philanthropic investments, cause marketing activities (Varadarajan and Menon, 1988), and using
disruptive innovations to market to the bottom of the economic pyramid (Christensen and
Overdorf, 2000; Prahalad and Hammond, 2002). Garriga and Mele´ (2004) noted that disruptive
innovations could achieve social objectives and create a competitive advantage for companies in
‘‘telecommunications, consumer electronics and energy production and many other industries’’
(p.55). (Energy production is an important area of green innovations.)
Political theories advocate that the corporations are being socially responsible because of their
power and also they are legally obliged to follow some benchmark to environmental marketing
(Menon and Menon, 1997). On the other hand Integrative theories focus on stakeholder
management, related Marketing and Innovation theory to social norms (Osterhus, 1997), green
marketing (Rivera-Camino, 2007), and to the common good (Argandona, 1998). These theories
include those strategies because of the stakeholder’s expectations from the business. Ethical
theories focus on doing the right thing for society, and include universal human rights,
environmental sustainability, and the common good (Garriga and Mele´, 2004). Green marketing
has been related to the common good, the tragedy of the commons dilemma (Shultz and
Holbrook, 1999) and to environmental justice (Oyewole, 2001). The corporations can adopt any
of the strategies to become socially responsible. Each of the groups of theories can be related to
firms’ motivations to pursue green marketing strategies and actions, and all four areas are
important to a social system (Garriga and Mele´, 2004).
From the above literature review, it appears that diffusion of innovation theory on corporate
responsibility theories have been overlooked, which could add a valuable perspective to green
marketing. This paper has extended the CSR category of instrumental theories to include
innovation theory (Rogers, 1962/1983/1995). Though integrative theories have been included
which takes into stakeholder management and the common good however, this paper aligns
diffusion theory more closely with instrumental CSR theories, because green marketing is a
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strategic tool, similar to cause marketing. As we know that green marketing involves new
innovations be it products or services, Diffusion of innovation theory shed light on how to
increase the rate of adoption of green products, services, and processes to help companies create
a competitive advantage, and simultaneously help move the world toward greater ecological
sustainability. Diffusion theory explains that how businesses can use their resources in a desired
manner so that they can innovate freely, this theory also explains on how to use the different
innovative strategies under given circumstances
Green Marketing: Developing Marketing Strategies
As the consumers are becoming more environmental conscious businesses need to consider
environmental consequences into consideration while formulating any marketing strategy. Thus
businesses need to formulate their green marketing strategies in accordance with their business
strategies. Environmental policies have been measured as the secondary plans until 1980’s and
were not considered and incorporated in the overall planning process. But nowadays it has
become an essential part of an organization to be socially responsible as it is considered as a key
indicator of determining the market hold of a company. As a result, such a strategic marketing
process must be designed where green marketing acts as an integral part. Figure 1 depicts a
model for doing this. This can be facilitated through following ten steps:
• Step 1. Develop an environmental corporate policy.
This policy should state the company's mission and objectives with regard to the environment
and should allow for environmental considerations to be integrated into all company decisions.
• Step 2. Build environmental leadership at the top level of the organization.
Doing this should communicate a long-term commitment to environmental action.
• Step 3. Hire or develop environmental advocates on the inside.
These people can concentrate on environmental concerns and provide a consistent environmental
voice for the organization. Some companies may even create an entirely new department
dedicated to environmental planning.
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• Step 4. Educate and train all employees on environmental awareness.
From the boardroom to the mailroom, an environmental consciousness must pervade the
organization.
• Step 5. Maintain active dialog with outside environmental groups and government agencies.
It is essential to stay abreast of outside needs and concerns.
• Step 6. Develop an assertive environmental action program.
This program should be integrated into all parts of the strategic planning process.
• Step 7. Integrate all departments to facilitate flexibility in responding to environmental needs.
Doing this may require building bridges between competing interests in the organization.
• Step 8. Allocate adequate resources to show commitment.
This environmental commitment must be demonstrated by provision of money and personnel to
implement the environmental action program effectively.
• Step 9. Through effective advertising and publicity, communicate to customers what you are
doing.
This communication will not only build customer loyalty toward your organization, but also
encourage customers' co-operation in environmental efforts.
• Step 10. Monitor consumer response with an active marketing research program.
The dynamic nature of environmental needs and demands requires constant monitoring along
with flexibility to adapt.
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Figure 1. Strategic Green Marketing Planning Model
As we could depict the importance of green marketing strategies for overall advantage of the
business. Corporations always have to respond to the changes in the external environment, thus
they need to be proactive to such changes which gives them excellent opportunity to gain
competitive excellence.
P1. Businesses need to develop their marketing strategies while taking in account the importance
of green marketing which will not only fulfill their social obligation but it will make them
profitable in the long run.
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Environmental Concerns
Include in Company’s mission and objectives
Analyze government regulatory trends
Analyze Competitor strategies
Analyze government regulatory trends
Forecast Impact of environmental trends on relevant products and markets
Incorporate into strategic marketing plan
Take an assertive approachModify current products/marketsIntroduce new products/markets
Integrate with all organizational elements
Green Marketing: Reactive vs. Proactive strategies:
Whenever a research on general business strategy is conducted it often reflects a dichotomy
between reactive and proactive strategies (Aragon-Correa, 1998). Whenever a business responds
to any changes; be it external or internal environment, it often uses the reactive strategy.
(Sandberg, 2002; Bennett, 1996). These strategies are often kept in place whenever some unusual
reaction takes place in the external environment, the timing of such strategies is quite important.
On the other hand Proactive strategy is being implemented by the businesses before they are
forced to respond to any changes in the external environment, thus creating new opportunities in
the environment. McDaniel and Rylander (1993) proposed two main approaches to green
marketing: the first is a defensive or reactionary approach, and the second is an assertive,
aggressive strategy. This paper utilizes the term reactive to describe the former approach, and
proactive to refer to the latter. A reactive green marketing strategy (also referred to as a
compliance strategy) follows regulations of environmental management (Miles and Covin,
2000), requires limited resources, has a low level of organizational commitment, low
involvement of top management, and a short-term orientation (Menon et al., 1999).
P2. Reactive green marketing strategies are related to: low organizational ecological
commitment and resource allocation and are more likely to develop continuous innovations.
P3. Reactive green marketing strategies can lead to: short-term benefits (e.g. short-run increases
in sales and profits), risks of green washing criticisms, and lower levels of ecological
sustainability.
Green marketing has failed in the recent times due to so many factors thus it has created a space
for more research to be done so that green marketing can be used as an important tool for
businesses to be profitable as well as environment friendly at the same time. According to Peattie
and Crane (2005), green marketing has failed because of five problems. The first two problems
are related to what is often referred to as ‘‘green washing:’’
Peattie and Crane has described Green spinning as a first problem which is manipulation
of green image via publicity and lobbying from ‘‘dirty’’ industries such as oil, chemicals,
pharmaceuticals, and automotives), and
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The second problem has been termed as ‘‘Green selling’’ where firms do a post-hoc
identification of environmental features in existing products, and then opportunistically
promote them sometimes with misleading or unproven green claims.
Green Marketing has also received lot of criticism by the use of ‘‘Green harvesting’’. It
refers to those firms who pursue short-term cost savings by reducing packaging,
increasing energy efficiency, greening their supply chain, using life-cycle pricing
approaches, (Peattie and Crane, 2005), designing products for disassembly and selling
products at premium prices without perceived added value by customers. Most of these
tactics do not address the issue of long-run sustainability.
We know that businesses reflect their owners, when the owners lack the green vision the
green marketing strategies of firms will not be implemented unless its owners are
interested and willing to make it happen. Some firms even fail in the long-term because
of their production orientation with a lack of accurate marketing research and ineffective
marketing communications to educate customers. Or, perhaps these firms were ahead of
their time, and the true era of green marketing may still emerge in the future.
The fifth problem is termed as compliance marketing by which the firms act according to
certain accepted standards to promote their green credentials. This issue has received lot
of criticism from consumers as they see it as a tactic of businesses to show their concern
about the environment; however they are actually meeting the legal standard.
Reactive green marketing strategies require less resources which are less risky and
inexpensive however on the other hand the proactive green marketing strategy requires
greater resources which can be expensive as well as risky at the same time, it also needs high
organizational commitment including an out stated environmental corporate policy which
reflects high levels of top management and employee involvement, and is more long term in
orientation. Whenever a firm is employing its proactive green marketing strategies it takes
into account its customer needs, the other stakeholders of the company, future potential
customers of the business; not only this firms tends to meet all these expectations in a most
innovative manner, thus creating innovative solutions. Firms always employ those strategies
which will enhance their economical sustainability thus the objective of proactive green
marketing strategy would ideally address what is referred to as the ‘‘triple bottom line’’ of
economic, social, and ecological sustainability. Firms who successfully implement these
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proactive green marketing strategies would always be among the firms who have achieved
what is referred to as ‘‘eco-effectiveness.’’ As Chen et al. (2008) noted, ‘‘Eco-effectiveness
aims beyond merely reducing negative environmental impact by ending ecological
degradation. Seeking an ultimate solution for ecological problems, eco-effectiveness
oftentimes requires a shift of mindset and transformation of business models’’ (p. 188).
P4. Proactive green marketing strategies are related to: high organizational ecological
commitment and resource allocation and will create more dynamically continuous and
discontinuous innovations.
Green marketing strategies and degrees of innovation:
Figure 2. Green marketing strategies and degrees of innovation.
Degree of innovation can range from low to medium to high. This paper also explains about the
extent of innovation in terms of continuum of degree of innovation from reactive to proactive
green marketing strategies. Figure 2 explains about the two green marketing strategies and the
degree of innovation involved among them. We can recognize that the degree of innovation is
high in terms of proactive strategies while it is on the lower side in case of reactive strategies.
According to Robertson (1971), degrees of an innovation (e.g. a product, service, or process) can
range from low to medium to high. A low degree innovation is called a continuous innovation
(also known as a ‘‘me-too product’’) which simply makes small changes (such as color, style,
packaging) to an existing product or service. Continuous innovations may easily be imitated by
the competition and can usually only provide short-term advantages (e.g. short-run increases in
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Reactive Green Marketing Strategies Proactive Green Marketing Strategies
Low Involvement High Involvement
Low Degree Medium Degree High Degree
Continuous Dynamically Discontinuous Innovation Innovation Innovation
profits and revenues). Businesses prefer continuous innovations as they are low in risk and are on
a positive side since they require very little or no change in buying behavior. Continuous
innovations are quick to diffuse in the marketplace and can be easily adopted. They are less risky
in the sense that businesses do not abruptly change the product or replace it by new one however
it is a long time development which takes into account the needs and desires of the consumers. It
also analyses the tastes and preferences as consumers tend to change their perceptions from time
to time. An example of a continuous innovation in green marketing is when a firm introduces a
new ‘‘second generation’’ of an existing product which does not need a totally new
manufacturing process, and is a ‘‘green’’ upgrade that can help save more energy, conserve
natural resources, or eliminate waste for business customers. At the medium level, a product or
product category that is in existence, but that provides a new format which changes customer
behavior (e.g. laptops, mobile phones) is a dynamically continuous innovation. The highest level
is a discontinuous innovation (e.g. the internet, space travel for businessmen) which will change
customer behavior the most, and may take decades to diffuse, unless the diffusion characteristics
are positively directed. If a company proactively introduces a radically different manufacturing
process, product, or service that achieves environmental benefits, then it would be a dynamically
continuous or discontinuous innovation. Ka¨rna¨ et al. (2003) asserted that companies can use
innovations related to environmental sustainability to create advantages that can be larger (i.e.
more proactive strategy) than simply following and complying with government regulation (i.e. a
reactive perspective). However businesses always try to be proactive rather than reactive as their
actions are almost neglected by the consumers, for example when a government regulation forces
a company to follow a certain standard and the business uses its reactive strategy, the consumers
feel that the business only became environmental conscious after the legal factors.
P5. Proactive green marketing strategies can lead to: longer-term financial benefits related to
competitive advantage; greater product differentiation and customer brand loyalty; lower costs;
enhanced corporate reputation; higher R&D support; and more ecological sustainability for the
common good.
(Note: P5 is related to the Model in Figure 2 and Table II shown later in the paper.)
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Diffusion of innovation theory research:
Most technological advancements are irregular innovations which require supplier organizations
to be proactive in their strategies. Frambach (1993) declared that technology can be implemented
as a tool to add competitive edge. It is one of the main concerns of this learning to explore how
green marketing strategies of Corporate Social responsibility are related to competitive
advantage in the present world where sustainability is the main focus of most companies.
Diffusion of innovation theory has been applied to technological innovations in many researches
done by Robertson and Gatignon (1986) and Frambach (1993). High JSIT technology is used to
formulate various green marketing innovations; therefore, this paper is a subject of investigating
the function of diffusion of innovation to green marketing strategies. Diffusion of innovation
theory (Rogers, 1995) is applicable in different disciplines, from sociology to business. From
1970’s, diffusion theory has been efficiently utilized in marketing products and services to
personal consumers. Technological advancements and innovations has been concentrated as the
main focus by the most organizations which has entitled massive amount of researches to apply
diffusion theory of marketing in the territory of businesses
Studies have looked at the implementation of: technology by US non-profit hospitals, approval
of an ecologically related regulatory alternative by organizational trade centre members
(Apaiwongse, 1991), and building of successful new products with a completely new technology
(Woodside and Biemans, 2005). Furthermore, the recent trend has showed the research among
the businesses to study the adoption of technology related to the internet: online trading
interactions by small organizations (Quaddus and Hofmeyer, 2007), Technologies to improve
securities within the business to business dealing (Carayannis and Turner, 2006), influence of
supplier on buyers’ online purchasing (Deeter-Schmelz et al., 2001), different e-services from
primary generation to multi-channel solutions (Legner, 2008), online reverse auctions for
business amongst suppliers for dissimilar adopter categories (Schoenherr, 2008), regional e-
market places for small and medium enterprises which are government-supported (Gengatharen
and Standing, 2005), and internet markets where business buyers and sellers perform marketing
and logistics activities (Woodside et al., 2004).
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Elements of Diffusion of innovation theory:
Diffusion of innovation theory in a social system includes the following elements: an innovation,
communicating the innovation, over a period of time, towards social system members. Diffusion
theory includes:
The implementation process: It involves an organization’s buying centre to make a
decision whether to adopt or reject an improvement;
Distinctiveness of the adopter: It may involve the size of the organization, its
arrangement or structure, the level of professionalism in it, the corporate culture among
its members, etc;
Knowhow of the innovation i.e. marketing communications;
The environment in which the organization operates e.g. competition; and
The characteristics of the Diffusion of innovation (Frambach, 1993).
This part of the study in this paper primarily focuses on diffusion of innovation characteristics,
such that their relationship with the aspect of green marketing strategies can be outlined.
Previous research included diffusion characteristics related to the adoption of innovations by
personal consumers (Vaccaro and Cohn, 2007; Vaccaro, 2008). The diffusion of innovation has
five characteristics that influence whether an innovation must be implemented or not in a social
system: relative advantage; observability; compatibility; complexity; and trialability
The degree to which a modernization is alleged as being better than the idea it communicates is
called relative advantage. However, in this paper, relative advantage is defined more generally to
exist when an innovation provides better benefits than the existing products offered by that firm
or the competition. More the relative advantage, the quicker the new innovation will be adopted.
The ease by which the benefits by a product and its attributes are visible and can be
communicated represents the obsevability of a new product or service. Therefore, the new
products or services with higher social visibility diffuse more rapidly. Compatibility represents
the degree of the consistency of a new product or service with the existing customer values and
practices or in other words their tradition (i.e. the more the degree of compatibility, the faster the
adoption). Complexity is defined as the degree of difficulty a new product or a service has to use
it or to understand it. It has an indirect relation with the adoption, i.e., the more complexity
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carried by a product, more time the innovation will take to get adopted. Trialability is the ability
of a new product or service to be tested on a limited basis. The greater the trialability, the faster a
new product or service will be adopted and thus has a direct relationship with the adoption.
P6. Proactive green marketing strategies are most effective when they are related to diffusion of
innovation characteristics in the direction that leads to faster rates of diffusion and adoption.
A number of conceptual models have been proposed on the Green marketing and the competitive
advantage which it provides like Menon andMenon, 1997; Bansal and Roth, 2000 and Menon et
al., 1999. However, on the basis of our study and discussion on reactive and proactive strategies,
this paper frames out a diagrammatic representation of a new model of green marketing
innovation strategies and the competitive advantage that it provides. The studies have been done
on the reactive and proactive strategies earlier under the literature of Green Marketing by various
researchers like Peattie and Crane in 2005 and Miles and Covin in 2000, but this paper reflects
the competitive advantage associated with them and is given a tabular shape of green marketing
model. In addition to this, the model reflects the short term results associated with the reactive
strategies and how proactive strategies afford a competitive advantage through long term benefits
which include more sustainable competitive advantage and environmental sustainability.
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A new model of green marketing innovation and competitive advantage:
Analysis and discussion
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Green Marketing Innovation Strategies Competitive Advantage
Reactive Strategies
-Fulfill Environmental Regulations. Decrease resource outlay and lacking organizational commitment towards environment.
-Continuously developing innovative products that are easily initiated.
-Tactical Green Marketing- e.g. price premiums which may not be perceived as worth the cost to customers; misleading advertisement claims.
-Reactive strategies lead to short term increase in the financial performance;
-Involves risk of criticism from media about green washing;
-Sustainability in the environment and competition can be short-term.
Proactive Strategies
-Make regulations the bench-mark and performing activities beyond them; environment should be related to the corporate mission, objectives, policies, organizational structure, and resources; Top management must be involved in the environmental commitments and the inputs must be imported from the external shareholders.-Continuous innovations must be made which are dynamic and thus stretching the boundaries of the product and the organization.
-Use diffusion of innovation characteristics to help design more effective green marketing strategies in the direction of faster diffusion and adoption.
-Proactive strategies lead to Long term increase in financial performance and allows sustainable advantage;
-Enhances the reputation of an organization; Lower costs; Differentiation and brand loyalty; satisfied stakeholders; environmental sustainability for common good.
Diffusion of innovation characteristics and Proactive green marketing strategies:
Marketing research
Must do an in-depth research on sustainability and obtain the necessary information from the stakeholders on products, communications, pricing, and distribution strategies.Diffusion characteristics: relative advantage, observability, compatibility, complexity, trialability.
Production Need to change production processes in order to be greener and environment friendly.Diffusion characteristics: relative advantage, observability, compatibility and trialability.
Product (a) Products must be recyclable, biodegradable, and are based on sustainable development and also extending these product lines. It will be a competitive advantage.Diffusion characteristics: relative advantage, observability, compatibility, complexity, and trialability.(b) Substitute product rentals instead of ownership of physical goods.
Distribution/ markets
(a) Using different ways of distribution like internet.(b) Creating more circular markets werein products are recycled.(c) Using green products to create new markets or market niches.Diffusion characteristics: relative advantage, observability, complexity, and trialability.
Price (a) Long-term costs of ownership must be considered and short term price like energy efficiency should be used rather.(b) Price incentives like coupons should be offered.(c) The prices of the green innovations should be set lower.Diffusion characteristics: relative advantage, observability, and trialability.
Promotion Green values and benefits must be used to promote the new product by using that media of promotion which is environment friendly like internet, and mobile marketing to increase the compatibility between organizational sellers and buyers.Providing sales incentives to customers and rewarding repeat purchases must be used.Education of green policies and strategies should be communicated to various Stakeholders.Diffusion characteristics: related mainly to observability, but also related to compatibility, complexity, and trialability and relative advantage.
Partnerships ‘‘Eco-alliances’’ should be created with stakeholders for inputs, strategies, and implementation.Diffusion characteristics: relative advantage, observability, and compatibility.
Table 1. Relationship between proactive strategies and the diffusion of innovation characteristics
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Table 1 reflects the relationship between the seven explicit areas of proactive green marketing
strategy and the diffusion of innovation characteristics which depicts the acceptance and
adapting the new innovations like products, services, or processes.
Analysis and Discussion:
This table and the following discussion is according to the various researchers such as Robertson
and Gatignon (1986), Gatignon and Robertson (1991), Rogers (1995), Menon andMenon (1997),
Peattie and Crane (2005) and Miles and Covin (2000). The nalysis and discussion of the afore-
mentioned table according to this research is as follows:
1. Marketing research strategies: The studies must be conducted to obtain inputs on the
strategies of the company and its environmental sustainability issues from outside
stakeholders and it must be related with the diffusion characteristics which are: relative
advantage, observability, compatibility, complexity, and trialability. These researches would
help a company to determine the optimum way of reaching its specific target markets and
would also determine the most effective way of communicating the information about the
green efforts taken or to be taken by the organization to its stakeholders. Therefore, the
researches would help them to educate their stakeholders about greening efforts while
identifying their target markets (Ka rna et al., 2003). In addition to this, it could also be used
to identify customers’ needs before designing new products, and to determine optimum price
and distribution strategies that a company needs to decide upon.
2. Production strategies: Changing all production processes and other activities such that they
will be more environmentally sensitive and will affect the following diffusion characteristics:
relative advantage, observability, compatibility, and trialability. Organizations must involve
green innovations to include in the resources of manufacturing where they need to
concentrate on the production process of a product or a service and the way it is consumed so
as to formulate the processes in an environmentally sustainable way. This could be ensured
by associating through suppliers, manufacturers, retailers, and consumers’ compatible green
values foundation for buying organic food, fair trade materials, parts, and products. On the
other hand, to ensure observability, the potential customers, stakeholders and other external
bodies like media must be involved through factory tours that will help the organization to
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obtain the general awareness in the society and promotional efforts could be taken to attain
media coverage about the new green production strategies undertaken by the organization.
3. Product strategies:
The green products must be created which have a diverse set of advantages and are
recyclable, biodegradable, and based on sustainable development. The product lines can
be extended which will be related to the following diffusion characteristics: relative
advantage, observability, compatibility, complexity, and trialability. Such type of
perception should be developed wherein the green innovations are given the higher
preference in terms of value and acceptance to the existing products which is related to
differential advantage and is known as a ‘‘unique selling proposition’’ in advertising.
Once the consumers try the product or service, the degree of technical performance and
the workmanship must be up-to the mark. In addition to this, the new product or service
should be designed in such a way that it is easier to understand or in other words
possesses as low complexity as possible, is also observed simply by the consumers and
the stakeholders as well and should be easier to consume like sample products should be
available for trial basis or should provide some sort of assurance to the customer like
warranty or guarantee. The innovation should also be compatible with customers’ needs
and values that will in turn increase the value of the company in the society.
Companies should create easy-to-try substitute products or services which are cheaper
than ownership of physical goods This is another green marketing strategy wherein
substitute services or product rentals instead of ownership of physical goods can be
introduced; this strategy will be related to: relative advantage, observability, complexity,
and trialability.
4. Distribution or market strategies:
To create more circular markets wherein materials can flow through product take-back
and recycling,
Using different channels of distribution like internet distribution to make the product
easily findable, simpler to comprehend, and readily available so that the new green
product or service could be tried easily, and
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Green technology transfer can be used to create new market places or niches which will
be related to the following diffusion characteristics: relative advantage, observability,
complexity, and trialability.
5. Price strategies: Use of long term costs of ownership should be emphasized rather than
short-term price e.g. energy efficiency. Price incentives such as quantity and frequency
discounts, coupons, and rebates to increase interest can be offered and it can act as a
promotion. Proactive organizations can use prices of the innovative product or service for
organizational customers to gain the competitive advantage by setting it lower than the
competition and this way their trialability will increase. These price strategies will be related
to the following diffusion characteristics: relative advantage, observability, and trialability.
6. Promotion strategies: whatever businesses do in order to become more environmentally
friendly needs to be addressed to its stakeholders. Here promotional strategies play an
important role, because one needs to choose among the various promotional ways be it print
or electronic media - email, e-newsletters, print materials, webinars, and mobile marketing.
Using marketing communication strategies that rely more on environmentally-friendly new
media will be related to the diffusion characteristic mainly of observability, but also to
compatibility, complexity, and trialability, and relative advantage. After the firms have
taken any eco-friendly initiation, it needs to be observable, i.e. it needs to be promoted
among your stake holders. Promotion not only helps in creating credibility among your
stakeholders but it also helps to create awareness and educate them. With the use of new
technology like internet, it is easy to follow up your customers in most inexpensive and less
time consuming manner. Firms can also use e-CRM and other information systems to
support relationship marketing and loyalty/reward programs in the supply chain. In
designing promotional messages for personal selling and other marketing communications,
firms should demonstrate and clearly explain the reasons and benefits of buying and using
the green innovation, describe how the product is compatible with the customers’ green
values, and market needs, and how it offers a differential advantage to the competition.
Firms can also create easy to use websites so as to create communication sources. They can
also create among the society by organizing events in schools and arrange some debates and
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conferences. Further, if the price of the product or service is initially high, promotional
messages might need to emphasize long-term costs associated with ownership and use rather
than short-term price (e.g. energy efficiency).
7. Partnerships/strategic alliances: Other green marketing strategies could be to create
partnerships (e.g. ‘‘eco-alliances’’) with multiple stakeholders with similar ‘‘green values’’
for input, strategy, and implementation will be related mainly to the following diffusion of
innovation characteristics: relative advantage, observability, and compatibility. One way to
make eco-alliance is that a business can work with its suppliers and channel. They could
involve with them in environmental programs, initiate a awareness campaign among the
society or gaining product endorsements and corporate sponsorships from environmental
groups. This will not only fulfill your obligation but it will also enhance your credibility
among stakeholders. (Stafford and Hartman, 1998; Ka¨rna¨ et al., 2003).
Diffusion characteristics and related competitive advantage in proactive green marketing:
This particular section of the research is related to the final half of the previously presented new
model in Figure 2, and the aforementioned benefits of competitive advantage.
As far as our research is concerned there are four major elements that affect the success or failure
of an innovative idea, which are; the innovation, time, communication channel, and a social
system Diffusion is the process by which an organization/individual's innovation is
communicated through specific channels over a period of time among the members of its overall
social system. If we look at table 2, it shows us the relationship of diffusion of innovation
characteristics to the potential benefits that we are most likely to get as a competitive advantage,
resulting from various proactive green marketing strategies.
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8.
As we have already discussed above in our previous sections, in order for us to speed up our
diffusion process and adoption of our green innovation, we need to follow standardized strategies
and related diffusion characteristics, already discussed above. Applying strategies like Changing
production and processes to be more environmentally sensitive( e.g. observability) or even
obtaining feedback/ inputs from stakeholders on ones product, communication channels,
promotion, and distribution strategies(e.g. trialability), compatibility of our green innovation
with environmental values(e.g. compatibility) as well as having an innovation that is very easy to
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Diffusion Characteristics Potential competitive advantages
Observability
Compatibility
Complexity
Trialability
Relative advantage
1. Enhanced corporate reputation
2. More satisfied stakeholders (suppliers, retailers, customers, general public, stockholders, the media, government, etc.)
3. Greater brand differentiation and brand loyalty
1. Enhanced corporate reputation
2. More satisfied stakeholders
3. Greater brand differentiation and brand loyalty
4. Higher business performance
5. Increased revenues & higher profits; long-term profits
6. First-mover advantage
7. Higher market share and ROI
8. Cost savings and market gains due to differential advantage
9. Increased R & D support
10. Fulfill mission of the organization
11. Greater ecological sustainability for the common good
Table 2. Relationship of Diffusion characteristics to the potential competitive advantage
use(e.g. less complexity). All these diffusion characteristics and related diffusion marketing
strategies can give us the following associated competitive advantage over our competitors:
Increased visibility or even less complexity of an organization's message will give it the
following competitive advantage;
Enhanced corporate reputation for the company and also its alliances.
Greater brand differentiation and brand loyalty.
Organization will have more satisfied stakeholders: Suppliers, customers, employees,
volunteers, government agencies, and media.
The company would enjoy cost savings and market gains due to differential advantage.
Greater ecological sustainability for the common good, for the organization itself and its
stakeholders.
Relative advantage tells us to what extent an innovation would be or is productive, efficient, or
provide an advantage to the organization in some other manner upon existing practices. Since the
diffusion characteristic of relative advantage alone is viewed as synonymous with competitive
advantage, but such is not the case as every good idea does not sell itself, some might be
complex to understand, difficult to be accepted easily by the society or even difficult to
implement. That is why it is also proposed that other diffusion characteristic like observability,
compatibility, complexity, and trialability all contribute to the establishment of relative
advantage. The benefits of competitive advantage such as enhanced corporate reputation, more
satisfied stakeholders, and greater brand differentiation and brand loyalty, we can also see them
in the table above which shows benefits related to diffusion characteristics, the above mentioned
benefits also appear in table 2 as the first set of benefits of relative advantage. It is proposed that
these benefits that we get because of certain diffusion characteristics would then lead ultimately
to the other benefits associated directly with relative advantage of longer-term increased
financial performance (e.g. Increased revenues & higher profits; long-term profits, etc.).First, in
general, studies and experiences have concluded that higher environmental performance leads to
higher business performance. Not only this, Successful green marketing can also lead to
increased revenues and profits, higher market share and ROI as these are few of many benefits
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that an organization gets by going green. Studies that have been done on business-green
relationship, have shown that resource-based environmental strategies with top management and
corporate cultural commitment, which are difficult to imitate helped companies achieve long-
term, more sustainable competitive advantage. Environmental programs can enhance operational
efficiencies, develop new technologies, achieve first-mover competitive advantages, and increase
profits. Companies that implement environment favoring strategy report considerable benefit.
Human resource employees see improved morale in all the employees and a stronger public
image that are the top benefits to an organization. Companies can gain first-mover advantage, in
part by helping shape future regulations. Research has also found higher benefits that an
organization gets in terms of cost savings and market gains due to differential advantage. Other
benefits that follow a successful green marketing strategy can be to help the firm generate
increased support for research and development, and overall, will help the firm to reach to its
mission. The ultimate benefit in implementing a green marketing strategy is environmental
sustainability for the common good of society. This particular benefit can be achieved by an
organization by having proactive green marketing strategies that are maximized in effectiveness
in relation to the diffusion of innovation characteristics to produce the other aforementioned
benefits of competitive advantage.
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Limitations, implications, and future research:
This paper was mainly concerned with introducing green marketing as an effective tool of CSR
to gain competitive advantage. However this study was limited to one main aspect of diffusion
theory: diffusion of innovation characteristics. Future research could expand the application of
other elements of diffusion theory. Also, this study generated six key propositions related to
innovation and green marketing strategies. These propositions, along with the new Model, and
the relationships referred to in Tables I and II, can be tested in future research with Business
firms in case studies and empirical research. There are additional tools of CSR other than green
marketing that can be used by a company to gain competitive advantage which can be stated in
future. This research used only the main characteristics of diffusion theory and in future these
characteristics can be determined and used according to the various environmental traits that will
confine the research to smaller groups and will help to develop strategies to be used according to
these targeted groups. This study found seven areas of green marketing strategies related to five
diffusion of innovation characteristics, which can ultimately produce 11 different benefits of
competitive advantage. In future, other aspects of diffusion theory can also be used to uncover
the areas of innovation and the degree of innovation required to increase the participation of a
company towards society so as to ensure the long term benefits and competitive edge provided
by it.
As the green marketing has gained lot of impetus due to the growing concerns for environment,
so it opens a space for further research in this field. Future research can find some other ways or
more green marketing strategies which can not only fulfill the obligations of businesses but also
make them profitable in the long run. One such research can test other diffusion characteristics
suggested by Gatignon and Robertson (1985, 1991), Frambach (1993), and Robertson and
Gatignon (1986), as well as variables such as organisational psychographics (Robertson and
Wind, 1980). Also, research by Wind et al. (1982) found separate diffusion patterns among
different target markets adopting an industrial innovation. Future research might also test for
differences between market segments with diffusion characteristics and green marketing
strategies. Further, research can also test diffusion characteristics with green marketing strategies
targeting personal consumers with variables such as global consumer values, consumer trust of
marketers, and consumer perceived risk of products and services.
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Conclusion:
Businesses in today's world operate in ever-changing environment be it economically or
ecologically. Nowadays, competition with others firms is not the only purpose, it's also about
surviving in the ever changing market, dynamic environment. Businesses nowadays use green
marketing strategies that they use as an effective tool of corporate social responsibility in order
to get economic, social as well as ecological sustainability. The purpose of this research was to
find out major concepts of green marketing strategies, and how they could be used as an
effective tool for CSR to gain the competitive advantage. The strategies will not only help the
corporations to become greener but it will also meet there bottom line of becoming
economically, socially as well as ecologically sustainable. This research primarily focuses on
diffusion of innovation characteristics, such that their relationship with the aspect of green
marketing strategies. Diffusion theory explains; how businesses can use their resources in an
efficient and desired manner so that they can innovate freely, this theory also explains on how to
use the different innovative strategies under given circumstances. In addition, the study
demonstrates the value of applying diffusion of innovation theory in achieving our green
marketing objectives. We classify these strategies into two major categories – reactive and
proactive – which are part of a continuum that can be related to degrees of innovation. Whenever
a business responds to any changes; be it external or internal environment, it often uses the
reactive strategy. On the other hand Proactive strategy is being implemented by the businesses
before they are forced to respond to any changes in the external environment, thus creating new
opportunities in the environment. Further, a unique model was developed of Business green
marketing innovation strategies and competitive advantage. In the research we found that
organizations which prefer and utilize proactive green marketing strategies related to the
diffusion of innovation characteristics rather than being reactive in approach are more likely to
achieve long-term competitive advantage and produce ecological sustainable goods or provide
services. Proactive green marketing strategies that we will opt for in order to fulfill our goal
should effectively increase the rate of adoption of new products, and services, and processes, so
as to achieve competitive advantage, stakeholders’ satisfaction, and also help the world but
making it a better place to live in.
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