Antecedents of Green Brand Equity: An Integrated Approach

Pui Fong Ng Muhammad Mohsin Butt

Kok Wei Khong Fon Sim Ong

Received: 11 January 2013 / Accepted: 20 March 2013

Springer Science+Business Media Dordrecht 2013

Abstract A steady demand for green products from

concerned consumers has led companies to introduce new

product lines that match or exceed consumer environ-

mental concerns. Nonetheless, not all the organizations

were able to achieve significant returns on their invest-

ments in green products. These failures are generally

attributed towards companies inability to overcome con-

sumer scepticism towards the performance of functional

and green attributes of their brands to generate a positive

green image and green value in consumers mind. There-

fore, the question arises that does the success in promoting

green brand image and value depend on consumer existing

perceptions about the brand quality and credibility? This

study analyzes the influence of brand perceive quality and

credibility on consumer perceptions towards a brand green

image, green value and green equity. A theoretical model

with hypothesized relationships is developed and tested to

answer these research questions. Data have been collected

from the consumers of electrical and electronic goods. The

hypothesized relationships were tested with the help of

structural equation modeling procedure. The results sug-

gest that brand perceived quality and its overall credibility

does have a significant influence on generating a greener

image, green perceive value and green brand equity.

Keywords Brand quality Brand credibility Greenbrand image Green brand perceive value Green brandequity Structural equation modeling

Abbreviations

BQ Brand quality

OBC Overall brand credibility

GBI Green brand image

GBPV Green brand perceive value

GBE Green brand equity

Introduction

The significance of integrating green marketing into

contemporary business practices is evident by the growing

interest of marketing researchers and practitioners in

environmental issues and their impact on marketing

activities (Chamorro et al. 2009; Lee 2008; Ottman et al.

2006; Peattie and Crane 2005; Polonsky 2011). Most of the

leading organizations have responded by developing and

introducing eco-friendly products, but still facing the

challenge to overcome consumer scepticism about the

functional performance of these products and/or their green

attributes (Kalafatis et al. 1999). This is a significant

challenge considering the fact that in the recent past, claims

made by several organizations about the green attributes of

their products or services were found to be at best

ambiguous, if not overwhelmingly deceptive (Chen and

P. F. Ng M. M. Butt (&)Nottingham University Business School, The University of

Nottingham Malaysia Campus, Semenyih, Selangor, Malaysia

e-mail: mohsinbutt@hotmail.com;

mohsin.butt@nottingham.edu.my

P. F. Ng

e-mail: ngpf_8989@hotmail.com

K. W. Khong

Taylors Business School, Taylors University, Subang Jaya,

Selangor, Malaysia

e-mail: kokwei.khong@taylors.edu.my

F. S. Ong

Taylors Business School, Taylors University, Subang Jaya,

Selangor, Malaysia

e-mail: fonsim.ong@taylors.edu.my

123

J Bus Ethics

DOI 10.1007/s10551-013-1689-z

Chang 2012a, b; Kalafatis et al. 1999). Thus it appears that

organizations are facing dual challenge, one is to produce

eco-friendly products that matches if not outperform the

functional performance of conventional products and the

second is to generate positive perception towards eco-

friendly branding initiatives.

To understand and address the second problem recent

research on green marketing have seen the development of

novel constructs such as green image, green trust, green

satisfaction and green brand equity (GBE) to gauge con-

sumer-specific attitude towards the green branding initia-

tives (Chen 2010; Chen and Chang 2012a, b). Nonetheless

these novel green marketing constructs, only represent a

subset of consumer overall perception towards a brand and

will not be able to fully explain consumer purchasing

behaviour towards green products (Rios et al. 2006;

Mourad et al. 2012). Past research suggest that it is highly

unlikely that consumer will compromise on traditional

branding attributes such as price, quality and credibility

over the greenness of a brand (Chen and Chang 2012a, b),

as they tend to discount future environmental problems

more than other types of risks (Hendrickx and Nicolaij

2004).

Amongst these factors perceived quality and brand

credibility are thought to have most significant influences

on consumer purchasing decision (Sweeney and Swait

2008; Zeithaml 1988). Furthermore, as most of the eco-

friendly products are new lines by existing brands thus it is

highly likely that consumers existing perception of that

brand will continue to shape their perceptions towards

these new product offerings that embrace the green con-

cept. One of the possible theoretical explanations can be

drawn from associative memory network model. In mar-

keting literature, associative memory network model is

frequently used to explain the memory structure of brand

associations in consumers mind (Chang and Chieng 2006).

In the context of green marketing, consumer general

attitude towards the environment and consumer perception

of a brands conventional performance are present as sep-

arate nodes. However, when a brand claims to offer eco-

friendly attributes, these two separated nodes become part

of each other set of associations. Thus, when a consumer

thinks about environmentally friendly products, he/she may

automatically consider brands that assert claims on envi-

ronmentally friendly attributes (Spry et al. 2011). On the

other hand brand signalling theory specifically helps in

explaining, why brand credibility can significantly influ-

ence consumer perception towards a brands green image,

its green perceived value and consumer-based brand

equity. Firms use brands as signals to dismantle informa-

tion in a marketplace that is largely characterised with

imperfect and asymmetric information (Erdem and Swait

2004). Thus any marketing communication about new

attributes of a brand, such as energy efficient, will be

assessed in the light of its existing credibility.

Second, the possible influence of the overall perceived

quality of a brand and brand credibility on consumer atti-

tude towards environmentally driven marketing constructs

can also be based on the assumption that the overall atti-

tude of consumers towards a brand could produce a Halo

effect in influencing their environmental-specific attitudes

towards a brand. The Halo effect is the influence of overall

trait impressions of an evaluation subject on the evaluation

of other traits of this subject (Oh and Ramaprasad 2003,

pp. 318). Thus, the more consumers positively evaluate the

product quality of a brand and its credibility, the greater is

the possibility that this evaluation influences their envi-

ronmental-specific perceptions and attitudes towards that

brand.

In the past a great deal of emphasize was paid by

researchers on exploring the interrelationships of conven-

tional branding constructs (such as brand product quality,

its credibility and consumer-based brand equity), compared

to that only a handful of researchers provide empirical

evidence on the validity of the interrelationships amongst

green branding constructs (Chen 2010; Chen and Chang

2012a, b). More importantly, no one before has attempted

to explore the relationships amongst conventional and

green branding constructs in a holistic framework.

This research is a first attempt that proposes a frame-

work to explore the possible positive relationships between

conventional branding constructs (perceives quality and

brand credibility) and green branding constructs (green

brand image (GBI), green brand perceived value (GBPV)

and green band equity (GBE)).

The rest of the paper is organized as follows. First a

brief review of literature is presented, followed by a section

on research methodology and design. Lastly, the results are

discussed along with their managerial implications.

Literature Review and Hypotheses Development

The Positive Effect of Brand Perceived Quality on GBI

Perceived quality is referred as the customers assessment

on the overall supremacy attributes or performances of a

brand/product with regard to its intended objectives (Aaker

and Jacobson 1994, 2001; Zeithaml 1988). Brand perceived

quality is considered as one of the important factors that

influences consumers decision making by providing them

a sound reason to prefer one brand over the other (Aaker

1991; Pappu et al. 2005). Superior brand quality generates

excellent reputation and positive brand image (Jarvinen

and Suomi 2011). Several past researchers have empiri-

cally demonstrated that brand perceive quality influence

P. F. Ng et al.

123

consumers willingness to pay a premium price, thus gen-

erating brand equity (Pappu and Quester 2008).

Furthermore, a brand that is known and linked with its

superior quality tend to build a positive mental image,

which in turn influences consumer attitude towards the

brand, purchase frequency and brand loyalty (Arslan and

Altuna 2010; Vranesevic and Seancec 2003; Wu et al.

2011). One can find a plethora of empirical research sup-

porting the positive association between the perceived

quality of a brand and its image. Thus far, no research has

been conducted on the influence of perceived quality on

environmental-specific brand image.

Chen (2010, p. 309) defines GBI as a whole range of

impressions, conceptions and apprehensions towards a

brand in the customers memory which is correlated to the

sustainability and eco-friendly concerns. GBI is a subset

of the overall brand image. As the quality of a brand sig-

nals a firms ability to deliver overall supremacy and per-

formance with regards to its intended objectives (Aaker

and Jacobson 1994, 2001), it is plausible that when a firm

proclaims to deliver environmentally friendly products, the

existing quality perceptions in consumer mind may posi-

tively influence to enhance a greener brand image. Based

on the above discussion this study proposed the following

hypothesis:

Hypothesis H1 Perceived quality of a brand is positively

associated with its GBI.

The Positive Effect of Brand Perceived Quality

on Green Brand Value

Despite the availability of numerous definitions related to

customer perceived value, it is often described as the

proportion or ratio between the brands quality and its price

(Sweeney et al. 1999; Tsai 2005). Stated differently, the

value-for-money approach is frequently used as the base-

line to explicate the concept of brand perceived value

(Sweeney et al. 1999; Tsai 2005). Based on the concep-

tualization of Patterson and Spreng (1997), Chen and

Chang (2012a, b, p. 506), define green perceived value as a

consumers overall appraisal of the net benefit of a product

or service between what is received and what is given

based on the consumers environmental desires, sustain-

able expectations and green needs.

In the context of green marketing, the green attributes of

a brand are integrated with conventional value propositions

to generate consumer acceptance. Thus it is not surprising

that green products are only able to successfully capture

consumer attention when they fully integrate the non-green

aspects of consumers value considerations into their

offerings (Ottman et al. 2006). The mistake of ignoring the

conventional value propositions in green marketing can be

observed during the early days of the green marketing

era in which consumers had the tendency to reject green

products largely due to their inferior product quality

(Ottman et al. 2006). Nonetheless, organizations commit-

ments and efforts in building better quality green products

have gradually changed the consumers misconception

towards the functionality and quality of green products

(Ottman et al. 2006). This eventually, enables some brands

to command higher price for being able to generate strong

positive perceptions towards the quality of their green

products (Ottman et al. 2006). Thus it is not only the eco-

friendly attributes of a brand but also its ability to deliver

superior product quality that guarantees success. For

example, besides being energy efficient, front-loading

environmentally friendly washing machines are able to

clean the garments more thoroughly and gently in com-

parison to the orthodox top-loading washing machines

(Ottman et al. 2006). Thus one can argue that brand per-

ceived quality will serve as a heuristic to influence con-

sumer judgement about its abilities to fulfil its

environmentally friendly attributes. Therefore, this study

proposed that brand quality has a positive influence on

customers perceived green brand value.

Hypothesis H2 Perceived quality of a brand is positively

associated with its green brand value.

The Positive Effect of Perceived Quality on Brand

Credibility

Brand credibility refers to the consumers trust in a firms

abilities and expertise to deliver products/services that can

satisfy their demands (Erdem and Swait 1998; Fombrun

1996). Whilst expertise implies to the extent to which a

source holds valid assertions, trustworthiness pertains to

consumer confidence in the intent of that source to convey

legitimate contentions (Hovland et al. 1953). Past research

suggest that the quality of the products manufactured in

past serve as an indicator of the companys abilities to

introduce quality products in the future (John and Paul

1994). Thus it is necessary for the newly launched product

lines (such as in this case eco-friendly products) to have

consistent or better quality relative to the brands well-

developed products to maintain and reinforce the trust-

worthiness amongst consumers (Sternthal et al. 1978). In

simple words product quality influence perceived credi-

bility of a brand. Hence, this study hypothesized that brand

perceived quality will positively influence its credibility.

Hypothesis H3 Perceived quality of a brand is positively

associated with brand credibility.

Antecedents of Green Brand Equity

123

The Positive Effect of Brand Credibility on Perceived

Green Value

According to the utility ideology, perceived value is the

perceived brand utility in relation to its risks and costs,

whereby it is simultaneously evaluated by the customers as

what is gained and what is needed to scarify in order to

obtain what has been gained (Boris et al. 2004, p. 157).

Increasing awareness amongst consumers on environmental

threats caused by electronic products has pushed companies

to incorporate eco-friendly attributes in their products to

fulfil consumers green expectations. Therefore, companies

that offer environmentally sustainable products/services

enhance green perceived value of their brands. However,

incorporating green attributes in a product may not directly

influence perceived value of a brand. According to Chen and

Chang (2012a, b), the influence of green attributes may be

mediated through its brand credibility Brand credibility can

impact on consumers brand perceived value and selection,

especially when cost of assessing the relevant information is

high (Aaker 1991). Past research suggests that higher the

credibility of a brand, the greater the perceived value will be

in the minds of consumers (Hauser and Wernerfelt 1990).

Hence, consumers perceived value increases where the

perceived risk towards a brand is weakened tremendously

(Boris et al. 2004), so long as the brands uncertainty and

information search costs can be reduced to the minimum

level (Erdem and Swait 1998). Based on the above discus-

sion this study implies the following hypothesis:

Hypothesis H4 Brand credibility is positively associated

with green perceived value.

The Positive Effect of Brand Credibility on Brand

Green Image

In the field of green marketing, companies often face three

common difficulties, which are, low credibility, green

cynicism and uncertainty (Mendelson and Poonsky 1995).

Thus it is not surprising to note that to project an eco-

friendly image companies are largely dependent on build-

ing their brand credibility. One way of building credibility

is through establishing relationships with other environ-

mental protection bodies and groups that can enable com-

panies to enhance their brand credibility (Coddington

1993; Mendelson and Poonsky 1995; McArthur 1994).

This is because consumers are likely to perceive and

believe those brands to be more environmentally respon-

sible which associate their products with the environmental

protection agencies (Mendelson and Poonsky 1995).

However, leveraging on secondary association via envi-

ronmental protection agencies could only be helpful in

cases where a brand has significant existing credibility in

conventional products. In other words, when credible

brands introduce eco-friendly products, their existing

credibility could create certainty and therefore, have a

positive effect in overcoming consumer green cynicism,

making it easier to project an environmentally friendly

image. Therefore, this study proposed the following

hypothesis:

Hypothesis H5 Brand credibility is positively associated

with GBI.

The Positive Effect of Brand Credibility on GBE

In general, the concept of brand equity stems from

Farquhars (1989) viewpoint, in which brand equity is out-

lined as the barometer to determine the degree of value

added or accumulated by a brand to a product or service.

Brand equity is a relative construct as it can only be eval-

uated, when comparisons are made with rival brands (Lassar

et al. 1995; Yoo et al. 2000). Aaker (1996) refers brand

equity as the assets or liabilities which are associated to the

name, term, logo or emblem of a brand, whereby it may

enhance or depreciate the value that are generated by a

good or/and service to the companies brands or customers

(p. 103). Based on Aakers (1991) definition of brand equity,

Chen (2010, p. 313) defines GBE as a set of brand assets

and liabilities about green commitment and environmental

concerns which are associated to the brand name, symbol

and logo that can either elevate or decrease the value given

by the eco-friendly goods and services. The main advantage

of cultivating robust GBE, in the growing environmental-

conscious era is that it enables companies to achieve com-

petitive advantages by positioning their products differently

in the market (Ailawadi and Keller 2004).

A number of past studies suggest that brand credibility

helps to differentiate renowned brands from their less

known counterparts (Aaker and Joachimsthaler 2000;

Farquhar 1989; Keller 1993). In a relatively recent attempt,

Papasolomou and Vrontis (2006) reported that stronger

brand equity prevails for those brands that exhibit higher

brand credibility. Credible brands enjoy lower information

processing costs and are associated with lower perceived

risk. Hence, they promote brand equity by enhancing their

value beyond functional aspects (Erdem and Swait 2004).

In other words, brand credibility is the central pillar around

which a firm can build and manage its brand equity (Erdem

and Swait 1998; Erdem et al. 2006; Spry et al. 2011). As

the novel construct of GBE is a subset of overall consumer-

based brand equity, making it plausible to be influenced by

brand credibility in a similar way. Therefore, this study

proposes the following hypothesis.

Hypothesis H6 Brand credibility is positively associated

with GBE.

P. F. Ng et al.

123

The Positive Effect of GBPV on GBE

Past research suggests that consumers believe that the

consumption of eco-friendly products deliver additional

benefits as compared to the conventional products (Hartmann

and Apaolaza-Ibanez 2012). Thus, developing strong and

positive perceived customer value towards a brand is

important as it tends to strengthen the customer-based brand

equity (Kim and Kim 2004; Malik 2012). Baldauf et al.

(2003) argue that brand equity is the customers impalpable

and subjective evaluations of a brand perceived value. Thus,

consumers intention to purchase green products or services

can be enhanced when a favourable perceived value is

developed towards the green product/brand (Chen and Chang

2012a, b). Since eco-friendly electronic products are usually

priced at a premium in comparison to the conventional

electrical products, it is extremely important for the compa-

nies to ensure that along with green attributes, the functional

performance of their brands are at least equal if not better

than the conventional electrical products in the same category

to generate substantial GBE (Ottman et al. 2006).

Viewed from another perspective, when the conventional

product attributes of a green product are at par with com-

peting brands, the environmental-friendly attributes will act

to serve as the source of additional value that could generate

consumer preference towards such brands (Hartmann and

Apaolaza-Ibanez 2012; Sriram and Forman 1993). There-

fore, this study proposed that customer green perceived

value will positively influence consumer-based GBE.

Hypothesis H7 GBPV is positively associated with GBE.

The Positive Effect of GBI on GBE

Cretu and Brodie (2007) define brand image as the con-

sumers mental visuals that illustrate a specific brand which

is related to the products produced by a company. Chen

(2010, p. 309, italics added) refers to GBI as a whole range

of impressions, conceptions and apprehensions towards a

brand in the customers memory which is correlated to the

sustainability and eco-friendly concerns. Companies pur-

suing green marketing strategies have incorporated con-

sumers green and eco-friendly brand impressions into their

marketing, promotional and communication strategies. A

successful GBI can be delineated in the consumers mind,

when a brand is capable to ignite consumers green or

environmentally affirmative emotions, perceptions, atti-

tudes and behaviours (Hsieh et al. 2004; Chen 2008).

The essential role of brand image in building brand

equity has been widely discussed in the past literature

(Aaker 1991, 1992; Faircloth et al. 2001; Keller 1993;

Martenson 2007). In a recent research, Chen (2010) finds

that GBI has a positive effect on GBE. Therefore, this

study also proposed that GBI will positively influence

consumer-based GBE.

Hypothesis H8 GBI is positively associated with GBE.

Based on the review of existing literature and proposed

hypotheses this study presents a conceptual model (Fig. 1)

that integrate perceived product quality and brand credi-

bility with consumer perception towards green image,

green perceived value and GBE.

Data Collection and Methodology

To empirically test the proposed hypotheses a survey was

conducted amongst young and old Malaysian consumers

of electric and electronic products. Electronic and electric

products were chosen as a product category as this sector

is notoriously considered to be one of the major contrib-

utors of polluting natural environment and thus face the

brunt of stringent regulatory requirements and a steady

demand for more eco-friendly(green) products from

concerned consumers (Badgie et al. 2012; Hawari and

Hassan 2008).

A self-administered questionnaire was used to collect

data from the respondents. The questionnaire was distrib-

uted in different shopping malls to the willing participants.

The potential respondents were required to answer a

screening question. These screening questions were inten-

ded to ensure that the potential respondents have purchased

an electric or electronic product during last 6 month. A

total of 300 questionnaires were distributed, out of which

236 usable responses were obtained. Apart from standard

demographic information, all the items in the questionnaire

were measured using seven point Likert type scale (1

represents strongly disagree and 7 represents strongly

agree). The respondents were requested to keep their focal

brand in mind whilst answering the survey questions. 42 %

of the respondents were females, whilst 58 % were male.

More than 50 % of the respondents have an income of

\4,000 Malaysian ringgits a month. Most of the respon-dents were at least a bachelor degree (42 %), whilst 27 %

have a high school diploma and rest were having either a

master or a PhD, qualification.

Measurement of Variables

This study has adopted previously validated scales to

capture consumer perceptions towards product quality,

brand credibility, GBI, consumer green perceived value

and GBE of their focal brand. The five-item scale for brand

perceived quality was adapted from Washburn and Plank

(2002). Some of the items include (1) the brand is of high

Antecedents of Green Brand Equity

123

quality; (2) the likelihood that this brand is reliable is very

high; (3) this brand must be of very good quality. Brand

credibility was measured using the six items adapted from

the work of Newell and Goldsmith (2001), which include

items such as (1) my favourite brand delivers what it

promises; (2) over time, my experiences with my favourite

brand have led me to expect it to keep its promises, no

more and no less; (3) my favourite brand has a name I can

trust. GBI (five items) and GBE (four items) were mea-

sured using items from Chen (2010). Examples of items

that were used to measure GBI include (1) the brand is

regarded as the best benchmark of environmental com-

mitments; (2) the brand is professional about environ-

mental reputation. GBE (four items) includes statements

such as (1) it makes sense to buy this brand instead of other

brands because of its environmental commitments, even if

they are the same. Green perceived value (four items) was

measured by the scale adopted from Chen and Chang

(2012a, b) which include items such as (1) this brands

environmental functions provide very good value for me;

(2) I purchase this brand because it has more environmental

benefit than other products. Appendix 1 shows the items

that measure the constructs.

Results

Data were analysed using Statistical Package for Social

Science (SPSS) Version 19.0 and AMOS version 18. A

series of statistical analyses were conducted to tests the

reliability, validity and proposed hypotheses. Reliability

was tested to establish the internal consistency of each

construct, exploratory factor analysis (EFA) was conducted

to examine how the factors converged, and confirmatory

factor analysis (CFA) was conducted to confirm the man-

ifestation of variables on their respective constructs.

Finally, structural equation modelling was used to test the

hypothesized causal relationships between the constructs.

Reliability tests showed that the Cronbachs alpha of

GBPV was 0.736, perceived quality of brand (BQ) was

0.806, brand credibility (BC) was 0.832, GBI was 0.856

and GBE was 0.757. According to Nunnally (1978), the

threshold for acceptable internal consistency is when the

Cronbachs alpha is above 0.7. Furthermore, EFA was

conducted to understand how the factors converged when

the indicators were reduced into a set of manageable

dimensions. Using principal component analysis, with

varimax rotation five clear factors were extracted

(Table 1). The five factors solution accounted for 67.85 %

of the total variance explained for the 19 variables. The

KMO (0.818) and Bartletts Test (p \ 0.05) results impliedthat the factors extracted were distinct and reliable (Hair

et al. 2006). Table 1 depicts the results of EFA.

In order to test for common method variance (CMV),

the Harmans one-factor test was used (Podsakoff et al.

2003). Of the 19 variables manifested on 5 factors, EFA

(fixed on a one-factor extraction without any rotations) was

conducted on the latter to determine the variance explained

by the single general factor extracted. Results revealed that

the single general factor only accounted for 33.35 % of

total variance explained for the 19 variables. In short, there

was no apparent general factor (Chen and Chang 2012a, b).

Therefore, the presence of CMV was not significant as the

single general factor did not represent the majority of the

variance explained (Malhotra et al. 2006).

The measurement models were established for the

respective factors using CFA. The CFA is used to establish

construct reliability and validity. In CFA, variables were

confined to their respective constructs where their corre-

lation coefficients (with the constructs) were the highest.

Table 2 depicts the results of these tests. Based on the

results, all constructs had significant standardized

Fig. 1 Research framework

P. F. Ng et al.

123

regression weights (k) loaded on their respective factor.The high shared variance of the variables with the con-

structs were represented in the composite reliability and

average variance extracted (AVE). The acceptable

thresholds level for these two tests is values [0.7 and 0.5,respectively (Chen and Chang 2012a, b; Yap and Khong

2006). All constructs met these thresholds except for

GBPV which marginally failed the AVE threshold.

Table 1 Exploratory factoranalysis

Factor loadings below 0.46 were

suppressed. Extraction methodprincipal component analysis.

Rotation method varimax withKaiser normalization

Components Variance

explained (%)

Constructs

labels1 2 3 4 5

GBPV 1 0.802 6.70 GBPV

GBPV 2 0.788

GBPV 3 0.687

GBE 2 0.685 8.06 GBE

GBE 3 0.760

GBE 4 0.803

BC 1 0.781 10.08 BC

BC 2 0.879

BC 3 0.844

BC 4 0.462

BC 5 0.490

GBI 1 0.716 33.92 GBI

GBI 2 0.804

GBI 3 0.844

GBI 4 0.808

BQ 2 0.562 8.79 BQ

BQ 3 0.729

BQ 4 0.853

BQ 5 0.814

Table 2 Constructs showingthe manifesting variables, k,reliability coefficients and

AVEs

** p \ 0.05

Constructs Variables k Cronbachsalpha

Composite

reliability

AVE

BQ BQ2 0.656** 0.806 0.8194 0.5370

BQ3 0.631**

BQ4 0.914**

BQ5 0.697**

GBPV GBP1 0.556** 0.736 0.7495 0.5063

GBP2 0.806**

GBP3 0.617**

BC BC1 0.799** 0.832 0.8352 0.5186

BC2 0.910**

BC3 0.816**

BC4 0.552**

BC5 0.492**

GBI GBI1 0.622** 0.856 0.8610 0.6110

GBI2 0.768**

GBI3 0.899**

GBI4 0.846**

GBE GBE1 0.718** 0.757 0.7352 0.5053

GBE2 0.732**

GBE3 0.683**

Antecedents of Green Brand Equity

123

Nonetheless, the construct met the composite reliability

threshold and therefore qualified for further analyses.

In assessing the validity of the constructs, the Fornell

and Larckers (1981) measure of discriminant validity was

used. Based on this measure, correlation between con-

structs must not be greater than the square root of the

constructs AVE. Table 3 shows the results of discriminant

validity tests on the pairs of five constructs. For example,

the correlation (/) between GBPV and GBE is 0.463 andthe square root of the AVEs of GBPV and GBE were 0.712

and 0.711, respectively; both AVEs were above the cor-

relation (/ = 0.463) between them implying the presenceof discriminant validity. Based on the results presented in

Table 3, all constructs had acceptable discriminant valid-

ity. Thus, one can conclude that the constructs in this

proposed research framework (Fig. 1) are valid, reliable

and distinct from each other (Yap and Khong 2006).

As the preliminary tests results were acceptable, SEM was

conducted to test the series of hypotheses developed in the

proposed framework. This structural equation modelling

procedure was carried out using AMOS (Version 18.0). The

results indicated that the data were an excellent fit to the

proposed model. Chi square (v2) was 208.4 with 144 degreeof freedom. The RMSEA was 0.068 whilst IFI and CFI were

0.919 and 0.916, respectively. These results implied that

the model has absolute and incremental goodness of fit. The

v2/df (1.447) was between the thresholds of 1 and 2 furtherindicating model parsimony. Furthermore, the residuals of

covariance were small indicating that the model could pre-

dict the variance covariance matrix. Based on the results in

Table 4, the causal relationships rooted on the series of

hypotheses were depicted. All associations were significant

(p \ 0.05) except for hypotheses H2 and H6.

Testing the Mediation Effects Using Bootstrapping

Sobel test is a common approach to test the mediations

amongst constructs. Nevertheless, this conservative

approach in test for mediation is gradually being replaced

by SEM (Kenny 2012). Therefore, bootstrapping was used

to analyse the direct and indirect effects amongst constructs

for relatively small sample size (Zhang and Wang 2008;

Nevitt and Hancock 2001). When multiple mediations are

present in a model as shown in Fig. 1, bootstrapping

approach can be used to simultaneously test these media-

tions. In this paper, the simultaneous test of mediations via

bootstrapping allowed the authors to determine if media-

tions are independent of other mediators (Kenny 2012). As

the constructs were already tested for discriminant and

convergent validity, the mediators in Fig. 1 measured dis-

tinct hypothetical concepts. Consequently, the model is

ideal for multiple mediations test. The number of bootstrap

samples extracted was 2,000 and the bias-corrected confi-

dence intervals were set at 95 %. The confidence intervals

implied that there should be a 95 % assurance that the

mediations amongst the respective constructs were signif-

icant. Based on the model in Fig. 1, four mediations were

tested and the bootstrap total effects of two-tailed signifi-

cance results were depicted in Fig. 2. Based on the results,

GBI and GBPV (GBI and GBPV) fully mediated the

relationship between brand credibility and GBE

(BC ? GBE). Brand credibility is found to partially

Table 3 Discriminant validity test amongst constructs

Constructs GBPV GBE BC GBI BQ

GBPV 1

GBE 0.463

(0.712, 0.711)

1

BC 0.422

(0. 712, 0. 720)

0.319

(0. 711, 0. 720)

1

GBI 0.336

(0. 712, 0. 782)

0.484

(0. 711, 0. 782)

0.430

(0.720, 0. 782)

1

BQ 0.355

(0. 712, 0.733)

0.355

(0. 711, 0.733)

0.439

(0. 720, 0.733)

0.443

(0. 782, 0.733)

1

Values in bracket indicates square root of the AVEs of respective constructs, with upper values indicating the correlations

Table 4 Hypotheses testing of the structural model

Hypothesis C p value Results

GBI / BQ H1 0.361 0.014** Supported

GBPV / BQ H2 0.180 0.101 Not supported

BC / BQ H3 0.478 0.001** Supported

GBPV / BC H4 0.342 0.016** Supported

GBI / BC H5 0.282 0.018** Supported

GBE / BC H6 0.028 0.902 Not supported

GBE / GBPV H7 0.331 0.016** Supported

GBE / GBI H8 0.352 0.006** Supported

**p \ 0.05

P. F. Ng et al.

123

mediate the associations between brand perceived quality

and GBI (BQ ? GBI). Test of mediation for the rela-tionship between brand perceived quality and GBPV

showed the full mediation effect of brand credibility

(BQ ? GBPV), similarly, brand perceived credibility alsofully mediate the relationship between brand perceived

quality and GBPV (BQ ? GBPV).

Conclusion and Implications

Although recent studies have explored the relationship

amongst several green marketing constructs, this study is

the first that developed an integrated model to investigate

the relationship between conventional and green branding

constructs. The theoretical contribution of this study

towards the green marketing literature is in exploring the

direct and indirect relationships between conventional and

green branding constructs. The results of this research

suggest that perceived brand quality has a significant and

positive influence on the overall brand credibility (H3), and

GBI (H1). However, the direct relationship between per-

ceived brand quality and GBPV was not significant (H2).

Similarly, the overall brand credibility significantly

influences green perceived value (H4) and GBI (H5) but

fails to have any significant direct effect on GBE (H6).

Thus, this study is the first to provide empirical evidence

that the existing credibility of a brand influence its claims

to deliver environmentally friendly attributes, which ulti-

mately dictate its green value (Chen and Chang 2012a, b).

Furthermore, all the direct relationships amongst green

branding constructs were significant suggesting a positive

influence of green brand perceive value and GBI on GBE

(H7 and H8).

As the model proposed multiple mediations, thus it was

imperative to test whether the non-significant results of H2

and H6 indicates a full mediation effect. The results of

mediation test via bootstrapping procedure confirm that the

non-significant effect of perceived brand quality on GBPV

is the outcome of the full mediation effect of overall brand

credibility. Similarly, the mediation results also confirm

that the non-significant effect of brand credibility on GBE

was due to mediating role of GBI.

The results of the present study indicate substantial

empirical evidence that ignoring the importance of con-

ventional marketing concepts could be costly to marketers

who failed to realize the importance of conventional

attributes whilst embracing green marketing initiatives.

Mediations tested Mediations paths Mediations results

BC GBI GBE Full mediation

BC GBPV GBE Full mediation

BQ BC GBIPartial mediation

BQ BC GBPVFull mediation

Fig. 2 Results of mediationtests. ns denotes no -significancewhilst ** denotes significance at

p \ 0.05

Antecedents of Green Brand Equity

123

One can infer that the results reaffirms the conventional

thinking in green marketing area that without the provision

of core functional quality and strong brand credibility any

organizational effort to successfully attract environmen-

tally conscious customers with green product attributes will

face difficulties (Rios, et al. 2006; Mourad et al. 2012).

The second major finding concerns the effect of con-

ventional attributes of brand perceived quality and brand

credibility on GBI and GBPV. Brand credibility partially

mediated the relationship between brand perceived quality

and GBI and fully mediates between brand perceived

quality and GBPV. Thus, for brands to build strong eco-

friendly image, delivering core functional quality and

building brand credibility are relevant in shaping and

building GBI.

Several implications can be drawn from the results of

this study. First, this study provides empirical evidence that

there exist a relationship amongst conventional branding

constructs and recently developed green marketing con-

structs. Thus, organizations with established credibility and

excellent brand perceived quality have every possibility to

leverage their success in getting a significant share of green

markets. Second, it is also evident from the results that

creating a greener image helps brand to build GBE. This

type of brand equity can play a vital role in differentiating a

green brand from its competitors. Furthermore, when a firm

integrates green marketing approach in its overall business

strategy, it stimulates a culture of innovation to incorporate

new attributes into products. This may help them to

achieve breakthroughs that could lead to the developments

of an entirely new market.

These results should be interpreted whilst considering

their limitations. First of all this study is based on a single

industry, i.e., the electric and electronic consumer goods

sector. Future studies may consider multiple sectors to

support the generalizability of these results. Second, we did

not incorporate consumers general attitude towards the

environment that might be able to test for differences

between consumers with strong environmental concerns

with those who were less concerned about environmental

issues. Future studies could also explore the implicit

motivations for preference towards green products using

qualitative approach such as projective techniques or lad-

dering. Based on these methods, new dimensions of why

and how consumers consume green products can be

determined.

Appendix

See Table 5

Table 5 Measurement of variables

Items Source

Brand perceived

quality

Washburn and Plank

(2002)

BQ1 The brand is of high quality

BQ2 The likely quality of this brand is extremely high.

BQ3 The likelihood that this brand would be functional is very high.

BQ4 The likelihood that this brand is reliable is very high.

BQ5 This brand must be of very good quality.

Brand credibility Newell and

Goldsmith (2001)

BC1 My favourite brand delivers what it promises.

BC2 Service claims from my favourite brand are believable.

BC3 Over time, my experiences with my favourite brand have led me to expect it to keep its promises, no

more and no less

BC4 My favourite brand is committed to delivering on its claim, no more and no less.

BC5 My favourite brand has a name I can trust.

BC6 My favourite brand has the ability to deliver what it promises.

GBI Chen (2010)

GBI1 The brand is regarded as the best benchmark of environmental commitments.

GBI2 The brand is professional about environmental reputation.

GBI3 The brand is well established about environmental concern.

GBI4 The brand is trustworthy about environmental promises.

Green perceived

value

Chen and Chang

(2012a, b)

P. F. Ng et al.

123

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Antecedents of Green Brand Equity: An Integrated ApproachAbstractIntroductionLiterature Review and Hypotheses DevelopmentThe Positive Effect of Brand Perceived Quality on GBIThe Positive Effect of Brand Perceived Quality on Green Brand ValueThe Positive Effect of Perceived Quality on Brand CredibilityThe Positive Effect of Brand Credibility on Perceived Green ValueThe Positive Effect of Brand Credibility on Brand Green ImageThe Positive Effect of Brand Credibility on GBEThe Positive Effect of GBPV on GBEThe Positive Effect of GBI on GBE

Data Collection and MethodologyMeasurement of VariablesResultsTesting the Mediation Effects Using Bootstrapping

Conclusion and ImplicationsAppendixReferences