Industrial Marketing Management xxx (2013) xxx–xxx

IMM-06895; No of Pages 10

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Industrial Marketing Management

Sustainability and branding: An integrated perspective☆

V. Kumar ⁎, Angeliki Christodoulopoulou 1

Georgia State University, J. Mack Robinson College of Business, Center for Excellence in Brand & Customer Management, 35 Broad Street, Suite 400, Atlanta, GA 30303, USA

☆ The authors thank Suraksha Gupta and Peter LaPlacathis study. The authors also thank Renu for copyediting th⁎ Corresponding author. Tel.: +1 404 413 7590; fax: +

E-mail addresses: vk@gsu.edu (V. Kumar), achristodou(A. Christodoulopoulou).

1 Tel.: +1 404 413 7591.

0019-8501/$ – see front matter © 2013 Elsevier Inc. All rihttp://dx.doi.org/10.1016/j.indmarman.2013.06.008

Please cite this article as: Kumar, V., & Christagement (2013), http://dx.doi.org/10.1016/j.

a b s t r a c t

a r t i c l e i n f o

Article history:Received 15 January 2013Received in revised form 21 May 2013Accepted 15 June 2013Available online xxxx

Keywords:SustainabilityBrandingIndustrial marketingIntegration framework

Sustainability is increasingly drawing the attention of scholars, policy makers, and companies, as the latter arerecognizing the necessity and opportunities of implementing sustainable practices in their operations. Marketingplays a substantial role in both applying such initiatives and promoting them, which can be greatly supportedthrough brands.We suggest that firms can use their brands to promote the value of sustainability to their indus-trial customers, consumers, and other stakeholders. This may be achieved through branding activities that em-phasize the firm's sustainability practices and their impact on stakeholders. Expressing sustainability actions asthemeasurable and relatable outcomes they yield and associating themwith brands have the potential to furtherfacilitate this integration of sustainability and branding. A framework and guidelines for sustainability practicesthat may be employed in this process of integrating operations and marketing are discussed.

© 2013 Elsevier Inc. All rights reserved.

1. Introduction

More than 25 years ago, the Brundtland report emphasized theimportance of sustainability for future prosperity, defining it as develop-ment that “meets the needs of the present without compromising theability of future generations to meet their own needs” (WorldCommission on Environment and Development, 1987, p. 8). There isgrowing interest from firms in learning more about sustainability,which has driven the formation of a great number of organizationslike the Sustainability Consortium that support such initiatives andprovide useful information. MIT Sloan Management Review also has adedicated section with news and advice on sustainability. In addition,the Global Reporting Initiative assists companies in reporting their ac-tivities towards sustainability and keeps records of these reports in itsSustainability Disclosure Database.

Despite the fact that many companies from diverse industries –

like Nokia, Caterpillar, Johnson & Johnson, Walmart, and Starbucks –

recognize and embrace the concept of sustainability in their business,there are plenty of social and environmental issues that still need tobe addressed. The following statistics were reported in a recent Finan-cial Express article: The richest 1% of adults worldwide control 4% ofthe world's assets, while the bottom 50% access only 2% of the assets(Malhotra, 2012). It is important for companies to recognize that theiractions or inactions impact the future prospects and that sustainabilityis a passport to a secure future. Bridging the rich-poor gap is a business

for the opportunity to work one manuscript.1 832 201 8213.lopoulou1@gsu.edu

ghts reserved.

odoulopoulou, A., Sustainabiliindmarman.2013.06.008

imperative, and corporations and individuals who are in a position tohelp should do their share. Contrary to social concerns, environmentalissues have been addressed more extensively, but the results are stillpoor. For example, although products have increasingly become moreenvironmentally friendly and recyclable, the actual recycling that occursis minimal. As reported recently in the Washington Post, the plasticbeing recycled in the United States amounts to only 7% of total plasticused (Palmer, 2013).

Operating in competitive markets requires businesses to developcontemporary, modern and state-of-the-art capabilities using enor-mous amounts of energy, infrastructure and resources. However, over-display of infrastructure, excess use of natural resources, or con-sumption of energy by any business raises sustainability concerns inthe minds of researchers and policy makers. While businesses rational-ize their excessive use of resources based on survival reasons, carefulattention is needed to balance consumption and avoid crossing theline to exploitation. “Organizations that are driven primarily by profitmaximization will… eventually suffocate to death. Profit and purposeneed to go hand in hand for an organization's survival and prosperity”(Govindarajan & Srinivas, 2012, p. 2). According to the authors, firmsshould have a purpose to contribute value to the society, and therefore,shift from shareholder capitalism to responsible capitalism. Embracingthis responsibility to the society and the environment, in addition tothe shareholders, is at the core of sustainability.

Differences in the needs of businesses and individuals require man-agers to focus on the core concepts of sustainability and researchers toconsider the multidimensional nature of the field. Programs such asThe World Bank's Millennium Development Goals enable managers toidentify future business objectives while considering policy-related is-sues such as sustainability and influencing the quality of life of stake-holders. The anecdotes present the managerial perspective of marketconditions and customer requirements, but their recommendations

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lack academic rigor. This area of research is still gainingmomentum andpractitioners are looking at academics for strategic directions tomanagesustainability while considering businesses on a global slant. As firmsrace towards sustainability, the concerted efforts of operations andmar-keting can provide substantial benefits and secure the external supportof customers and other stakeholders. Therefore, we propose that suchsupport and increased firm performance can be achieved by integratingthe sustainability-geared actions of operations with a firm's brandingefforts, focusing in the business-to-business (B2B) context.

2. Current research on sustainability

Sustainability has been extensively researched by academics frommany business disciplines, including management, marketing, andoperations. The multidisciplinary nature of scientifically establishedknowledge on sustainability has generated a number of differentterms to describe someor all of its components, including sustainable de-velopment, triple bottom line, green business, environmental manage-ment, corporate social responsibility (CSR), and corporate citizenship.Responding to the need for sustainable practices, the International Orga-nization for Standardization has developed the ISO 14000 family, a groupof standards that provides guidance regarding environmental manage-ment (International Organization for Standardization, 2004). ISO 26000was also introduced in 2010 with an aim of offering guidance to compa-nies that want to implement social responsibility initiatives. It describesthemain elements of social responsibility, which include: organizationalgovernance, human rights, labor practices, the environment, fair operat-ing practices, consumer issues, and community involvement and devel-opment (International Organization for Standardization, 2010). Thesecomponents can be summarized as pertaining to the society and theenvironment. The theory of triple bottom line includes an additionalfocus on the economy, in order to emphasize the financial benefits thatresult from sustainability. According to the triple bottom line, companiesshould conduct their business in a way that respects the environmentand the society, while being profitable (Elkington, 1998; Savitz &Weber, 2006). In this paper, we refer to sustainability in accordance tothe theory of triple bottom line, with social, environmental, and econom-ic dimensions.

A large body of literature revolves around the environmental aspectof sustainability, as it relates to corporate environmental policies, i.e.,actions of businesses to mitigate their negative influence on the envi-ronment, and the motivations behind them. For example, accordingto González-Benito and González-Benito (2005), a transformation to-wards environmental sustainability can be done by implementing prac-tices in three areas of an organization: planning and organizationalpractices in the management area, operational practices in the opera-tions area, and communicational practices in the marketing area. Theyshow that the areas of environmental transformation have differentdeterminants: ethical, competitive (operational or commercial), and re-lational motivations. Alternatively, Bansal and Roth (2000) identifiedthree reasons why firms implement environmental initiatives as a re-sponse to ecological concerns, namely competitiveness, legitimation,and ecological responsibility.

Researchers have also studied the impact of environmental sustain-ability on firm performance. Research by Russo and Fouts (1997) re-vealed that firms that exhibit high environmental performance enjoyhigher profitability, as expressed through their higher return on assets,and this effect is stronger for those operating in fast-growing industries.Furthermore, Bansal and Clelland (2004) found that firms that havehigh environmental legitimacy – that is, firms that meet stakeholders'expectations for corporate environmental performance – show lessunsystematic risk, compared to firmswith low environmental legitima-cy. In addition, the latter firms can actually lower this risk component bypublicly expressing their environmental commitment, as supported bytheir findings about firms that operate in industries with high environ-mental impact (like chemical and paper industries). Porter and Van der

Please cite this article as: Kumar, V., & Christodoulopoulou, A., Sustainabiliagement (2013), http://dx.doi.org/10.1016/j.indmarman.2013.06.008

Linde (1995) explain how environmental practices can be very benefi-cial for firms, as they enhance resource productivity and foster innova-tion, and thus, lead to improved competitiveness. Furthermore,stakeholders have been shown to play an important role in shapingsustainability actions of firms. The characteristics and environmentalattitudes of communities where firms operate have an impact on envi-ronmental performance (Kassinis & Vafeas, 2006), while pressures byexternal stakeholders can even affect environmental policy decisionsabout global standardization in multinational companies (Christmann,2004). In addition, different environmental commitment levels – termedas proactive, accommodative, defensive, and reactive – are associatedwith different relative importance of stakeholder groups (Henriques &Sadorsky, 1999).

Further, extant research has focused on corporate social responsibil-ity (CSR), which closely relates to sustainability, but to a greater extentto the social component than to the environmental component. Carroll(1979) described CSR as the economic, legal, ethical, and discretionaryduty of companies towards society. He also introduced a corporatesocial performance model that incorporates defining CSR, identifyingthe related issues, and specifying a response. Another relevant theory,corporate citizenship, views the social involvement of companies in amore holistic way, conceptualized as “the role of the corporation in ad-ministering citizenship rights for individuals” (Matten & Crane, 2005,p. 173). CSR practices are becoming commonplace, even for small andmedium enterprises (Hsu & Cheng, 2012), as they are associated withpositive outcomes. For example, CSR has an impact on multiple stake-holder relationships, as research has shown that CSR initiatives are re-lated with positive company associations and increased willingness topurchase from, work for, and invest in the firm (Sen, Bhattacharya, &Korschun, 2006). CSR is also related to better financial results; for exam-ple, it was found to be positively related to market capitalization value(Pätäri et al., 2012). In addition, corporate social performance (CSP),which is the performance of a company in CSR initiatives relative tothe competition, has a negative effect on firm-idiosyncratic risk (Luo &Bhattacharya, 2009). Furthermore, a recent study found that the qualityof CSR reporting is negatively related to the cost of equity capital(Reverte, 2012), especially for companies operating in industries thatface environmental issues. These results indicate that both superiorCSP and comprehensive disclosure of CSR activities can further boostfirm value, by reducing the risk associated with the firm as assessedby the investor community.

2.1. Sustainability and operations

Extantwork on sustainability in operations is aimed at including en-vironmental practices as a part of the overall operations strategy, to bet-ter address issues like pollution control, waste minimization, reusing,and recycling (Angell & Klassen, 1999). Research has shown thatreporting of environmental management practices (recycling, wastereduction, remanufacturing, environmental design, and surveillanceof the markets) has a positive impact on firm performance, mainlythrough improving product and process innovation indicators(Montabon, Sroufe, & Narasimhan, 2007). Further, Jacobs, Singhal, andSubramanian (2010) find evidence that environmental performance isassociated with firm value. Specifically, they find that the stock marketexhibits varied reactions following specific announcements of Corpo-rate Environmental Initiatives, which are self-reported, and Environ-mental Awards and Certifications, which are granted by third parties.While, increases in firm value result from environmental philanthropyannouncements and ISO 14001 certifications, there are decreases infirm value when firms publicize their actions pertaining to voluntaryemission reductions. Sarkis, Gonzalez-Torre, and Adenso-Diaz (2010)found that there is a relationship between stakeholder pressures andenvironmental practices, and it ismediated by employee environmentaltraining, as seen in the context of environmentally oriented reverse lo-gistics practices in the automotive industry.

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Green supply chain management (GSCM) has also received con-siderable attention in the operations literature. It has been shownthat GSCM practices have a positive influence on both environmentaland economic performance expectations of managers of Chinesemanufacturing and processing firms (Zhu & Sarkis, 2004). Moreover,Rao and Holt (2005) find evidence that green supply chains are posi-tively related to both competitiveness and economic performance.Their concept of GSCM includes environmental initiatives in “inboundlogistics, production or the internal supply chain, outbound logistics,and reverse logistics,” in a firm's interactions with materials suppliers,service contractors, vendors, distributors, and end users (Rao & Holt,2005, p. 899). Further evidence of the positive impact of GSCMactivities(green purchase, investment recovery, and customer cooperation) onperformance was evidenced by Chan, He, Chan, and Wang (2012).The authors found that this effect is driven by internal and externalenvironmental orientation, which highlights the role of managerialsupport in fostering pro-environmental corporate culture. Greener sup-ply chain operations can also be supported by incorporating sustainabil-ity criteria into inventory models for reducing carbon emissions(Bouchery, Ghaffari, Jemai, & Dallery, 2012), and into life-cycle assess-ment tools, used in optimization of closed-loop supply chains, that canguide decision making while considering environmental, social, andeconomic concerns (Matos & Hall, 2007).

2.2. Sustainability and marketing

Marketing research on sustainability has largely been related to ei-ther the environmental or the social aspect of sustainability, which issometimes referred to as green marketing and social or cause-relatedmarketing, respectively. In addition to sustainable practices in general,marketing literature has also focused on sustainable products, whichinclude environmentally friendly or green products, and socially con-scious or ethical products. A list of organizational theories that maybe applied in marketing sustainability research was proposed byConnelly, Ketchen, and Slater (2011), which include transaction costeconomics, agency theory, institutional theory, population ecology, re-source dependence theory, the resource-based view of the firm, upperechelons theory, social network theory, and signaling theory.

An extensive review of sustainability-related issues and researchstreams in marketing is provided by Chabowski, Mena, and Gonzalez-Padron (2011). They develop a typology of sustainability capabilitiesthat categorizes such resources based on their focus (internal vs. exter-nal), emphasis (social vs. environmental), and intent (discretionary,ethical, or legal), and suggest that sustainability initiatives can have aninfluence on marketing assets. Indeed, research has indicated that CSRcan have an influence on consumer responses and firm value. Througha series of experiments, Brown and Dacin (1997) found that CSR associ-ations have an influence on the evaluation of new products. Moreover, astudy by Luo and Bhattacharya (2006) on thefinancial impact of CSR re-vealed that CSR initiatives have a positive effect on customer satisfactionand, through it, on firm market value. In addition, they found thatreturns on CSR depend on product quality (Luo & Bhattacharya, 2006).In subsequent research, they further showed that higher CSP reducesfirm risk, especially for firms with higher investments in advertising(Luo & Bhattacharya, 2009).

Another camp of researchers has discussed the role of marketingin addressing sustainability through the environmental dimension(Cronin, Smith, Gleim, Ramirez, & Martinez, 2011; Sharma, Iyer,Mehrotra, & Krishnan, 2010), and through challenges such as responsi-ble consumption (Huang & Rust, 2011; Sheth, Sethia, & Srinivas, 2011).Recognizing the need for restructuring marketing in response toenvironmental concerns, Kotler (2011) predicts that the number of con-sumers preferring to purchase from companies that care about sustain-ability is growing.We expect that B2Bfirms are also subject to pressuresfrom their distributors and customers, driven by this trend in consumerpreferences.

Please cite this article as: Kumar, V., & Christodoulopoulou, A., Sustainabiliagement (2013), http://dx.doi.org/10.1016/j.indmarman.2013.06.008

Consumer environmental and social concerns are posited to drivepreference for sustainable products and companies. In contrast to favor-able consumer preferences for sustainable products, another stream ofresearch suggests that their perceptions about them are not equallypositive, which is usually due to certain trade-offs (Barone, Miyazaki,& Taylor, 2000; Olson, 2013). Lin and Chang (2012) found that environ-mentally friendly products are perceived as less effective than regularproducts, and this leads to their increased usage as a means to compen-sate for their perceived lack in efficacy. The effect is stronger for envi-ronmentally conscious consumers, but it disappears when the greenproduct is supported by a credible endorsement. Similar perceptionsseem to hold for ethical products. Specifically, ethical products are notpreferred when consumers place a higher importance in strength-related attributes, but this effect can be countered by explicitly promot-ing the product's effectiveness (Luchs, Naylor, Irwin, & Raghunathan,2010). In addition, promoting a product through its ethical attributescan be beneficial in situations when self-accountability is entailed, asevidenced in research by Peloza, White, and Shang (2013). Their find-ings demonstrate how ethical benefits can enhance product preferencein situations where buyers are accountable for their purchases, such asin public settings. We expect that this finding should hold to a great ex-tent in organizational buying too.

3. Current research on branding for business-to-business firms

The dynamic environment of industrial markets indicates that apowerful brand, when supported by smooth operations, can drive suc-cess in competitive markets. Research by Mudambi (2002) showedthat branding may not be important for all industrial purchases, but itcan be more than traditionally credited for. Specifically, branding wasfound to be important for buyers who are large and complex, andmake purchases of high importance and risk. Further research in thearea indicates that B2B firms can benefit more from branding.Bendixen, Bukasa, and Abratt (2004) found that, although brand is con-sidered less important than delivery, price, and technology, it still has arelative importance of 16%, which is a considerable amount. In addition,the authors found that the presence of a strong brand can yield a pricepremium, positively affect new product introductions, and boost will-ingness to recommend among B2B customers. The relationship be-tween price premium and brand image was also studied by Persson(2010), who investigated brand image dimensions (like service andcompany associations) as drivers of price premium.

In a related study, Backhaus, Steiner, and Lügger (2011) found thatbrand relevance, or the relative importance of the brand in thedecision-making process, is positively related to the perceived risk ofthe purchase and information search costs in B2B settings. In addition,their study, which spanned across 20 industries, showed that brand rel-evance is slightly higher when the exchange requires high specific in-vestments from the buyer. Therefore, industrial customers place moreimportance in brands in order to reduce the information costs andrisks associated with the purchase, especially in important situationsthat require higher dedicated investments, and they are willing to paya premium for it.

4. Integration of sustainability and branding

4.1. The need for integration

Being characterized as the new business megatrend (Lubin & Esty,2010), sustainability is clearly a matter of strategic importance. There-fore, implementing sustainability practices should be guided by a com-prehensive plan in the form of a sustainability strategy. This strategy isthe response of the firm to sustainability issues and a part of the compa-ny strategy. The strategy, structure, and performance (SSP) model canbe applied to show how a sustainability strategy can lead to desirableoutcomes. Specifically, according to the SSP paradigm, strategy should

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be supported by a suitable structure so as to drive performance(Chandler, 1962). For example, Miller (1988) showed how differentcompetitive strategies are related to specific organizational structuresand environment conditions, especially for companies that performwell. Chandler (1962) explains how changes in the environment of afirm create the need for changes in strategy which, in turn, requireschanges in the firm structure. Consequently, in order to respond to thesustainability megatrend, firms need to include sustainability in theirstrategy and support this strategy with an appropriate, improved struc-ture; thus, they can reap the benefits of superior performance.

Developing a sustainability-capable structure requires making radi-cal changes across all of the departments of a firm, including research-and-development, production, finance, and marketing (Kotler, 2011).Firms need to coordinate the implementation of sustainable practicesacross these units in order to trigger synergistic effects and, thus, maxi-mize returns. Moreover, they can gain a competitive advantage by pub-lishing information about these practices, regardless of whether theyinvolve activities implemented in the firm's operations (production,supply chain, etc.) or activities performed outside of the firm (commu-nity, stakeholder groups, etc.). Communicating these activities and theiroutcomes to stakeholders is a function of marketing, whether it is real-ized through sustainability or CSR reports (Nikolaeva & Bicho, 2011) orother communication devices. Therefore, it is suitable to support a sus-tainability strategywith a structure established on the integration of op-erations and marketing.

Indeed, current research indicates that integrating operations withthe marketing activities of a company enables businesses to be, and beseen as, more sustainable (Sharma et al., 2010), although this is a com-plex issue for managers. One of the main reasons of this complexity forB2B firms regards the organizational objectives of intermediaries. Inother words, apart from managing the adaptation and standardizationof the marketing mix based on suppliers' functional requirements, in-termediaries need to consider their own rational requirements. Func-tional integration can facilitate this. Coordinating sustainable supplychain management and green marketing has been discussed by Liu,Kasturiratne, and Moizer (2012). In their proposed hub-and-spokemodel, marketing and supply chain are integrated though six points,called the 6P's, which include “product, promotion, planning, process,people, and project” (Liu et al., 2012, p. 583).

Still, businesses are struggling to clearly understand ways tooperationalize the integration of marketing and operations for becom-ing sustainable. We propose that such integration can be achievedthrough branding. Various research studies that reflect on the operationof brands in competitive industrial markets are available, includingthose previously cited. However, there is very little research that iden-tifies and discusses this gap in academic research and managerialpractices from the perspective of business sustainability. Associating sus-tainability to the brand is how marketing can support and promotesustainability-oriented activities in operations, as illustrated in the frame-work in Fig. 1 and further explained in the following section. Table 1 alsoprovides a brief overview of past literature related to our framework.

Sustainabilitystrategy

Sustainability structure

Sustainabilityperformance

Operations

Marketing

Branding

Fig. 1. Integration for sustainability— framework.

Please cite this article as: Kumar, V., & Christodoulopoulou, A., Sustainabiliagement (2013), http://dx.doi.org/10.1016/j.indmarman.2013.06.008

4.2. Integration through branding

Integrating sustainability into branding can enable firms to appeal toclients that are concerned about sustainability, and thus, grant a com-petitive advantage. Research shows that CSR initiatives influence newproduct evaluation through their impact on company evaluations(Brown & Dacin, 1997). We believe that this should impact the corpo-rate brand as well. Similarly, sustainability initiatives, which mayinclude social or environmental practices, can have an impact on thecorporate brand by creating sustainability associations. Such associa-tions are typically related to values of responsibility, social and environ-mental stewardship, and morality. Therefore, industrial firms can havea better appeal to sustainability-oriented customers by implementingsustainability practices in their operations, communicating these prac-tices to their customers, and transforming them to associations that be-come a part of their brand image.

Ensuring that sustainability becomes an integral part of the brandcan be realized through several marketing applications. For example,it may involve communication of sustainability efforts and their out-comes in advertisements, product packaging, and other promotionalmaterial. Also, these efforts may be translated into sustainability attri-butes of products, when possible. These tactics should certainly becomplemented with disclosure of sustainability efforts, including theiroutcomes, in both company reports and dedicated sustainability re-ports. Through this process, firms can create sustainability-orientedbrands and enjoy the recognition that follows them. Indeed, sustainablebrands are increasingly being acknowledged. For example, Interbrandrecently published its second annual report of the Best Global GreenBrands. These rankings feature the top brands based on their environ-mental sustainability performance and the associated consumer percep-tions. Such advantages further enhance the importance of employing thebrand to support the sustainability efforts of the firm.

As demonstrated earlier, research shows how the sustainabilitypractices adopted by a company for managing its operations becomedeterminants of its strength, being positively related to indicators ofcompetitiveness and performance (Bansal & Clelland, 2004; Jacobset al., 2010; Porter & Van der Linde, 1995; Rao & Holt, 2005; Sen et al.,2006). Firms can enjoy additional advantages by enabling their cus-tomers to understand these sustainability practices as brand-relatedvalues that have an influence on their lives. Brands should assess theecological and social requirements of customers and other stakeholders,and communicate themethods they adopt to create value through theireffort to create a sustainable environment for people to live in. Interme-diaries of brands that operate through industrial markets also engagethemselves in co-creation and delivery of brand value to consumers,by participating in sustainable practices adopted by the company.

4.3. Branding to the skeptics

It is clear that most companies are starting to appreciate the value offocusing on sustainability and have increasingly embraced it. Con-sumers, on the other hand, are not always interested in such initiatives.They may report caring about the environment, but they do not use in-formation regarding sustainability policies of companies in their actualpurchase behavior regularly because they perceive them as irrelevantto them (Stafford & Hartman, 2013). This notion can be extended to in-dustrial customers as well; that is, sustainable actions of suppliers arenot always perceived as having an impact on business customers' andintermediaries' bottom line and sustainability efforts. This can partly ex-plainwhy green practices in B2B supply chains are not aswidespread asin B2C supply chains (Hoejmose, Brammer, & Millington, 2012).

Companies operating in B2B settings need to transform this indiffer-ence of their clients into positive attitudes toward sustainability andpromote socially responsible organizational buying. This purchasing be-havior is defined as one that “attempts to take into account the publicconsequences of organizational buying or bring about positive social

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Identify Sustainability Issues

Table 1Integration for sustainability — past literature.

Framework principles Relevant literature Key findings

Strategy, Structure, andPerformance (SSP) paradigm

Chandler (1962) When changes in strategy are required, changes in structure are needed in order to be profitable.Lenz (1980) Environment–strategy–structure combinations are different between high vs. low performing firms.Miller (1987) Organizational structure and formation of strategy are dependent and complimentary, and they contribute

to performance.Wasserman (2008) The SSP paradigm can still be applied and explain firm performance in contemporary business settings.

Sustainability in operations Angell and Klassen (1999) Overview of the research in environmental practices in operationsmanagement and proposal of a researchagenda.

Dekker, Bloemhof, andMallidis (2012) Comprehensive review of operations research focused on the area of green logistics.Tang and Zhou (2012) Overview and classification of recent sustainability research in operations, with a focus on quantitative

models studies.Sustainability in marketing Achrol and Kotler (2012) The sustainable marketing concept adopts a “biocentric” approach to balance consumption and resources

throughout the product life cycle.Chabowski et al. (2011) Overview and classification of sustainability research in marketing and proposal of a research agenda.Hunt (2011) Sustainable marketing from the perspective of economic growth and its intersection with resource-

advantage theory.Menon and Menon (1997) Marketing can address entrepreneurship and environmental and social issues through an enviropreneurial

marketing strategy.Sustainability in branding Ellen et al. (2006) CSR efforts that fit with the company's activities are perceived more positively by consumers, and lead to

higher purchase intentions.Henderson and Arora (2010) Social cause programs enhance brand preference, especially in corporate brand vs. house-of-brands settings.

5V. Kumar, A. Christodoulopoulou / Industrial Marketing Management xxx (2013) xxx–xxx

change through organizational buying behavior” (Drumwright, 1994,p. 1). Sustainable organizational buying is being implemented slowly,with public procurement being one of few such occasions, as evidencedby Oruezabala and Rico (2012) in a public hospital setting. Promotionefforts that publicize manufacturers' sustainability activities can helpbuild a sustainability-oriented brand. In turn, this can enable thefocal firm to be a part of their clients' socially responsible organizationalbuying.

Applying the suggestions by Stafford and Hartman (2013) on popu-larizing green activities, marketing can also focus on positioningsustainability-implied characteristics into valued benefits, which mayeven be unrelated to environmental or social concerns. Some examplesof such benefits include: “cost and energy savings, health and safety,better performance, status and prestige, convenience, bundling oradding consumer value” (Stafford & Hartman, 2013, p. 32). Combiningsuch associations with sustainability associations has the potential tofurther improve the brand.

Strategy

Form Sustainability Strategy

Operation

Apply

Measure

Sustainability Initiatives

Sustainability Outcomes

Marketing Communicate Sustainability Initiatives and Outcomes

Branding

Create

Build

Brand Sustainability Associations

Brand Value

Firm Performance

Fig. 2. Integration for sustainability — implementation.

4.4. Reporting measurable sustainability outcomes

Companies should respect and preserve the communities, cultures,and environments in which they operate through sustainability actions.In addition, they should publicize these actions, as research suggeststhat reporting environmental activities (Jacobs et al., 2010; Montabonet al., 2007) and CSR activities (Reverte, 2012) improves firm perfor-mance. When announcing these activities, companies traditionally re-port the amount of money they have devoted towards improving acause. However, we suggest that it is better to report the specific resultsof their sustainability endeavors, instead of the monetary investment.For example, in one of the states in India, 65% of the schools do nothave electricity, 95% of the schools have shared toilets for boys andgirls, and only 36% of the toilets have water (Pandey, 2012). A companythat has contributed in improving these conditions should communi-cate its actions by focusing on the outcomes, using messages like“now X schools have electricity,” “we built X toilets in local schools,”or “we provided water in toilets that serve X students.” Focusing onmeasurable and relatable outcomes can convert the sustainabilityactivities of a firm into values that are more familiar and relevant forstakeholders. Thus, reporting sustainability outcomes can provide addi-tional value to the brand. Incentivizing outcomes rather than just ex-penditures is a key to driving business innovations for a societal valuecreation.

Please cite this article as: Kumar, V., & Christodoulopoulou, A., Sustainabiliagement (2013), http://dx.doi.org/10.1016/j.indmarman.2013.06.008

4.5. Framework and implementation guidelines

In order to implement our framework of integration for sustainabil-ity, we propose following the process outlined in Fig. 2. Table 2 also in-dicates some of the past literature that has discussed these elementsand how they are related that can provide further recommendations.We explain how to apply this implementation in the following steps.

Step 1 The first step includes assessing the issues the firm plans to ad-dress through its sustainability actions and creating a sustain-ability strategy based on them. Both the industry in which thecompany operates and the social and environmental concernsof all stakeholders should be taken into consideration when

ty and branding: An integrated perspective, Industrial Marketing Man-

Table 2Integration for sustainability implementation — past literature.

Implementation steps Relevant literature Key findings

Sustainability strategy functions(identifying issues)

Henriques and Sadorsky (1999) The intensity and nature of environmental practices undertaken by firms is associated with therelative importance of their stakeholders.

Kassinis and Vafeas (2006) Environmental performance is influenced by the characteristics and environmental attitudes of thecommunities where firms operate.

Zimmer, Stafford, and Stafford (1994) A summary and typology of consumer environmental concerns that can facilitate the formation ofgreen strategies.

Sustainability strategy functions(forming strategy)

Cronin et al. (2011) Firms can follow one of the following green strategies: green innovation, green alliances, and greeningthe organization.

Lubin and Esty (2010) Forming a sustainability strategy is one of the five critical areas that firms need to address so as tosucceed in the sustainability megatrend.

Sustainability operations functions(applying initiatives)

Beard et al. (2011) Sustainability initiatives may be applied to many areas in a firm, as illustrated by some successfulcompany examples.

Merad, Dechy, Serir, Grabisch,and Marcel (2013)

Selecting the optimal sustainability initiatives for a firm can be facilitated through multi-criteriadecision aid methodology.

Unruh (2008) The Earth's biosphere is a model for sustainable operations, providing three simple rules to guidesustainability implementation.

Sustainability operations functions(measuring outcomes)

Keeble, Topiol, and Berkeley (2003) Measuring sustainability performance may be facilitated through the use of specialized indicators.Montabon et al. (2007) Measuring environmental performance is not uniform, and as such, it is challenging; MEPI project.

Sustainability marketing functions(communication)

Maignan and Ferrell (2004) Marketing communications are important in enhancing the positive effects of CSR efforts onstakeholder-firm identification.

Nikolaeva and Bicho (2011) Voluntary reporting of CSR activities is influenced by institutional pressures and communicators ofcorporate identity.

Pomering and Dolnicar (2009) Firms should educate their customers about the CSR issues they are tackling, as consumer awarenessof CSR issues and initiatives are low.

Sustainability branding functions(creating brand associations)

Brown and Dacin (1997) CSR initiatives create corporate CSR associations that can influence new product evaluation throughtheir impact on company evaluation.

Ellen et al. (2006) CSR efforts that fit with the company's overall activities lead to the formation of desirable corporateassociations.

Sustainability branding functions(building brand value)

Henderson and Arora (2010) Social cause programs yield increased ROI compared to traditional promotions, especially in corporatebrand vs. house-of-brands settings.

Simmons and Becker-Olsen (2006) Social sponsorships that align with a firm's current associations have the potential to reinforce itsbrand positioning and equity.

Brand value and firm performance Madden, Fehle, and Fournier (2006) High-value brands create shareholder value through increased financial returns and with lower risk.Simon and Sullivan (1993) Brand equity accounts for a large portion of the market value of many firms.Srivastava, Shervani, and Fahey (1998) Brand value, as a market-based asset, can increase shareholder value through its positive influence on

cash flows.Sustainability initiatives and firmperformance

Chan et al. (2012) GSCM activities have a positive impact on firm performance, especially for firms operating in highlycompetitive markets.

Luo and Bhattacharya (2006) CSR efforts have a positive effect on customer satisfaction and, through it, on firm market value.Montabon et al. (2007) Reporting of environmentalmanagement practices has a positive impact on indicators of product and

process innovation.

6 V. Kumar, A. Christodoulopoulou / Industrial Marketing Management xxx (2013) xxx–xxx

defining these issues. It is important to address issues that arerelevant to all stakeholder groups – including customers, em-ployees, investors, suppliers, and communities – in order to betruly market-focused (Hult, 2011; Smith, Drumwright, &Gentile, 2010). After obtaining this information, managers canform a strategy that outlines the principles around which theirsustainability practices should be centered. Table 3 offers someexamples of sustainability principles and relevant literature.

Step 2 As the subsequent step, firmsneed to plan, implement, andmea-sure the results of their sustainability actions. First, specific envi-ronmental and social initiatives need to be employed. Forcompanies in B2B settings, sustainability can be implementedthrough various practices, both in their operations and as sepa-rate activities. Some examples that include sustainability in op-erations and literature that has examined them are listed inTable 4. This list is not exhaustive and new business practicesthat are geared towards sustainability are constantly invented.Potential activities should be evaluated based on their integratedviability and impact regarding operations, marketing, and sus-tainability. Thus, selecting themost appropriate practices to sup-port sustainability should consider their total impact to the firm.For example, research has shown that CSR efforts that fit withthe firm's overall activities lead to higher purchase intentions(Ellen, Webb, & Mohr, 2006), while social sponsorships that donot align with a firm's current associations dilute its positioning(Simmons & Becker-Olsen, 2006). Therefore, all sustainability

Please cite this article as: Kumar, V., & Christodoulopoulou, A., Sustainabiliagement (2013), http://dx.doi.org/10.1016/j.indmarman.2013.06.008

efforts should be aligned with the firm's activities in order to re-inforce current and desirable corporate associations. Next, man-agers should measure the outcomes of the sustainabilityinitiatives they apply. Besides providing a record to keep trackof these actions, this information can be used for reporting andfacilitate the function of the brand, as outlined in the followingstep.

Step 3 The final step focuses on communication and managing thebrand in order to connect the sustainability strategy of thefirm to superior performance. First, research has shown that“consumers' personal support of a CSR domain appears to be akey determinant of their sensitivity to a company's CSR efforts”(Sen & Bhattacharya, 2001, p. 238). This implies that marketersshould identify the sustainability outcomes that are relevant tostakeholders, based on their social and environmental concerns.This information should ideally be at their disposal in the firststep of this framework, as it is useful for guiding the sustainabil-ity strategy formation. After the important sustainability prac-tices and outcomes are specified, they need to be consistentlyreported in all communications, such as company reports, spe-cial sustainability and CSR reports, advertisements, productpackaging, etc. Thus, customers and other stakeholders can beinformed about the sustainability outcomes of the firm and con-nect them to the brand, thereby creating brand associations ofsustainability, responsibility, and consideration. These associa-tions have the potential to enhance the brand image and build

ty and branding: An integrated perspective, Industrial Marketing Man-

Table 4Sustainability practices for B2B firms — past literature.

Sustainability practices Relevant literature Key findings

Adopting a green supply chain Hoejmose et al. (2012) Adopting GSCM is not as common in B2B as in B2C supply chains, as it requires greaterpartner trust and top management support.

Zhu and Sarkis (2004) Implementing GSCM has a positive influence on both environmental and economicperformance expectations of managers.

Advocacy of green products for driving demand Lin and Chang (2012) Supporting environmentally friendly productswith a credible endorsement reduces theirperceived lack in effectiveness.

Stafford and Hartman (2013) Green characteristics should be positioned as valued benefits, which may even beunrelated to sustainability, so as to appeal to consumers.

Participation of B2B customers in sustainabilityinitiatives — life cycle management

Dekker et al. (2012) The impact of products on the environment throughout their life cycle involves theirtransportation and storage as well.

Matos and Hall (2007) Incorporating sustainability criteria into life cycle assessment for optimization of closed-loop supply chains, can aid decision making.

Participation of B2B customers in sustainabilityinitiatives — value chain management

Chouinard, Ellison, and Ridgeway (2011) Developing value chain indices in the supply chain can help lower the impact of productsthroughout their life cycle.

Hartman and Stafford (1998) “Enviropreneurial” value chain strategies can be successfully implemented throughgreen alliances.

Collaborative efforts for optimum usageof resources

Cheng and Sheu (2012) The desire to develop and maintain relationships with green supply chain partners ispositively related with collaborative strategy quality.

Gold, Seuring, and Beske (2010) Sustainable supply chains have the potential to grant a competitive advantage bydeveloping inter-firm resources.

Innovation using less resources Martin and Kemper (2012) Solving the environmental crisis requires both restraint and innovation.Porter and Van der Linde (1995) Innovation through enhanced resource productivity can improve competitiveness while

protecting the environment.Sharma and Iyer (2012) Resource-constrained product development reduces the impact of the supply chain

while contributing to green marketing efforts.Sustainable product design Chen, Zhu, Yu, and Noori (2012) Evaluating sustainable product designs through Data Envelopment Analysis can reduce

trade-offs related to environmental attributes.Dangelico and Pujari (2010) Developing green products can be achieved through energy minimization, materials

reduction, and/or pollution prevention.Remanufacturing and recycling Sarkis (2001) Description of recycling, remanufacturing and reuse practice examples and required

manufacturing capabilities.Sharma et al. (2010) The role of marketing in supporting recycling, remanufacturing, and build-to-order

manufacturing sustainability strategies.Risk management through engagementand reporting

Bansal and Clelland (2004) Firms that report environmental performance andmeet stakeholders' expectations showless unsystematic risk.

Luo and Bhattacharya (2009) Corporate social performance has a negative effect on firm risk, especially for firms withhigher investments in advertising.

Reverte (2012) The quality of CSR reporting is negatively associated to the cost of equity capital,especially in industries with environmental issues.

Efficient and eco-friendly transportationnetworks

Dekker et al. (2012) Comprehensive review focused on research in green logistics, which also involves eco-friendly transportation.

Table 3Sustainability principles — past literature.

Sustainability principles Relevant literature Key findings

Treating employees well Beard et al. (2011) Incorporating labor relations practices as part of a sustainability strategy is a valuable endeavor, as showcased bySouthwest Airlines.

Berger, Cunningham, andDrumwright (2006)

Employees of firms that form social alliances identify more closely with their employers and develop positivefeelings.

Preserving the environment Hart (1995) The natural-resource-based view of the firm shows how environmental commitment can yield a competitiveadvantage.

Kotler (2011) Firms should change their marketing strategies and practices in order to respond to the environmental andsustainability issues.

Shrivastava (1995) Companies should embrace sustainability to address the environmental problems that have resulted from theirown activities.

Supporting philanthropy Porter and Kramer (2002) Focused and planned strategic philanthropy can grant a competitive advantage, by improving the firm'scompetitive context.

Sen et al. (2006) Corporate philanthropy efforts are related with positive company associations for customers, employees andinvestors of the firm.

Varadarajan and Menon (1988) Supporting philanthropy may be integrated with corporate performance through the use of cause-relatedmarketing programs.

Fostering human rights andwell-being

Huang and Rust (2011) Sustainability has the potential to improve consumers' well-being by balancing consumption and increasingcharitable aid to poor countries.

Sheth et al. (2011) Sustainability, as environmental, personal and economic well-being of the consumer, can result from exercisingmindful consumption.

Resolving societal andcommunity issues

Crittenden, Crittenden, Ferrell,Ferrell, and Pinney (2011)

Societal engagement enables firms to both “give back” to the society and enjoy a competitive advantage.

White and Lee (2009) The social dimension of sustainability can be addressed through operations, as shown in the case of designing asustainable city.

Respecting cultural differences Strizhakova and Coulter (2013) Global cultural identity moderates the effect of materialism on “green” tendencies of consumers in both emergingand developed markets.

7V. Kumar, A. Christodoulopoulou / Industrial Marketing Management xxx (2013) xxx–xxx

Please cite this article as: Kumar, V., & Christodoulopoulou, A., Sustainability and branding: An integrated perspective, Industrial Marketing Man-agement (2013), http://dx.doi.org/10.1016/j.indmarman.2013.06.008

8 V. Kumar, A. Christodoulopoulou / Industrial Marketing Management xxx (2013) xxx–xxx

brand value, as they are relevant to customers. It shouldbe noted that these branding efforts are pertinentmainly to cor-porate brands, as it is more feasible to translate sustainabilitypractices employed at a company-wide level into brand associ-ations of a corporate brand than into brand associations ofmanydifferent product brands. Still, this approach can be applied tocompanies with more diverse branding strategies, like house-of-brands, though the impact on brand value is expected to bequite lower, due to the lack of synergistic effects among thedifferent brands. Indeed, research in social cause donationprograms shows that the brand associations created by theseprograms in one product category carry over to other productcategories of the same corporate brand (Henderson & Arora,2010).

This framework illustrates how implementing sustainability prac-tices can improve firm performance through two different paths. First,some sustainability initiatives can provide direct benefits, when theyare applied to optimize operations and lower costs.Moreover, most sus-tainability practices and their outcomes can provide indirect benefits,when they are communicated to the company's stakeholders and,thus, enhance brand value.

5. Discussion and future research

Successful implementation of sustainability initiatives requires thatfirms set sustainability as a high priority goal. In other words, sustain-ability has to become part of the core mission of the company. Thisline of research has the potential to address the concerns of stake-holders and equip managers with tools to tackle their business require-ments and the sustainability challenges that are making our societiesand ecosystems vulnerable. We propose that managers can build theirbrands by explaining the impact of their sustainability actions for help-ing the planet and mankind. Therefore, firms should expect to generatevalue from implementing the sustainability framework suggested.Governments have a role to play as well, by offering differential in-centives to reward companies that exhibit exceptional sustainabilityperformance. Only then will sustainability “move from a realm of con-scientious philanthropy to one that is driven by a competitive valueproposition” (Malhotra, 2012, p. 2).

Operations, management, and marketing should continue to ad-vance the theories that discuss the contributions and criticality of theirdomains in managing a long-term business plan focused around sus-tainability. Apart from these domains, the use of new technologies inimplementation andmanagement of sustainability initiatives, while ad-hering to ethical issues in business practices, also needs attention. Theinability of current academic knowledge to satisfactorily explain thesereflectionspresents ample opportunities for future research. In addition,the proposed framework offers directions for future investigation, tounderstand how businesses can further develop while adhering to thetriple bottom line of people, planet, and profit. Specifically, future re-search should examine how different sustainability initiatives and out-comes succeed in creating sustainability associations. Furthermore,one of the avenues for future exploration includes determining themost effective communication formats andmedia for creating such sus-tainability associations. Additional research should investigate whethersustainability can be incorporated as another dimension of B2B brandpersonality, expanding the work of Herbst and Merz (2011) on the In-dustrial Brand Personality Scale. Moreover, researchers should explorehow different sustainability initiatives and outcomes affect brand equi-ty. Finally, future research should study the direct and indirect effect ofsustainability initiatives on firm performance, and assess the relativeimportance of a sustainability-oriented brand. Managerial practiceslook forward to using findings from the inquiries made by researchersto unwind the complexity of development and growth on the intersec-tion of the social, environmental, and economic aspects of business.

Please cite this article as: Kumar, V., & Christodoulopoulou, A., Sustainabiliagement (2013), http://dx.doi.org/10.1016/j.indmarman.2013.06.008

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V. Kumar (VK) is the Regents' Professor, Lenny Distinguished Chair Professor of Market-ing, Executive Director of the Center for Excellence in Brand & Customer Management,andDirector of the Ph.D. Program inMarketing at the J.Mack Robinson College of Businessof Georgia State University. He has been recognized with seven lifetime achievementawards inMarketing, the Paul D Converse Award, the Sheth Foundation/JM Long Term Im-pact Award, and the Gary L Lilien ISMS-MSI Practice Prize Award. He has published over200 articles and books in many scholarly journals in marketing including the HarvardBusiness Review, Sloan Management Review, Journal of Marketing, Journal of MarketingResearch, Marketing Science, Management Science and Operations Research. VK leadsthemarketing science to marketing practice initiative at the INFORMS Society for Market-ing Science and has worked with Global Fortune 1000 firms to maximize their profits. Fi-nally, VK has been chosen as a Legend inMarketing where Dr. Kumar's work is publishedin a 10 volume encyclopedia with commentaries from scholars worldwide.

Angeliki Christodoulopoulou is a Ph.D. candidate in Marketing at the Center for Excel-lence in Brand & Customer Management at the J. Mack Robinson College of Business ofGeorgia State University. She has earned an MSc (with distinction) in Marketing Manage-ment from the Rotterdam School of Management of Erasmus University Rotterdam and aBSc in Marketing and Communication from the Athens University of Economics and Busi-ness. Her current research interests include sustainability, customer referrals, and branding.

ty and branding: An integrated perspective, Industrial Marketing Man-