Keyword:

Green Marketing (GM), Green Image (GI), Green Satisfaction (GS), Green Loyalty (GL), Green Trust (GT), Sustainability (SU)

Citation Information:

AlQershi, N., Ali, G.A., Al-Rejal, H.A., Busenan, E.F., & Ahmad, A. (2021). Analyzing the relationship between firms’ green marketing and sustainability: Benchmarking malaysian manufacturing firms. Journal of Management Information and Decision Sciences, 24(S1), 1-8.

Introduction

Sustainability is now a major concern, and millennials are willing to pay more for products and services that are seen as sustainable or have a positive social impact (Dabija & Băbuț, 2019; Sogari et al., 2017; Hanks et al., 2008). Customers feel reassured when their products are free of artificial chemicals and are made from recyclable materials that do not harm the environment (Chaney et al., 2021; Oates, 2020; Alqershi et al., 2021; Font et al., 2017).

One of the most important factors in sustainability is green marketing, the process of promoting products or services based on their environmental benefits (Debruyne & Tackx, 2019). These products may be environmentally friendly in themselves or produced in an environmentally friendly manner (Chen et al., 2018).

Since the middle of the last century, the scientific community has begun to show increasing concern about pollution as a result of human practices (Jahan et al., 2019; Boisvenue & Running, 2006), such as industrial waste, logging, excessive consumption of energy sources, and other practices that harm nature (Singh & Singh, 2017; Zhang & Wen, 2008; World Health Organization, 1992). Scientific and technological progress have resulted in increasing warning of deterioration in the environment and the resulting climate change, with the reduction of green spaces, damage to the ozone layer, air pollution and melting icecaps (Patz et al., 2000; Shepardson et al., 2012; Nema, Nema & Roy, 2012; Masindi & Muedi, 2018; Manisalidis et al., 2020; Mensah, 2019). Concerted efforts are beginning to spread awareness of the risks to the environment and what we must do to preserve the planet we inhabit (Brown, 2013; Beck, 2009; Branche, et al., 2008; Porter, 1996).

Marketing is not immune to these efforts, with the term green marketing appearing in the 1980s, and commercial activities paying attention to ways in which to preserve the environment (Nistoreanu et al., 2020; Melovic et al., 2017; Charter, 2017; Delafrooz et al., 2014). This concept now refers to commercial, service and industrial companies that take into account limiting the harm to the environment resulting from their activities (Melovic et al., 2017).

Green marketing and awareness campaigns help customers make informed choices that are likely to contribute to environmental issues (Ottman, 2017; Rahbar & Wahid, 2011); this is a key asset, as conscientious customers care about the products they buy and use, and will therefore become more active in purchasing green products, resulting in increased sales (Chan, 2014; Vieregge et al., 2007; Meyer, 2001). In the green marketing tradition, organizations release eco-friendly products or create a corresponding environment around them by using eco-friendly packaging, making products recyclable and reusable, using green energy to produce products, designing products from recycled materials to reduce waste and choosing to sell locally to reduce transport energy (Singh, 2013; Morel & Kwakye, 2012). Large amounts of money and resources are now spent on advertising and promotion of green products (Charter, 2017; Cant, 2009), as green marketing also entails increasing consumers’ sensitivity to green products, in some cases using social networking sites to post profiles related to green marketing (Dangelico & Vocalelli, 2017; Ko et al., 2013; Sharma & Iyer, 2012; Cronin et al., 2011). Nevertheless, we focus on the fact that organizations still need to be made aware of green products, and motivated to produce them.

We argue that green marketing is an important factor in a firm’s sustainability, that is its own ability to continue and succeed. In addressing this research problem, we propose a new framework to model large Malaysian manufacturing firms’ sustainability, linking green marketing to sustainability. The literature explores this relationship in different contexts and industries, and many scholars (Ho et al., 2021; Chandran & Bhattacharya, 2019; D'Souza et al., 2015) have pointed out the importance of studying sustainability in relation to green marketing. The current paper contributes to the body of knowledge by exploring the relationships between green marketing dimensions (image, satisfaction, loyalty and trust) and the sustainability of these Malaysian firms. In summary, our study will attempt to answer the following question, in the context of a sample of large Malaysian manufacturing firms: is there a relationship between green marketing dimensions and firms’ sustainability?

Literature Review and Hypothesis Development

Green marketing and Sustainability

Green marketing can be seen as an expression of the requirements of social and ethical responsibility for marketing, which came to light as a response to the increasing environmental challenges in the new era (Dief & Font, 2010). This marketing approach coincides with the increasing global interest in protecting consumer rights, and the emergence of movements aimed at protecting the rights of people to live in an environmentally oriented organization in a safe environment (Finisterra do Paço et al., 2010; Charter, 2017). Green marketing revolves around the commitment of business organizations to deal with environmentally friendly goods, which are goods that are not harmful to society and the natural environment, and to carry out marketing activities within the framework of a strong commitment to environmental responsibility and within specific controls to ensure the preservation of the natural environment and not harm it (Menguc & Ozanne, 2005).

Indeed, green marketing is not limited to the promotion of products or services with environmental characteristics, but also includes product modification and changes in the manufacturing process, where it comes to taking a different perspective on marketing, taking into account the global consequences of environmental degradation (Dalton et al., 2010). Institutions and companies that rely on green marketing should take upon themselves their human and social responsibility towards the environment, so that they do everything they can to reduce damage to the environment and ensure that their industry is clean and environmentally friendly, whether they provide industrial products, services or raw materials for other industries (Polonsky, 2011; Smith, 2016).

A number of researchers have stressed the importance of green marketing. For example, Grimmer & Woolley, (2014) concluded that green marketing allows companies and institutions to reach new markets and categories of consumers who are environmentalists and who prefer to use environmentally friendly products. Mathur & Mathur, (2000) stated that green marketing gives organizations many competitive advantages thanks to the social responsibility that they adopt in preserving the environment. Liu, et al., (2012) found that organizations that focus on green marketing activities appear more reliable to customers and consumers, and build long-term loyalty relationships with their audience.

Previous studies have indicated several factors that affect organizations in terms of focusing on embracing green marketing, including prices. Dekhili & Achabou, (2013) believe that organizations see green products as high in price, but that consumers who compare the benefits of green products respond differently and are inclined to pay more attention to them. Another study concluded that organizations with a high level of concern about the environment will be more convinced of the value of green marketing (Ginsberg & Bloom, 2004).

Previous studies have explored the relationship between green marketing and sustainability, D'Souza, et al., (2015) for example finding a significant relationship. Ho, et al., (2021) demonstrated that green marketing is significantly linked with sustainability during the hospitality industry in the Covid-19 pandemic. Other studies confirmed a significant relationship between green marketing and performance, specifically in Europe (Fraj et al., 2011), and America (Zampese et al., 2016). However, this relationship has not been explored in Malaysia, so we propose the following hypotheses, as expressed in Figure 1:

H1a. There is a significant relationship between green image and sustainability in large manufacturing firms (LMFs) in Malaysia.

H1b. There is a significant relationship between green satisfaction and sustainability in LMFs in Malaysia.

H1c. There is a significant relationship between green loyalty and sustainability in LMFs in Malaysia.

H1d. There is a significant relationship between green trust and sustainability in LMFs in Malaysia.

Methods

The context of this study is large-sized manufacturing firms in Malaysia; the population was identified from the list provided by the Federation of Malaysian Manufacturers Directory of 2019 (FMM, 2019). The study adopted a quantitative data collection instrument, specifically a survey questionnaire, which was distributed online and in person. The respondents were selected through the use of stratified random sampling as this allowed every member of the population to have an equal and independent chance to be selected (Alqershi et al., 2020). From the 237 questionnaire copies administered to the CEOs of the manufacturing firms, 192 were retrieved in a data collection process that spanned six months. After screening, nine with incomplete answers or suspicious data were removed leaving 183 suitable for analysis. PLS-SEM analysis was carried out on the 183 valid questionnaires to test the proposed hypotheses The questionnaire included measurement items of green marketing and sustainability gauged using a 5-point Likert scale that ranged from 1 depicting strongly disagree to 5 depicting strongly agree. The constructs’ measurements were adopted from prior studies, in particular, 17 measurement items of the green marketing and sustainability constructs from Martínez (2015); Yong, et al., (2020) respectively.

Results

This study used composite reliability to confirm the internal consistency of the measurement adopted in the study, as Cronbach’s alpha values, which are commonly used, have a tendency to over-underestimate or under-estimate the reliability of scales (Alqershi et al., 2021). The results of Cronbach’s alpha are tabulated in Table 1. Notwithstanding the reliability test utilized, internal consistency over 0.70 indicates satisfactory model adequacy, while those lower than 0.60 indicate lower reliability. In this regard, Hair, et al., (2016) established rule of thumb for composite reliability coefficient states that for a particular construct reliability has to be 0.70 or more. Table 1 presents the Cronbach’s alpha of the study and from the values (ranging from 0.804-0.891), the measures has sufficient internal consistency reliability.

Table 1 Composite Validity and Reliability
Construct	Cronbach's Alpha
Sustainability	0.804
Green Image	0.842
Green Satisfaction	0.862
Green Loyalty	0.817
Green Trust	0.891

Consistent with the formulated hypotheses, the relationship between green marketing dimensions and large manufacturing firms’ sustainability were investigated. The empirical findings depicted in Figure 2 show a significant relationship between all the green marketing dimensions (image, satisfaction, loyalty and trust) and sustainability at (β=0.359, t=2.318, p<0.02), (β=0.109, t=3.091, p<0.01), (β=0.421, t=3.438, p<0.05), and (β=0.198, t=1.963, p<0.02) respectively. In other words, the results confirmed that the four green marketing dimensions do contribute to enhancing the firms’ sustainability. Table 2 presents the results for the direct relationships of the study model.

Table 2 Relationship Results
Constructs	t-values	p-values	Decision
GI -> SU	2.318	0.002	Supported
GS -> SU	0.091	0.098	Not Supported
GL -> SU	3.438	0.005	Supported
GT -> SU	1.963	0.002	Supported

Discussion

The importance of this paper lies in investigating the relationship between the four green marketing dimensions and the firms’ sustainability, the first in Malaysia to examine this relationship and build this framework. We hypothesized that each of the four green marketing dimensions has a significant relationship with the sustainability of LMFs in Malaysia, and our results support this; respectively, green image, loyalty and trust influence the firms’ sustainability: (β=0.359, t=2.318, p<0.02), (β=0.421, t=3.438, p<0.05), and (β=0.198, t=1.963, p<0.02).

This result confirms the importance of green marketing in achieving business sustainability, reflecting that environmental issues such as pollution, depletion of energy sources and climate change are considered one of the biggest threats to the world today. Green marketing has become the driving force behind increasing public awareness of environmental issues and the sharp rise in demand for environmentally friendly goods.

Organizations that work or seek to adopt green trends recognize that green marketing is an important activity, aimed at creating a positive impact or eliminating the negative impact of a particular product on the environment. It is also the process of developing, pricing and promoting products that do not cause any harm to the natural environment. In other words, Malaysian industrial companies must adopt a wide range of activities based on environmental dimensions, and develop strategies and solutions that meet the needs and desires of consumers with the least possible negative impact on life.

Finally, the results of our study indicate that green marketing helps organizations to reduce waste, through the use of self-degrading natural raw materials, so that when the product expires, it decomposes naturally. This marketing encourages the design and use of products that are recyclable and those that can be repaired and maintained and not discarded at the end of their life. It also focuses on pricing, meaning that the consumer must pay a price that corresponds to its true value as a green product. It also helps organizations focus on designing products that can be used over long periods, reducing excessive use and adding to the importance of recycling and maintenance.

Conclusion, Limitations and Future Research

Green marketing is a promotional activity that focuses on spreading the principles of preserving the environment and encouraging the use of environmentally friendly products. It focuses on clean and environmentally friendly health factors and encourages organizations to adopt the values that confirm this, in addition to spreading awareness of the risks to the environment around us and how to reduce them.

To the best of the author’s knowledge, the present study is one of the very first to examine the effects of the green marketing dimensions on firms’ sustainability in the context of Malaysian manufacturing, exploring the theory and practice of the green marketing-sustainability relationship in South East Asian countries. Nevertheless, further studies are needed, to include service firms in the targeted population as they also make a significant contribution to the national economy. In addition, the population of our work was limited to large manufacturing firms in Malaysia. This paper recommends that other sectors of the Malaysian economy be investigated, for example, green marketing among SMEs. Sustainability can also be investigated among hotels, universities and other large organizations. Also the authors personally administered the questionnaires to the CEOs. Future studies can investigate the relationship of green marketing with sustainability by using qualitative techniques. While the current findings may be appropriate for large manufacturing firms in Asia, the authors believe they cannot be suitable to large manufacturing firms in Europe and America, with different management cultures. The data was analyzed using Smart PLS software, specifically, the study employing PLS-SEM to determine the independent variables’ effects on the firms’ sustainability according to the four formulated hypotheses. All the hypotheses were supported. The study’s findings thus highlight the importance of the green marketing-sustainability relationship and the contribution to both theory and practice in the Malaysian context.

Acknowledgement

Communication of this research made possible through monetary assistance by Univsersiti Tun Hussein Onn Malaysia and the UTHM Publisher’s Office via Publication Fund E15216.

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