For decades, academics have been performing studies, analyzing data, and conducting stakeholder interviews in regard to the successes and failures of green marketing campaigns. When I was presented with the opportunity to work with Dr. Omar Rodríguez-Vilá to assess the current state of research on the effects of sustainability investments on brand performance, I signed on for the ride since the topic deeply interested me. As a 2017-18 Scheller College of Business Sustainability Fellow, collaborating with Dr. Rodríguez-Vilá and another Fellow, Braden Beaudreau, was an impactful experience that illustrated to me the challenges that brand managers face when they consider whether consumers value green investments.
When Braden and I first met with Dr. Rodríguez-Vilá, he provided us with a list of 24 renowned academic journals spanning four major disciplines: Marketing, Management, Accounting, and Finance. Our task: to scour the journals from top to bottom and compile a database of articles on the themes of sustainability, corporate social responsibility, and green marketing. When Braden and I finished, our combined database totaled over 300 articles—which represents, I am sure, only a fraction of the available research in the field. We then analyzed the data using NVivo (a qualitative data analysis computer software package that is a graduate student’s best friend). We combed articles and categorized references according to various attributes related to our research, including topics such as risks and rewards of sustainability investments, causes and effects of green marketing on brand performance, effects of sustainability on customer loyalty, and antecedents of effective sustainability brand investments. After we categorized the overwhelming amount of research on the topic, our goal then became to make sense of our findings.
Throughout the project, our team met weekly to discuss our progress and pose questions about the research. One topic that came up stuck with me. Study after study confirmed that a positive correlation exists between sustainability marketing and consumer demand. However, if we know green marketing has a positive effect on brand performance, why isn’t this type of marketing utilized more often? In short: Why doesn’t every company embrace sustainability as a core principle and build a marketing strategy around it? This question was central to one of our team’s first weekly meetings, and it resonated with me to the extent that my research positioned on trying to find an answer.
While there have been many attempts to unlock the reasons why brands don’t invest more in sustainability, there is no single answer. Rather, there are a number of explanatory factors, some of which are uncovered while others are yet to be determined. For example, one reason may be that green-minded consumers are often the most skeptical consumers toward green advertising. These consumers may question the validity of a brand’s green features based on the belief that the company may be “greenwashing.” One can hardly fault a brand for being wary of building a marketing campaign around sustainability if the very consumers they are targeting are those most likely to find fault with its messaging. Another reason may have to do with the gap between what consumers say they believe and what they actually do. According to one survey, 83% of global consumers express support for implementing environmental protections; however, only 22% would actually pay more for eco-friendly products. If consumers will not actually vote with their dollar to support green products, brand marketers may not see sustainable branding as worth the time or money.
While I cannot claim after a year of study to know all the answers to these questions, some findings present possible paths forward. In “The Skeptical Green Consumer Revisited,” Matthes and Wonneberger talk about the importance of choosing the right appeal when targeting green consumers. Rather than employing emotional advertising (a common practice when it comes to sustainable messaging), this study finds that skeptical green consumers are much more likely to be persuaded by utility-based communication. That is: Tell consumers why your product is green, arm them with the facts, and seek to inform their purchasing decision.
To help marketers bridge the gap between consumers’ attitudes toward sustainability and their actual purchasing decisions, one suggestion would be to better align altruistic messages used in sustainability advertising with the needs of the consumer. Rather than focusing on messages about how green products will save our planet on a macro-level, studies suggest that advertisers should instead demonstrate to consumers how green products will help them reduce waste in their daily lives—whether that waste is financial, food, time, effort, or resources. In doing so, brands can align their marketing message (about working towards a healthier planet) with the consumer’s goal to reduce waste.
We have much more to learn about why brands choose to invest in sustainability and whether those investments pay off. Moving forward, a strong starting place would be to perform gap analysis that underscores what more we need to learn. One area where it may be beneficial to increase our research is on case studies of the failures of sustainability investments. In categorizing our research in NVivo, I found plenty of sources that explored the conditions that moderate the success of sustainability investments, and many others that delved into the mechanisms through which brands invest in sustainability. Often, studies focused on the financial rewards and brand reputational effects of green marketing, and some articles analyzed the antecedents that allow for effective sustainability investments. While we may want to report on sustainability success factors, learning from failures also provides value—in helping us determine how to mitigate the risks of sustainability investments. In addition, one limitation of many consumer studies I researched is that they only interviewed consumers in a single country. Given the variations in cultural values around the world, we cannot be certain that the responses given by consumers in one country correlate to those of another.
My emerging belief after this year’s project is that for a green product to succeed in the market, it must exist first and foremost to solve a consumer need. For example, in an experiment whose population consisted of Australian MBA students, undergraduate students at a Hong Kong university, and supporters of Amnesty International, the findings suggested that even among consumers who place a high value on social product features, product functionality cannot be sacrificed without experiencing a drop in consumer willingness to buy. These results indicate it is not enough to expect green product marketing or attributes to offset an increase in price for the same good, or to make up for a deficiency in product functionality. And while evidence suggests that environmental corporate social responsibility investments can reduce negative consumer reactions toward service operations failures, this can only be at best an insurance policy to mitigate the risk of consumer backlash. Marketers should look to use sustainability as a secondary point of differentiation from competitors after first determining the brand’s core capability and targeting the corresponding market segment.
As I look to apply the beliefs I have developed from our project this year, I can start with testing my own theories behind effective sustainability brand investments, and I hope eventually to add my own successes—and failures—to the story.
Tommy Bledsoe is a student in the Evening MBA Program at the Scheller College of Business. He was a 2017-18 Scheller College of Business Sustainability Fellow.