Kausar Hayat, Govt. College of Management
Sciences, Wana, Waziristan. Email: kauser.hayat87@yahoo.com
Shahid Jan, Islamia College, Peshawar. Email:
shahidjan@icp.edu.pk
Fayaz Ali Shah, Islamia College, Peshawar. Email:
fayaz@icp.edu.pk
Aamir Nadeem, City University, Peshawar.
Email: emailpsh@gmail.com
Wahid Raza, College
of Management Sciences, Wana, Waziristan. Email: wrkhattak287@yahoo.com
Abstract. In the present condition, environmental poverty has
appeared as a very scorching issue of concern. The alarming level effects of
commercial sector on climate and atmosphere have shaped several life
threatening worries and has become a great challenge for organizations. The
current research work aims to achieve a better understanding of the corporate
sector and their adaptation of green strategies in their production and
decisions. Through purposive sampling technique data from 264 respondents were
taken. Structure Equation Modeling was used to test the hypothesized
relationship of the model. Findings
of the study suggests that green product (GPD), green price (GPC), green
promotion (GPM) and green place have significant relationship with firm
performance. The current research study can help industrial sector in
identifying best solutions for replacing conventional activities used. This research
has all the limitations of any social science research. It is suggested for the
forthcoming research to splay the study background across the country. Larger
sample size is also recommended.
Keywords: Green
Marketing Mix& Firm Performance
Introduction
In current situation the
competitive setting is significantly improved by the growing concern headed for
ecological sustainability. Today organizations are trying to come up with green
practices to define the implementation of “green” marketing practices and how
these practices can assist their corporate activities (Leonidou et al., 2013).
The growing knowledge of the community, no leniency of principles, and pressure
from shareholders and patrons have motivated professionals to think
of “green activates” in business
choices (Leonidou et al., 2013). Ecological goods attracted
high devotion from consumers (Kotler, 2011; Luchs
et al., 2010).
Later on, corporate executives are started to include green practices in schedule,
sustainability of promotion plans has been inadequately accepted in practical
studies (Cronin et al., 2011). Thus, the impacts of espousing ecological
marketing rehearses persist comparatively unidentified amongst the executives
of organizations (Chabowski et al., 2011).
Green marketing scheme (GMS), which means set of marketing practices
and features, that permits firms to assist the marketplace and customers to
triumph organizational objectives without spoiling the natural environs
(Al-Salaymeh (2013). Participation in environmental shelters motivates the
consumers to buy green products, which resulted the justifiable and sustainable
development in the surroundings (Gopalakrishnan & Muruganandam, 2013). It
is evident by the literature that GM includes marketing practices, set of
rules, and techniques deeply considered environmental issues; such practices
aimed to produce profits and deliver results that justify the line of the
product, goals of both the business and entities. The concept of GMM refers the
tool that are intended to attain the planned and commercial goals of a firms,
mainly in term of dipping their harmful effects on the natural setting. This
conceptualization of GMM is compatible with earlier definitions of ecological
(Leonidou et al., 2013).
We are acquiescent this fact that companies are trying to move towards
green marketing activities, but for this they need to pass a number of barriers
and fences. To ensure reasonable advantages in market, they need to invest more
and more on R&D actions to embrace modern technologies and cooperate with
nearly other appropriate green plans in there developmental process. Another
barrier is the customers who are not willing pay more for such products. It has
also been observed that firms are facing promotional problem. People’s
knowledge of green product is weak. Therefore, companies must concentrate on suitable
advertising plans to address this problem.
Literature Review
Green goods can be named green if the process of production involves
alternative procedure which is eco-friendly and have a reduced amount of
harmful effects for the ecology. It is obvious by literature that it is the
responsibility of every business to lessen pollution in their fabrication and
manufacturing process (Leonidou et al., 2013). The provision of raw material
used for the product is essential to be gained in way that natural properties
remain safe. A product may be named green if there is a proper waste management
program, which is essential for the environment.
Reverse logistic (i.e., a method used in which consumers giving back
used packaging, containers, wrappers and second hand product itself) would
meaningfully support in maintaining the surroundings (Arseculatne &
Yazdanfrd, 2014). Overall process of packing, labeling and handling the goods
in an environment friendly way is a challenge for today’s organizations. Green
products are aimed because of pollution and waste reduction, energy and environment
conservation. For example, in the France HP addressed the issue of packaging
and accept the challenge to supply laptops in a container rather than to use a
not reusable packaging, which reduced the use 97% of throwaway packaging (Belz &
Peattie, 2009). On the other side Nestle’ also confronted the packaging
challenge and they reduced the extent of paper used on its bottle water brand
up to 30% (Ottman, 2011).
Green Price
Green pricing refers to premium price, which can additionally be
increased with the accumulation of other cost. Going green process is luxurious
and costly in terms of bed in new technology, bringing new machinery, external
cost, employee training and renovating waste into recycled goods. The expenses
need to be rationalized through marketing efforts; on one side consumers need
to be fortified to shell out extra charges or premium prices. Companies trying to reduce the cost of green
goods by lessening per unit cost of packaging because packaging establish a
larger portion of the element cost (Arseculeratne & Yazdanifard, 2014). Green
valuing mean giving preference and value simultaneously to consumers and
reasonable profit to business. The pre-emptive perspective of motivating the
consumers towards green goods is the use of rebates for returning wrappers and
the use of charging high prices for conventional products. In UK, Mark &
Spencer emboldens the high use of ecologically friendly shopping bags by
indicting the consumers (Belz & Peattie, 2009). Firms can use their prices
within the green sustainability framework if they seceded in converting the
cost of research to disposal. They need to lessen the life cycle charges of the
product (Dahlstrom, 2011).
Green Distribution or Place
It is refers to the selection of distribution channels in way that
decrease or minimizes the environmentally damages or having less impact on the
ecology. It is evident by the literature that many ecological issue or
environmental concerns occurs during the distribution of the goods and services
(Arseculeratne & Yazdanifard, 2014). The arrangements of disposal and also
make sure that consumers are capable to make returns of ecological things are
the two main and strategic ways that organizations could pursue in the green
distribution. For instance HP and cock etc. (Matthews 2011). From the strategic
point of view the corporate sector and suppliers may develop rules and policies
that compelled both the manufacturer and suppliers to be within the boundaries
of environmentally responsible standards. Fewer and fuller cargos can be
helpful in reducing the harmful impact of distribution and placement of the
product on the surroundings (Dahlstrom, 2011). For example, Pepsi, Nestle, and
L’Oreal are get together and have a strategic alliance with Tesco, the largest retail
partner to have a supply leadership association which works for advancing and
rebuilding strategies for to reduce the carbon footprints of the firms
(Leonidou, 2013).
Green Promotion
Green marketing or green promotion are used for projecting the overall
look of green activities used for attracting the people towards green goods and
services by using the renowned techniques like sales promotion, direct
marketing and public relation etc. For organizations green promotion means to
inform the stockholders about their ecological commitment with the society,
preservation efforts and green achievements. Green promotion is using as an
effective mean to provide platform to the corporate sector with competitive
edge (Belz & Peattie, 2009; Dahlstrom, 2011). Strategic and tactical point of view
companies need to adopt programs that are healthier for the environment and
society (Kotler, 2011). Green promotional techniques can be utilized to
disseminate the green and environmental benefits of their goods and services to
the final users.
Firm Performance
It is one of the critical issues for the companies. Many researchers
provide insights and alike explanations but the overall standards of measuring
performance varies from class to class, product to product etc. (Holsapple
& Wu, 2011). DuPont in 2008 spent $50 billion on energy saving projects and
succeeded to recover all investment in only one year. Thus we can say that
profits and positive impact of green activities and initiatives are certain.
Firm Performance
Firm performance (FP) was measured on the basis of 6 items which were
haggard and adapted from number of studies. Two items were in use from
Pornpratang et al. (2013) and rest of the items were developed by the author
himself.
Green Product
Green product was measured on the basis of 4 items. In pursuance to measure green product two
items were modified and adapted from (Numraktrakul et al., 2011). The remaining
items used in the present study were taken and adapted from Flavian, Guinaliu
and Torres (2005).
Green Price
The measurement scale for green price includes 4 items which were
nominated to base on previous authenticated instruments utilized“(Jain &
Srivastava, 2000; Numraktrakul et al., 2011; Zhen & Mansori 2012)”. One
item each be present taken from the above authors respectively. The other
remaining item were taken from (Numraktrakul et al. (2011) from the study named
green purchase intent of green products (Jain & Srivastava, 2000).
Green Promotion
The construct green promotion have 4 items. Like the other dimensions
green promotion items were modified from (Mukherjee & Hoyer, 2001; Roehm
& Sternthal, 2001; Sakthirama & Venktram, 2012; Zhen &Mansori,
2012). In the current research work one item each were adapted from the above
authors respectively.
Green Place or Distribution
The current variable green place has limited studies. The items needed
that could appropriate for measuring the variable were scarce and limited in
numbers. Most of the items used for green place were structured by the author
himself, hence one item additional item were adapted though without Cronbach’s
alpha reading.
Conceptual Framework
Green Product Green Promotion Green Price Green Place Firm Performance
Figure: 1 Model of the Study
Hypothesis of the study”
H1: There is a significant impact
of green product on firm performance.
H2: There is a significant effect
of green price on firm performance.
H3: There is a significant
influence of green promotion on firm performance.
H4: There is a significant
control of green place on firm performance.
Methods Adopted for the study
Populaces for the existing work are the private limited companies of
Peshawar. Over-all 264respondent were nominated by using Krejcie and Morgan
(1970) formula of determining the sample size. Statistics were composed from
the high officials belongs to management and production departments.
A five-point Likert scale” was employed to measure the constructs. Current
research study adopted purposive sampling technique. Factor analysis were used
for item reduction that were not loaded considerably on a factor or cross
loaded or having small suppress coefficient of <.35. Later on “SEM” was
utilized to check the relational hypotheses.
Analysis and Results”
Table 1 Reliability
Statistics
|
Variables” |
α Values |
|
“Firm Performance“ |
.800 |
|
“Green Product“ |
.780 |
|
“Green Price“ |
.899 |
|
Green Promotion |
.810 |
|
“ ““Green Place |
.872 |
Cronbach’s Alpha or Coefficient Alpha is the most
commonly reported consistency index in literature. All the constructs have been
tested for reliability. The results of the current table indicates and
establish to have a consistent Cronbach’s alpha reading above .80 except one
variable green product less than .80. The value 0.60 is also still within the
acceptable limits“(Cooper & Schindler, 2003)”. Current alpha assessment of
each variable is well above the threshold or acceptable range. The greater the
reliability value suggests higher consistency amongst measured items.
Table 2 Descriptive
Statistics (N=264)
|
Variable |
Minimum |
Maximum |
Mean |
Std.
Deviation |
|
Firm Performance |
3.11 |
4.67 |
3.8519 |
.25605 |
|
“Green Product” |
2.80 |
4.60 |
3.8167 |
.45649 |
|
“Green Price” |
3.21 |
4.61 |
3.8778 |
.32875 |
|
“Green Promotion” |
2.82 |
4.82 |
3.8175 |
.43092 |
|
“Green Place” |
3.22 |
4.82 |
3.9380 |
.36336” |
Statistics of the overhead table specify outcomes of descriptive
figures comprises sum of respondents, smallest, supreme, mean values and SD of
research work utilized to locate the topographies of cool data from nominated
section of the companies of Peshawar, Khyber Pakhtunkhwa. The effects shown
that firm performance (FP) is having
least worth of 3.11 with highest value
4.67, mean of FP is 3.85 and with st.
dv 0.26. GP aspect of the study is
come up with the lower most grades of 2.80 with uppermost of 4.60, the mean of (GP)
is 3.842 and SD is .457.
GPric facet requiring least value 3.21 with highest 4.61,
GP have mean of 3.878 and SD is .32875. “Green promotion” (GP) have smallest value is 2.82 with
“highest” value of 4.82 mean of GP is 3.818 and SD 0.431.
To conclude values of final variable “green place” (GP) have least value of 3.22 with utmost value of 4.82. Mean of
green place”is 3.938 with st dev of
0.363.
Table 3 “Assumptions’
Statistics for Factor Analysis“
|
“Constructs” |
DCM |
KMO |
BTS |
Sig |
|
Firm Performance |
.021 |
.770 |
1699.894 |
000* |
|
“Green Product” |
.138 |
.800 |
524.984 |
000* |
|
“Green Price” |
.176 |
.813 |
640.784 |
“000*” |
|
“Green Promotion” |
.258 |
.899 |
732.633 |
“000*” |
|
“Green Place” |
.084 |
.723 |
1555.701 |
“000*” |
DCM: Determinant of Correlation Matrix”
Kaiser-Meyer-Olkin Measure of Sampling Adequacy“
Bartlette’s Test of Sphericity“
Kaiser-Meyer-Olkin (KMO) Measure is an alternative method to check the
sample size adequacy. Figures are adjudged factorable if the measure of
sampling adequacy is larger than .60. It is ranged from 0-1. If the value of
KMO is less than .50 it indicates that you have sample size issue. The values
of KMO in the above mentioned table is well above the threshold values which
demonstrate that there is no sample issue.
Bartlett’s test of sphericity basically means that there should at
least one significant correlation b/w two of your items somewhere. In this test
we look for its p-value which is labeled sig in SPSS. The P-value should below
.001. Here in this table the P-value is lower than .001 which shows that the
data set is accurate. DCM inter-variable correlation need to be computed and
correlation matrix should display at least some correlation.
Structural Equation Modeling
SEM was employed to check hypothesized association between dependent
and independent variables. Before to check hypothesized relationship all
individual construct were tested to get good model fit.
Figure 2“Measurement
Model for Firm Performance“
Latent side of the frame work confined to firm performance which were
originally composed of 10 objects. In the conduction of exploratory factor
analysis 4 items were removed due to cross loading and do not laden
substantially on a single factor. Modification indices were done and covariance
were drown where it is needed. The values of “CMIN/Df,
SRMR, GFI, CFI, TLI and RMSEA” were amongst
the favorite range which clearly demonstrate the goodness and fitness of model.
Figure 3“Measurement Model for Green
Promotion
Green product was initially made up of the total five items. P2 were
eradicated owing to low stacking on a “single factor”. The values of the fit indices were among the
desire range which indicates reasonable fit of the model. Covariance existed
where it is needed.
Figure 4 Measurement
Model for Green Price
Green price construct was comprised of a total of 5 items. The values
of the fit indices used for the goodness of the model were in between the
threshold values. The value of RMSEA is little high which does not affect the
overall fitness. RMSEA is used for the purpose to check the error of
approximation in the examined population. The values indicate a decent apt of
the model.
For the construct green promotion in the beginning 5 items were
subjected to EFA, not a single item were excluded due to loading on one factor.
The result of the model used in the study indicates a good fit. Amendment and
covariance were pinched to achieve worthy fit.
The construct green place had over-all five items. PL2 were omitted
because of low loading on a single factor. Fit indices used to check the good
and fitness of model directs a best fit of model. Concluding loadings are
equated in the below table.
Table: 4 “Measurement Model Indices Summary”
|
Construct |
CMIN |
SRMR |
GFI |
CFI |
TLI |
RMSEA |
|
“Firm Performance |
1.518 |
.05 |
.982 |
.991 |
.977 |
.050 |
|
“Green Product“ |
3.019 |
.06 |
.990 |
.992 |
.964 |
.041 |
|
“Green Price“ |
2.515 |
.03 |
.990 |
.994 |
.957 |
.071 |
|
“Green Promotion“ |
3.123 |
.04 |
.994 |
.996 |
.946 |
.057 |
|
“Green Place“ |
3.210 |
.08 |
.980 |
.982 |
.988 |
.063 |
Hypotheses Testing
In the current research study SEM was utilized to
check the relationship between the outlined hypotheses. Overall path
investigation was through to check hypothesized relationship of observed and
unobserved.
Figure 7
Structural Model
CMIN/DF SRMR GFI TLI
CFI RMSEA”
4.743 .06 0.938 0.967 0.944
.068
Table 5 Hypotheses Results
|
Hypothesis |
Structural Paths |
Estimates |
Std. loading |
C.R |
P |
Results |
|
H1 |
GPROàFP |
-.157 |
.079 |
-1.99 |
.006 |
Supported |
|
H2 |
GPRICàFP |
2.106 |
.912 |
2.31 |
.001 |
Supported |
|
H3 |
GPROMàFP |
1.530 |
.674 |
2.27 |
.013 |
Supported |
|
H4 |
GPLACEàFP |
-.011 |
.054 |
-.21 |
.036 |
Supported |
A total of four hypotheses were framed in the current research study.
It was tested with SEM. The result of the hypotheses demonstrate significant
effect on “firm performance”. The aforementioned independent variables
contributing positively to firm performance with the significant p-value
<.05. The value of “CMIN/df, SRMR, GFI,
CFI, TLI and root mean square error of approximation”
among the chosen range that clearly demonstrate the goodness and fitness of the
model. Therefore all the hypotheses H1, H2, H3, H4 is supported.
H1: There is a significant impact of green product on firm performance“.
H2: There is a significant impact of green price on firm performance“.
H3: There is a significant impact of green promotion on firm performance“.
H4: There is a significant impact of green place on firm performance“.
Conclusion”
SEM existed and utilized to square the relationship of suppositions
used in the study. The outcomes of the study discovered that green product
(GPRO) having significant control on firm performance. It is supported by the
earlier literature (Gould, 1990). Similarly, ecological concerns and green
availability from the opinion of “(Ali &
Ahmad, 2012; Ahmad & Juhdi, 2010; Kim & Han, 2010)“might openly affect the buying intent to purchase
“green product”.
Green price (GPRIC) is found an optimistic predicate element of firm
performance. The present statistics revealed positive impression of green price
on FP and find reliable with the
previous studies. A constructive association was bring into being between green
promotion and firm performance. Awareness plays an energetic role in accomplishment
of every organization goals. Green promotion”
is a strong forecaster for the reception of green products. The independent
constructs find significant in relationship with firm performance. From the
entire tested and established hypothesis it is decided that four out of four
hypotheses were found significant in relation with firm performance.
Theoretical Implications
The current research backs significantly to the current literature as
the issue of green marketing across Pakistan is rarely discussed, and nearly no
study exist on the exact issue in background of KP. Thus, it expands the body
of knowledge in this particular field.
Managerial Implications
Corporate sector should prioritize their resources in term of R&D,
technological investment, manpower in most effective and efficient way to
consider possible ways of reducing pollution. Non-governmental organizations
need to arrange some motivating sessions with public to disseminate information
while discussing the existing model of the study. How the corporate sector work
closely on the determinants of green purchase intention. To consider possible
ways to reduce the use of conventional marketing programs and to focus on
learning processes like to learn from within and outside organization.
Limitations and Recommendations
This research has all the limitations of a social science research. It
is suggested for the upcoming research to broadening the work setting through
Pakistan. Longitudinal statistics will offer more reliable results. Larger
sample size recommended. It can provide more faultless data, though, the
current population and sample size was enough for the justification of results.
It is vital for the government to come up with some timely decisions, because
government playing a part of key participant. Mixed-method approach is further
recommended for future research studies.
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