Environmental values in industrial marketing relationships

Abstract

Concern for the natural environment has become an issue that virtually all companies have to address. Literature suggests that an environmentally oriented marketing strategy, such as an environmental brand image, yields competitive advantage for the supplier in the form of improved customer outcomes and financial performance. At the same time, key barriers to environmental purchasing are found to be related to higher perceived cost and lack of environmental interest among purchasing professionals. In addition, research has repeatedly revealed a gap between customers’ environmental values and attitudes and their manifestation in purchasing behavior. This dissertation contributes to the interface of environmentally oriented business literature and theory of industrial marketing relationships. The aspects of environmental concern and value-based approach are integrated in a framework that explains the formation of customer-perceived value and loyalty – the key outcomes of marketing efforts in existing relationships. Marketing communication is inserted as the key supplier-initiated process that enables loyalty-oriented development of the relationship. This study adheres to positivist methodology and employs quantitative methods. Empirical data was collected among customers of three Finnish industrial companies and consists of customers’ responses to an online survey (n=121). The research hypotheses were tested with partial least squares modeling (PLS). The results show that environmental values of industrial customers consist of three dimensions: awareness, competitive advantage and corporate stance. It is found that more environmentally motivated customers perceived more overall value in their supplier relationships. Overall value, in turn, is a significant driver of customer loyalty. Findings of this study therefore support the applicability of a value-based conceptualization of customer motivations in order to understand supplier evaluation and purchasing behavior in industrial marketing relationships. Of managerial interest is the finding that customers considered device-mediated marketing communication such as email and telephone more effective than face-to- face interaction. This provides marketers with opportunities to more frequent yet cost efficient communication that fosters customer loyalty.