Shades of green in risk and value

Importance of customers’ environmental perceptions

Developing a framework to increase purchase intentions

According to legend – and to the Johnny Cash song – Ireland has 40 shades of green.

According to some marketers, businesses these days have to contemplate, if not 40, at least

several shades of green when they consider their own environmental responsibility and the

growing perception among their customers that ‘‘green is good’’. As green products are

more popular in the market, green marketing has become more prevalent as a

consequence.

Terms such as ‘‘lean green’’ (for the more passive and silent approaches), ‘‘extreme green’’

(for the more reactive and visible strategies) and the in-between concepts of ‘‘defensive

green’’ and ‘‘shaded green’’ are already in our vocabulary. To these can now be added

‘‘green perceived value’’ (a value based on the consumer’s environmental wishes,

sustainable expectations and green needs), ‘‘green perceived risk’’ (a belief that there might

be negative environmental consequences in choosing a product) and ‘‘green trust’’ (a

willingness to depend on a product based on belief about credibility, benevolence and

ability in environmental performance.)

If firms are serious about successfully adopting green marketing they should integrate the

concept into all aspects of routine marketing activities. They should apply green marketing

strategies to enhance the perceived value of their products and reduce the perceived risk.

Green marketing activities involve developing, differentiating, pricing, and promoting

products and services that satisfy customers’ environmental needs without a damaging

influence on the environment. Such activities can not only provide a differentiation strategy

by creating environmental needs, but also reshape rules within the market.

Green marketing can enhance the corporate image

As the public is more willing to purchase green products with sufficient trustworthy

information, companies should provide them with reliable data. They need to reveal more

information about the environmental performance of their products to obtain the consumer’s

trust. Reasons for adopting green marketing include: utilizing green opportunities;

increasing corporate image; raising product value; and enhancing competitive

advantage. It should also be remembered that, although today’s consumers are more

aware of environmental issues and concerned about them, most are unlikely to sacrifice or

lessen their requirements in order to ‘‘be green’’.

Maybe the beautiful Irish countryside does not really have 40 shades of green, but it is the

perception and belief that counts, just as it is the perception among customers of a

company’s trustworthiness on green issues that counts. So how do you try to enhance

DOI 10.1108/SD-05-2013-0018 VOL. 29 NO. 6 2013, pp. 5-7, Q Emerald Group Publishing Limited, ISSN 0258-0543 j STRATEGIC DIRECTION j PAGE 5

purchases based on your own green strategy and your customers’ perceptions? How do you

develop a green marketing framework to increase green purchase intentions via those three

drivers: green perceived value, green perceived risk, and green trust?

Motivation to reduce risk rather than maximize utility

These are the questions tackled by Dr.Yu-Shan Chen of the National Taipei University’s

Department of Business Administration, and Dr. Ching-Hsun Chang of Tamkang University’s

Department of Business Administration, both in Taiwan, in a study based on the Taiwanese

electronics sector.

They note that consumers are often motivated to reduce risk than to maximize utility in their

purchase processes. Since green perceived risk would lower both green trust and green

purchase intentions, marketers need to eliminate and reduce the perception of green risk at

every opportunity.

As green marketing can become a way of differentiating and positioning nowadays, firms

should exploit the environmental concerns of consumers to position their products and seize

new green markets. Although some firms would like to develop long-term strategies to carry

out their green marketing, the major challenge for them is how to incorporate their

environmental mission into their business strategies rather than to only promote their green

products.

Companies must increase their green perceived value, reduce their green perceived risk,

and enhance their green trust in order to raise their green purchase intentions. A useful

starting point is to develop strategies for raising perceptions of green value and for helping

potential customers to develop sufficient green trust to build up a longer-term relationship in

an era when environmental concerns are of increasing importance to customers, regulators

and businesses themselves.

Companies should consider educating experienced retailers

If companies would like to enhance their green purchase intentions for their products, they

should combine the concepts of green perceived value, green perceived risk, and green

trust into their long-term environmental strategies in the strategy-planning stage.

They should consider educating experienced retailers as an effective and prestigious

information channel between consumers and manufacturers to increase green perceived

value and to decrease green perceived risk. In addition, companies need to enhance their

customers’ green trust.

In a B2C context, retailers are regarded as crucial mediation agents in the delivery of

information between consumers and manufacturers. Retailers’ technical knowledge and

services play an important role in both enhancing value perception and reducing risk

perception. Consequently, it is crucial to offer retailers enough product knowledge and

services that can not only increase consumers’ value perception but also decrease their risk

perception.

Customers may be keen to take the green perceived risk if they are confident that the

product provider stands behind their products. Assuring consumers of the reliability of

products can reduce consumers’ perceived risk. Additional effective approaches to reduce

‘‘ Companies need to reveal more information about theenvironmental performance of their products to obtain theconsumer’s trust. ’’

PAGE 6 jSTRATEGIC DIRECTIONj VOL. 29 NO. 6 2013

perceived risk may include money-back assurances and guarantees about green perceived

value.

If companies can adopt the above green marketing strategies, they can raise their green

trust and further enhance their green purchase intentions.

Comment

This review is based on ‘‘Enhance green purchase intentions: the roles of green perceived

value, green perceived risk, and green trust’’ by Yu-Shan Chen and Ching-Hsun Chang. The

authors apply four original concepts – green perceived value, green perceived risk, green

trust, and green purchase intentions – to develop an integral model to enhance green

purchase intentions. They demonstrate that the relationships between green purchase

intentions and their two antecedents – green perceived value and green perceived risk –

are partially mediated by green trust. Hence, investing resources to increase green

perceived value and to decrease green perceived risk is helpful in enhancing green trust

and green purchase intentions.

Keywords:

Marketing strategy,

Consumer behaviour,

Green marketing,

Green perceived risk,

Green perceived value,

Green purchase intention,

Green trust,

Perception

Reference

Chen, Y-S. and Chang, C-H. (2012), ‘‘Enhance green purchase intentions: the roles of green perceived

value, green perceived risk, and green trust’’, Management Decision, Vol. 50 No. 3, pp. 502-520.

‘‘ Customers may be keen to take the green perceived risk ifthey are confident that the provider stands behind theirproducts. ’’

VOL. 29 NO. 6 2013 jSTRATEGIC DIRECTIONj PAGE 7

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