GREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING AND THEIR NEXUS WITH THE PERFORMANCE OF SMES IN SOUTH AFRICA
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Journal of Sustainability Science and Management eISSN: 2672-7226
Volume 16 Number 1, January 2021: 174-192 © Penerbit UMT
GREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS
AND LABELLING AND THEIR NEXUS WITH THE PERFORMANCE OF SMES
IN SOUTH AFRICA
REGINALD MASOCHA
School of Economics and Management, University of Limpopo, Sovenga 0727, South Africa.
*Corresponding author: reginald.masocha@ul.ac.za
Submitted final draft: 27 April 2020 Accepted: 1 December 2020 http://doi.org/10.46754/jssm.2021.01.015
Abstract: The perilous nature of human activities over the planet earth is a central issue
from both the public and academic perspectives. Shifting customer behaviour towards
pro-environmentalism has been equally attributed as embedding the green revolution
prevailing in the business world. Confronted by an endangered widespread system due to
brittle planet earth demanding environmental responsibility behaviour from its inhabitants,
interrogations exist on the subsequent impact on the overall performance of businesses
when they assume green virtues. The study investigated three independent variables
(eco-branding, eco-labelling, and environmental advertisements) as green marketing
practices with firm performance being a dependent variable. The research objective was
to determine how eco-branding, eco-labelling as well as environmental advertising relate
to firm performance on Small and Medium Enterprises (SMEs) in Polokwane, Limpopo
Province of South Africa. Convenience sampling was utilised to select a sample size
of 156 participants from the Limpopo province of South Africa. A self-administered
questionnaire was used in gathering data and the structural equation modelling through
AMOs version 25 was applied in analysing the collected data. The research established
that all the independent variables had significant nexuses with firm performance. Thus,
recommendations are made for SMEs to consider green marketing practices as they impact
positively on their subsequent firm performance.
Keywords: Green Marketing, eco-branding, eco-labelling, environmental advertisements,
firm performance.
Introduction need to consciously utilise practises and
The phenomenon of green marketing emerged resolutions that are environmentally competent
to prominence during the 1980s and has since (Carvalho et al. 2019). Consequently, businesses
grasped the interests and attention of latent all over the world are increasingly embracing
researchers in the management sciences. The green marketing practices in response to these
American Marketing Association (AMA) demands (Fuentesa, 2015; Simãoa & Lisboa,
convened for the first time about the concept 2017). However, the specific implications of
of ecological marketing in 1975, while the embracing green marketing practices persist
year 1980 marked the emergence of the term to be somewhat incomprehensible amongst
green marketing (Yazdanifard & Igbazua, marketing practitioners and policymakers
2011; Durmaz, & Yaşar, 2016). Attune to global of present firms principally on the nexus of
sustainable development aspirations, guidelines, specific green marketing strategies and the
and practices, ever-increasing demands for performance of businesses (Eneizan & Wahab,
businesses to examine their business practices 2016). The growing demand for firms to go
and their aftermaths towards the environment green is heightening competition subsequently
have been witnessed (Masocha & Fatoki, 2018; increasing worries amongst firms concerning
Carvalho et al., 2019). Meanwhile, there is an the inherent value or detrimental impact on their
upsurge scale of firmness impelled by climate performance (Eneizan & Wahab, 2016)
changes reiterating that the earth’s inhabitants Green marketing is commonly defined asGREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING 175
integrating the marketing discipline, public transforming their entire business philosophy
policy processes together with the natural and image (Medhi, 2015; Simãoa & Lisboa,
environment and constitutes the selling of 2017). In latent literature, numerous apparent
products and services on the premises of their advantages are emanating from green
benefits towards the environment (Medhi, 2015). practices, namely, improved corporate image,
Green or environmental marketing is deemed to waste reduction, lower costs, high customer
constitute all undertakings intended to produce satisfaction, improved efficiency, enhanced
and enable exchanges aimed at the satisfaction goodwill, growing market share, as well as
of human needs and wants with a minimal profitability (Hasan & Ali, 2015). Coherently,
detrimental impact to the environment (Joshia marketing literature highlights some of the
& Rahman, 2015). In latent literature, the terms gains of following green inventiveness, namely,
green marketing and environmental marketing, superior financial increases and market share,
ecological marketing, or sustainable marketing more employee commitment, improved firm
are often interchangeably used (Hasan & Ali, performance, and heightened capabilities
2015; Masocha, 2018). Contemporarily, there (Eneizan & Wahab, 2016). Notwithstanding the
is a definitional dilemma amongst marketing proliferation of sustainability issues amongst
practitioners and consumers at large about the corporations, satisfactory empirical studies still
phenomenon of green marketing (Carvalho need to be conducted about green activities and
et al., 2019). Regardless of the definitional the performance of SMEs (Eneizan & Wahab,
dilemma, what is apparent in the contemporary 2016).
business world is that consumers’ demand Research must be channelled towards
for green products has recently reached SMEs considering their renaissance as economic
unprecedented levels with sporadic signs of engines towards economic growth, employment
agitation and unyielding posture towards non- creation, poverty alleviation in many economies
green practice in the future (Negassa, 2015). across the globe (Hamann et al., 2017; Masocha
Firms linked to unethical business practices or & Fatoki, 2018). SMEs have been regarded to be
operations which damage the environment are at the backbone of the South African economy
being increasingly boycotted by consumers (Rungani & Potgieter, 2018). Although there
(Negassa, 2015). In the same regard, researchers, is voluminous literature concerning green
academics, and managerial practitioners are still practises, much of it is centered on large
baffled about how to create an appropriate green corporations (Hamman et al., 2017). As such,
marketing offering that is visible and profitable there is a need to investigate the phenomenon
(Fuentesa, 2015). Businesses on another angle of green marketing practises towards SMEs
are concerned that only a small number of since small businesses face institutional and
these people are willing to purchase these green structural conditions that are different from
products at a premium (Sreen et al., 2018). their counterpart large corporations (Masocha &
Green marketing is largely concerned with Fatoki, 2018). Furthermore, there is an existing
formulating and utilising strategies and practices incessant gap between green attitudes and green
that lead to the achievement of strategic and consumption to the extent exacerbated by a
profitability goals of a firm, predominantly growth in the number of people prepared to buy
about the reduction of negative or improving green products, with little evidence suggesting a
positive impact on the ecological environment relative growth in the purchase of green products
(Eneizan & Wahab, 2016). By greening has also grown (Joshi & Rahman, 2015). In South
their marketing practices, firms are poised Africa, most SMEs are constrained regarding
to experience numerous benefits, inter alia, the provision of sustainable products due to an
security against regulations, satisfying green increase in the cost of the production process
consumer needs and expectations, gain a green and other difficulties associated with green
competitive edge against their counterparts, or business operations (Lekhanya, 2014). Faced
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192Reginald Masocha 176
with this plethora of challenges in going green product adjustments, operations modifications,
the major question that needs to be answered packaging, promotional strategies, and
is on the effect of adopting green marketing on awareness creation amid industries (Yazdanifard
the performance of SMEs. On this backdrop, the & Igbazua, 2011). Consistently, latent research
primary objective of this study was to establish significantly postulates that customers are deeply
the nexus between green marketing practices involved pertaining to environmental matters
and the performance of SMEs in South Africa. which emanates from rising environmental
mindfulness (Yazdanifard & Igbazua, 2011).
Overview of the concept of green marketing As such, the phenomenon of green marketing
is a consequence of firms responding to
As society’s apprehension for the natural
environmental concerns by consumers
environment has spiralled over the preceding
(Oattman, 2011).
decades, businesses worldwide are similarly
presented with pressures and obligations Since assertions have been made concerning
about environmental cognisance (Govender the nexus between consumption and greenhouse
& Govender, 2016). Eventually, as pressure gas emissions, the focus has been placed on
has been mounting towards businesses green consumers as a target market (Guckian
to be cognisance and accountable for the et al., 2017). Green consumers are concerned
environmental consequences of their activities, with products that have minimal or no adverse
green marketing has developed to be a notion consequences on the environment and being
that is anticipated as an impending moral prepared to acquire them even at premium
responsibility (Govender & Govender, 2016). prices (Mahapatra, 2013). Consequently, the
Simultaneously, the green marketing strategy profitability of green consumerism fuelled green
(GMS) has increasingly pervaded academics claims and greenwashing as firms sought to
in latent research. Thus, various stakeholders profiteer from the preparedness of consumers
such as customers, suppliers, government, to make purchases at relatively higher prices
and society need to actively impose pressure (Chen et al., 2019). Greenwashing relates to
on firms to adhere to green practices in the marketers utilising uncorroborated or deceptive
marketing process (Handayani & Prayogo, claims regarding the environmental virtues
2017). The strategy is regarded as the business’s ‘being green’ within their products, services,
resolute orientation towards developing or business activities (Wahba, 2012; Chen et
procedures and practices that align corporate al., 2019). Contrary to genuinely greening their
and marketing objectives with the protection of products, firms barely transformed products
the natural environment in line with customers’ which they deemed to be green and offered
perceptions on sustainable marketing (Govender their regular products at the habitual lower
& Govender, 2016). costs. Consequently, the existence of genuine
green consumers became questioned with some
By definition, green marketing is a
suggestions inclined towards the unpreparedness
process of coming up with products and
of customers to pay above normal prices for
services, utilising promotions that result in
green efforts (Peattie & Crane, 2005).
customer satisfaction for customers who
desire products and services of high quality The economy of South Africa promotes
and performance offered at convenient prices green activities, regulations, and laws are passed
without simultaneously causing detrimental to ensure that the environment is protected for
effects towards the environment (Handayani & both the current and future generations (Muposhi,
Prayogo, 2017). From the American Marketing 2019). The vision for a green economy for South
Association (AMA) definitional perspective Africa is enshrined in the National Framework
green marketing involves the integration of for Sustainable Development (NFSD), which
environmentally friendly activities such as is premised on various thematic dimensions.
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192GREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING 177
The NFSD encompasses sustainability in (Hart, 1995; Fowler & Hope, 2007; McDougall,
environmental responsibility, production and Wagner & MacBryde, 2019). Herein, the study
consumption, water management, transport will make empirical contributions towards
and infrastructure, efficient and clean energy, NRBV by validating the relationship between
waste, buildings, resource management, firm performance and eco-branding, eco-
agriculture, food production, and forestry labelling as well as environmental advertising.
(Muposhi, 2019). Thus, firms must adhere to Eco-branding, eco-labelling, and environmental
these regulatory requirements and develop advertising are strategic issues that are included
strategies to communicate with their customers under the natural environment which are
concerning environmental issues (Kanonhuwa expected to make a positive contribution towards
& Chimucheka, 2014). firm performance within the context of SMEs.
In November 2011, the government
launched South Africa’s Green Economy Green Marketing and SMEs
Accord which is a significantly wide-ranging
Firms consider environmental marketing as
social treaty on green jobs in economic activities
providing the impetus in the achievement of
covered in the above nine thematic dimensions
their corporate objectives and aspirations.
outlined in the NFSD as well as bio-fuels and eco-
However, it is paramount that green marketing
tourism (Economic Development Department,
becomes acculturated into the firm by being
2011). Furthermore, this Accord is accompanied
prominent in the mission and vision as well as
by revelations that assist in establishing the
being engraved in the core values and principles
premises for a sustainable tomorrow for the entire
of the firm (Emery, 2012). Firms that desire to
South African community and their subsequent
be effectively green need to ensure that availing
interaction in the green technological revolution
of green products is an integrative obligation of
globally. It is evident that the government is not
all departments prevailing in a firm, rather than
silent on these issues, this means there is more
letting marketing alone. Herein, green products
pressure on businesses to change their way of
inherently have the potential to enable firms to
doing things because customers are changing
distinguish their brands and position in their
their buying behaviours.
relative markets (Wahba, 2012). Furthermore,
The theoretical lens of the Natural- green production, green distribution, and
Resource-Based View (NRBV) theory by Hart green marketing activities have been noted to
(1995) provides the basis for this study. Hart contribute towards creativity and efficiency,
postulated the NRBV based on the insights of profitability, and lower product life cycle
the traditional Resource Based View (RBV) costs (Ottman, 2011). Waste management
which is utilised to explain the impact of the undertakings such as recycling, re-use, or sale of
firm’s unique resources and capabilities towards processed or unprocessed waste substances can
firm performance and competitive advantage also contribute towards efficiency, profitability,
(Ramon-Jeronimo, Florez-Lopez & Araujo- and cost-effectiveness (Durmaz & Yaşar, 2016).
Pinzon, 2019; Ferreira, & Fernandes, 2017). Adopting green marketing practices has various
The NRBV makes a significant contribution by benefits, namely, enhanced health and safety
encapsulating the constraints emanating from of workers, consumers tend to enjoy products
the natural environment which was missing that do not pose health threats during the use
in the classical RBV (Fowler & Hope, 2007). of a sustainable product, customers tend to
According to the NRBV theory, pollution enjoy their lives in their communities without
prevention, product stewardship and sustainable any form of air and sound pollution and other
developments are essential elements that should externalities, as well as, preservation of the
be integrated into the firm’s capabilities and environment especially for younger generations
resources to enhance the performance of firms (Ottman, 2011). However, there is still a wide
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192Reginald Masocha 178
research gap arising from incongruences about value to their success (Adawiyah, 2017). By
the impact on firm performance of going green embracing green marketing firms are positioned
(Hari Adi & Adawiyah, 2018). to additionally realise consequential benefits
Drawing from extant marketing from an otherwise relatively cost-effective and
management literature, it is submitted that firm temperate intervention (Joshia & Rahman 2015).
performance is directly dependent on proficient Additionally, in the endeavour to minimise
marketing practices (Fraj-Andrés et al., 2009). environmental catastrophes, innovations or
The executions of good marketing practices optimum energy utilisation can surface, as
attach superiority to firms’ activities and fortify well as new products and market developments
the competitiveness and market share of the (Fuentesa, 2015).
firm. However, about their effectiveness in green
practices, SMEs are constrained by inherent Green Marketing and Firm Performance
characteristics such as limited resources that Firm performance, also regarded as business
include skills, finances, know-how, as well as no performance is a prominent and vital concept
expertise in green issues (Amegbe et al., 2017) in the broader business management research
perhaps owing to them being primarily family- field which is often utilised in latent marketing
owned (Hamann et al., 2017). Furthermore, and strategic management studies as a final
there is relatively less pressure that is imposed dependent variable (Masocha, 2018). The
on SMEs by customers towards being green concept’ importance as an attribute in business
compliant (Hamman et al., 2017). On the is chiefly enshrined in determining the
contrary, many large business organisations success or failure of strategies implemented
export operation activities to developing nations, by businesses (Amegbe, & Hanu, 2016).
which practically exempts them of many Moreover, the significance of firm performance
obligations in their home countries. In some as the variable is enshrined in processes that
of the developing nations, large corporations pertain to planning and control processes in a
are known of being involved in non-green firm (Mustafa et al., 2012). Scholars provide a
practices such as natural resource misuse which relatively similar definition of firm performance
eventually exhibits negatively on the image of but with differences existing in the manner in
the large corporations (Belz & Peattie, 2010). which firm performance is assessed in latent
Latent literature contains numerous studies (Eneizan et al., 2016). Therefore,
considerations underpinning the proliferation firm performance as a construct continues to
of green marketing amongst existing firms undergo developments especially in the manner
across industries, with SMEs included. Going it is assessed due to challenges regarding the
green is being increasingly deemed a moral conceptual and methodological issues (Amegbe,
obligation (Belz & Peattie, 2010), increasing & Hanu, 2016; Masocha, 2018).
government regulations (Masocha & Fatoki, Two approaches are used in measuring
2018), competitors’ environmental orientation firm performance namely, financial and non-
activities (Amegbe et al., 2017), as well as cost financial measurement matrices (Eneizan
implications in the waste disposal and material & Wahab, 2016). There has been a notable
usage, are all enforcing demands for small approach of predominantly utilising financial
and large firms to modify their behaviour. Top performance measures in the determination of
businesses nowadays consider simultaneously firm performance amongst former academic
meeting customer and environmental needs, works. Some of the classical financial
building green product platforms, reputation, accounting measurements (i.e. return on equity
and loyalty, as well as substantiating new and return on sales) are deemed inadequate in
values and innovations on the backdrop of ascertaining performance disparities amongst
environmental concerns of a paramount firms (Masocha, 2018). Likewise, there is a
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192GREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING 179
potential for ambiguous signals to emanate from and reducing costs (Durmaz, & Yaşar, 2016).
classical financial accounting measures (e.g. Financial and market performance are posited as
return on investment and earnings per share) accruals from green marketing for firms that go
about incessant improvement and innovation green (Punitha & Mohd Rasdi 2013). However,
(Eneizan & Wahab, 2016). Similarly, the scant empirical scholarships within the context
concept of firm performance in the marketing of SMEs exist that assess a direct nexus between
literature has classically been grounded on the green practices and performance.
premises of the profit maximisation principle
from microeconomics (Amegbe & Hanu, 2016). Eco-Branding
Reservations exist in the usage of financial
Eco-brand pertains to a contemporary approach
measures in determining firm performance has
towards the conventional branding tools such as
because they have been to be backward-looking,
name, signs, and design of products that posit no
rigid, and unsophisticated when ascertaining
harm towards the environment (Rahbar & Abdul
sustainability and green practices (Masocha,
Wahid, 2011). Eco-branding topographies
2018). The integration of financial and non-
provide a differentiation approach for firms
financial measures is as such gaining momentum
vis-a-vis their non-green counterparts. A green
in contemporary studies emphasising the
brand presents substantial eco-advantages when
essence of non-financial matrices (i.e.
contrasted with incumbents by appealing to
customers, investors, and stakeholders) as well
customers who are prepared to prioritise going
as processes, people development, and future
green (Grant, 2008),. Increasingly, branding
(Eneizan & Wahab, 2016). This is consistent with
strategies targeting both businesses to consumers
the view held by marketing and management
(B-2-C) and business to business (B-2-B)
theorists towards utilising a multidimensional
markets are depending on being significantly
approach by encapsulating the triple bottom line
green brands (Schmidt et al., 2017). Thus,
(TBL) elements of societal and environmental
marketing practitioners and researchers need to
dimensions in measuring firm performance on
comprehend the extent to which brands sway
top of financial performance (Eneizan & Wahab
consumer’s buying decisions. Consistently,
2016).
researchers and a practitioner in the field of
The study at hand adopts a similar marketing must comprehend the impact of
approach to integrating financial and non- eco-branding on consumer’s buying decisions.
financial measures in the ascertainment of firm A green brand identity is defined by explicit
performance. Solely focusing on financial such brand components as well as benefits connected
as profit as well as other marketing aspects to plummeting environmental harm (Lin et al.,
such as sales is irrelevant in the light of green 2017). An appropriately executed green brand
concerns. Accordingly, firm performance is identity ought to afford paybacks to ecologically
of significant apprehension for a firm being cognisant customers. Subsequently, the ultimate
primarily driven by unique resources that are effect of brands on consumers buying decisions
essential and can seldom be imitated (Eneizan is reckoned as brand equity.
& Wahab, 2016). This suggests that there
Environmental labels have a significant
are embedded opportunities for firms that
impact on the consumer’s assessment regarding
adopt green marketing to enhance their firm
how brands perform environmentally. The
performance. The assimilation of green practices
concept of brand equity relates to the distinction
in business management processes has been
in how a consumer responds towards a particular
propounded to have a bearing on the performance
brand based on knowledge about the brand
of firms (Hasan & Ali,2015). Previous studies
(Keller, 2014). Furthermore, brand knowledge
demonstrate that green marketing strategies
encapsulates the entire connotations involving
resulted in firms improving their profitability
a brand with the customers e.g. opinions,
through enhancing marketing performance
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192Reginald Masocha 180
emotions, metaphors, views, assertiveness, purchasing greener products. As depicted by the
and experiences. Thus, green branding needs labels, green marketing results in the eradication
to prioritise the distinction of green products of information asymmetry with customers being
in contrast to non-green ones in terms of furnished with information about the extent to
performance. For customers to consider altering which products meet the required environmental
their buying behaviour towards green products impact standards in production processes (Lamb
there is a need for a significant factor motivation et al., 2015). Germany’s Blue Angel, the US’s
driven by the existence of realistic emotional Green Seal, Japan’s Eco-mark, Canada’s
brand benefits underlying green products Environmental Choice, European Commission’s
(Rahbar & Abdul Wahid, 2011; Danciu, European Eco-label, and Scandinavian Nordic
2015). Green consumers are influenced by the Swan are deemed as illustrations of national
existence of green values rather than products standards of eco-labels (Massari et al., 2016;
that have been repackaged without the necessary Minkov et al., 2018). In South Africa, the
green values (Danciu, 2015). Empirical South African Bureau of Standards (SABS)
evidence established that green trust and green has an ‘environment mark’ which is operated
satisfaction are vital attributes that impact green concurrently with its classification of established
brand preferences (Mourad & Serag Eldin and permitted standards (Tung, 2016).
Ahmed 2012). Conversely, other studies have There is a wide assortment of eco-labels
established that green branding strategies are with each type having attributes that are peculiar
faced with drawbacks with regards to consumers’ to the label strategy. Eco-labelling strategies can
understanding which tends to be incongruent to be identified based on affirmative, negative, or
green performances by firms (Danciu, 2015). middle-of-the-road attributes (Hahnel et al.,
Thus, while genuinely green firms exist, these 2015). Positive labelling strategies confirm that
do not get to optimally reap rewards from their labelled products positively contribute to the
green efforts due to the prominent practise of protection of the environment by containing at
greenwashing which dissuades customers from least one environmentally friendly attributes.
patronising genuinely green firms (Lin et al., Furthermore, negative labelling cautions
2017). Thus, hypothesis 1 proposes that there is consumers of the unsafe or unsafe components of
a positive nexus between eco-branding and firm the products. Finally, neutral labelling strategies
performance. focus on simply providing environmental
information pertaining to the labelled product
Eco-Labelling (Hahnel et al., 2015). Green-labelling is vital
in differentiating green products and assisting
Eco-labelling gained prominence within the
customers in green purchasing (Struwig, &
context of marketing in 1992 following the
Adendorff, 2018). Green labels have been
promulgation of the Rio Earth Summit Agenda
utilised to furnish customers with meaning
as a mechanism of advancing sustainable
and functioned as a market-based mechanism
development (Muposhi, 2019). A green-label
envisioned to contribute towards environmental
is regarded as a mark or emblem utilised on
enhancements, with further advantages towards
the container of green products, or insertion
affirmative corporate brand image connotation
in an information sheet that complements the
for firms (Song et. al., 2019). Thus, green-
product, providing facts about the extent to
labels have been valuable towards creating
which the products promote non-detrimental
environmental awareness and minimising
environmental effects (Struwig, & Adendorff,
information complexities associated with green
2018). Towards the latter part of the 1980s,
products thereby enhancing consumer acceptance
various nations have implemented labelling
of green-product and their subsequent purchase
systems on a national scale as a response
(Song et al., 2019). Coherently, eco-labelling
to shifting consumer expectations towards
is a market-based economic mechanism that
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192GREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING 181
directs consumer’s purchasing behaviour to 2018). Firstly, functional fact-based appeals
consider product attributes besides the monetary are green adverts that that are premised on
aspect, thereby offering control to consumers highlighting particular utilitarian features of
who purchase green products. green products in contrast to rivalry traditional
Existing empirical studies pertaining to products (Matthes et al., 2014). Secondly,
eco-labels have indicated that green labels the image-based emotional appeal focuses
influence firm performance in the automobile on transferring the environmental emotional
industry (Kushwaha & Sharma, 2015), wine positioning and the related affective responses
industry (Leenders & Chandra, 2013) their towards a brand (Schumack et al., 2018). The
understanding, meaning, and perceptions on executional style in this kind of advertising is
these labels. Eco-labels are used as tools by through the utilisation of pleasant nature scenic
consumers to facilitate decision making in images which are aimed at evoking affirmative
selecting environmentally-friendly products and affective responses (Hartmann et al., 2013;
enabling customers to know how products are Parguel et al., 2015). Finally, a combination
made. This study focused on investigating green- (functional and emotional appeals) positioning
labels in the context of SMEs due to inadequate strategy has been deemed to attain optimum
research efforts in the field and postulated effects towards changing consumer attitudes
in hypothesis 2 that there is a positive nexus (Schumack et al., 2018).
between eco-labelling and firm performance. The primary aim of the green advertisement
is to inspire consumers’ purchase activities
Environmental Advertisements towards products that ensure no or less harm
to the environment thereby and redirecting
Environmental advertising also known as green
their alertness of the progressive contribution
advertising finds its prominence out of the
of their purchase behaviour (Rahbar & Abdul
growing expectations on the part of businesses to
Wahid, 2011). However, the phenomenon
reach environmentally concerned customers with
of greenwashing is also a prevalent force
the necessary green information of their products
negatively affecting the attitude of consumers
and services (Wahba, 2012). Environmental
towards green advertising (Lin et al., 2017). As
(or green) advertisements convey messages
businesses pursue environmentally cognisant
that comprise ecological, environmental
buyers, their environmental claims within their
sustainability, or eco‐friendly requirements
advertisements are subjected to severe scrutiny
and expectations of the ecologically conscious
(Leonidou et al., 2011; Schumack et al., 2018).
interested party (Leonidou et al., 2011).
Green advertising campaigns by small and large
Furthermore, environmental advertising focuses
businesses need to be effective in enabling
on how products or services are related to the
consumers to exercise their quest for social
natural environment, support an environmentally
backing or outward personal expression (Lin et
conscious lifestyle, and reflect a corporate
al., 2017).
environmental appearance or concern (Schmuck
et al., 2018). Analogous to rising global green To remain competitive, businesses
activities and the public consideration towards are continuously responding by becoming
environmental complications, most firms have environmentally conscious thereby
opted for environmental advertisements. In this environmental advertising has become a
regard, the various media are being utilised, major part of marketing. Numerous studies
inter alia, social media, newspapers, radios, have revealed that consumers are increasingly
billboards, magazines through the utilisation of interested in the green content about
primarily three strategies, namely, functional advertisements and they have increasingly
fact-based appeals, image-based emotion influenced by-products they deem to be
appeals, or any of the two (Schumack et al., supporting the environment (Leonidou et al.,
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192Reginald Masocha 182
2011). More precisely, the relationship between Software for Social Sciences Statistical
the adoption of environmental advertisements software and Analysis of Moment Structures
and firm performance has been confirmed in (AMOS Version 25.0) were used in performing
the automobile industry (Kushwaha & Sharma, statistical analysis. Inferential analysis in this
2015). In the context of SMEs, a global outlook study primarily constituted the performance
study established that green marketing strategies of structural equation modelling (SEM) which
(environmental advertising included) contribute constitutes the computation of the multiple
towards the financial performance of SMEs regression analysis of the postulated hypotheses.
(Miroshnychenko et al., 2017). However, SEM constitutes two components, namely, the
studies that focus on the South African SMEs measurement model and the structural model.
are scant, as such; hypothesis 3 proposed that The measurement model is equated to factor
there is a positive nexus between environmental analysis and focuses on determining the best
advertising and firm performance. fit between the factors being measured and the
items used to measure the items thereof.
Research Design and Methodology The measurement model enables the
researcher to model or establish relationships
The quantitative research methodology was
that exist among indicators of observed
utilised in this study and the cross-sectional
variables and their related latent variables
survey research design was applied. The
(unobserved variables or constructs) through
population of the SMEs in the Limpopo Province
the definition of a structural model (Martínez-
comprises the sample frame for this study.
López et al., 2013). Together with the statistics
According to Small Enterprises Development
from the measurement model, the structural
Agency (Seda, 2018), there are approximately
model enables the researcher to accept or reject
314 880 of both registered and unregistered
the hypotheses (Mishra, 2015). The structural
SMEs found in various sectors in the Limpopo
model explains the relationship between latent
Province. As such, obtaining a complete sample
variables by the way of determining the variance
listing of all SMEs in the province with the
explained and unexplained. Thus, this becomes
greater portion being in the informal sector was
similar to the analysis of the relationships in the
a daunting task for this study. Consequently, for
regression models. The structural model is built
this study, the non-probability sampling method
on various estimation models, and usually, it
was used, and convenience sampling was then
depends on the software that is utilised (Mishra,
followed in choosing participants to get data
2015). Of the various estimation models that
from. The sample size was 156 respondents who
exist, such as, Maximum Likelihood (ML) is
were either owners or managers in the SME
the commonly used approach and was utilised
businesses that were investigated. Furthermore,
in this study because it is highly consistent with
the study made use of a survey in a form of paper-
categorical data within a multivariate normality
based self-assessment questionnaires where the
context (Dandagi et al., 2016).
respondents answer the questions at their own
time. In this study, quantitative data was used.
The survey was operationalised through printed Results and Discussion
questionnaires which were distributed in- Descriptive Analysis
person and electronically (e-mail). The research
instrument was designed based on a critical The data presented in this section was gathered
literature review and comprised of a 5-point using questionnaires from a sample of 181
Likert scale format of questionnaire items. respondents. The questionnaires that were
returned are 156 and that produces an 86 %
The data analysis stage followed the usual response rate which is deemed ideal to proceed
two-pronged approach, namely, descriptive with the data analysis. The following discussion
and inferential analysis. IBM Statistical
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192GREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING 183
presents the biographic information on the indicated no substantial irregularities towards
sample participants as depicted in Figure 1. the use of SEM. Table 2 presents information
As in the figure above, 58% were male on normality tests. Additionally, exploratory
and 42% were female in terms of gender factor analysis (EFA) on the premises principal
distribution. In terms of age, most (52%) of the component analysis (PCA) and varimax rotation
respondents were between the 31 to 40 years age was applied to ascertain the dimensionality of
group. As for education, the majority (43%) of the study variables. The Varimax rotation, an
the respondents had a matric qualification with orthogonal rotation option was applied in this
the next category being those with diplomas study. Preference for varimax was informed
having 30%. The respondents also indicated the by its ability to simultaneously minimise the
different types of legal ownership between sole number of variables that has high loadings
proprietorship, partnerships, co-operatives (Co- for each particular factor and ensuring that
ops), close cooperation (CCs), and companies, insignificant loadings are even more decreased
and the percentages were 15%, 40%, 19%, 26%, (Yong & Pearce, 2013)
and 16% respectively. In terms of the different Prior to performing EFA, data was first
industries, there were manufacturing (37%), measured for sample adequacy at the hand of
wholesaling and retailing (24%), agriculture Kaiser-Meyer-Olkin (KMO) and Bartlett’s Test
(31%), services (7%) and there was none from of Sphericity (BTS) measures, of which all
mining and tourism. Of the sampled firms, the variables had KMO statistics greater than
employees were 5% less than 5 employees, 0.5 and BTS was significant (pReginald Masocha 184
Table 2: Descriptive statistics
Variable Mean StDev Variance Min Max Mode Skewness Kurtosis
Ecolab1 4,4419 0,6251 0,3907 1,0000 5,0000 4 1,05 0,97
Ecolab2 4,5581 0,5225 0,2731 3,0000 5,0000 5 -0,49 -1,22
Ecolab3 4,6512 0,5481 0,3004 2,0000 5,0000 5 -1,13 0,60
Ecolab4 4,6395 0,4830 0,2332 4,0000 5,0000 5 -0,59 -0,69
Ecobra1 4,2674 0,5407 0,2923 3,0000 5,0000 4 0,11 -0,39
Ecobra2 4,3488 0,6091 0,3710 1,0000 5,0000 4 -1,23 1,04
Ecobra3 4,3721 0,5749 0,3305 2,0000 5,0000 4 -0,62 1,24
Ecobra4 4,4302 0,5211 0,2715 3,0000 5,0000 4 0,03 -1,03
Econbra5 4,3023 0,5955 0,3546 1,0000 5,0000 4 -1,18 1,17
Envadv1 4,5349 0,5246 0,2752 3,0000 5,0000 5 -0,39 -1,10
Envadv2 4,6047 0,5152 0,2654 3,0000 5,0000 5 -0,70 -0,92
Envadv3 4,7093 0,4567 0,2086 4,0000 5,0000 5 -0,94 -1,15
Envadv4 4,4070 0,5397 0,2912 3,0000 5,0000 4 -0,08 -1,07
Envadv5 4,4070 0,5816 0,3383 3,0000 5,0000 4 -0,36 -0,72
Firmper1 4,3953 0,5375 0,2889 3,0000 5,0000 4 -0,03 -1,06
Firmper2 4,4070 0,5174 0,2677 3,0000 5,0000 4 0,12 -1,20
Firmper3 4,4070 0,5397 0,2912 3,0000 5,0000 4 -0,08 -1,07
Firmper4 4,4070 0,5816 0,3383 3,0000 5,0000 4 -0,36 -0,72
Table 3: Sample adequacy
Measures MEAN SD EIGEN TVE (%) KMO BTS
ECOLAB 4.58 1.942 4.158 83.157 0.806 0.000
ECOBRA 4.32 1.716 2.765 55.103 0.773 0.000
ENVADV 4.64 1.290 2.267 56.486 0.576 0.000
FIRMPER 4.42 1.870 3.499 87.474 0.757 0.000
0.7 demonstrating substantial convergence & Lacker, 1981). Parameter assessments and
of the data. Table 4 illustrates Cronbach’s related t-values for each construct are used in
coefficient values that are between 0.759 the calculation of values for CR and AVE were
and 0.951 which specify the reliability of the used (Fornell & Lacker, 1981). For satisfactory
data. Composite Reliability (CR) and Average internal consistency CR values > 0.7 and AVE
Variance Extracted (AVE) were applied in values > 0.5 are needed (Hair et al., 2014).
determining internal consistency about the Entirely, as exposed in Table 4, the CR and AVE
constructs. CR and AVE define the magnitude measurements surpassed the proposed cut-off
of variance about a construct’s measure standards, thus describing the internal steadiness
contrasted to the measurement error (Fornell of the constructs.
Journal of Sustainability Science and Management Volume 16 Number 1, January 2021: 174-192GREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING 185
Table 4: Measurement model
Factor Items SFLS Cronbach’s Cronbach’s α AVE CR R-Squared
Alpha if Item
Deleted
Eco-labelling Ecolab1 .813 .834 0.907 0.712 0.916 ---
(ECOLAB) .829
.833
.834
.830
Ecolab2 .867 .829
Ecolab3 .905 .833
Ecolab4 .826 .834
Eco-branding Ecobra1 .811 .838 0.759 0.733 0.892 ---
(ECOBRA)
Ecobra2 .870 .852
Ecobra3 .886 .841
Environmental Envadv1 .818 .840 0.833 0.733 0.856 ---
Advertising
Envadv2 .946 .841
(ENVADV)
Envadv3 .796 .842
Firm Firmper1 .936 .830 0.951 0.871 0.964 0.94
Performance
Firmper2 .948 .829
(FIRMPER)
Firmper3 .954 .832
Firmper4 .894 .831
Furthermore, discriminant validity was advertising. However, between eco-branding
ascertained through correlation analysis. Herein, and environmental advertising a negative and
discriminant validity sought to determine insignificant relationship (r=-0.067; p=0.542)
whether constructs that were meant to be was found. Finally, there was a negative
unrelated were indeed so. The rule of thumb is insignificant between firm performance and Eco
that the inter-construct correlation coefficients labelling (r=-0.103; p=0.348) together with eco-
(r) should not exceed 0.80 (Mishra, 2015). The branding (r=-0.168; p=0.122). Whereas, there
correlation analysis (Table 5) indicates that a was a significant positive correlation between
positive and significant relationship (r=0.465; firm performance and environmental advertising
p=Reginald Masocha 186
Table 5: Pearson correlation analysis
ECOLAB ECOBRA ENVADV FIRMPER
ECOLAB 1
ECOBRA 0,46(0,000) 1
ENVADV 0,017(0,879) -0,067 (0,542) 1
FIRMPER -0,103(0,348) -0,168 (0,122) 0,743 (0,000) 1
ECO-LABELLING ECO-BRANDING ENVIRONADVERT FIRM PERFORMANCE
Structural Equation Modelling Figure 1 diagrammatically portrays the
The section pertains to the research hypotheses structural model with the results of the path
and presents the conclusions on the tested analysis presented in Table 6 below. To test the
hypotheses. The next table (Table 6) presents hypotheses, standardised regression weights
the standardised regression weights (β) for were computed and the guiding rule was if the
the path diagram about the hypothesised p-value is less than 0.05 the null hypothesis is
variables through a path analysis approach in rejected in support of the alternative hypothesis.
structural equation modeling (SEM). Through For the first hypothesis (H1) which stated that
AMOS version 25, the SEM approach was there is a positive and significant relationship
applied because of the inherent advantages between eco-labelling and firm performance, the
of simultaneously estimating parameters in null hypothesis was also rejected. As indicated
one model. In ascertaining model fitness, the in Table 6 below, at β=0.203, t=5.007, and
R-squared (R2) value relating to the endogenous PGREEN MARKETING PRACTICES: GREEN BRANDING, ADVERTISEMENTS AND LABELLING 187 H2 is supported. Lastly, regarding the third is being noted by consumers as well as other hypothesis (H3) which posited the existence of stakeholders. Conspicuously, more and more a positive and significant relationship between SMEs are adopting green marketing tools across environmental advertising and firm performance, the world as well as in South Africa. Therefore, thus, the alternative hypothesis was affirmed. As this study focused on whether or not green outlined in Table 6 below, at β=0.114, t=3.969, marketing tools utilised by SMEs influence and P
Reginald Masocha 188
and strategies to enhance their position. antecedents to green marketing practices within
Furthermore, with the competitive terrain being the context of SMEs. For policymakers, there is
amplified in the contemporary environments, a need to ensure a framework on the utilisation
SMEs’ managers need to consider the essence of of eco-branding, green advertising, and eco-
eco-labelling, eco-branding, and environmental labelling is developed that is customised for
advertising in their marketing strategies to SMEs. Consequently, this study goes a long way
enhance their competitiveness against large in providing a background for this framework.
firms. Undoubtedly, green marketing is a However, the major limitations of this study rest
strategy that is going to be around for some time in the focus area. The study focused on SMEs
in the business world. Thus, an elaborate and in general, and in one province of South Africa.
comprehensive sustainable and green approach A nationwide study could be more enriching as
should be pursued by SMEs that desire to results may differ from province to province.
optimise their performance. This implies that
at every contact point with customers the green
Acknowledgements
elements of their branding should be clear and
obvious to the customers and stakeholders. The researcher wants to acknowledge Nyasha
Eco-labelling, eco-branding, and environmental Chiuta for assisting with proofreading the draft
advertising are important tools to communicate of the manuscript. Acknowledgements are also
green efforts on behalf of SMEs. There is no need extended to the University of Limpopo for
for uncertainty on what SMEs represent within funding the publication costs of the article
the context of green marketing as large firms are
seriously considering going green. Similarly, References
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