A Ten Country-Company Study of Sustainability and Product-Market Performance

Abstract

Countries, companies, and customers are becoming increasingly concerned with sustainability. However, it is unclear how much increased cost, if any, companies are willing to tolerate for sustainability efforts at the rate of potentially lower profits. Plus, what are the customers' sensitivities to the prices of products/services that are developed within the realm of sustainability initiatives (e.g., how much more can the products/services cost and still be viable)? Additionally, with 193 countries of the United Nations ratifying the Sustainable Development Goals, we know that countries are focused on sustainability, but can companies achieve positive sustainability effects on performance above what countries are doing? Consequently, what are the macro-micro dynamics in play for sustainability efforts? In a 10-country study involving 4,051 companies, we examine these macro-micro (country-company) dynamics, company costs, customer costs, and price sensitivities on the effects of sustainability on companies' performance. The results indicate that positive effects on companies' performance can be achieved (1) from the companies' sustainability efforts in all 10 countries studied, (2) even if the costs and/or prices increased by 27 to 72 percent (depending on the dynamic and scenario), and (3) by companies implementing sustainability efforts that are 5 to 30 percent above the efforts of the country. Increased sustainability effects can also be gained from lowering customer and company costs, but no such effects were found when lowering product prices.

Antecedents and Consequences of Customer Satisfaction: Do They Differ Across Online and Offline Purchases?

“…In this vein, a recent report notes that the ability to purchase 24x7 in the comfort of their home is the main convenience-related reason why customers chose to purchase online. 4 Thus, for the customers to purchase offline, their willingness to bear the convenience costs needs to be offset by the benefits offered by the overall quality of the purchase experience (Berry, Seiders, and Grewal 2002;Hult et al 2018), which can further heighten the importance they attach to the perception of overall quality when shopping offline. The possibility of receiving custom products (or services) for their specific needs, reliability and reduced perception of shopping risk, a positive store environment, and the quality of service offered by the employees in satisfying customer concerns are all components of the overall quality of the offline purchase experience that are not easily replicable in the online context.…”

Cognitive and Affective Antecedents of Consumers’ Satisfaction: A Systematic Review of Two Research Approaches

“…Perhaps one of the novelties that our review offers is related to the comparison between types of transaction. In fact, the type of transaction would moderate the relations between satisfaction and its determinants, thus, we can propose that purchasing by Internet is not the same as traditional purchasing when addressing the phenomenon of satisfaction [59,60]. Specifically, we observed stronger relationships in the empirical studies in the case of purchasing by Internet for the cognitive variables: expectations, confirmation, and performance.…”

Sustainable Marketing

“…Whereas the studies that are based on the organization's perspective are concerned toward economic aspect, i.e., financial and firm performance. For example, past studies have evaluated sustainable performance of firms by using different approaches such as via fuzzy model (Pogrebova et al 2017), qualitative risk analysis (Lanfranchi et al 2015), marketing audit (Serbanica et al 2015), non-financial performance indicators (Calu et al 2015), identification of contingencies factors (Schneider et al 2014), value-based management (Müller and Pfleger 2014), analysis of trends of budgets (Capatina et al 2017), and analysis of financial viability, costs, and priced sensitivity (Hult et al 2018). There are also studies that examined the impact of sustainable and green strategy on firm performance (Langerak et al 1998;Leonidou et al 2013;Taoketao et al 2018;Tollin and Christensen 2019).…”

“…In addition, Connelly et al (2011) reviewed nine theories which are transaction cost economics, agency theory, institutional theory, population ecology, resource dependence theory, the resource-based view of the firm, upper echeleons theory, social network theory, and signaling theory in understanding the sustainability aspect. Moreover, in understanding the impact of sustainability, company and consumer costs, and product price toward the growth of market competitiveness, Hult et al (2018) considered the resource-based view and institutional theory. Furthermore, Leonidou et al (2013) utilized stakeholder theory, andDiaz-Siefer et al (2015) have utilized item response theory to assess effect of green marketing on products' market performance.…”