How to earn a premium price: The effect of green marketing and brand coolness

Abstract

Purpose: The current paper aims to explore how brand coolness can mediate the relationship between tactical green marketing orientation (GMO) and willingness to pay (WTP), by exploring the differences between two global brands with opposite green marketing perceptions. Design/methodology/approach: Based on the stimuli-organism-response (S-O-R) framework, the relation between tactical GMO, brand coolness and consumer's WTP is examined through a survey with 272 participants, who gave their perceptions about two different brands regarding their green orientations: British Petroleum (BP) and L'Oréal. The variable set was adapted and validated through focus group sessions. Findings: Brand coolness is found to mediate the impact GMO on WTP and, for both brands, green marketing does affect the extent to which brands are perceived as cool by consumers. More importantly, evidence shows that only in the case of the “green brand” (e.g. L'Oréal), the impact on WTP is significant, which offers new implications regarding the outcomes of companies' pro-environmental policies. Originality/value: This study is the first to investigate the outcomes of GMO over consumer's intentions (WTP) and the role of brand perceptions (coolness). The effects are compared between two global brands, with significantly different perceptions on their environmental sustainability.