Does an environmental marketing strategy influence marketing and financial performance? a study of Indonesian exporting firms

Abstract

Purpose - Broadly speaking, the implementation of green practice leads to higher performance in exporting firms. To test this concept empirically, this study proposes environmental marketing strategy as an antecedent of product differentiation and cost leadership as a means to promote marketing and financial performance. Design/Methodology/Approach - This study was conducted on 388 respondents serving as operational, production, and marketing managers of Indonesian exporting firms and used structural equation modelling (SEM) with AMOS 18 as an analysis technique. Findings and implications - The findings revealed that environmental marketing strategy significantly influences product differentiation and cost leadership. More specifically, product differentiation simultaneously influences marketing and financial performance. However, cost leadership influences financial performance but not marketing performance. This study implies the importance of environmental orientation in setting a firm strategy and promoting the performance of international firms. Limitations - The measurement items proposed in this study were adopted from studies conducted in developed countries; they have not been proven appropriate for direct application in developing countries such as Indonesia. Originality - This study is original in that it explores the importance of environmental studies in setting a firm strategy and promoting the performance of international business.