INDEPENDENT JOURNAL OF MANAGEMENT & PRODUCTION (IJM&P)

http://www.ijmp.jor.br v. 4, n. 1, January – June 2013.

ISSN: 2236-269X
DOI: 10.14807/ijmp.v4i1.70

MARKET SUCCESS FACTORS OF SUSTAINABLE

PRODUCTS

Janine Fleith de Medeiros

Universidade Federal do Rio Grande do Sul (UFRGS) - Brazil
E-mail: [email protected]

José Luis Duarte Ribeiro

Universidade Federal do Rio Grande do Sul (UFRGS) - Brazil
E-mail: [email protected]

Submission: 08/04/2013
Accept: 23/04/2013

ABSTRACT
This article investigates dimensions and factors that according to the
perception of business managers drive the market success of
environmentally sustainable products. Initially, publications related to
new products introduced to the market (with or without environmental
focus) were evaluated. Four complementary dimensions were identified
as responsible for proper performance: (i) Market Knowledge, (ii)
Interfunctional Collaboration, (iii) Knowledge Integration Mechanisms,
and (iv) Generative Learning. Considering the above, an exploratory
study following a qualitative approach was conducted with managers
that work in the Brazilian market. For the choice of the respondents,
some characteristics were considered, such as growth in the sector of
activity where the organization works, and the area that they manage.
Results lead to the validation and ranking of the factors and dimensions
mentioned in the literature. They also allowed the identification of new
factors as: technological domain, competitive price, quality, company's
brand, and payback. Moreover, considering the variables described
and the relationships established among them, it was inferred that
technological domain can be considered as a dimension. This
suggestion is based on the respondents' perception concerning
"technological domain", such as: specialized people, research budget,
and also budget for facilities and equipment. The study also shows
deeper difference among practice areas than among sectors. Based on

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http://www.ijmp.jor.br v. 4, n. 1, January – June 2013.
ISSN: 2236-269X
DOI: 10.14807/ijmp.v4i1.70
the list of factors that was generated, new studies are recommended to measure the
impact of the factors and dimensions on the success of green products.

Keywords: Environmental; Innovation; Marketing Success Factors

1. INTRODUCTION

Focus on product innovation is one way to impart a competitive advantage to

an organization working in the industrial market. For this reason, studies on
successful product innovation practices have been gaining ground since the late
1980s. At the same time, in light of the current scenario of natural resource
limitations, product innovation practices which are environmentally sustainable take
on greater importance for companies, apart from being strategic and economically
viable.

Within this context, this article investigates which dimensions and factors, from
the perspective of managers in the manufacturing industry, drive the marketing
success of environmentally sustainable innovation. The objectives center around (i)
analyzing whether such individuals consider the measurement suggestions proposed
in the literature to be sufficient for evaluating the performance of green products, (ii)
discovering what factors they consider most relevant, and (iii) identifying if the sector
in which the organization operates promotes differences in regards to the importance
of the factors.

This article is organized into five sections. It first presents the dimensions and
factors identified through a state-of-the-art survey. Then, the methodological
procedures used for conducting the research are outlined. After this, the findings
from the field research are analyzed and compared to the data arising from the
literature review. Lastly, a list of dimensions and success factors for green product
innovation is proposed.

2. LITERATURE REVIEW

2.1 Market Knowledge

According to Iyer (1999), Rennings (2000), Chen (2001), Beise e Rennings
(2005), Zhu, Sarkis and Geng (2005), Mickwitz et al. (2008), Kammerer (2009) and
Carrillo-Hermosilla et al. (2010), environmentally sustainable product innovation
depends on consumers willing and able to acquire such products, environmental-
friendly legislation and government incentives, and educational campaigns that

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ISSN: 2236-269X
DOI: 10.14807/ijmp.v4i1.70
disseminate sustainable culture among society. According to the mentioned authors,
organizations will invest efforts towards innovative cleaner technologies and
production processes if these three forces are well intertwined and if companies
recognize these external factors.

Complementarily, Cambra-Fierro et al. (2008) and Fraj-Andrés et al. (2009)

argued that, when market realizes that organizational practices minimize negative
environmental impact, companies tend to obtain benefits related to cost and
differentiation. To Chen et al. (2006) and Chen (2009), environmentally sustainable
practices add value to a brand as they generate positive awareness towards the
brand, as well as increased perceived quality and trust that may positively impact
customer satisfaction.

Hanssen (1999), Baker and Sinkula (2005), Lee, Gemba e Kodoma (2006),
González-Benito and González-Benito (2008), Peng and Lin (2008), Brito et al.
(2008) and Naranjo-Gil (2009) all confirm that market knowledge and organizational
adaptation towards market characteristics are positively related to success of
environmentally sustainable innovations. Thus, organizations operating at global
levels must adapt processes and products to local demand in order to reap increased
profitability.

Foster Jr. et al. (2000) state that knowledge about buyers’ intentions and
buyers’ level of involvement in production and consumption of green products directly
impact environmental activities promoted by companies. Also Pujari et al. (2003) and
Visser et al. (2008) observed that green product development and market success
depend on customer behavior analysis, which can generate increased satisfaction,
loyalty and positive word-of-mouth. Cetindamar (2007) and Triebswetter and
Wackerbauer (2008) also highlight the importance of competitor practice analysis.

Still on the topic of knowledge about buyer behavior and intentions regarding
environmentally sustainable products, Bhate and Lawler (1997) found that
psychological and situational factors are more influent to the development of
environmentally friendly behavior than demographic factors. Similarly, Halme et al.
(2006) and Houe and Grabot (2009) showed that when environmentally friendly
products increase buyer perceived quality of life, consumers are more likely to
acquire them independently of sex, social class, employment and age group.

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ISSN: 2236-269X
DOI: 10.14807/ijmp.v4i1.70
2.2 Interfunctional Collaboration
Considering interfunctional collaboration, it is worth noting the study by Byrne
and Polonsky (2001), who identified that synergy among different sectors must
happen not only internally, but also among the stakeholders involved in
environmentally sustainable product development and delivery processes. According
to Chen (2007, 2008) and Triebswetter and Wackerbauer (2008), successful
environmentally friendly innovation is driven by a mixture of internal and external
factors, such as available technology, development costs, consumer pressure and
governmental regulations.

In a similar tone, Jabbour (2008) highlight the importance of both organization

maturity level and relationships between organizational areas and other players from
the delivery chain (especially those responsible for the logistics) for an adequate
environmentally sustainable product development process. The same trend is
observed by Carrillo-Hermosilla et al. (2010), who evidenced not only how marketing,
R&D and operations must act systemically, but also the need for key stakeholder
involvement and integration in order to implement green innovation.

Specifically regarding integration among areas as a success factor for

environmentally sustainable products, Pujari et al. (2003) identified that there is more
interaction than conflicts between traditional and environmentally-oriented product
development models. Similarly, Maxwell and van der Vorst (2003) proposed a
method for developing effective sustainable products and services integrated into
company strategies, business functions and overall supply chain. Hallstedt et al.
(2010) confirmed that superior green product development performance requires the
complete incorporation of an environmentally sustainable vision into all areas of the
organization, as well as the internal availability of incentives for this approach.

As a last aspect of the factor dealing with interfunctional collaboration, Ellram

et al. (2008) identified that concurrent engineering can be an important tool for
improving environmentally responsible practices in companies. Gonzalez-Benito
(2008) states that widespread proactivity and continuous exchanges between
different areas promote a distinctive characteristic that drives sustainable innovation
performance improvements.

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ISSN: 2236-269X
DOI: 10.14807/ijmp.v4i1.70
2.3 Knowledge Integration Mechanisms
Damanpour (1991) map the organizational variables that negatively impact the
established mechanisms for knowledge integration, among which are included: risk
aversion, traditional rewarding mechanisms, bureaucracy, conservative
organizational culture and structure, internal rivalries, and complex, rigid and
centralized organizational hierarchies. On the other hand, Sinkula et al. (1997)
contend that issues with the interpretation of organizational data and memory can
negatively impact organizational performance. Similarly, the study by Barczak et al.
(2007) highlights how the use of information and communication technologies can
contribute to integrate and preserve knowledge related to new product development
processes, and the study by Zancul, Marx and Metzker (2006) suggest that
concurrent engineering must be use.

According to Hurley and Hult (1998), an organizational culture that

emphasizes learning is a key element for generating positive innovation results in
market-oriented organizations, along with participative decision-making, support and
collaboration, and power sharing, all of which can be understood as knowledge
integration mechanisms. As the authors aptly put it, “researchers would be hard-
pressed to make the case that market and learning orientations are not simply
antecedents or phases of a process that could be labeled ‘market-driven innovation’”.
Similarly, Noble et al. (2002), Baker and Sinkula (2007) and Berchicci and Tucci
(2010) conclude that management must translate and disseminate market
information all over the organization, allowing the employees to question and adapt
organizational knowledge used for innovation means. It seems clear the role of
organizational knowledge integration mechanisms as antecedents to innovation.

2.4 Generative Learning

Generative learning is especially dependent on cultural barriers. As Eder
(2003) notices, cultural barriers can be an impediment for seizing market
opportunities related to environmentally sustainable innovation. Chen (2007, 2008),
in a similar tone, shows how superior green product performance can be achieved
when the whole organization develops a set of green competences that influence the
management processes. To Battisti (2008), the corporate ability to rethink processes
according to different lenses allows to reduce the gaps between technological
improvements and economic results.

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ISSN: 2236-269X
DOI: 10.14807/ijmp.v4i1.70
To Jabbour (2008) and Arevalo (2010), companies oriented towards
developing environmentally sustainable solutions are primarily those that develop a
consistent way of learning through critical reflective analysis of their actions. Hallstedt
et al. (2010) complement this reasoning by emphasizing companies' support
mechanism (in particular, its flexibility) among the variables that underpin the success
of green product innovation.

2.5 Synthesis of the Critical Success Factors

Considering the literature reviewed, table 1 shows a synthesis of the critical
success factors and its constituent elements that influence environmentally
sustainable product innovation.

Table 1 - List of Factors for Successful Innovation with Environmentally Sustainable

Products
Dimension Factors
Meeting the expectations of consumers
Meeting the expectations of society
Knowledge of the variables that motivate sustainable
purchases
Market
Complying with laws and legislation imposed by the
Knowledge
government
Knowledge about Competitors

Willingness of teams to collaborate

Organizational Climate that fosters Sustainable Innovation
Integration of the R&D, Production and Marketing
Cross-functional departments
Collaboration
Formalization and documentation of the PDP
Systemic Vision
Integration of key stakeholders
Risk Propensity
Low Bureaucratization of Processes
Knowledge Effective Internal Communication
Integration
Mechanisms Investment in Empowerment
Use of Simultaneous Engineering
Use of Information Technology
Elimination of cultural barriers
Development of green skills
Generative Critical reflective analysis ability
Learning
Flexibility

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ISSN: 2236-269X
DOI: 10.14807/ijmp.v4i1.70
3. METHOD

This study is exploratory in nature. Exploratory research is commonly used to

measure attitudes and study the behavior of small groups (GIL, 1999). In terms of
approach, it was qualitative in nature. Qualitative research is based on small
samples, and by delving into the issues, can provide a better understanding of the
context under study (MALHOTRA, 2006).

With respect to the data collection procedure, the technique of individual

interviews was chosen. To perform the data collection, the interviews were scheduled
in advance and conducted personally by the researchers. The elaboration of the data
collection instrument took into account the dimensions and factors revealed in the
state-of-the-art survey.

Judgmental sampling, a non-probabilistic sampling technique, was used in the

study. The Indicators of Industrial Production by Subsectors and Activities of Industry
(Brazilian Institute of Geography and Statistics - IBGE) were used as the selection
criterion for the sectors that were covered, choosing three for the collection that have
been experiencing growth in the last six years (Table 2). After this, different criteria
were observed for defining the companies, such as proximity and ease of access for
the researchers. Lastly, in terms of those interviewed, managers from marketing,
production and research and development departments were considered qualified to
answer, totaling nine persons sampled, three per organization.

For the data analysis, relevant excerpts were separated and isolated for
coding and categorization, for which a systematic coding framework for comparison
purposes was used. The collected data was then first compared with the list
generated in the state-of-the-art survey (theoretical comparison), after which a
comparison was made between the sectors and departments of the managers who
responded in these interviews (internal comparison) (RIBEIRO, MILAN, 2007). Lastly,
the interpretation involved the conclusions of the authors regarding the material,
taking into account the information obtained in the literature review (OLIVEIRA,
2007).

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DOI: 10.14807/ijmp.v4i1.70
Table 2 - Indicators of Industrial Production by Industry Subsectors and Activities of
Industry (IBGE)
Manufacturing Industry of Rio Grande do Sul Feb/06 Feb/07 Feb/08 Feb/09 Feb/10 Feb/11
(Brazil)
Food 92.35 98.83 110.13 94.31 87.31 105.11
Beverages 99.15 98.79 87.45 94.45 99.14 98.06
Tobacco 65.32 70.54 63.24 45.98 40.67 110.27
Footwear and Leather Articles 75.31 69.02 71.71 51.73 52.65 98.27
Pulp, Paper and Paper Products 117.66 115.39 119.5 120.61 132.23 93.23
Publishing, Printing, Reproduction of Recorded 78.33 82.39 81.39 78.48 71.43 101.52
Media
Oil Refining and Alcohol Production 83.21 94.9 125.03 128.5 105.64 90.23
Other Chemical Products 91.04 97.73 101.72 74.45 102.92 102.75
Rubber and Plastic 96.92 105.01 108.98 79.89 95.81 94.96
Basic Metallurgy 104.16 108.45 124.5 65.13 111.83 94.35
Metal Products 99.47 98.08 108.31 80.85 99.77 105.09
Machinery and Equipment 90.23 100.39 125.99 87.17 111.99 111.97
Motor Vehicles 121.86 139.82 174.6 115.67 167.21 103.35
Furniture 75.99 72.8 87.31 63.81 109.97 96.81
Base: 2002 average = 100
4. Results Analysis

The first question in the interview sought to discover out how the managers
who were surveyed view the practice of environmentally sustainable innovations. The
majority said that developing green products is important for expanding the
organization's competitiveness, in other words, enabling the company to enhance the
value of its brand and increase its sales share. Apart from that, some managers
understand that engaging in green innovation yields financial benefits from
government agencies, promotes significant changes in the structure of the
organization and affords technological training. Table 3 contains a summary of the
most frequently cited responses.

Table 3 - Importance of developing Environmentally Sustainable Innovations

Important Factors Times Cited
Expands the company's 6
competitiveness
Brings about financial gain 4
Promotes changes in the 3
organization
Engenders technological growth 2

In question two, the interviewees were asked what factors they believed to be
drivers for successfully marketing green product innovations. The factor everyone
cited is the knowledge that companies must have about their target markets. In

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DOI: 10.14807/ijmp.v4i1.70
explaining why they consider this to be a factor that ensures success, the managers
stated that design and performance must be in line with consumer expectations
("there's no point having a sustainable product if the design does not stimulate
sales").

Another factor cited by the majority of the managers interviewed deals with
technological mastery, that is, employee skills, research and machinery that
organizations must have so that proposed green innovations will generate good
market results. Another commonly-cited factor was price. According to managers
there is a certain leeway on the part of consumers regarding how much more they'll
pay for a product that is greener than another, and this must be respected ("success
depends on the perception consumers have of the product and what they are willing
to pay for it"). Table 4 summarizes the most frequently-cited responses.

Table 4 - Factors that Drive the Marketing Success of Green Product Innovations
Success Factors Times Cited
Consumer Market Knowledge 9
Technological Mastery 7
Competitive Prices 5
Good Quality 4
Company Brand 3
Financial Return 3

The third question on the survey asked managers about possible interplay
between the factors cited in the previous question. All the interviewees agreed that
the aforementioned factors are related to each other. In terms of the interplay that
managers deemed most important, all mentioned consumer market knowledge as
the initial factor, on the basis of which improvements need to be considered and put
into effect (but for this technological mastery is needed). In addition, the managers
realized that technological mastery is interrelated as a factor giving rise to good
quality, competitive prices and desired financial return. The interviewees also listed
good quality as a factor that generates positive associations with the company's
brand image (reliability) and due financial return.

The next questions refer to the dimensions and factors mapped in the
literature as drivers for the successful marketing of green innovations. To make it
easier for respondents, they were shown cards with each dimension and its factors,
and requested to identify the three most important. The results obtained for market
knowledge (Table 5) will be presented first.

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Table 5 - Importance of the Factors from the Market Knowledge Dimension
Degree of
Importance
Factors from the Market Knowledge Dimension 1 2 3
Meeting the Expectations of Consumers 3 2 2
Meeting the Expectations of Society 1 1
Knowledge of the variables that motivate sustainable 1 4 1
purchases
Complying with laws and regulations imposed by the 5 1
government
Knowledge about Competing Products 1 5

Looking at Table 5, it can be seen that the managers interviewed considered

compliance with laws and regulations imposed by the government as the most
important factor from the market knowledge dimension. The second most important is
knowledge of the variables that motivate sustainable purchases, that is, knowledge of
the consumer market and the attributes that are valued in this type of purchase.
Lastly, monitoring the activities of competitors ranks as the third most important factor
in regards to market knowledge. Table 6 presents the results obtained for the cross-
functional collaboration dimension.

Table 6 - Importance of the Factors from the Cross-functional Collaboration

Dimension
Degree of
Importance
Factors from the Cross-functional Collaboration 1 2 3
Dimension
Willingness of teams to collaborate 1 1 4
Organizational Climate that Fosters Sustainable 1 3 1
Innovation
Integration of the R&D, Production and Marketing 6 2 1
departments
Formalization and documentation of the PDP 1 1
Systemic Vision 1

Judging from the importance attributed by managers to the cross-functional

collaboration dimension, it is clear that opinions are more divided on this one than in
relation to the market knowledge dimension. However, the results indicate that
integration between the R&D, Production and Marketing departments is considered
the most important factor for successful innovation. Also in regards to the factors
from the cross-functional collaboration dimension, it should be noted that the culture
of the organization must be geared toward sustainability. Table 7 presents the results
obtained for the factors from the dimension of knowledge integration mechanisms.

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DOI: 10.14807/ijmp.v4i1.70
Table 7 - Importance of the Factors from the Knowledge Integration Mechanisms
Dimension
Degree of
Importance
Factors from the Knowledge Integration Mechanisms 1 2 3
Dimension
Risk Propensity 1
Low Bureaucratization of Processes 2 2 3
Effective Internal Communication 3 4 2
Investment in Empowerment 3 4
Use of Information Technology 3

For the dimension of knowledge integration mechanisms, two factors tied in

the number of times they were cited as first in importance: "use of IT tools",
especially with regard to forming the organization's memory, and "effective internal
communication". Several managers commented that proper communication coupled
with a good organizational climate decreases internal rivalries. Lastly, Table 8 deals
with the importance ascribed by managers to the generative learning factors.

Table 8 - Importance of the Factors from the Generative Learning Dimension

Degree of
Importance
Factors from the Generative Learning Dimension 1 2 3
Elimination of cultural barriers 7 1
Development of green skills 2 4 2
Critical reflective analysis ability 1 3
Flexibility 3 4

Most of the managers interviewed rated the elimination of cultural barriers

within the organization as the most important factor in this dimension, Development
of green skills and flexibility are the next most-cited factors. To conclude the
interview, the managers, from their perspective, had to rank the dimensions in order
of importance. Table 9 contains a summary of the results.

Table 9 - Importance of the Dimensions

Degree of Importance
Importance of the Dimensions 1 2 3 4
Market Knowledge 8 1
Cross-functional Collaboration 5 2 2
Knowledge Integration Mechanisms 2 7
Generative Learning 1 3 5

According to the managers who responded to the survey, market knowledge is

the most important dimension, corroborated by the responses given in questions two
and three. This is followed by cross-functional collaboration and generative learning.

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Comparing the results of the importance given to the factors mapped in the
literature by sector of activity investigated and by functional area, it was possible to
pinpoint more differences between the areas of activity than between the sectors in
which the study was conducted. For example, in the dimension of market knowledge,
the R&D and production departments for the most part ranked "compliance with laws
and regulations" as the most important factor while managers from the marketing
department pointed to the factor "meeting consumer expectations" as the most
important.

As for the differences noted between the sectors, the most striking is that none
of the managers who work in the furniture sector highlighted the "use of IT" as an
important factor in the dimension of knowledge integration mechanisms. Moreover,
"integration of key stakeholders" was not designated among the three most important
factors for managers working in the automotive sector, when the cross-functional
collaboration dimension factors were assessed.

5. Factors driving the marketing success of green innovations

This study enabled new factors to be identified that serve as drivers for the
market success of environmentally sustainable innovations. According to the
managers interviewed from the manufacturing industries, technological mastery,
competitive prices, good quality, company brand and financial return need to be
considered, in addition to consumer market knowledge.

Furthermore, taking into consideration the above variables, as well as the

established interrelationships, it can be concluded that technological mastery
constitutes a dimension. This proposal is based on the variables linked together by
the respondents, such as specialized personnel, investments in research and
investments in facilities and equipment. Added to this, are the relations between this
factor and the others cited in the responses to question three.

Following is a summarized list of the factors that drive the marketing success
of green innovations (Table 11). It contains those factors mapped through the
literature review, as well as those generated via the managers selected for the
interviews.

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Table 11 - Final List of Factors for Successful Innovation with Environmentally
Sustainable Products
Dimension Factors
Meeting the expectations of consumers
Meeting the expectations of society
Knowledge of the variables that motivate sustainable
purchases
Market Complying with laws and legislation imposed by the
Knowledge government
Knowledge about Competitors
Company Brand
Competitive Prices

Willingness of teams to collaborate

Organizational Climate that fosters Sustainable Innovation
Integration of the R&D, Production and Marketing
Cross-functional departments
Collaboration
Formalization and documentation of the PDP
Systemic Vision
Integration of key stakeholders
Risk Propensity
Low Bureaucratization of Processes
Knowledge Effective Internal Communication
Integration
Mechanisms Investment in Empowerment
Use of Simultaneous Engineering
Use of Information Technology
Elimination of cultural barriers
Development of green skills
Generative Critical reflective analysis ability
Learning Flexibility

Investments in Research
Investments in Facilities and Equipment
Technological
Investment in Technological Training
Mastery
Quality Assurance
Financial Return

6. Final Considerations

This article explored what factors manufacturing industry managers perceive

as being drivers for the market success of environmentally sustainable innovation. In
this sense, the dimensions (i) market knowledge, (ii) cross-functional collaboration,
(iii) knowledge integration mechanisms and (iv) generative learning, mapped through
a literature review, were confirmed as important. In addition, a new dimension
emerged which was called (v) technological mastery.

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In that focusing on better products is an alternative for imparting a competitive
advantage to organizations, it should be noted that the classification of success
factors for environmentally sustainable innovation is an important aspect to be taken
into consideration by organizations in strategic decisions related to their portfolio.
Thus, the list of factors generated can be used to (i) to support a diagnosis or (ii)
serve as a starting point for developing a study of structural equations which quantify
the relationship between the variables listed.

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