How do consumers’ perceptions change when greenwashing is revealed?

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How do consumers’ perceptions

change when greenwashing is

revealed?

Effect of information on consumer perceptions and

purchase intention in the context of greenwashing

BACHELOR THESIS WITHIN: Business Administration NUMBER OF CREDITS: 15 hp

PROGRAMME OF STUDY: Marketing Management AUTHORS: Filip Forsell & Ida Åkerblom

TUTOR: Nadia Arshad JÖNKÖPING Spring 2020

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Acknowledgements

First and foremost, the authors of this thesis want to express their gratitude towards the friends and family that have given their support during the period of writing our thesis, the

encouragements and discussions are greatly appreciated and helped us through, even during personally challenging times. We also want to thank the persons who agreed to be interviewed for the purposes of completing our research, as the thesis would not have come to be without them. We want to thank our supporting tutor, Nadia Arshad who has given very insightful and appreciated feedback even on short notice during stressful times. Lastly, we want to thank Anders Melander for keeping us in the loop and giving instructions on the next steps during the process.

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Bachelor Thesis Degree Project in Business Administration

Title: Effect of information on consumer perceptions and purchase intention in the context of greenwashing

Authors: Filip Forsell & Ida Åkerblom Tutor: Nadia Arshad

Date: 2020-05-18

Key terms: Greenwashing, Consumer Perceptions, Purchase Intention, Awareness, Interest

Background: The emergence and growth of the green economy has prompted companies to take more steps towards becoming environmentally conscious, but this is not always done in an honest way, from which cases of greenwashing has emerged. Cases of greenwashing can be recognized in all areas of business, and most of the research at the moment only recognizes the effect of a greenwashing case on consumer behavior, missing the link of consumer perceptions. The existing case study research also focuses on the attitudes after the fact, not investigating how a consumer reacts to the information during the revelation of a company’s misconduct.

Purpose: The purpose of this thesis is to investigate the connection between the concept of greenwashing and consumer perceptions, and thus the decisions consumers take based on the level of information they possess.

Method: The research is conducted as an interpretivist qualitative case study based on a single imaginary case, where the data is gathered through triangulation of previous existing literature and observations from semi-structured interviews, analyzed through abductive reasoning.

Conclusion: The research found that when a consumer is presented with information about a company and their initiatives, the perceptions that the consumer has change accordingly. The perceptions are dependent on the level of interest the consumer has in sustainability issues. Some findings that were not expected considered the partial effect of the sustainability initiatives, showing that consumers are only interested in green initiatives up to their personal constraints or

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preferences. The consumers largely see the motivations of a company to be attributed to profits, however, some more optimistic consumers seem to be less affected by greenwashing.

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3. Methodology 17 3.1 Research philosophy 17 3.2 Research approach 18 3.3 Research strategy 18 4. Method 18 4.1 Research structure 18 4.2 Interview design: 19 4.3 Sampling: 19 4.4 Ethicality, trustworthiness: 20 4.5 Interview guide: 20 4.6 Data analysis 23 5. Empirical Findings 23 6. Analysis 30 7. Conclusion 35 8. Discussion 36 8.1 Managerial implications 36 8.2 Limitations 37 8.3 Further research 39 9. References 40

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10. Appendices 46 10.1 Interview 1 46 10.2 Interview 2 47 10.3 Interview 3 47 10.4 Interview 4 48 10.5 Interview 5 49 10.6 Interview 6 50 10.7 Interview 7 51 10.8 Interview 8 51 10.9 Interview 9 52 10.10 Interview 10 53 10.11 Interview 11 54 10.12 Interview 12 54

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1. Introduction

1.1 Background

The value of the green economy is constantly increasing, and there is value to be gained from utilizing green marketing tactics, as 66% of consumers are willing to pay more for a sustainable brand (Nielsen, 2015). The value of the green economy is worth around four trillion USD as of 2018, which is the same amount as the fossil fuel market (UNFCCC, 2018). In the United Nations Framework Convention on Climate Change report (2018) the green economy is defined as an economy that is aiming for sustainable development without degrading the environment, as well as reducing ecological scarcities and environmental risks.

Green Marketing is defined by Prakash (2002) as “strategies to promote products by employing

environmental claims either about their attributes or about the systems, policies and processes of the firms that manufacture or sell them”. The communication about these aspects can be

undertaken by multiple outlets, such as advertising, PR, customer relations, and packaging for the purpose of creating a more sustainable image.

Green marketing can create long lasting customer relationships, which in turn increase the brand value of companies (Vilkaite-Vaitone & Skackauskiene, 2019; Zampese, Moori & Caldeira, 2016). This creates an incentive to utilize green marketing tactics, however there are cases where green marketing is misleading the customer, a practice which is called greenwashing.

Greenwashing can be defined as the act of misleading consumers regarding the environmental benefits of a product or service or the environmental practices of a company (TerraChoice, 2007). This communication is usually undertaken as a means to relay information to potential customers and change their perceptions about the efforts a company takes to satisfy the green needs emerging from the expansion of the green market. The communication can be viewed as misleading in cases where the company exaggerates their actions (TerraChoice, 2007).

Therefore, companies would be able to profit from the unawareness of customers or unwillingness to search for information thus creating increased profits without making any adjustments to their business model. In many cases brands may exhibit imagery or colors such as green - which has a general connotation of being environmentally friendly - on their

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is doing more for the environment than they really are (Schmuck, Matthes & Naderer, 2018; Parguel, Benoit-Moreau & Russell, 2015).

There are many examples of greenwashing. Arguably the largest one in recent years was the “Dieselgate” scandal caused by Volkswagen. Volkswagen stood accused of installing a “defeat device” in the software of the car which was active in situations when the car was being tested on how much emissions it had by governing bodies around the world (BBC, 2016). However, when the cars were being used in real life, they would emit 40-80 times more than they would in the lab, where the defeat device was active. This led to a scandal with multiple repercussions, such as: 30,000 employees were let go and the company had to buy back 500,000 cars in the US alone (BBC, 2016). This meant that the greenwashing in this example lead to massive damages for all stakeholders: the employees at Volkswagen, the consumers who had bought a car in the belief that it was eco-friendly, and to the shareholders when the stock went from 240 euros to 101 euros in less than 6 months.

However, greenwashing can be recognized not only in consumer goods, but also in areas such as finance and funds. In 2018 Goldman Sachs was advertising their new “Just fund” as a socially responsible and sustainable investment fund (Sirota, 2018). However, some of the largest investments are in fossil fuel firms and other companies that are not actively working to minimize the negative impact they have on the environment. Sirota argues that sharing part of the investments in “socially just” funds does not make a company responsible if Goldman Sachs are still investing the majority of their capital in companies that are acting against the good of the environment.

Starbucks faced similar scrutiny in 2007 when they launched their new paper cup, which was made of 10% recycled paper and on the cups Starbucks promoted recycling together with the slogan “Help us help the planet”. However, due to the plastic lining inside the cups, which is used to make sure that the cup does not leak, the cups could not be recycled (Conrad, 2007). This led to a public relations scandal where Starbucks was accused of manipulating consumers who thought they were doing something good for the environment. Starbucks has since doubled down and are once again promising greener cups, however, the debate on their effect on the

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1.2 Problem discussion

The emergence and growth of the green marketing practices create a need for further research of the topic. As green marketing is a very broad practice, the authors of this thesis will rather concentrate on the misleading part of this communication as there is a lack of research on how misleading communications affect customers’ perceptions, and what are the effects of customer awareness on the perceptions. In particular, this thesis will focus on greenwashing, which is a form of misleading advertising.

Most of the existing literature on green marketing is concerned with positive aspects of green marketing. However, the authors of this thesis also find that there is a lack of research when it comes to how the level of information that the consumer has affects their perceptions of a company or product. Thus, based on related research and frameworks, the authors theorize that the effect on customer perceptions is dependent on the awareness of the customers and the measures they take to research the background as well as the availability of information. The purpose of this thesis is therefore to investigate the connection between the concepts of greenwashing and consumer perceptions, and thus the intentions and the decisions the consumers take based on the level of information they possess. The authors of this thesis have an

explanatory approach and will therefore not only investigate how greenwashing affects customer perceptions, but also why it affects consumer perceptions in certain situations through the

perspective of the consumer. This will enable the investigation to consider the thought process of the consumers and a possibility for businesses to better develop their communications to be more applicable and understand the response of consumers to greenwashing, especially as managers need updated information to base their decisions on (Dangelico & Vocalelli, 2017).

The authors have developed a research question in order to closer investigate specific aspects of the problem:

How does the information a consumer has about a company affect their perceptions and purchase intention in the context of greenwashing?

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1.3 Delimitations

This paper intends to focus on consumers in Finland and Sweden and how their awareness impacts their purchase intention in the context of greenwashing. Firstly, the research conducted in this paper is limited to investigating how awareness impacts a consumers purchase intention in the context of greenwashing in low-involvement products. Secondly, the research is limited to consumers in Sweden and Finland, the respondents are therefore limited to these two countries. Lastly, the study is limited to one low-involvement product.

2. Frame of reference

The frame of reference was created by an non-systematic literature review, however the researchers set criteria for the articles reviewed in order to ensure the quality and reliability of the research considered: 1) the impact factor of the journal the article was published in were equal to or above 1, or the journal was listed either in Association of Business Schools’ (ABS)

Academic Journal Guide (2015) or in the Social Science Citation Index journal list (SSCI, 2019), and 2) the article was published in the last 25 years to ensure relevance. Since the topic of

marketing has been increasingly developing with digitalization and technology, the time frame was chosen to be representable of the topic considering the current time. Outside of this criteria, a few sources, namely TerraChoice (2007), Kemikalieinspektionen (2019) and Changing

Markets Foundation (2018) were used to exemplify and illustrate the issue. TerraChoice (2007) has been cited in almost every greenwashing literature the authors have read, which is why it was seen as relevant to mention in this paper.

The research begun with utilizing mainly Google scholar and JU Primo as databases, with multiple search terms, of which various combinations were made. These search terms included:

Greenwashing, Drivers of greenwashing, Impact of greenwashing, Green marketing, Consumer perceptions, Green brand equity and Green brand image. After a more focused reading of the

articles, also the often cited articles were searched for and read, conclusively allowing for the researchers to read through the prominent research in the fields. All the articles read were written in English and were read as online publications.

However, it is necessary to mention that the generalizability of some of the articles concerning consumer perceptions have been conducted in Asia, and in fields such as agriculture or aviation,

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that do not provide very transferable results to the topic of this research. As this gap was

recognized, the most applicable studies were still chosen to be considered as the themes seemed applicable to the topic and provided a framework to consider the results, keeping the viewpoint critical while conducting the analysis.

2.1 Greenwashing

Greenwashing can be defined as the intersection between two different firm behaviors, positive communication about environmental performance, and poor environmental performance (Delmas & Burbano, 2011). Greenwashing can also be defined as the act of misleading consumers regarding the environmental benefits of a product or service or the environmental practices of a company (TerraChoice, 2007). Four types of research approaches have been done on greenwashing. Firstly, macro-level research on the correlation between the greenwashing practices of an organization and their performance overall (Walker & Wan, 2012). Secondly, quantitative studies that explore the relationship between perceived greenwashing practices and consumer perceptions (Chen & Chang, 2013). Thirdly, studies that focus on consumer reactions in regard to greenwashing (Atkinson & Kim, 2014). Lastly, studies of an experimental nature that compares the effects of non-greenwashing and greenwashing practices (de Jong, Huluba & Beldad, 2019).

2.1.1 Sins of greenwashing

Greenwashing can take on many forms and can therefore be hard to identify. However, a framework exists which is useful in identifying environmental claims that might be

greenwashing. That framework is called the Seven Sins of Greenwashing and was developed by a Canadian environmental marketing agency called TerraChoice in 2007, which was acquired by United Laboratories in 2010. The seven sins are:

● Sin of the hidden trade-off ● Sin of no proof

● Sin of vagueness

● Sin of worshipping false labels ● Sin of irrelevance

● Sin of lesser of two evils ● Sin of fibbing

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The first sin, the sin of the hidden trade-off is when a firm claims that their product or service has positive environmental attributes without mentioning the hidden trade-offs in the process

(TerraChoice, 2007). One example of this is when a paper producer uses trees from sustainable tree production, since other parts of the paper making process might be unsustainable such as greenhouse emissions from the paper plant when the paper is made. Therefore, there might be a hidden trade-off. The second sin, the sin of no proof is an environmental claim that is not

supported by any easily accessed information or a third-party with high reliability (TerraChoice, 2007). The third sin, the sin of vagueness is defined as a claim that is either too broad or poorly defined so that the real meaning of the claim is likely to be misunderstood by the consumer (TerraChoice, 2007). An example of this is the adjective “all-natural”, uranium and arsenic are both occurring naturally and can therefore be classified as all-natural, they are however highly poisonous and is therefore neither green or good for the consumer. The fourth sin, the sin of worshipping false labels is when a product gives the impression of an endorsement from a third-party where no such endorsement exists, in other words, fake labeling (TerraChoice, 2007; Changing Markets Foundation, 2018). The fifth sin, the sin of irrelevance, is when a firm make an environmental claim that may be unhelpful or unimportant to consumers looking to purchase green products, even though it is truthful (TerraChoice, 2007). Such sins are made when a firm claim that a product is for example CFC-free, since CFC is banned in many countries

(Kemikalieinspektionen, 2019). The sixth sin, the sin of lesser of two evils is a claim that risks distracting consumers from the green impacts of a product category as a whole (TerraChoice, 2007). One example of this is organic cigarettes. The last sin, the sin of fibbing is defined as false environmental claims.

2.1.2 Drivers of greenwashing

One of the main drivers of greenwashing are the non-strict and uncertain regulations regarding greenwashing (Delmas & Burbano, 2011; Lyon & Montgomery, 2015). Lyon and Montgomery (2015), point to the lax regulatory environment as a factor that makes it possible for firms to manipulate the demand from both investors and consumers in regard to green firms, products, and services. Examples of greenwashing as a result of the weak regulatory environment are the problems with ill-defined adjectives such as “all-natural” and “biodegradable”, in short, there is a lack of clarity on what constitutes green behavior (Delmas & Burbano, 2011). Lyon and

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Montgomery (2015) state that all firms prefer to greenwash if there is no punishment for doing so.

Delmas and Burbano (2011) arranges the drivers of greenwashing into three different levels: individual, external, and organizational. Individual drivers include narrow decision framing and an optimistic bias. External drivers include market actors such as consumers, competitors and non-market actors such as non-government organizations and regulators. Organizational drivers include organizational culture and leadership, where obedience to authority has a positive relationship with greenwashing, however, ethical leadership is unrelated to the occurrence of greenwashing practices (Blome, Foerstl & Schleper, 2017)

2.1.3 Effects of greenwashing

de Jong, Huluba & Beldad (2019) suggest that the research previously made on greenwashing point to the fact that greenwashing strategies have detrimental effects on a consumer’s image of an organization or brand. However, the previous research has been done on extreme forms of greenwashing and does not correspond to a clear majority of greenwashing cases identified (de Jong, Huluba & Beldad, 2019). According to a study made by Lim, Ting, Bonaventure,

Sendiawan, Tanusina (2013), consumers had trouble evaluating the actual greenness behind green claims when confronted with a greenwashing case, which in turn led to cautiousness and distrust towards green products. However, these tensions can be resolved by rationalizations used by the consumer to solve the issue of skepticism towards green claims (Atkinson & Kim, 2014). Greenwashing also has direct negative effect on a company's green word of mouth (Chen, Lin & Chang, 2013). Greenwashing can have short term gains in terms of increased sales, and an increase in perceived environmental performance, however, it can be incredibly harmful to the perceived integrity of the firm if the greenwashing is uncovered (De Jong, Harkink & Barth, 2017).

2.2 Consumer Perceptions

Consumer perceptions are the set of beliefs that affect the behavior of the customer in relation to a product or brand. The different ways for a company to affect customer perceptions are any communications from or about the brand.

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Studies show that the consumer behavior is affected by green marketing, with research attesting to how customers are willing to pay a premium for a ‘green product’ (Wei, Ang & Jancenelle, 2018; Nielsen, 2015). However, these studies concentrate on the effect of the marketing on behavior, missing the link on consumer perceptions, and what affects them (Bruhn, Georgi & Tuzovic, 2009).

This can be affected by a vast number different internal and external factors ranging from

packaging of a product to the opinions of friends and family members. Consumer perception can be internally influenced by modifying the perceived values of a brand via different kinds of marketing efforts such as social media content, linear media and events (Bruhn et al., 2009). The types of communication can be divided into value creating instruments, which affect the core offering, and includes instruments such as product, price and service. The second group is relationship instruments, the goal of which is to establish a relationship with the customer, such as direct mail and customer service, and thirdly brand instruments, which includes advertising and sponsorships (Bruhn et al., 2009). For all the other categories the effects of the marketing efforts on perceptions is shown to be quite ineffective, except for the brand instruments, which seem to have a strong link. Thus, communications through advertising and sponsorships are seen to be the most impactful to customer perceptions. The study argues that the more involved the customer is, the higher their communications perception is, and the customer will evaluate the message more.

There are multiple factors outside of only marketing instruments that affect the consumer’s perceptions, however, including the consumer’s level of awareness regarding a specific

greenwashing incident, and level of interest in greenwashing and green brands or sustainability issues.

2.2.1 Consumer’s level of interest in Sustainability

This paper considers the level of interest a consumer has to mean the level of involvement the consumer has with sustainability issues. The behavior of a customer is not only dependent on the perceptions that the customer has, but also on the level of interest (McDonald & Oates, 2006; Peattie 2001). McDonald and Oates (2006) argue that the more interested the customers are, the stronger they react to greenwashing. Straughan and Roberts (1999) also found that studies generally have found a correlation between environmental concern and environmentally friendly behavior.

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Research by Peattie (2001) proposes a matrix to which purchases can be divided to based on the degree of compromise they have to make to do that purchase, which means paying more or traveling for the product. The second dimension is the degree of confidence, meaning the extent that they believe that the issue and solution are genuine. This dimension has been supported by research in which it is described at the perceived consumer effectiveness, or the level of

difference the consumer believes the purchase to do Straughan and Roberts (1999). This describes the cost-benefit tradeoff of making a green purchase. The matrix has been later modified by McDonald & Oates (2006) so that the two dimensions represent the ‘effort’ of the purchase and the ‘difference’ that the purchase makes.

Studies have been conducted to research if a consumer’s level of interest affects their ability to recognize greenwashing ads, but the study concluded that the consumers with more interest are no better at recognizing if the claim is true or misleading (Newell, Goldsmith, and Banzhaf, 1998). The study also found that consumers have negative perceptions towards claims made, but only if they perceive deception, and they are equally affected by both deceptive and true green adverts, if no deception is perceived (Newell et al, 1998).

Bruhn et al. (2009) theorise that the higher that the customers involvement is, the more they analyse and are able to evaluate the message the brand sends through their communications. Thus, higher involvement would indicate a higher level of awareness regarding the product or service.

2.2.2 Consumer’s level of awareness regarding greenwashing

The level of awareness referred to in this paper is considered to be the amount of knowledge and education a consumer has regarding a product or a brand and how much information they

possess about an incident of greenwashing. This means how much information have they

accessed and retained regarding a specific event. This is different from the level of interest, since the customer can have high interest in the sustainability issues, but low awareness because of multiple reasons, including lack of access to the information or misinformation. Thus, the level of awareness is dependent on how accessible the information is as well as the consumers level of interest to engage in the topic.

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A theory has been proposed that higher levels of environmental knowledge would increase environmental concern, thus increasing green consumption (Oskamp et al., 2017). This theory has however been criticized due to low proof of a direct relationship, instead it has been proposed that increasing environmental knowledge may actually reduce the purchasers’

confidence in the effectiveness of the solutions promised by adverts, and it may make them more knowledgeable of the issues and possible resolutions (Peattie, 2001). However, these studies only consider the effects of information on purchase decision instead of perceptions of the company and the product. No further qualitative studies were found to be applicable to illustrate the change in perceptions depending on the level of awareness regarding a single greenwashing case.

2.3 Company motivations for developing a green brand image

As the market for green products has increased, the consumers demand more green products, thus, companies are motivated to respond to the demand of the consumers by creating a more green perception of their brand. Being able to increase the perceived greenness, companies can create competitive advantage.

Previous research made by Wu & Lin (2014) indicates customer relationships to be the key to building brand equity, since consumers that have a good relationship with a company

continuously buy products and build loyalty to the brand. A related concept is green brand equity, which is the green value of the brand name and is related to the perceptions and ratings of the greenness of the brand (Parguel Benoît-Moreau & Larceneux, 2011). This green brand equity is created by the image and perception that consumers have of the level of greenness of the brand (Chen, 2009). As consumer perceptions affect the choices consumers make, research by Akturan (2018) outlines the effect of green brand associations and brand credibility on green brand equity, and argues it to positively affect the consumers purchase intention and behavior.

As the consumers consider the motivations for companies to engage in sustainable actions (Parguel et al., 2011), it is important to discuss the company motivations. Research by Parguel et al. (2011) outline how customers purchase intention is positively influenced by a positive green rating – a positive perception of the brand’s green efforts - which indicates a good green brand image. Thus, the company’s perceived motivations can affect the purchase decision of a consumer. Chen (2009) outlines that green innovation and green core competence are the key

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factors in terms of building the green image of the company, this creates a competitive advantage for the company, if other similar size companies are lagging behind.

Parguel et al. (2011), further discuss how a company’s existing sustainability ratings and the company’s perceived efforts affect whether the green Corporate Social Responsibility

communication is seen as motivated by extrinsic or intrinsic motives. Their conclusion was that consumers examine the communication messages and wonder about the company’s motives, and they differentiate between the motives to be either for “genuine environmental consciousness by the company (intrinsic motive) or an attempt to take opportunistic advantage of sustainable development trends (extrinsic motive)”.

If the brand is able to satisfy the consumers’ green needs, it is a chance for the company to either build a relationship in high-involvement purchases, or make the choice easier for

low-involvement purchases, if the consumer was satisfied with the product previously. Thus, it is important for companies to consider the consumer perspective and to make sure that they are satisfied.

3. Methodology

3.1 Research philosophy

This study will be based on an interpretivist approach due to the research question being addressed by deriving answers through interpreting qualitative research data from a small sample. The interpretive research paradigm attempts to understand the issue from a subjective viewpoint to derive valuable observations in order to explain the problem (Ponelis, 2015). The ontological assumption of this study is that the researchers will interact with the subject of the research, because separating the social world from the researcher’s thoughts is not possible, as they attempt to understand the complex humanist phenomena (Collis & Hussey, 2014). As the research is not interested in the frequency but rather in the meaning, the study will look to deepen the understanding and impact of greenwashing on consumer perceptions through developing patterns and theories in the natural environment. (Collis & Hussey, 2014). In addition, the interpretivist approach tends to use small samples and produces more and richer data, and the findings are assumed to be of low reliability but high validity. (Collis & Hussey,

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3.2 Research approach

The research begun with a review of secondary data in the form of previous literature of the topic to identify existing gaps, which the authors then explored. The research is based on existing theories which were then applied in the context of a case study to be able to deduct qualitative data, which was analyzed for the likeliest outcome, thus using an abductive reasoning (Mantere & Ketokivi, 2013). The previous literature was applied to the context where qualitative data was derived through interviews in an exploratory manner, where the researchers attempted to gain insights and knowledge within the subject area. This is a flexible approach as there are only a few constraints on the nature of activities (Collis & Hussey, 2014). This has derived the primary data, which has been analyzed to describe the problem.

3.3 Research strategy

This paper will be based on a case study, which is an “in-depth, multifaceted investigation using qualitative research methods, of a single social phenomenon” (Feagin, Orum & Sjoberg, 1991). This method was chosen to gain a deeper understanding into the perception of consumers. The case chosen is fictional, created by the researchers to resemble an existing case, since the authors want to answer how information affects the intention for purchasing a specific brand or product in the context of greenwashing (Yin, 2018). Yin states that a case study is favorable when the researchers have little or no control over behavioral events, and that the focus of the study is something in the present, these criteria fit this paper and therefore a case study strategy can be utilized.

4. Method

4.1 Research structure

The research will be based on a single fictional case that resembles an occurred event, in order for the participants not to have any pre-existing knowledge that could influence their answers. As the case is not a real occurred one, it presents the issue of lower generalizability, but the

researchers value this issue to be lower than the pre-existing knowledge, as that would possibly inhibit the investigation of the level of awareness if the interviewees already had the complete

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information (Wikfield, 1993). The case will be presented in written text during the structured interviews. The questions have been set in advance and will be presented in the same order to make the answers more comparable (Collis & Hussey, 2014). The authors will conduct at least 12 interviews to ensure the needed amount of data is collected to reach theoretical saturation (Guest, Bunce & Johnson, 2006).

4.2 Interview design:

The interview design this paper was influenced by is a case involving Starbucks in 2007. However, the case presented in this paper has been altered and the company name changed to avoid pre-existing perceptions of the case and the company. The case was disclosed in stages for the researchers to be able to evaluate the effect of awareness on the consumers’ purchase

intention. Before the first stage script were presented the interviewers asked three questions to gauge the level of awareness and interest of the interviewee as well as their predispositions to perceived company motivations. After each stage, three identical questions were presented to be able to determine the change in their answers depending on the information available to the consumer. The interviews were conducted by asking open questions face-to-face or via a phone and one-on-one in a convenient location to be able to gather more complex data and opinions in a familiar and safe environment (Collis & Hussey, 2014). The interviewees read the information disclosed in each stage themselves to negate the effect the researcher reading aloud the

information would have through a possibly unconscious tone of voice or expressions. The interviews were conducted in English, Swedish and Finnish, which led the researchers to be responsible of translating the answers of the respondents mindfully. This is justified by the researches experiencing a higher level of knowledge and vocabulary in both languages than the respondents, so they feel the responses will be more accurate if done so.

4.3 Sampling:

The interviewees were chosen through non-probability convenience sampling to be able to simplify the collection and easily reach the consumer group being researched in a short amount of time. While writing the report the authors are aware of the possible disadvantages of this method including bias and the influence that the researcher has. The sample was relatively small since it would be impractical to conduct extensive interviews on a huge number of people as this

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4.4 Ethicality, trustworthiness: Ethical issues

The interviewees were told in advance that their answers will be anonymous and they have the right to not answer any questions and should not feel pressured in case they get emotional or do not feel aware enough to answer the questions. To protect the privacy of the respondents, the real names of the participants are anonymized and are only referred to as R (respondent) followed by a number (e.g. R1, R2, R3 etc.) The respondents are numbered for the purpose of being able to follow the reactions of each respondent due to the study being conducted in stages.

Trustworthiness

Due to the interpretive approach, there is the challenge of the integrity of the data (Collis & Hussey, 2014). The validity is however rather high due to the qualitative approach and the richness of the data through the interviews. The credibility for the findings of this research is increased by triangulation which is present because of the multiple referents through the

literature and research conducted. The transferability is considered to be moderately low because of the concentration in geographical area and population. The findings are based on the

responses from the interviewees, so the confirmability is considered to be relatively high, regardless of having a small sample. The researchers attempt to negate any biases and be

straightforward in analyzing the findings. The research design and process is clearly explained in detail which allows for replication and increases the dependability of the results, but as the study is qualitative, the results may depend on the context (Wikfield, 1993).

4.5 Interview guide:

The interview was designed in order for the researchers to measure and explain the change in the respondents attitude towards a company suspected of greenwashing. The company was made up in order for the respondents to not have any preconceptions about the case. The company in this case could be accused of many sins of greenwashing such as: sin of the hidden trade-off, sin of no proof, and sin of vagueness. The interview was divided in 4 different steps. First, three questions were asked in order for the researchers to find out if the respondent were interested in sustainability issues and their perceptions regarding companies motivations. After those three questions the respondent read the first part of a three-part case. After the respondent had read the

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first part of the case, the interviewer would ask three questions to find out what the respondent think about the information presented in the case. Following that, the respondent would read the second part of the case and the three questions would be asked again. This was done to measure the changes in attitude toward the company in light of the new information. After this, the

respondent would read the last part of the case with the same three questions asked again in order for the researchers to find out if there were any changes in attitude towards the company after the last stage was presented.

Pre-case questions

● Are you interested in sustainability issues?

● What do you think motivates a company to be more sustainable?

● Does a company's sustainability initiatives affect your decision when purchasing something?

○ If yes: How does is affect your decision? Case stage 1

Nordic Coffee is a coffee shop chain that has in light of the increased environmental awareness to become more environmentally friendly and to recycle more decided to implement a new type of paper cup. The company says the following:

” Because of the effect that companies that operate on such a scale as ours have on the

environment, we have recently implemented a new type of paper cup in all our stores. The new paper cup is made of 50% recycled paper, in an attempt to respond to our customer’s wishes. This new paper will also be recyclable in order to lessen the waste that is discarded from our stores.

The cups will be changed in a phased-out manner and will be geographically implemented starting from big cities such as Stockholm to have a more immediate effect on the consumption and waste. Our goal is to implement this change in all of our locations by the end of 2020.’’

Stage 1 questions:

● Do you view this company as environmentally aware/friendly?

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● What do you think motivates the company to do this?

Case stage 2

Nordic Coffee has recently implemented a new “eco-friendly” paper cup in which they use paper that is recycled, they also claim that it can be recycled after it has been used.

The truth is, the cups are not recyclable at all in most places around the world. The reason for this is that the plastic coating that keeps the cup from leaking also prevents it from being recycled together with other paper products, since it is not only made up of paper. It cannot be recycled as plastic either because of all the paper in the cup.

Nordic Coffee is just using the positive publicity of being more sustainable, but they are forgetting to look at what happens after the cup has been used, as it is right now they are using recycled materials to make non-recyclable products.

● Would this information affect the likelihood of you buying from this company or consuming their goods?

Case stage 3

Nordic Coffee has made a new commitment to more environmental efforts in response to claims that their new cups are recently found out not to be recyclable. The company has not promised to take out their new “eco-friendly” cups, but has instead brought to attention and is now promoting their new PLA -plastic reusable cups that they sell from 10kr/1eur, as well as offering a 1kr discount to all customers who bring their own cups to the store and consume their coffee from them.

The company has also developed new reusable tumblers in numerous different designs, and offer a free cup of coffee when the customer buys a new reusable tumbler.

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● Would this information affect the likelihood of you buying from this company or consuming their goods?

4.6 Data analysis

The data analysis in this research has been conducted in an interpretivist thematic way where the researchers have attempted to analyze the data in a thematic way where the data has been

grouped by themes, which is suitable in qualitative research (Braun & Clarke, 2006). The researchers have attempted to be objective in the grouping, although the themes have been determined in the light of the previous literature review and the theories presented during this phase, through a continuous and systematic process suggested by Miles & Huberman (1994).

The data was first transcribed, during when also interviewer observations were noted for the limited number of observations that were made. During the transcribing the researchers also translated the text. Following this stage, the data was reduced through first creating individual interview summaries, after which the summaries were combined to one summary, which was then displayed via visual aids such as tables, and the most important quotes were highlighted. The data was then restructured to be applicable to each stage and question in the interviews to have summaries of the interviewees reaction to each stage to be able to analyze the effect of the information given. Finally, conclusions were drawn from the data, and the conclusions were grouped into thematic groups (Miles & Huberman, 1994).

5. Empirical Findings

12 interviews were conducted. The age span of the respondents was 20-40 years old. 50% of the respondents were male, 33% female and 17% identified as non-binary. Interviews were held in Finnish, Swedish and English. Interviews were held both face-to-face and by phone.

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The respondents stated level of interest in sustainability issues ranged from not interested to high, and the effects of a company’s sustainability initiatives affected the respondents choices from not at all to affecting their purchase intention greatly.

Respondent Interest in sustainability issues

Affected by sustainability initiatives when making a purchase 1 High Somewhat 2 Low No 3 High Greatly 4 Moderate Greatly 5 Moderate No 6 Moderate Somewhat 7 High Greatly 8 Low No 9 Moderate Somewhat 10 High Somewhat 11 High Greatly 12 Moderate Somewhat

Table 1. Responses before the case, adapted from interview summary

Four respondents considered the motivation for a company to take sustainability initiatives to be

“Higher profits”(R8), while seven respondents thought sustainability initiatives were motivated

by “reaching a younger audience” (R1) or “reaching a target audience”(R12). R2 stated that “laws and regulations” were the main motivation for companies to take sustainability initiatives.

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Three respondents stated that the sustainability initiatives only affect their choices in certain product groups, such as “fast moving consumer goods”(R7) and “groceries”(R1), but not in other product groups that could be considered more high-involvement such as “flights or car

purchases”(R7) or “clothes”(R1). R7 elaborated by saying that they take more environmentally

friendly measures in some categories to “make up” the negative effects of some of their other actions such as flying. Nine respondents stated that their purchase intention will be affected by sustainability initiatives, however, R7 and R12 said that it would only have an effect only until a price point that fits their personal budget. R9 stated that their purchase is dependent on the ‘’cost/benefit tradeoff of the product’’, explaining that if the benefit to the environment is perceived to be greater than the price difference to unsustainable alternatives, then they will go with the sustainable option. Three respondents said their purchase intention is not at all affected by a company’s sustainability initiatives.

Stage 1

Respondent Is the company

environmentally friendly?

Would this affect the likelihood of purchase? 1 No No 2 No No 3 Somewhat Yes 4 Yes Yes 5 Yes Yes 6 Yes Yes 7 Yes Yes 8 Somewhat No 9 Yes Yes 10 Yes Yes 11 Yes Yes

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12 Somewhat No Table 2. Responses to stage 1, adapted from interview summary

Perceptions of environmental friendliness after stage 1

When presented with the first part of the case, two respondents stated that they did not view the company as environmentally friendly, while seven did. Furthermore, three respondents stated the company to be “somewhat” environmentally friendly with R3 motivating the perception by saying “they are not doing all they could to be more sustainable”. The reasoning from R1 for not viewing them as environmentally friendly was that the company were not doing enough and stated that “having a recyclable cup was not rare” however, the respondent thought that they had “tried doing something good”. R2, which did not view them as environmentally friendly stated that “if they were to be environmentally friendly, they would have switched to 100% recyclable

paper”. R3 thought the company to be aware of the environmental issues, but not to be

environmentally friendly due to them “not doing all that they could”. R8 said that they “have

seen other companies do more”, which is why they saw the company as “medium environmentally friendly”.

Effect of stage 1 on purchase intention

The likelihood of the respondent buying from the company was stated to be high by eight respondents. Furthermore, R3 and R9 stated that the likelihood of them purchasing from the company in question would be affected by the other alternatives and the measures taken by other similar companies. On the other hand, four respondents said that they are unaffected by the initiative taken by the company. R3 said that the initiative “would still affect my purchase

intention, if there were no other companies that had taken the same measures, but I would always prefer the most ecological alternative overall”. R9 stated that “if I feel that the benefit the initiative is greater than the price difference is, then I will go with the sustainable option”.

Perceived company motivations after stage 1

Four respondents stated that the company took this initiative in order for them to “gain good

publicity” (R10) or because “it looks good”(R2) with R1 stating that they did it because “they can put a logo on their marketing signaling environmental awareness”. R10 said that the

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their reputation”. R9 said that the company is motivated by “common sense and trying to preserve the scarce resources of the world’’. Four respondents stated that they are doing this to

“make money”(R6). R11 stated that “they did this because the company is expected to take these

kinds of initiatives”.

Stage 2

Would this affect the likelihood of purchase? 1 No No 2 No No 3 No Yes 4 No No 5 Somewhat Yes 6 No Yes 7 No Yes 8 No No 9 No No 10 No Yes 11 No Yes 12 No Yes

Table 3. Responses to stage 2, adapted from interview summary Perceptions of environmental friendliness after stage 2

After being presented with the second stage of the case, only one respondent viewed the

company as somewhat environmentally friendly, while the other respondents did not. R3 stated that the “general perception of the company will be dependent on which stage get the most

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are trying to use some recycled materials, even if they were not able to be recycled’’. R4 thought

the company might have been “unaware’’ of the reality, while R2 thought that the company had “little knowledge of what they were doing”, although they were trying to make a change. R10 stated that “especially for big companies, there is bound to be a whistleblower and that’s why

companies should stay careful”.

Seven respondents stated that the information presented in the case would affect their likelihood of buying something from this company, all of them said that it would have a negative effect. Five respondents said the new information had no effect on the likelihood of them purchasing something from the company with R1 stating “this is what I thought before, that they are not

really caring about the environment, the likelihood of me buying their products does not change”. R3 stated that they felt tricked and frustrated, thus they would “boycott the company”

with R5 stating it would only make them “less likely to buy from the company”. Perceived company motivations after stage 2

Four respondents stated that they thought that the company only took this initiative in order for them to look good, gain publicity or improving their reputation. Furthermore, R1 elaborated and stated that they took this initiative in order to “trick people that might have lower awareness and

knowledge about these things”, while R10 said that the company “wanted to make it seem like they were sustainable without actually making a change’’. Five respondents attributed the

motivation to increasing sales or making a larger profit or making more money, which is an increase since the last stage.

Stage 3

Would this affect the likelihood of purchase?

1 No No

2 Yes Yes

3 No Yes

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5 Yes No 6 No No 7 Yes No 8 No No 9 Yes Yes 10 No No 11 No Yes 12 No Yes

Table 4. Responses to stage 3, adapted from interview summary Perceptions of environmental friendliness after stage 3

After the last stage of the case was presented, five respondents viewed the company as

environmentally friendly while seven respondents did not, which is an increase in respondents that are viewing the company as environmentally friendly. R4 stated that the company is “taking

initiative and making change” and that “the initiatives they were taking were not only aimed at changing the company’s behavior but also changing the customer’s behavior”. R10 stated that

they saw the company as not environmentally friendly, but aware to the extent that they knew they knew they have to do better.

Six respondents said that the new information would have no effect on the likelihood of them purchasing something from the company. However, six respondents stated that the new

information would change the likelihood of the making a purchase with four respondents being more likely to purchase something from the company. R6 said that they would have a hard time trusting the company after their misleading actions stating that they would only buy from this company if they did not know about the second stage, since the “image of the company is tainted

by their greenwashing”. R11 and R12 stated that this would have a negative effect on the

likelihood since they viewed the company's new environmental efforts as a way of “trying to fix

their reputation”(R11) or “making a profit”(R12). The four respondents that stated that the new

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viewed the company's effort as a way of “fixing their mistake” (R3) or as a way to “better

themselves”(R4). One respondent said that they would consider buying from the company with

their reusable options, if the competitors did not offer better alternatives. R5 said they would only buy from the company again if the management changed, because they stated that “the

company cannot change unless the people in charge change”.

Perceived company motivations after stage 3

Eight respondents said that the company is trying to fix their mistakes and reputation with one respondent stating the motivation for the company to be “to look good”(R9). R12 stated that they only took the new measures to make more profit. R8 said that the motivation for the company is to “upkeep their reputation and gain back the customers they had lost.”

6. Analysis

Through our interviews the researchers identified four distinct themes, partially supported by previous research, in each of which there were also new findings identified: Level of interest, Level of Awareness, Customer Relationships and Perceived company motivations. The findings are derived from both interviewee answers and researcher observations. As there is a gap within the studies on consumer perceptions, most of the findings were supported to an extent, but not focused on the same aspects as these findings.

Consumers’ level of interest in greenwashing

The level of interest was observed by asking the interviewees if they are interested in

sustainability issues, with the respondents specifying on the spectrum if they were very interested to not at all interested. This answer was then compared to the reactions that the participants had to the following case and their answers in relation to others in the same level of interest group and cross analyzed with other groups.

Finding 1: The consumers that showed more interest in sustainability issues were more

affected by greenwashing

As seen in previous research (Bruhn et al., 2009), the more interest and involved the customer is with sustainability issues, the more they analyze and evaluate the messages and the higher their communications perception is. This was supported by the research findings which were that if the person being interviewed was interested in sustainability issues, the more affected they were by the case, which can be observed in the tables above as more volatile changes in the

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respondents reactions to purchase intention as well as in their interview answers and body language. When asked if the case would affect the consumer’s purchase intention, the respondents who identified themselves as more highly interested reacted visibly agitated and mentioned drastic measures such as “boycotting the company”(R3) compared to less interested respondents who might have just answered to be “less likely to buy from the company” (R5). This clearly indicated higher effect of greenwashing on those consumers who have a higher level of interest in sustainability issues.

Finding 2: Consumers who stated to be interested in sustainability issues exhibited more

skepticism towards the company’s green claims

However, the respondents who were more interested in the sustainability issues exhibited critical attitude the company even in the first stage, with R1 not rating the company as environmentally friendly (table 2), and R3 stating that “they are not doing all they could to be more sustainable”. They suspected the company to be more interested in the publicity rather than in being

ecological.

Finding 3: Consumer that was more interested in sustainability issues was more

skeptical and did not view the company as environmentally friendly in the end

Similarly to the more intense reactions, and in line with the same theory, the respondents who were more interested seemed to have higher levels of skepticism towards the company, seen from the end of the interview where they would still be unlikely to buy from the company, when other less interested respondents would possibly be inclined to buy from the company again. This can be observed through a respondent saying that they would be unlikely to buy from the company because the “image of the company is tainted by their greenwashing”(R6). All but one of the interviewees who identified themselves as interested in sustainability issues did not see the company as environmentally friendly in the end of the case, even though they had taken greater measures to improve. One interested interviewee elaborated to say that “I would only be likely to

buy from the company if I did not know about them misleading the customer before, as I don’t believe that the company can change at all, unless the management changes” (R7), exhibiting

the extreme skepticism that other less interested respondents did not indicate. Based on previous research to green brand ratings (Praguel et al., 2011), the researchers would imagine this to extend into future brand communications, where the interested consumers would be unlikely to believe any green communication from the brand.

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Finding 4: Uninterested consumers did not react to the greenwashing

The participants who were not engaged or affected could be seen giving similar answers throughout the interview, being generally unaffected and non-interested in the topic. Thus, the researchers assume that people who are not interested in sustainability issues are not affected by the greenwashing and thus even the level of awareness does not have any effect. This indicates that the level of interest in sustainability issues is more important than the level of awareness, but the reactions with level of awareness vary due to the level of interest.

Finding 5: Many of the respondents were only affected by sustainability initiatives partly An unassumed finding was that R1, R7, R12 evaluated themselves to be affected by

sustainability initiatives only partly, specifying product categories in which they strive to be sustainable. R3, R4, R7, R8, R9 and R10 also considered themselves to be inclined to buy more sustainable alternatives, but the decision to buy was affected by the price. R9 elaborated on a price point where the benefit observed from the product is not enough to cover the price

difference to other less sustainable alternatives, quoting the cost-benefit principle. This is in line with the matrix by Peattie (2001), which describes the compromise that a consumer has to do to make a purchase and its relation to the benefit of the purchase.

Consumer’s level of awareness

The interviews have been structured so that the researchers have been able to examine the effect of the level of awareness stage by stage and its effects on consumer perceptions, which has, in addition to affecting all other findings, derived separate findings further discussed here.

Finding 6: Most of the respondents saw the company as environmentally friendly on the

1st stage, when the greenwashing has not been revealed

The respondents mostly rated the company at least as somewhat environmentally friendly in the first stage, with only two out of twelve rating the company as not environmentally friendly. As they were presented with the second stage, however, no one considered the company as

environmentally friendly anymore, although R5 considered the company to be somewhat

environmentally friendly, because “they were still using recycled materials even though they are

not re-recyclable”. After the third stage when the full information was revealed, the opinions

were more split, with 7 respondents not considering the company as environmentally friendly and 5 considering it environmentally friendly. Especially R3 and R5 voiced their negativity

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towards the company, with R3 saying “I have a hard time trusting the company after their

misleading actions”. R5 stated that they would be “suspicious of the company again conducting unethical practices”. This result indicates that the level of awareness does indeed affect the

consumer perception of the brand, with more information disclosed, the perception of the greenness of the brand changes, and even when the company does a more drastic change, the perception still lingers.

Finding 7: Respondents that were more skeptical were more distrusting of the company

after the revealed greenwashing

The respondents that were more interested in environmental issues exhibited skepticism towards the company’s green claims (R1; R3,), especially noticeable in saying that “the company was not

doing enough to be regarded as environmentally friendly” (R3). These respondents seemed to be

more mistrusting of the company after the revealed greenwashing and held on to mistrust, while other less interested participants might have bought from the company again and saw them as environmentally friendly. Considering the level of interest to be the effect on perceptions would not be a stretch based on Peattie’s (2001) study on consumer behavior. The study indicated that increasing environmental knowledge may actually reduce the purchasers’ confidence in the effectiveness of the solutions promised by adverts, and it may make them more knowledgeable of the issues and possible resolutions. However, this study only considered the effects of information on purchases instead of perceptions of the company and the product.

Effect on purchase intention

The interviews included questions concerning the likelihood of purchasing the product from the company after each stage, from which a few findings were derived to discuss the effect on purchase intention and the perceptions of the brand’s greenness.

Finding 8: Multiple respondents considered the effect of alternatives on purchase

intention

A finding that was not expected by the researchers was that the respondents considered the effect of alternatives on the purchase intention, mentioning that their decision to buy from this

company is dependent on how their competitor coffee chains are doing. This indicates that the consumers are not loyal towards coffee shop brands, and most of the respondents being averse to price increases, with R9 stating that “if I feel that the benefit the initiative is greater than the

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price difference is, then I will go with the sustainable option”, when discussing the cost-benefit

of the green initiative on the customer. The product falls into the low involvement category because of the low price point, but as coffee is often not a necessity, but a “luxury” good, the purchase intention is somewhat led by the feeling the customer has of the brand, which is why greenness could be considered especially important in this category. The customers however do not seem to do extensive information search, which is why only the most public ventures of the brand are seen, as also mentioned by R3, who stated that the most public phase will linger in people’s minds and form the general perception of the brand.

Furthermore, Respondents 1, 7 and 12 mentioned that they are affected by green initiatives only in some product categories, but interestingly specified that they are affected by the initiatives only in the more mid- to low involvement categories, and consider high price point or

involvement purchases on other criteria than greenness.

Finding 9: A majority of respondents that had their purchase intention affected in the

last stage had had a positive effect on likelihood of purchasing

After the last stage, there were only 6 respondents who were affected by the company’s actions, two out of which were affected negatively as in they were less likely to buy from the company after this stage. 4 respondents were affected positively, meaning they would have been more likely to buy from the company after the last stage. However, majority of the respondents would not be affected in any way by the “fixing” of the company. This shows that after greenwashing, the consumer will still be less likely to buy from the company, even when they have acted greenly afterwards. Thus, the risk that companies take when engaging in greenwashing is greater and they stand to lose more customers if it is revealed, than if they do not take any green action at all.

Perceived company motivations

As this research has been conducted on the customer perspective and how the customers assume the motivations of the company based on the communications, there were three conclusions that the researchers were able to deduct from the interviews.

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Finding 10: Motivation was largely seen as extrinsic; to make money, profit, attract

customers, fill a gap, to reach a target group - as a response to an external demand or pressure.

Before the case, all respondents saw the company’s motivations as profit based, citing business perspective motivations such as to fill a gap or gain more revenue instead of more goodwill motivations such as to decrease environmental damage or to preserve scarce resources. During the first stage 10 out of 12 respondents still cited these to be the motivations for the company to make a change. Throughout the interview, respondent 3 stated that the only motivation of a company is to make money, which could also be seen in other consumers responses, who saw this as the underlying motivation. This viewpoint is also underlined by the Friedman Doctrine which states that the social responsibility of business is to increase its profit, as companies are only responsible to their shareholders (Friedman, 1970).

Finding 11: The respondents who saw the company have intrinsic motivations, were still

likely to buy from the company after the revealed greenwashing.

The two respondents (R5 and R10) who attributed the company’s change to intrinsic values and motivations were still more likely to buy from the company after the third stage. This would indicate that the respondents rated the company to be of high ethicality or “greenness” and not to suspect greenwashing. As Parguel et al. (2011) outlines, positive green ratings affect the

purchase intention positively, which seems to be in line with our findings that, whereas this research considers the intrinsic motivations of a company to be more valuable to the extrinsic ones in the eye of the consumer.

Finding 12: Most respondents stated the motivation for the company to be repairing

their image

Everyone except one respondent thought at the end of the third stage that the company was only motivated by trying to repair the damage they had done to the to the brand. This is in line with research by Prague et al.’s (2011) theory of the effect of green rating, where negative green rating of the company affects the purchase intention negatively, since more consumers were not willing to buy from the company after the revealed greenwashing and negative perceptions towards the brand.

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The purpose of this research was to investigate the connection between the concepts of greenwashing and consumer perceptions, and thus the intentions consumers take based on the level of information they possess. With this in mind, the research began with a literature review into related concepts of greenwashing, consumer perceptions the level of interest of a consumer, level of awareness of a consumer and green branding. Through this the researchers developed a Research Question: How does the information a consumer have about a company affect their purchase intention in the context of greenwashing? Data was then gathered through interviews where a case study was presented in stages. The findings were grouped into themes and

discussed in the context of the theoretical framework. In conclusion, the research found that when a consumer is presented with information about a company and their initiatives, the perceptions that the consumer has change accordingly. Moreover, the perceptions are dependent on the level of interest the consumer has in sustainability issues. Some findings that were not expected considered the partial effect of the sustainability initiatives, showing that consumers are only interested in green initiatives up to their personal constraints or preferences. The consumers largely see the motivations of a company to be attributed to profits, however, some more

optimistic consumers seem to be less affected by greenwashing. In the end, it seems like even though the company took corrective actions, the consumers were still unwilling to buy, implying that the risk of greenwashing is greater if revealed, than not taking any green action.

8. Discussion

8.1 Managerial implications

As the research has been focused on the viewpoint of consumer perspective, the authors feel it useful to discuss the managerial implications and the company viewpoint and how do the findings affect companies.

As one of the findings was that the consumers have personal constraints in how much or to what extent do green initiatives affect their choices, the companies should thus segment their target groups accordingly. It might be useful to consider the target group’s preferences, and how do they consume green goods. Even if the target group is relatively interested in green consumption, they might be budget constrained or due to preferences they might be interested in greener consumption, but not in the category in which the company’s product is marketed. This is why the perspective should be included in segmenting and planning the marketing and how to produce green goods.

How do consumers’ perceptions change when greenwashing is revealed?