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Sustainability In The Dutch Sneakers Industry: Adidas And Nike Gp Essay Help

Abstract


Different businesses have placed a significant emphasis on sustainable practices over the past two decades. In 2017, fifty percent of the top one hundred fashion firms established a sustainability strategy (McKinsey, 2017). Sustainability is emphasized within the fashion industry's social and environmental movements. In contrast, emphasis on sustainability from the consumer's standpoint has become a subject of general concern. Constantly, consumers are drawn to businesses with transparently sustainable methods and products. Yet, corporations have persistently failed to maintain their socially responsible image in the public eye.



Widespread social worry that businesses are broadcasting false or confusing environmental information has resulted in an increase in customer skepticism regarding the environmental performance and advantages of green products. Previous study has contemplated how skepticism may negatively impact consumer responses (Annamma, Sherry, Venkatesh, Wang, & Chan, 2012). Other research have identified a number of obstacles that consumers may encounter when purchasing sustainable items. Therefore, a greater understanding of how skepticism influences green purchasing behavior is required (Wunker, 2017).



This study will uncover consumer perception barriers to green purchasing behavior and analyze their impact on CSR activities. Moreover, customer perception influences the purchase attitudes of consumers. This study focuses on consumer perceptions regarding purchasing decisions and intent to spread the word. To define the scope of this study, the target population will consist of young customers (aged 18 to 35) in the Netherlands who purchase Nike and Adidas footwear. Quantitative questionnaires will be utilized to obtain primary data, which will then be analyzed using SPSS software.

Abbreviations List

Corporate Social obligation (CSR) Mouth-To-Mouth (WOM) (Px-F) Parley x Footwear (Plant-Based Footwear) (P-BF) Index of Footwear Sustainability (FSI) Air Sole Development (ASI)

Introduction

academic background

Over the past two decades, sustainability in business has garnered a great deal of interest from academics and practitioners in industries across the globe (Turker & Altuntas, 2014). Sustainability is a vital component of businesses since it encourages the sensible use of resources and facilitates company marketing. While the subject has generated considerable controversy, the vast majority of firms consider sustainability fundamental to their activities.



The Triple-Bottom-Line refers to the three pillars of sustainability that address social, economic, and environmental challenges (Govindan, Khodaverdi, & Jafarian, 2013). Firms must build Corporate Social Responsibility (CSR) plans that integrate environmental, social, and ethical rights into company operations in order to produce a more sustainable corporation.



The affiliation of a firm with environmental concerns determines its reputation (Caplan, 2003). As a result, more fashion firms are considering environmental impact (Choi & Cheng, 2015). Adidas and Nike, for example, have made significant strides. Adidas has built a cleaner supply chain, eliminated plastic bags, and participated in a variety of environmental initiatives. Their partnership with Parley enables Adidas to employ recycled ocean plastic and yarn to create "Parley x Footwear" (Px-F) products (Amir, 2018). Nike, on the other hand, strives for sustainability by decreasing the quantity of pollutants discharged from their production lines.



Using the Considered Index, designers can manage the environmental impact of a shoe during the whole design process. Adidas's plan also included the incorporation of Plant-Based Footwear (P-BF), which enhanced their CSR impression. In addition, Nike implemented the Footwear Sustainability Index (FSI) and Air-Sole Innovation (ASI), enabling the firm to assess the environmental impact of each product (Appendix 2).



Due to their commitment to sustainability, these companies have won a great number of devoted customers (McKinsey, 2017). According to CGS's results, brand loyalty is tied to product quality; nevertheless, sustainable practices are the second-highest reason consumers return to a given brand (Sungchul & Ng, 2011). Thus, fashion companies can compete strongly in their respective markets by incorporating sustainability into their business strategies.



Multiple obstacles influence the purchasing decisions of sustainable products. Skepticism is one of the obstacles preventing consumers from purchasing green items (Wunker, 2017). Consumer skepticism is described as "the tendency of consumers to question any aspect of a company's activities" (Morel & Pruyn, 2003, p. 352). When businesses disseminate unclear environmental information regarding their sustainability plan and environmental performance, consumers become skeptical. A study by Yiridoe et al. (2005) revealed that mislabeling, misinterpretation, and misrepresentation of green products contribute to consumer distrust.



Thus, even if consumers desire to purchase green items, their cynicism over environmental performance may prevent them from doing so. A crucial part of CSR is avoiding skepticism (Fuentes, 2018). According to Kwong and Balaji (2016), doubt has a negative effect on consumer purchase intentions. Yet, a greater knowledge of how skepticism affects the green purchase decision is required. Fashion companies must combat consumer cynicism since it can impact consumers’ purchase decisions, which can be detrimental to a business.

Problem statement

As the level of competition among shoemakers increases (World Trade Organization, 2018), a rising number of businesses implement sustainable methods. Recent research indicates, however, that consumers may not be inclined to purchase green items due to their mistrust (Joshi & Rahman, 2015). According to Bronn and Vrioni (2001), customer distrust is increasing as more companies engage in CSR. When consumers mistrust the greenness of a company's products, they may switch to other brands or disseminate negative word-of-mouth (WOM), which harms the company's reputation (Shim & Yang, 2016; Zeynep & Atik, 2015). According to the latter, businesses must alter this "negative attitude" among consumers. This is a dilemma for fashion firms, particularly Nike and Adidas, as their procedures must be stated clearly to consumers without provoking skepticism.

Research objective

This article aims to investigate how consumers perceive Adidas and Nike's sustainability practices. The purpose of this study is to model how consumer mistrust contributes to the prevalence of CSR skepticism. In addition, the study aims to highlight how skepticism regarding CSR procedures effects the reputation of companies, which in turn influences the purchasing decisions of customers in the shoe business. The study then simulates how business reputation and unfavorable WOM influence customer purchase decisions. As a positive component, this research seeks to establish an understanding of how consumers' perceptions of CSR practices affect their purchasing behavior. The'suspicion' of consumers contributes to the enhancement of the CSR policies of footwear firms such as Adidas and Nike.



Literature review

Dimensions of environmental

Sustainability is a crucial factor in modern success (Haanaes, 2016). Several big fashion businesses, notably Adidas and Nike, introduce sustainable efforts (Payseno, 2018). Sustainable development is defined by Williams and Millington (2004) as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (p. 100). There are three important facets of sustainability, which are known as the triple bottom line (Govindan et al., 2013; Williams & Millington, 2004).



According to Dahlsrud's (2008) research, there are numerous definitions of CSR. Crane (2013) provides a nice description of CSR: "CSR is the way in which organizations integrate economic, social, and environmental concerns into their values and operations in a transparent and accountable manner." The term emphasizes social, environmental, and economic imperatives, sometimes known as the triple bottom line.

Barriers to sustainable consumption

Today's consumers recognize the significance of sustainability, yet a number of obstacles inhibit purchasing intent (Bonini & Oppenheim, 2008; Wunker, 2017). In addition, Joshi and Rahman's (2015) study revealed that there is a weak relationship between customers' green attitudes and their purchasing behavior, referred to as a "attitude-behavior-gap." Bonini and Oppenheim (2008) investigated over 7,000 consumers in eight major economies and found that 87% of consumers were concerned about the social and environmental impacts of the products they purchased. However, just 33% of these consumers acknowledged that they should purchase green products.



This is partially due to consumers' cynicism towards CSR programs. Consumer skepticism towards CSR initiatives was defined by Morel and Pruyn (2003) as "the tendency of consumers to question any aspect of a company's CSR activities." In addition, Webb and Mohr (1998) assert that doubt arises when consumers question and mistrust a company's CSR practices. The poor view of green fashion can be attributed to a lack of awareness and comprehension. In order to overcome mistrust as a barrier, it is vital to gain an understanding of how customers view green fashion.

Mistrust and perception of CSR

Since the second half of the 20th century, there has been extensive debate on CSR; since then, businesses have always included social responsibility as part of their sustainable practices (Rosenbaum & Wong, 2015). Customers are unable to discern whether organizations pursue sustainability for profit or out of a genuine desire to be sustainable. The source of skepticism is mistrust of advertising claims made by companies about their products (Obermiller & Spangenberg, 2013; Kwong & Balaji, 2016). To increase their market share and keep customers, businesses must take use of a variety of advertising possibilities.



Nonetheless, buyers acquire mistrust when they discover that the quality of products does not match the advertised features. According to Morel and Pruyn (2003), mistrust is related to skepticism because, when consumers are doubtful, they doubt the information about the things they intend to buy. In this instance, Adidas and Nike advertisements are susceptible to mistrust, resulting in "green skepticism" over CSR activities. Therefore, the following alternative hypothesis (H1) anticipates the impact of customer mistrust on CSR practices' skepticism.

Customers' mistrust positively predicts skepticism regarding CSR efforts.

impression of CSR and WOM

Customers' perceptions of CSR efforts are influenced by interactions between businesses and customers. According to Wang (2018), WOM consists of both positive and negative words that customers or potential consumers express and that influence the perception of a company's products and services. Prior research indicates that customer skepticism adds to bad WOM because it effects attitudes, purchasing intentions, and brand image (Balaji, Khong, & Chong, 2016; Skarmeas & Leonidou, 2013).



Effective connection between firms and customers, according to the dialogic theory, generates durable communication channels, reduces mistrust, and promotes the development of good WOM (Uysal, 2018). Therefore, enterprises must reduce the amount of mistrust and skepticism among customers to prevent the propagation of bad WOM over their CSR operations (Servaes & Tamayo, 2013). In this instance, customer distrust influences the perception of CSR, leading to bad WOM. The consequence was the formulation of the following alternative hypothesis (H2):

Consumer suspicion over CSR practices is a predictor of negative WOM.

CSR perception and business standing

In corporations, reputation is crucial since it impacts the effectiveness of marketing strategies. According to the attribution theory, the reputation of an enterprise is influenced by how customers perceive, believe, and trust CSR practices (Chen & Chiu, 2018). According to Rim and Kim (2016), there is an intricate relationship between company reputation and the perception of CSR practices. In essence, corporations' reputations in competitive markets depend on the sort of CSR initiatives they advocate. When customers mistrust CSR activities, they create a poor view of businesses and become skeptical. Previous research has demonstrated that customer skepticism negatively affects how consumers view a company's reputation (Becker-Olsen, Cudmore, & Hill, 2006; Ellen, Webb, & Mohr, 2006; Elving, 2013).



Consumers may perceive that businesses utilize CSR initiatives to increase revenues (Kim & Lee, 2009). Corporate reputation is diminished by skepticism over the CSR practices of businesses (Shim & Yang, 2016). The second alternative hypothesis (H3) was therefore developed:

Consumer cynicism regarding CSR initiatives is a negative predictor of corporate reputation, according to Hypothesis 3.

CSR and acquisition choice

According to Dawson (2006), consumers' product selection, brand selection, and buying habits are determined by their attitudes. A purchase decision is the outcome of each of these elements; therefore, it is beneficial for businesses to collect information about consumer preferences and use it to enhance their offers. Dewey (2012) determined that the purchasing procedure consists of the five steps listed below (Figure 1). Before making a purchasing decision, buyers identify the problem, look for pertinent information, and assess available options.



Figure 1 depicts the five steps of the buying procedure (Dewey, 2012).



This study takes a step farther than Kwong and Balaji (2016), which sought to investigate the role of skepticism in green buying behavior, by analyzing whether consumers are suspicious of the green sneakers given by both Adidas and Nike. Kwang's study presents findings from an investigation into whether consumer mistrust of organic labelling effects their propensity to purchase organic items.



This study indicated that customers' mistrust of organic labels has a negative influence on their purchase intentions and is negatively associated to their future buy intentions. The Kwang study was limited because it was conducted in Malaysia. Therefore, the purpose of this study is to evaluate if customers' skepticism in the category of shoes is related to their green purchasing decisions. Consequently, the following other hypothesis (H4) was developed:

H4: Consumers' distrust about CSR initiatives influences their decision to purchase green sneakers.

Reputation of firms and purchasing decisions

Explaining the relationship between brand image and customer behavior is the direct connection between a company's reputation and consumers' purchasing decisions. According to the theory of reasoned action, customers examine the features of organizations, brands, and products prior to making the crucial purchase choice (Mi, Chang, Lin, & Chang, 2018). Consumers are more likely to purchase a company's products if its CSR efforts contribute to a favorable brand image.



An empirical study involving 212 chief executive officers from various firms indicated that corporate reputation improves brand perceptions, raises consumer awareness, and increases product preferences (Jung & Seock, 2016). However, marketing managers should be aware of the impact of a negative reputation on customers' attitudes and purchase decisions. Jung and Seock (2016) advise companies and marketing managers to avoid unfavorable reputation since it fosters negative attitudes and exacerbates customers' purchase decisions. Thus, the idea of rational action explains the connection between a company's reputation and consumers' purchasing decisions.



Literature review reveals that the reputation of a firm has a considerable impact on customer satisfaction and, consequently, purchase decisions. Reputable firms have a propensity to satisfy their clients, thereby attracting and retaining them over time. El-Garaihy, Mobarak, and Albahussain (2014) found in a research of 300 Saudi firms that corporate reputation mediates the effect of CSR policies on an organization's competitiveness. This research demonstrates that the purchase choice is influenced directly by enterprises' reputation and indirectly by CSR.



In today's environment, where competition is essential to the survival and expansion of firms, organizations concentrate on establishing a competitive reputation in their target markets. According to Hanaysha (2018), firms utilize CSR to establish a favorable brand image on the market in order to influence consumer behavior and purchase decisions in favor of their products. Burke, Dowling, and Wei (2018) suggest that market managers use reputation as a marketing approach since it improves comprehension.

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