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Selling the circularity. An inquiry on the impact of promotional strategies on the performance of firms in the circular economy
In the adoption of a circular business model, marketing strategies and promotion activities play a relevant role, in order to bridge the gap between the purpose of increasing the value of the product and the real ability of the market to recognize it. We therefore are willing to inquire on the communication strategies of the companies which manifested an interest in adopting circular economy practices, with the aim of identifying the drivers that lead to better economic performance.
We propose an empirical analysis based on a sample of firms operating in Italy and adopting circular economy practices. Our population is composed of 322 companies listed among a variety of sources connected to the circular economy world, which can be identified out of a set of initiatives realized by qualified subjects (“Treno Verde”, “Io Penso Circolare”, “Verso un’economia circolare”, “Materiali innovative per una nuova edilizia sostenibile”, “Enel-Symbola”, “ReMadeinItaly”, “MAINN Legambiente”). Out of this population, we isolated companies operating in the manufacturing industry, therefore working on a final sample of 231 firms.
Our analysis of promotional activities is based on a unique web-scraped dataset of circular companies’ websites that enabled us to capture and analyze all text- and image based promotional efforts from these organizations across their web pages. To do that, we used CULTR, a suite of web-based applications specially designed to crawl websites and capture information about category promotion created by Gehman and Grimes (http://www.cultrtoolkit.com/). To further validate our theorized causal model and associated mechanisms, we supplemented our statistical analysis by interviewing a sample of circular companies’ entrepreneurs through a telephone survey (CAWI) conducted between March and July 2018. The survey was addressed to a sub-sample of 54 companies (23.4% of the universe).
The results of the study show that marketing strategies and promotion activities are necessary tools to bridge the gap between the purpose of increasing the value of the product and the real ability of the market (consumers) to recognize the greater value connected to innovation processes (product and process). These investments are essential for rethinking the way of consuming and doing business and for giving a boost to the transition process towards a circular economy.