Green Marketing Effectiveness and Environmental Cost Integration: A Cross-Country Analysis of Consumer Purchasing Decisions in Indonesia and Malaysia

Abstract

Growing environmental degradation and climate-related risks have intensified public awareness of sustainable consumption across Southeast Asia. Firms increasingly adopt green marketing strategies, yet empirical evidence on their effectiveness remains inconsistent across emerging markets. Prior studies often treat green marketing and environmental accounting separately, with limited integration. Cross-country comparative evidence is also scarce, particularly in explaining how market-specific factors shape consumer responses. This study examines the effectiveness of the green marketing mix and its integration with environmental accounting in influencing purchasing decisions in Indonesia and Malaysia. It employs a quantitative cross-sectional design using survey data from 610 respondents and applies Partial Least Squares Structural Equation Modeling with Multi-Group Analysis. The results show that in Indonesia, green price and green place significantly influence purchasing decisions, indicating that affordability and accessibility are key drivers of green consumption. Green product and green promotion are not significant, suggesting limited sensitivity to product attributes and promotional efforts. In Malaysia, none of the green marketing variables significantly affect purchasing decisions, although price shows a marginal effect. This indicates that other factors, such as brand trust or perceived value, may play a stronger role. The Multi-Group Analysis confirms significant differences between the two countries. The model shows higher explanatory power in Malaysia but stronger variable significance in Indonesia. These findings highlight the need to integrate environmental costs into pricing strategies and support marketing claims with transparent sustainability reporting. Context-specific strategies are essential to enhance the effectiveness of green marketing.