The Not So Green Mile : Greenwashing’s effect on brand image when moderated by customer loyalty, using Volkswagen as a case study

Abstract: Our planet is facing an environmental crisis in form of an ongoing increase in temperature caused by greenhouse gas emissions generated by humans. Volkswagen was recently proven guilty of greenwashing, claiming to be environmental friendly when in fact conducting poor environmental performance, causing society to react. Previous research states that this form of greenwashing needs to be studied further. The purpose of this study is to explain whether individual level of customer loyalty has an effect on brand image when greenwashing has been proven. Brand image has been divided into brand attitude and symbolic brand value. The study has a deductive approach and a cross-sectional design was used. The study is of a quantitative nature, handing out an electronic questionnaire in Kristianstad, Lund and Malmo using a non-probability sampling method. This study has found that greenwashing has a negative effect on brand attitude but fails to prove that greenwashing has a negative effect on symbolic brand value. Furthermore, increasing level of customer loyalty has a positive effect on brand attitude but has no effect on symbolic brand value when greenwashing has been proven. Thus, high levels of loyalty can be used to rescue brands in crisis. The limitations of this study are that the results found regarding symbolic brand value were of no significance and Volkswagen as a case may not be suitable for future research. Instead this study enables a generalization of greenwashing’s affect on brand image when moderated by customer loyalty, and can be applied to similar cases.