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Opinion Vol. 2, No. 1, June 2012

Consumers Environmental Concern & its Influence on their Purchase Intention: SEM Approach
Rinal Shah* Preeti Pillai**

Abstract

Green marketing is a recent concept which has been adopted by consumers, organizations & government all over the world to save the natural resources & to protect the environment for the sustainable development of the resources. The research purpose here is to find the environmental concern of consumers & its impact on their purchase decision while they have alternatives available for enviornmet friendly products. From literature review five factors were adoped for primary research. The purchase intention of consumers were measured using five factors named, Recyclable products (R), Not-used-on-animals (NA) products, Energy conservation (EC), Organically grown (OG), Ozone-friendly (OZ) products. The primary research was done using survey questionnaire using convenient sampling of 132 respondent in Ahmedabad. The research reveals that consumers are more willing to purchase & concerned about recyclable products than any other environmental issue. The study reveals that managers & government should focus on increasing awareness & knowledge among the consumers to accept the environment friendly products. Keywords: Green consumer, SEM, Amos, Environment

Introduction
Development has become a necessity for mans survival today and for every step put forward by man, nature has had to take three backwards. We have developed all kinds of technical know-how to make our lives simpler, swifter and better in all ways but there has been very little movement towards making our efforts Greener too. We have managed to put man on moon but not without first putting a hole on the ozone layer. But today the environment has been kicking back

stronger and harder than ever, making it impossible for man to overlook it. The damage done to the environment has crossed the threshold and reached alarming limits. Nonreplenishable natural resources are getting depleted at a rapid pace. All these negative developments have forced mankind to think more seriously about conserving the environment. Green Marketing is one such initiative towards environment protection, which is gaining popularity (Sharma & Bagoria, 2012).

*Asst. Professor, L.J. Institute of Management Studies, Gujarat Technological University, Gujarat. **Asst. Professor, L.J. Institute of Management Studies, Gujarat Technological University, Gujarat.

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Well the obvious assumption behind all these steps taken today is consumer cares, and will get affected. But all these activities most of the times involve a higher cost and still its unclear whether consumer is ready to shell out the extra penny or not (Upadhyaya & Shukla, 2010). According to Goyal, Rahman, Kumar & Kumar (2011), the impact of consumers environmental knowledge, attitudes, behaviour, and its resultant popular political actions have opened doors to proenvironmental thinking for the industries and the government. The impulse to go green is spreading faster among all the organizations round the globe. According to a Mckinsey Survey (2007), of 7,751 people in Brazil, Canada, China, France, Germany, India, the UK and the US, 87% consumers worry about the environmental and social impact of products they buy. The global market of green marketing is projected to reach $3.5 trillion by the year 2017, as stated in the global report of Global Industry Analysts Inc.,2011 (Sharma and Bagoria, 2012). Green-marketing, as a concept is at a pretty nascent stage, especially in India (G&R Consultancy). According to a survey, 25% of the consumers prefer environmentalfriendly products, and around 28% may be considered healthy conscious (Sharma and Bagoria, 2012). Amongst all these various lines of thoughts green marketing has arrived, but whether it will stay and grow into something that helps us to reach to the dream of sustainable development largely is in the hands of the consumers.

Literature Review
Environmental Quality in India Indian businesses have begun to modify their behavior in an attempt to address societys new concerns. They have been quick to accept concepts like environmental management systems and waste minimization, and have integrated environmental issues into all organizational activities (Latha 2012). According to a survey conducted by Global Green Brands (2011), AMUL, Dabur India ltd., Infosys, Taj Hotels, Britannia industries ltd., Suzlon India, HUL, Wipro technologies ltd., Maruti Udyog ltd., Godrej Consumer Products has been rated as the Top Indian Green Brands (Pavan Mishra & Payal Sharma, 2010). The results of the recently released 2011 edition of the Global Image Power Green Brands Survey showed that concern about the environment by the consumers, is translating into a willingness to pay for a premium for green products. 64% of Indian consumers indicate that they plan to spend more on green products next year. Furthermore consistent with emerging countries, Indians are willing to pay a green premium price, with 48% of Indians willing to spend 10% more on a product simply because it is green. Consumers in India are trusting of green advertising compared to other countries; with 86% of Indian consumers reporting that advertising about green products help them in making choices. Green Marketing Green marketing concept came in prominence in late 1980s & early 1990s, which incorporates many activities like product modification, change in production process, change in packaging, advertisement changes, etc. (Polonsky, 1994). According to Soonthonsmai (2007), green marketing is defined as activities performed by environment concerned firms to deliver the environmentally sound goods/services to provide satisfaction to consumers. A green marketing strategy for firms was proposed by Harrison (1993) to influence the purchase decisions of consumers by positioning green product benefits in minds of consumers. Green marketing is a management process to identify, anticipate & satisfy the requirements of consumers/ society in more
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The Objectives of this Study are

To find the factors responsible in understanding the environmental concern. To propose a model to measure consumers purchase intention based on a theoretical framework. To develop a set of statements for the proposed model. To test the reliability and validity of the model. To measure the consumers purchase intention in relation with their environmental concern.
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profitable & sustainable way (Peatitie, 1995; Welford, 2000). Green Consumers & Green Products According to Ottman (1993), Green consumers actively seek & support the products which satisfy their needs & have less impact on environment. Macdonald (2006) said that all consumers are potentially green consumers. He added that when a consumer has option to buy two similar kinds of products, he will tend to buy the environment friendly product among these two. Mainieri (1997) suggests that women are more environmentally conscious to purchase green products. Pickett (2008) found that market segments followed by demographic characteristics like age, income, education are positively related to consumer attitude for environment. Green product is an ecological or environmentfriendly product. According to Shamdasami et al., (1993), green product will not pollute earth, or deplore scarce resources, they will be recycled or conserved. Now a days, being conscious for environment is not only an activists ideology but it is also a matter of competition in market (McCloskey & Maddock, 1994). DSouza (2004) mentioned that the green vision being a reality needs to be functionally understood by the marketer to serve green customers need. The products having any of the following features can be called green product: Recyclable It is a product or package produced from recycled content. This has been recovered or diverted from the solid waste. It is either pre-consumer use (collected in the manufacturing process) or post-consumer use (after being used by consumer). Not used on/from Animals Many consumer products will go through precise testing to check whether it is safe & healthy for people & environment or not before reaching to market. These testing will be done on live animals. Government has mandated testing for certain products like drugs, food additives, but few products are tested voluntarily like cosmetic, personal care, home cleaners, etc. The consumer should be aware of companies which are
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voluntarily testing on animals, & boycott the products of that company. Energy Conservation It means to reduce the energy consumption, to increase the efficient use of energy, to save our natural resources. Less & efficient use of fuel, electricity, etc can conserve the energy. Organically Grown Currently only agricultural products are the only one which can be claimed to be organic. The term is regulated by the United States Department of Agriculture (USDA). They are required to meet specific guidelines to seek USDA Organic certification. Ozone-Friendly The product or packaging that does not harm the upper ozone layer is known as ozone-friendly product. However, this term can be deceptive: just because a product or package does not harm the upper ozone does not mean it does not contribute to smog or ozone formation at lower levels within the atmosphere. Proposed model to measure consumer s environmental concern

Figure 1

Consumers Environmental Conciousness

There are major destructive changes in like depletion of natural resources, loss of agricultural lands, ozone layer damages in environment (Mainieri and Barnett, 1997). Instead of changing their behavioral pattern or lifestyles, people rely upon technological innovation like
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developing alternative fuels to solve the environmental dilemmas. Even though the innovations have contributed a lot towards the environment, the problems cant be solved alone through technology (Hardin, 1993). Consumers need to be conscious for environment to save the natural resources & to prevent further damages, when they purchase or consume the products, which is called environmental consumerism. Oyewole (2001) argued that greater awareness of environment can lead to green marketing practice. He suggested to determine consumer awareness of environment & their willingness to pay cost associated with it. Hines et al (1986) & Newhouse (1990) mentioned that environmental attitude will characterize favorable or unfavorable feelings of consumers towards environmental issues. Hines et al (1986) also found that there are two kinds of attitude, one towards ecology/ environment & other for environmental actions. Kassarjian (1971) found that consumers attitude towards air pollution was very important variable in deciding overall consumer behavior for the product.

Sample & Data Collection Respondents were selected from Ahmedabad city using convenient sampling techniques as it is less time consuming & convenient. Out of 150 persons who had been approached, 132 had given responses in considerable manner Instruments & Measures The questionnaire was prepared to measure environmental friendly behavior of consumers. First few questions were related to demographic attributes, and then questions became specific to concern about Recyclable products, Not-used-on-animal products, energy conservation, organically grown food & ozonefriendly characteristics of environment. They were measured on five-point Likert scale (1: strongly disagree to 5: Strong Agree). Data Analysis For hypothesis H1 to H5, confirmatory factor analysis was performed using structural equation modeling concept by Amos 16.0. Firstly, measurement model was analyzed for reliability & validity which is having correlations of all the constructs including exogenous & endogenous factors. Then, construct hypothesis were tested. Model fit criteria suggested by Hu and Bentler (1999) were used for both the measurement and the structural model: (2)/df, goodness of fit (GFI), adjusted goodness of fit (AGFI), comparative fit index (CFI), root mean square residual (RMR), and root mean square error of approximation (RMSEA). Acceptable models should have (2)/df d 3, AGFI e .80, RMR d 0.1, RMSEA d 1.0, and GFI and CFI greater than 0.90, little variation in given criteria will accept the model moderately.

Research Methodology
A research framework was developed to test the below stated hypothesis to measure the environmental concern & Purchase intention of Indian consumer Research Hypothesis H1 The purchase intention will be positively influenced by consumers attitude towards Recyclable products. H2 The purchase intention will be positively influenced by consumers attitude towards Not-used-onAnimal Products H3 The purchase intention will be positively influenced by consumers attitude towards energy conservation H4 The purchase intention will be positively influenced by consumers attitude towards Organically grown food H5 The purchase intention will be positively influenced by consumers attitude towards Ozone-friendly products
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Result Analysis & Managerial Implication

Reliability & Validity of Measure First, Cronbachs alpha coefficients were used to measure the internal consistency of each identified dimension of construct, and items with adequate Cronbachs alphas were retained for the scales. The general criteria for the cronbach coefficient alpha should be greater than 0.6. Table-1 gives the details of
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constructs of the model & the number of items representing each construct along with the alpha value. As all the constructs have alpha value satisfying the criteria, all of the constructs were acceptable and a total of 25 items were retained for the six constructs in the study. Table 1 Cronbach Alpha of Construct
Construct Recyclable products Not-used-on-animal Products Energy Conservation Organically grown Ozone-friendly Purchase Intention Number of Items 3 3 5 5 4 5 Cronbachs Alpha 0.63 0.68 0.62 0.78 0.7 0.72

((2)/df =3.44 at p=0.00; GFI=0.69; AGFI=0.6; CFI=0.59 ; RMR=0.077, and RMSEA=0.136). Hence the model is moderately acceptable. Table 3 Parameter Estimates for the Measurement Model
Constructs & Items Recyclable Products R1 R2 R3 I use disposable plastic and paper items I use both sides of paper and waste envelopes for rough work I use plastic bags given by shopkeepers than carry own bags 0.5 0.8 0.52 0.00 0.00 Standardized p-value Factor Loading

Not-used-on-Animal Products NA1 Plants and animals exist primarily to be used by humans NA2 I only buy cosmetic products from companies that dont test on animals NA3 I dont purchase leather products as its made of animal skin Energy Conservation EC1 To save energy, I drive my car as little as possible EC2 I try to buy energy efficient household appliances EC3 I have purchased light bulbs that were more expensive but saved energy EC4 I switch off lights/fans when I leave office/class/public buildings EC5 I use cooler, air conditioners, fans, lights, etc., as little as possible Organically Grown OG1 I purchase organic fruits/ vegetables as they are considered healthier OG2 I dont purchase organic fruits/ vegetables are very expensive OG3 I dont purchase organic fruits/ vegetables as they dont look attractive OG4 I purchase organic fruits vegetables as they are more tasty OG5 I dont purchase organic fruits/ vegetables as they are not easily available Ozone-friendly OZ1 When there is a choice, I always choose that product which contributes to the least amount of pollution 0.53 0.00 0.79 0.76 0.67 0.78 0.23 0.00 0.00 0.00 0.00 0.38 0.52 0.33 0.00 0.00 0.49 0.72 0.68 0.00 0.00 -

Table-2 represents the convergent validity of all the constructs using Composite Reliability. Individual items reliability will be checked using Cronbach Alpha, while to test the reliability of construct or latent variables composite reliability is used. The composite reliability varied from 0.61 to 0.80, satisfying the criteria of 0.6. Table 2 Convergent Validity of Constructs
Convergent Validity of Construct Recyclable products Not-used-on-animal Products Energy Conservation Organically grown Ozone-friendly Purchase Intention Composite Reliability 0.64 0.67 0.61 0.80 0.69 0.76

0.41 0.77

0.00 0.00

Next, a confirmative factor analysis (CFA) with Amos 16.0 Graphics software (SEM package) for the measurement model with six constructs was performed. All factor loadings were significant at 0.05 level, except PI2 which will be eliminated from model, satisfying the convergent validity criteria as per Table-3. The goodness-of-fit statistics indicated that most criteria met the recommended values in the measurement model
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OZ2 I use hair spray even though I know that it affects ozone-layer OZ3 I purchase the products that are labeled ozone-friendly or CFC free OZ4 I have CNG/ LPG kit in my car as its eco-friendly Purchase Intention PI1 I would like to purchase those products which are costlier but causing less environmental pollution PI2 I would like to purchase those products which are inferior in quality but causing less environmental pollution PI3 I have switched products for ecological reasons PI4 I have convinced members of my family or friends not to buy some products which are harmful to the environment PI5 When I buy products, I try to consider how my use of them will affect the environment and other consumers 1. All loadings are significant at 0.05 level 0.76 0.38 0.8 0.65 0.00 0.00

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Table 4 Test Result

Hypotheses Relationships Standardized t-value p-value Coefficient H1 H2 H3 H4 H5 R NA EC OG OZ PI PI PI PI PI -0.67 0.22 0.57 -0.39 0.57 -3.76 0.64 1.01 -1.32 0.77 0 Results Supported

0.52 Unsupported 0.31 Unsupported 0.19 Unsupported 0.44 Unsupported

0.11

0.22

0.71 0.78

0.00 0.00

0.66

0.00

The result provided strong support for H1, meaning Consumers are more concerned about using recyclable products than showing concern for the rest of the factors. They are least concerned for the not-used-on-animal products, energy conservation, organically grown, ozone-friendly products. Thus consumers purchase intention is highly influenced by concern towards the use of recyclable products. It implies that consumers are only aware or concerned for the use of recyclable products, they may have less interest or knowledge about the environmental friendly products which are available in market. Marketers should focus on creating more awareness, easy accessibility & providing product at reasonable price to increase the use of such products. Until and unless consumers become aware and concern about the damage caused to the environment, organizations efforts will go in vain. Marketers and government should play an important role in creating this awareness and convince consumers to use environment friendly products. Limitation The research study to analyze consumers environmental concern & purchase intention was just limited to Ahmedabad city, so there is a scope to expand the results in other regional markets of India to avoid the significant regional gaps in consumers attitude & behaviors. There are many factors which identifies environmental concern of consumers, but only five main factors based on literature review have been considered for analysis.

Structural model According to our hypotheses, a structural equation modeling was developed to assess the statistical significance of the proposed relationships between consumers environmental concern factors& Purchase intention (see Figure-1). Recyclable products, Notused-on-animal products, energy conservation, organically grown, ozone-friendly were all taken as the exogenous variables, and Purchase Intention was the endogenous variable. All of the fit measures indicated that the structural model was moderately acceptable ((2)/df =3.44 at p=0.00; GFI=0.69; AGFI=0.6; CFI=0.59; RMR=0.077, and RMSEA=0.136). Along with the models general fit for the data, its parameters were tested to decide whether to accept the proposed relationships between exogenous and endogamous constructs (Hair et al., 1998). Although the five exogenous constructs were proposed to have impact on Purchase intention, the estimated model results supported for only one of the five hypotheses (Table 4).

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References 1. DSouza, C. (2004) Eco-label programmes: a stakeholder (consumer) perspective. Corporate communications, 9, 179. 2. Global Green Brands (2011), accessed from: www.cohnwolfe.com/en/ideas-insight/white-papers/greenbrands-survey-2011 3. Goyal, P., Rahman, Z., Kumar, V. and Kumar, I. (2011), Consumer Green Attribute Endorsement: An Empirical Study, The First International Conference on Interdisciplinary Research and Development, 31 May - 1 June 2011, Thailand. 4. Hair, J.F., Jr., Anderson, R.E., Tatham, R.L., and Black, W.C. (1998). Multivariate Data Analysis (5th ed). NJ: Prentice Hall. 5. Hardin, G. (1993) Living within limits, Ecology Economics and Population Taboos, Oxford University Press, New York. 6. Harrison, E.B. (1993). Going green: How to communicate your companys environmental commitment. Homewood, IL: Richard, D. Irwin, Inc. 7. Hines, J. M., Hungerford, H. R., and Tomera, A. N. (1986). Analysis synthesis of research on responsible environmental behavior: A meta-analysis. The Journal of Environmental Education, 18(2), 1-8. 8. Hu, L. and Bentler, P. M. (1999), Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives, Structural Equation Modeling, Vol. 6, pp. 1-55. 9. Kassarjian, H. (1971)Incorporating ecology into marketing strategy: the case of air pollution. Journal of Marketing, 35 10. Latha, S. (2012), Green marketing in India: Opportunities and challenges, Asian Journal of Research in Business Economics and Management, Volume : 2, Issue : 3, Online ISSN : 2249-7307. 11. Macdonald, S,. et al. (2006), Sustainability: Consumer Perceptions and Marketing Strategies. Business Strategy and the Environment, 15, 157-170. 12. Mainieri, T. and Barnett, E.G. (1997) Green buying: the influence of environmental concern on consumer behaviour, Journal of Social Psychology, Vol. 137, No. 2, April, pp.189205. 13. McCloskey, J. & Maddock, S. (1994) Environmental Management: its role in corporate strategy. Management Decision, 32, 27-32. 14. Newhouse, N. (1990). Implication of attitude and behavior research for environmental conservation. The Journal of Environmental Education, 22(1), 26-32. 15. Ottman, J. A. (1993), Green Marketing: Challenges & Opportunities for the New Marketing Age. Chicago. NTC Publishing Group. 16. Oyewole, P. (2001). Social Costs of Environmental Justice Associated with the Practice of Green Marketing. Journal of Business Ethics, 29(3), Feb, pp. 239-252.

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17. Pavan Mishra & Payal Sharma (2010), Green Marketing in India: Emerging Opportunities and Challenges, Journal of Engineering, Science and Management Education, Vol. 3, 2010/9-14 18. Pickett, B,. J (2008), Pro-environmental products: marketing influence on consumer purchase decision, Journal of consumer marketing, 25(5), 281-293. 19. Polonsky, Michael Jay. 1994. .An Introduction to Green Marketing., Electronic Green Journal, 1(2), http:/ /gopher.uidaho.edu/1/U I_gopher/library/egj/. 20. Shamdasani, p., Chon-Lin, G. & Richmond, D. (1993) Exploring green consumers in an oriental culture: role of personal & marketing mix. Advances in Consumer Research, 20, 488-493. 21. Sharma, S. and Bagoria, H., GREEN MARKETING: A GIMMICK OR THE REAL DEAL?, IJRFM Volume 2, Issue 2 (February 2012) (ISSN 2231-5985), 22. Soonthonsmai, V. (2007). Environmental or green marketing as global competitive edge: Concept, synthesis, and implication. EABR (Business) and ETLC (Teaching) Conference Proceeding, Venice, Italy. 23. Upadhyaya, A. and Shukla, R. (2010) Environmental concerns and influences on green consumers: An empirical study, JM International Journal of Marketing Management, ISSN PRINT 2230-701X.

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