International Journal of Management (IJM), OF MANAGEMENT ISSN 0976 INTERNATIONAL JOURNAL ISSN 0976 6502(Print), (IJM) 6510(Online), Volume

me 3, Issue 3, September- December (2012) ISSN 0976 6367(Print) ISSN 0976 6375(Online) Volume 3, Issue 3, September- December (2012), pp. 32-41 IAEME: www.iaeme.com/ijm.html Journal Impact Factor (2012): 3.5420 (Calculated by GISI) www.jifactor.com

IJM
IAEME

A STUDY ON DETERMINANTS OF CONSUMERS PURCHASE BEHAVIOUR TOWARDS GREEN PRODUCTS

Dr. N. Mahesh, Professor, Dhanraj Baid Jain Institute of Management, IT Corridor, Jyothi Nagar, Thoraipakkam, Chennai- 600 097. E-mail: maheshmba1975@gmail.com Dr. R. Ganapathi Assistant Professor, Directorate of Distance Education, Alagappa University, Karaikudi-630 003. E-mail: meenaramganapathi@yahoo.co.in ABSTRACT

The purpose of this research is to study the determinants of consumers purchase behaviour towards green products. . The study reveals that Green Purchase Attitude (GPA) is positively and significantly correlated with Green Purchase Intention (GPI) and GPI is positively and significantly associated with Green Purchase Behaviour (GPB). Besides, Perceived Product Price and Quality (PPP and Q) is also positively and significantly related with Green Purchase Behaviour (GPB). A three-step hierarchical regression analysis shows that the moderating effect of Perceived Product Price (PPP) and Quality (Q) have higher and positive impact on GPB of consumers as compared to Green Purchase Intention (GPI). Besides, the interaction between Green Purchase Intention (GPI) and Perceived Product Price (PPP) and Quality (Q) has also had a positive impact on consumers GPB. This shows that competitive price and quality of a green product have positive impact on consumers GPB, if they have high and positive intention to purchase them. This shows that if businesses offer environmentally friendly products to consumers with identical price and quality as compared to traditional products, along these consumers have positive intentions to purchase green products, GPB will be high. Therefore, businesses must ensure competitive pricing strategies along with strong green quality controls to attract the prospective green consumers. 32

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012) Key Words: Green Purchase Attitude, Green Purchase Behaviour, Green Purchase Intention, Perceived Product Price and Quality 1. INTRODUCTION Over the last decade concern for the environment has been steadily increasing due to media coverage, greater awareness of environmental problems, the impact of major industry disasters and the rise of activist groups on the environment (Kalafatis, et. al., 1999). As result, consumers have started considering ecological and environmental protection as a central factor to incorporate in their purchase behaviour, increasing realisation that environmental protection is not just a task of government bodies, but is each individuals responsibility (Fraj and Martinez, 2006). However, current environmental dreadful conditions are ever more menacing consumer health and wellbeing at both nationally and globally. Therefore, consumers are becoming more sensitive in their environmental attitudes, preferences and purchases (Sarigollu, 2009). The concern for environmental degradation has resulted in a new segment of consumers, i.e. the green consumers. These consumers have been identified as one who avoids products which are possible danger for health, damage the environment during production, use materials derived from threatened species or environment and cause unnecessary waste (Finisterra do Pao, and Raposo, 2008). The last 1980s has said to be the mark of the first stage of green marketing. In this stage, the industry has first introduced to the concept of Green Marketing, The second stage has begun with very high and hopeful forecasts about the emergence of a green tide of consumers and new products in 1990s (Vandermerwe and Oliff, 1990). The third stage of green marketing has started since 2000. More clean or green technologies have been implemented, new rules and regulations from the government and frequent inspection from environmental organisations and the media, consumers awareness, attitude and confident have been tremendously increased and high quality green products have been produced and marketed during this stage. With this background, the present study is attempted to study the determinants of consumers purchase behaviour towards green products in Chennai. 2. REVIEW OF LITERATURE Straughan and Roberts (1999) found that a person with positive ecological behaviour would prefer to buy these green products more often, as the positive indication of ones behaviour for environment would increase the likelihood to choose these products with greater frequency (Cornelissen, et. al.. 2008). The customers showed amplified environmental awareness and inclination for environmentally friendly businesses and their products, unveiling their keenness to purchase and pay more for green products/services (Manaktola and Jauhari, 2007; Vandermerwe and Oliff, 1990). Moreover, it was found that there was a positive relationship between environmental awareness and people attitude, decisions and finally participation (Haron, et. al., 2005; Fraj and Martinez, 2006). Therefore, green marketing did not strongly influence all consumers, thus it 33

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012) was necessary to identify and target environmentally concerned market segments (Lampe and Gazdat, 1995). Because, a high price of green product was an indicator of environmental performance, because less polluting products were more costly to produce (Mahenc, 2008). Bhate and Lawle (1997) indicated that a larger number of people had considered the prices of the green products higher than others, however even though they were ready to buy these green products. But, DSouza, et. al., (2006) concluded that generally perception of green products was negatively associated with customers intention to purchase them if they were of higher prices and low quality in comparison to traditional products. Tang, et. al., (2004) found that most of the consumers choose a product because of its environmentally friendly nature, but they did not make actual allocations of dollars in purchases. Therefore, environmental concerns were not the only reason for the customers to purchase environmentally friendly products and also they did not agree to trade-off other product attributes for a better environment. This revealed that traditional product characteristics such as brand name, its price and quality were still the most important ones that consumers considered when making purchasing decision (Gan, et. al., 2008). Therefore, green products must also perform competitively not only according to environmental aspects, but also on the basis of other important product characteristics for instance convenience or durability (Diamantopoulos, et. al., 2003). 3. METHODOLOGY

3.1. Conceptual Framework The present research study concentrates on conceptual framework of consumers purchase behaviour towards green products. The research framework and conceptualisation of the relationship between Green Purchase Attitude (GPA), Green Purchase Intention (GPI) and Green Purchase Behaviour(GPB) are constructed in the Figure- 1.

34

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012)

Perceived Product Price and Quality (PPP and Q)

Green Purchase Attitude (GPA)

Green Purchase Intention (GPI)

Green Purchase Behaviour (GPB)

Fig-1 Consumers Purchase Behaviour towards Green Products 3.2. Sampling and Method of Analysis Among the different cities in Tamil Nadu, the Chennai city has been purposively selected for the present study. The data and information have been collected from 300 consumers by adopting random sampling technique through pre-tested and structured questionnaire and pertain to the year 2012-2013. The variables used to measure consumers intention to engage the green purchase have been adopted from the study of Taylor and Tood(1995). Like wise the variables of perceived product price and quality have been used from the study of DSouza, et. al.. (2007).The variables of green purchase behaviour and the variables for green purchase attitude have been adopted from the research studies of Lee (2008) and Taylor and Todd(1995) respectively. The Likert five point scale (1 represents strongly disagree and 5 represents strongly agree) has been used to measure the variables. To accomplish the objective of the present study, the descriptive statistics, correlation analysis and three-step hierarchical regression analysis have been applied. 4. HYPOTHESES The hypotheses of the present research study are constructed in order to establish the relationships between factors. 1. GPA is positively correlated with GPI. 2. GPI is positively correlated with GPB. 3. PPP and Q moderates the relationship between GPI and GPB. 5. RESULTS AND DISCUSSION 5.1. Socio-Economic Characteristics of Consumers The socio-economic characteristics of consumers were analysed and the results are presented in Table-1. The results show that about 54.00 per cent of the consumers are males while the rest of 46.00 per cent of the consumers of are females. It is clear that about 44.00 per cent of the consumers belong to the age group of 26-40 years followed by 41-60 years (28.00 per cent), below 25 years (19.33 per cent) and above 60 years (8.67 per cent).

35

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012) The majority of the consumers (40.67 per cent) are graduates followed by post graduates (22.67 per cent), higher secondary education (15.33 per cent), professionals (12.00 per cent) and secondary education (9.33 per cent). The results also indicate that about 41.33 of the consumers are employed in private sector followed by government (36.67 per cent) and business (22.00 per cent). It is apparent that about 44.67 per cent of the consumers belong to the monthly income of more than Rs. 20001- 40000 followed by Rs.10001-20000(25.33 per cent), below Rs, 10000(17.33 per cent) and more than Rs. 40000(12.67 per cent). Table 1 Socio-Economic Characteristics of Consumers Particulars Gender Male Female Age( Years) Below 25 26-40 41-60 Above 60 Educational Qualification Secondary Higher Secondary Graduates Post Graduates Professionals Occupation Business Government Private Monthly Income(Rs.) Below 10000 10001-20000 20001-40000 >40000 Frequency Per cent

162 138 58 132 84 26 28 46 122 68 36 66 110 124 52 76 134 38

54.00 46.00 19.33 44.00 28.00 8.67 9.33 15.33 40.67 22.67 12.00 22.00 36.67 41.33 17.33 25.33 44.67 12.67

5.2. Relationship between GPA, GPI, GPB and PPP and Q The relationship between GPA, GPI, GPB and PPP and Q was analysed by computing the correlation co-efficient and the results are presented in Table-2.

36

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012) Table 2 Relationship between GPA, GPI, GPB and PPP and Q GPA GPI GPB PPP and Q

GPA 1.00 0.48** GPI 1.00 ** 0.46 0.44* GPB 0.32** 0.52** PPP and Q Note: ** indicates significant at one per cent level

1.00 0.54**

1.00

The results show that the correlation co-efficient between GPA and GPI is 0.48, which is moderately and positively associated with each other at one per cent level of significance. The correlation co-efficient between GPA and GPB is 0.46, which is also moderately and positively correlated with each other at one per cent level of significance. The correlation co-efficient between GPA and PPP and Q is 0.32, which is poorly and positively associated with each other at one per cent level of significance. The results also indicate that the correlation co-efficient between GPI and GPB is 0.44, which is moderately and positively associated with each other at one per cent level of significance. The correlation co-efficient between GPI and PPP and Q is 0.52, which is also moderately and positively associated with each other at one per cent level of significance. The correlation co-efficient between GPB an PPP and Q is 0.54, which is also moderately and positively associated with each other at one per cent level of significance. 5.3. Impact of GPI and PPP and Q on GPB The impact of GPI and PPP and Q on GPB was analysed by fitting three-step hierarchical regression analysis and the results are presented in Table-3. In the first step, independent variable is entered. In the second step the moderator variable is entered and at the third step the interaction between the moderator and the independent variables are entered. The results reveal that GPI has a positive impact on consumers GPB as indicated by the standardized beta values, 0.152 which is significant at five per cent level. The second step shows that the main effect of PPP and Q is entered next. GPI variable is still in the step 2. The beta coefficient of PPP and Q is 0.694 which is significant at one per cent level of significance. But, PPP and Q have higher and positive impact on consumers GPB as compared to GPI. In the third step, the beta coefficient for interaction between GPI and PPP and Q is 0.342 which is significant at one per cent level of significance. Hence, the results show that price and quality of a green product has positive impact on consumers GPB, if they have high and positive intention to purchase them.

37

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012) Table 3 Impact of GPI and PPP and Q on GPB Model 1 2 Variables Constant Standardized Coefficients (Beta) 2.124**
*

t-value 5.424 2.168 2.236 2.440 3.466 3.978 4.092 4.426 3.828

Sig 0.01 0.02 0.03 0.03 0.01 0.00 0.00 0.01 0.01

GPI 0.152 Constant 1.538* GPI 0.450* PPP and Q 0.694** 3 Constant 3.752** GPI 0.794** PPP and Q 0.826** GPI * PPP and Q 0.342** Note: ** indicates significant at one per cent level * indicates significant at five per cent level

Step#1

Step#2

Step#3

Adjusted R-square: Change R-square: F change: Sig. F change:

.021 .018 7.624 .016

.094 .084 19.216 .000

.176 .066 21.486 .000

The F change and adjusted R-square are significant from step 1 to step 2 and from step 2 to step 3 with the introduction of the interaction terms indicating the moderating effect of PPP and Q. For the interaction effect, the results indicate that the interaction between consumer GPI and PPP and Q is significant at one per cent.

6. CONCLUSION . The study reveals that Green Purchase Attitude (GPA) is positively and significantly correlated with Green Purchase Intention (GPI) and GPI is positively and significantly associated with Green Purchase Behaviour (GPB). Besides, Perceived Product Price and Quality (PPP and Q) is also positively and significantly related with Green Purchase Behaviour (GPB). A threestep hierarchical regression analysis shows that the moderating effect of Perceived Product Price (PPP) and Quality (Q) have higher and positive impact on GPB of consumers as compared to 38

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012) Green Purchase Intention (GPI). Besides, the interaction between Green Purchase Intention (GPI) and Perceived Product Price (PPP) and Quality (Q) has also had a positive impact on consumers GPB. This shows that competitive price and quality of a green product have positive impact on consumers GPB, if they have high and positive intention to purchase them. This shows that if businesses offer environmentally friendly products to consumers with identical price and quality as compared to traditional products, along these consumers have positive intentions to purchase green products, GPB will be high. Therefore, businesses must ensure competitive pricing strategies along with strong green quality controls to attract the prospective green consumers. One more imperative fact that the marketers must consider is that the consumers are often skeptical of the green claims, hence, organisations must guarantee that the offered green products perfectly meet the ecological values to define the consumers criticism. According to study findings that there are many consumers who have positive and high intentions to purchase green products but due to higher prices and poorer quality as compare to non-green products, they do not buy them. Hence, along with environmental aspects manufacturers should consider the prices and quality of green products to attract these consumers. REFERENCES 1. Allen, J. B. and Ferrand, J. L., (1999), Environmental Locus of Control, Sympathy and Proenvironmental Behavior: A Test of Gellers Actively Caring Hypothesis, Environment and Behavior, 31: pp. 338-353. 2. Beckford, C. L., Jacobs, C., Williams, N. and Nahdee, R. (2010), Aboriginal Environmental Wisdom, Stewardship, and Sustainability: Lessons from the Walpole Island First Nations, Ontario, Canada, The Journal of Environmental Education, Vol. 41, No.4:pp. 239248. 3. Bhate, S. and Lawle, K., (1997), Environmentally Friendly Products: Factors that Influence their Adoption, Technovation, Vol.17, No. 8: pp. 457-465. 4. Chan, W. W. and Lam, J. C.,(2002), Prediction of Pollutant Emission through Electricity Consumption by the Hotel Industry in Hong Kong, International Journal of Hospitality Management, 21: pp. 381391. 5. Cornelissen, G., Pandelaere, M., Warlop, L. and Dewitte, S., (2008), Positive Cueing: Promoting Sustainable Consumer Behavior by Cueing Common Environmental Behaviors as Environmental, International Journal of Research in Marketing, 25:pp. 46-55. 6. Diamantopoulos, A., Schlegelmilch, B. B., Sinkovics, R. R. and Bohlen, G. M.,(2003), Can Socio-Demographics Still Play a Role in Profiling Green Consumers? A Review of the Evidence and An Empirical Investigation, Journal of Business Research, Vol.56, No.2 : pp. 465-80. 7. Diekmann, A., and Franzen, A., (1999), The Wealth of Nations and Environmental Concern, Environment and Behavior, 31: pp. 540-549. 39

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012)

8. DSouza, C., Taghian. M. and Lamb. P., (2006), An Empirical Study on the Influence of Environmental Labels on Consumers, Corporate Communications: An International Journal, Vol. 11, and No.2: pp. 162-173. 9. Dunlap, R. E., and Mertig, A. G., (1995), Global Concern for the Environment: Is Affluence a Prerequisite?, Journal of Social Issues, 51: pp. 121-137. 10. Eltayeb, T. K., Zailani, S. and Jayaraman, K., (2010), The Examination on the Drivers for Green Purchasing Adoption among EMS 14001 Certified Companies in Malaysia, Journal of Manufacturing Technology Management, Vol. 21, No. 2: pp. 206-225. 11. Fraj, E, and Martinez, E., (2006), Ecological Consumer Behaviour: An Empirical Analysis, International Journal of Consumer Studies, pp. 26-34. 12. Finisterra do Pao, A.M., and Raposo, M. L. B.,(2008), Determining the Characteristics to Profile the Green Consumer: An Exploratory Approach, Int Rev Public Nonprofit Mark, 52: pp. 129140,. 13. Gan, C., Wee, H. Y., Ozanne, L., and Kao, T. H., (2008), Consumers Purchasing Behavior towards Green Products in New Zealand, Innovative Marketing, Vol.4,No.1: pp.93-102. 14. Haron. S. A., Paim. L. and Yahaya. N., (2005), Towards Sustainable Consumption: An Examination of Environmental Knowledge among Malaysians, International Journal of Consumer Studies, Vol.29, No.5: pp. 426436. 15. Kalafatis, S. P., Pollard, M., East, R., and Tsogas, M. H., (1999), Green Marketing and Ajzens Theory of Planned Behaviour: A Cross-Market Examination, Journal of Consumer Marketing, Vol. 16, No. 5: pp. 441-460. 16. Kassaye, W.W., (2001), Green Dilemma,Marketing. Intelligence and Planning, Vol.19, No.6: pp. 444-455. 17. Khwaja. Z. R., (2008), Consumer Voice, Consumer Rights Council, SINDH.06, from www.crc.org.pk. 18. Lampe, M., and Gazdat G. M., (1995), Green Marketing in Europe and the United States: An Evolving Business and Society Interface, International Business Review, Vol. 4, No. 3: pp. 295-312. 19. Laroche, M., Bergeron, J. and Barbaro-Forleo, G., (2001), Targeting Consumers Who Are Willing To Pay More For Environmentally Friendly Products, Journal of Consumer Marketing, Vol. 18, No. 6: pp. 503520. 20. Mahenc, P., (2008), Signaling the Environmental Performance of Polluting Products to Green Consumers, International Journal of Industrial Organization 26: pp. 5968. 40

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue 3, September- December (2012)

21. Manaktola, K. and Jauhari, V., (2007), Exploring Consumer Attitude and Behavior towards Green Practices in the Lodging Industry in India, International Journal of Contemporary Hospitality Management 19(5), 364- 377. 22. Roberts, J. A. (1996), Green Consumers in the 1990s: Profile and Implications for Advertising Journal of Business Research, 36: pp. 217231. 23. Sarigollu, E. (2009), A Cross-Country Exploration of Environmental Attitudes, Environment and Behavior, Vol. 41, No.3: pp. 365-386. 24. Straughan, R. D., and Roberts, J. A., (1999), Environmental Segmentation Alternatives: A Look at Green Consumer Behavior in the New Millennium,Journal of Consumer Marketing, Vol.16, No. 6: pp. 558-575. 25. Tang, E., Fryxell, G. E., and Chow, C. S. F., (2004), Visual and Verbal Communication in the Design of Eco-Label for Green Consumer Products, Journal of International Consumer Marketing, Vol.16, No. 4: pp. 85- 105. 26. Vandermerwe, S., and Oliff, M. D., (1990), Customers Drive Corporations Green, Long Range Planning 23: pp. 10-16. 27. Welford.,R.,(2000), IIijacking Environmentalism, Earthscan, London. 28. Yam-Tang, E. P. Y. and Chan, R. Y. K., (1998), Purchasing Behaviours and Perceptions of Environmentally Harmful Products, Marketing Intelligence & Planning, Vol. 16, No.6,: pp.356 362.

41