Abstract

Understanding behaviour of consumers is a key to the success of business organizations. Marketing personnel are constantly analysing the patterns of buying behaviour and purchase decisions to predict the future trends. Consumer behaviour can be explained as the analysis of how, when, what and why people buy. According to Loudon and Della Bitta, 1980.Consumer behaviour is The decision process and physical activity individuals engage in when evaluating, acquiring, using, or disposing of goods and services." Furthermore, the last decade has witnessed a dramatic increase in environmental consciousness worldwide. One survey found that 82 per cent of general public rated the environment as an immediate and urgent problem (Dembkowski and HanmerLloyd, 1994), while another study established that 69 per cent believe that pollution and other environmental damage are impacting on their everyday life (Worcester, 1993). The increase in environmental consciousness has had a profound effect on consumer behaviour, with the green product market expanding at a remarkable rate. Using three methods of data collection, secondary research garnered from a multitude of resources, one-to one exploratory interviews and online interviews; this research empirically examines the factors impacting consumers purchasing behaviour toward new green cosmetics products.

Introduction It is evident from the current societal climate in Australia that businesses and consumers alike have begun to take environmental considerations more seriously. They have become more concerned with the natural environment and are realizing that their production, consumption and purchasing behaviour will have direct impact on the environment (Laroche, Bergeron, and Barbaro-Forleo, 2001) The political leadership seems to weigh environmental aspects into its ongoing economic stimulus efforts. However, there is little empirical evidence to suggest that the environmental values and attitudes are congruent with the consuming publics actions towards green products and natural cosmetics particularly. In addition, most studies have focused on the general environmental behaviour instead of specifically on consumers purchasing behaviour towards green products.
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A study by Voss and Parasuraman (2003) suggests that the purchase preference is primarily determined by price than quality during pre-purchase evaluation. Given explicit quality information, price had no effect on pre-purchase or post-consumption quality perceptions. Instead, post consumption quality evaluations had a favourable impact on price evaluations. Another study by Chernev (1997) analyzed the effect of common features on brand choice and the moderating role of attribute importance. It is argued that when brand attributes differ in importance, with the best value on the most important attribute, thus further polarizing brands choice shares. In contrast, when attributes are similar in their importance, common features are likely to have an opposite effect, equalizing brands share. Vigneron and Johnson (1999) reported that people's needs for appearances and materialism were increasing. That is human beings wanted to satisfy the need to look and feel good. This created a boom in the cosmetic and toiletries sector across the world. Chambers Encyclopaedia defines cosmetics as (a)articles intended to be rubbed, poured, sprinkled or sprayed on, introduced into or otherwise applied to the human body or any part thereof for cleaning, beautifying, promoting attractiveness or altering the appearance and (b) articles intended for use as a component of such articles. Now a variety of cosmetic and toiletries ranging from natural to sophisticated items are available in the market. The pattern and preference of use of these items vary according to different segments of gender, age and socio-economic class. In order to understand the cosmetic industry, it is crucial, essentially for new brands, to monitor the major trends, dynamics, competitive forces and the factors that influence the consumers buying behaviour.

This Report provides an insight into the current trading conditions, consumer behaviour, purchasing patterns and future prospects in regards to green/natural cosmetic products.

The remainder of this paper is organized as follows. Section1 provide an overview of the business and market situation in Australia, Section 2 reviews previous studies on environmentally conscious consumer behaviour and factors affecting products choice and sales. Section 3 describes the data collection and the methodology employed. The results and their implications are discussed in section 4. Section 5 provides the conclusions and implications.
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Section1: Business situation The Cosmetics and toiletries retail sector, as is the case for the broader industry, is dynamic and constantly evolving. New product innovations, brand positioning, merchandising, promotions and pricing are all vital weapons in the battle for market share in this space.

The Australian Cosmetics and Toiletries market was worth $2.2 billion as of February 2010, with a 0.9% growth from 2009. (Richardson, 2010) Due to the recession around the world and the Global Financial Crisis, the Market has seen a slower growth than in previous years. There are a number of current and emerging trends that have contributed to changes in consumer preferences and patterns of behaviour towards health and beauty products. In terms of consumer trends, Australias population has been ageing steadily throughout this century and Baby Boomers have come to represent a sizeable and fast growing consumer segment for the industry due to their high levels of disposable income and demand for health and anti-ageing products. The male grooming market has also become a significant driving force for the growth in cosmetics in that men are becoming increasingly concerned about their appearance and have shifted away from unisex brands in favour of male specific varieties. Another trend within the industry is the growing societal acceptance of alternative therapies by consumers who are seeking alternatives to prescription medicine, This has resulted in an increase in the popularity and use of herbal remedies in recent years.

1.1 GEOGRAPHIC DIFFERENCES Imported brands are worth 48% of demand in Australia. Brands are exported from the US (29%), France (17%) and the UK (9%) Most businesses that sell these products are found on the East Coast with 35% in NSW and 25% in Victoria.

1.2 INNOVATIONS/TRENDS The emergence of the eco-ethical consumer has brought about a new category in the market of Natural (non-synthetic) product ranges. Another trend has been the masstige product high quality mass market products possessing the appearance and prestige or premium products. (Richardson,2010)

1.3 DRIVING AND SUSTAINING FORCES Consumer Sentiment Index: when consumers have higher sentiment, they are willing to buy more expensive items, and vice versa. As of 2010, sentiment was slowly increasing, after a radical drop in 2009 (due to the GFC). Consumers are still wary of higher priced items, but are moving towards buying higher end products again. (Richardson, 2010)

1.4 DENT-PC Demographics: there has been a move towards male-orientated products. The population is also ageing. This means there will be more consumers in the fifty plus age group.

Economy: the world is recovering from the Global Financial Crisis and, as Australia didnt reach recession, Australian consumers are well off when it comes to stimulating the economy and are spending money, not just saving. Natural environment: consumers are taking into account the ethical and environmental consequences of their purchases, and now turn to organic, ecofriendly and Fair-Trade products. (Richardson,2010) Technological forces: a shift towards natural ingredients has changed thecosmetic industry, particularly the creams market. Political/Legal forces: the industry has suffered backlash in regards to animal testing and has seen many court cases over the in-humane treatment of animal subjects. Cultural/Socio forces: there has been more emphasis on Fair-Trade and ethical products as well as natural ingredients that are healthier and better for the consumers skin.

CONSUMER SEGMENT

Baby Boomers: this demographic have become a large segment of the population and are very image conscious. (Richardson, 2010) The cosmetics and body product market have targeted them with anti-aging products. Male Market: The market has seen an increase in skin/body products for men. There have been many new product launches in this category over the past five years. (Richardson, 2010) 1.5 DISTRIBUTION CHANNELS/SUPPLIERS Over the past few years, there has been increased number of retailers. Now supermarkets and department stores want to expand their beauty and skincare ranges and stock only the most popular brands. Priceline stores have shifted into Priceline Pharmacy franchises, which change consumer perceptions, giving the store a more health-driven appeal. Suppliers are also making the move to online buying.

Section 2. Reviews previous studies on environmentally conscious consumer behaviour The environment has become a critical issue that is influencing how products are developed, marketed, and disposed of. Previous research has shown that 84% of consumers expressed concern on issues related to the environment and some consumers are changing their consumptive and purchasing behaviours because of their concern (Schlossberg, 1990; Fisher, 1990). Morgan Polls (2006) showed that majority of consumers are environmental conscious about the environment. Previous studies also suggest that consumers who are willing to purchase green products are, in general, conscious about the environmental problem, concerned about the environment and believe that it is important to be environmentally friendly (Larocheet
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al., 2001; Schwepker and Cornwell,1991). Furthermore, Antil (1984) discovered a positive relationship between environmental knowledge and pro-environmental attitudes. In other words, socially responsible consumers have more knowledge about environmental related issues and are likely to demonstrate positive attitudes toward the environment. Previous studies found that people engage in environmental behaviour as a result of their desire to solve environmental problem, to become role models (Hallin, 1995), and a belief that they can help to preserve the environment (McCarty and Shrum, 2001). Although these studies provide some insights into what motivates consumers to engage in green behaviours, it could not confirm that these motivations actually lead to consumers green behaviours (e.g., recycling behaviour) and in particular to green cosmetics product purchasing behaviour. Furthermore, most of these studies depend on self-reported data. These concerns raise questions regarding consumers actual green behaviours, since consumers may onlyclaim to be green as a result of social acceptance and peers pressure (Kalafatis et al., 1999). Research indicates that environmental concern is related but not necessary correlated with consumption behaviour. Balderjahn (1988) found that an individuals attitude towards environmental problem share a positive effect on one's attitude towards environmentally conscious living. This suggests that individuals who are genuinely concerned about environmental problems are likely to take measures to prevent further environmental deterioration. Additionally, Balderjahn found that those having a positive attitude toward the environment tend to purchase environmentally friendly products. The research by Crosby et al. (1981) also demonstrates such a positive relationship. Consumers in general will purchase products and services with a mix of attributes including environmental attributes that maximizes their utility. However, not all consumers are willing to pay a higher price for green products. This implies that consumers derive greater utility from the price and quality attributes rather than environmental attributes alone. The consumers may be willing to purchase the environmentally friendly products within certain constraints. However, huge price differentials and inconveniences associated with environmentally friendly products may deter consumers in buying them.

2.1 Factors affecting consumers' purchasing behaviours towards green cosmetics products.

A review of the literature, particularly for green and natural cosmetics, shows that little attention has been paid to the issue of product attributes and green purchasing behaviour. However, the product attributes play a very important role in product development since they affect consumer product choices and they help marketers to satisfy customers needs, wants and demands. For example, Roozen and De Pelsmacker(1998) investigate the relative importance of different green product attributes to consumers. Their study is useful in understanding how consumers determine what product is a green product. However, the authors only focus on green attributes and ignore other product attributes that may affect consumer purchase decision. Wessells et al. (1999) suggest that environmental attributes of a product are more difficult for a consumer to assess compared to other easily observable product attributes. A report by the Massachusetts Department of Environmental Protection (2002)also suggests that the difficulty in identifying and locating green products is one of the barriers to green product purchases. One way to overcome this issue is to utilize eco-labelling (or green labelling) programs to provide the customers with information while at the same time addressing environmental issues. An eco-label is a voluntary claim that a product has fewer impacts on the environment with either production or consumption of that product (Blend and van Ravenswaay, 1999).Previous studies suggest that consumers would purchase and are willing to pay more for green labelled products (see Bigsby and Ozanne, 2002; Vlosky etal., 1999; Ottman, 1992). However, green labelled products also contain potential dangers and drawbacks, especially when producers over-claim ecological responsibility or performance (Cary, Bhaskaran, and Polonsky, 2004). Some authors further suggest that consumers considered the information given on product labels inaccurate and confusing, thus they do not rely on these labels to make purchase decisions toward green products (DSouzaet al., 2006; Glegg, Richards, Heard, and Dawson, 2005).Johri and Sahasakmontri (1998) showed that consumers do not base their purchasing decision on environmental concern alone. Product attributes such as convenience, availability, price, and quality play a more important role in the consumers purchasing decision process. Anderson and Hansen(2004) also found
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that price was the most important attribute in American consumers purchase decisions for wood furniture. Their study also found that typical respondent is willing to sacrifice environmental certification for the sake of a lower price. Although consumers are in general concerned about the environment, the previous literature found that consumers are extremely price sensitive towards green products (Massachusetts Department of Environmental Protection, 2002) and are unwilling to pay higher prices for green products (Ottman,2000). Morgan Polls (2006) also found that a majority of consumers, perceived green products to be overpriced. DSouza e tal. (2006) further suggest that purchase probability for green product decreases as the price premium increases. Miller (1990) discovered that consumers are willing to pay up to 5% extra for a product under the environmentally friendly category (see Blamey,Bennett and Louivere, 1999. Ozanne and Vlosky (1997)found that that consumers' willingness to incur a green products as inferior in quality since some green products are manufactured with used or recycled materials, while others, provide a lower level of technical performance compared to the conventional brands. Assael(1987) discovered that brand conscious consumers tend to purchase branded products based on loyalty, quality, and satisfactory performance of the products. Thus, this group of consumers may be reluctant to try non-branded and new products such as green products. Ng, Png, and Tan (1993) found some consumers would purchase green products if the prices were cheaper or comparable to normal products. Similarly, Simmons (1995) argued that environmentally conscious consumers might be willing to reduce their overall consumption levels to some degree but is highly price and convenience conscious. While the results are ambiguous, the environmentally conscious consumer tends to be better educated, higher income, and higher socio-economic status, and politically liberal people who are concerned about the environment (Balderjahn, 1988).price premium for Eco labelled products varied depending on the value of the item considered, witha range from 4.4 to 18.7 precent.

Section3: Data collection and methodology There are some limitations which hindered this study from proceeding as planned initially. Firstly, due to time constraint, this research project mainly involved northern beaches resident as it was conducted in a restaurant operating in manly. Since it was during school holidays, we had chance to have a number of people from
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different suburbs. In addition, due to the issue of participation with no coercion, there was a combination of face to face surveys and online surveys in this study. a network of friends was used ( online survey) to search for potential participants who were willing to take part in this study. 3.1 Research hypothesis a) Perceived value and eco-friendly features have a positive effect on consumers acceptance of new products and brands. b) Natural ingredient and green packaging have major influence on consumers decision making process while buying cosmetic products.

3.2 Research objectives The specific tenor of this research lies in the perceived attribute of green/natural cosmetic products as either mostly benefiting society or mostly benefiting the individual. Based on individual and partially culturally informed characteristics and depending on the degree to which the perceived benefits of a certain product ally with their own preferences and inclinations. Using qualitative research design (see survey questionnaire; appendix) the aim of the study is to determine: The driving forces behind consumers current and future decision making process when they interface with natural cosmetic products. Potential market segment Consumers purchasing habit by demographic and geographic category. If the consumers use these product with or instead of existing products. Awareness of natural ingredient such as Argan oil in skin and hair treatment

3.3 Data collection Table 1 (respondents profile) Variable Total

Valid Percentage

Purchase Percentage

Not Purchase Percentage 48.1 51.9

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Gender Male Female

120.05 229.95

34.3 65.7

41.7 58.3

Age group: 18-25 26-35 36-45 46-55 56-65 Marital status: Single/ never married Married/ De facto Widowed/divorced/ separated Education Background School certificate Trade High school certificate University entry Bachelor degree Post graduate degree Household Income: $20,000 to $39,000 $40,000 to $59,000 $60,000 to $79,000 Over $80,000 Ethnic group: Australian European African Asian

51 68 109 85 37

14.57 19.42 31.14 24.28 10.57

6.9 21.5 39.3 24.2 8.1

29.3 30.8 15.6 20.9 3.4

81 217 52

23.14 62 14.85

39.7 49 11.3

44.2 41.9 13.9

30 26 97 87 73 37

8.5 7.4 27.7 24.8 20.8 10.5

5.2 6.6 17.2 31.7 29.5 9.8

9.4 11.2 21.4 28.6 26.4 3

62 136 103 49

17.7 38.8 29.4 14

13.4 29.9 34.7 22

24.6 22.1 16.9 36.4

193 88 12 57

55.1 25.1 3.4 16.2

58.3 17.8 1.7 22.2

47.3 15.6 13.4 18.7

Table 1 shows the sample respondents comprised of34.3% males and 65.7% females. Majority of the respondents are in the 36-45 years (31.1%) and 4655 years (24.2%) groups, whilst the groups with the lowest percentage are the 56-65 years (10.5%) and. Majority of the respondents were married or in a de facto relationships (62%)The highest education level for the majority of the respondents is at high school certificate (27.7%) followed by university entry(24.8%). The median
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annual household income of the respondents is betweenAUD$40,000.00 to AUD$60,000.00. Finally, the main ethnic group is Australian (55.1%) and European (25.1%) Theoretical construct for a priori determination of the factors that influence consumers purchasing behaviour towards green cosmetic products is not well developed. This research used factor analysis to identify factors affecting consumers purchasing behaviour towards green products. Section 4. Data analysis Question 6: have you purchased in the past 3months,natural cosmetics products?

About 74.5% of the respondents indicated that they purchased natural cosmetic products, while 25.5% of the respondents indicated they did not purchase this kind of product products. The respondents were also asked to indicate their intention to purchase natural cosmetic products in the future. A significant proportion (63.2%) of the respondents indicated that they are somewhat likely or very likely to purchase green products in the future, while only 27% of them indicated that they are somewhat unlikely or very unlikely to purchase green products in the future.

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Question 9: would consider buying cosmetics product that are qualified as natural?

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4.1. Impact of price consciousness, quality consciousness, environmental consciousness and brand loyalty on consumer purchasing decisions towards natural cosmetics. Questions 10-16 (see attached survey question) Factors with positive influence on consumers purchasing behaviours
100 90 80 70 60 50 40 30 20 10 0 Brand consciousness Quality Environmentaly Latest innovation friendly

Environmentally friendly and brand consciousness are statistically significant and the signs on the parameter estimates support the priori hypotheses outlined earlier. Table 2 Impact of price consciousness, quality consciousness, environmental consciousness and brand loyalty on consumer purchasing decisions towards natural cosmetics products. The results in Table 2 show that Environmental Consciousness and Brand Consciousness are statistically significant and the signs on the parameter estimates support the priori hypotheses outlined earlier. For example, Environmentally Consciousness positively impacts consumers purchasing decision on green cosmetic products and the marginal effect of Environmentally Consciousness on the probability of consumers purchasing natural cosmetics products is 31%. The result is consistent with Robertss (1996) findings whereby

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environmentally conscious consumers are expected to score higher than those not so environmentally conscious. Consumers who have developed brand loyalty to other conventional brands are also less likely to purchase natural cosmetics products. This may be because brand loyalty is hard to break; consumers who are brand loyal are less likely to switch to other brands or try new products (Miller and Layton,2001).However, Price Consciousness, and Quality Consciousness are not significant. The results contradict the findings in the literature (DSouza et al.,2006; Glegg et al., 2005; Anderson and Hansen,2004; Ottman 2000) that price and quality have significant effect on consumers green purchasing

4.2 The effects of product attribute and demographic characteristics on consumer purchasing behaviour towards green products. Factors with negative influence on consumers purchasing behaviours

Results indicate that Higher Price and Unfamiliar Brand have a negative impact on the consumers likelihood to buy natural cosmetics. The result is consistent with
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DSouza e tal.s (2006) and Blend and van Ravenswaays(1999) findings, whereby higher price has a negative effect on the probability of consumers purchasing green products. Consumers are less likely to purchase green products if the products are more expensive. In addition, consumers are less likely to purchase green products if it is not from a brand that they are familiar with (see Gleggetal., 2005; Johri and Sahasakmontri, 1998). Furthermore,DSouza et al. (2006) suggest in their study that consumers perceptions of green products as more expensive and inferior in quality are some reasons that cause their reluctance to switch brands. Purchase Intention is hypothesized to positively affect the probability to buy natural cosmetics. This finding is consistent with previous finding where green purchase intention is a significant predictor of green purchase behaviour (Chan, 2001).However Green Label is not significant. This may be caused by the inclusion of no other information question in the survey questionnaire. DSouza et al. (2006) argue that some consumers considered the information given on product labels inaccurate and therefore they do not rely on the labels to make purchasing decisions toward natural cosmetics. Similarly, Lower Quality and Inconvenient to Use are not significant. The demographic variables of Younger Age group, Postgraduate Degree, and Married are significant and positively impact the probability of consumers green purchasing decision. Gender, Income, Ethnic, is not significant and do not have an effect on the probability of consumers green purchasing decision.

Conclusion The research findings reveal that consumers who are environmentally conscious are more likely to purchase natural cosmetic products. Traditional product attributes such as price, quality, and brand are still the most important attributes that consumers consider when making natural cosmetic purchasing decision. As DSouza et al. (2006) suggest there is an expectation on the part of consumers that all products offered should be environmentally safe without a need to trade off quality and/or pay premium prices for them. This research reveals that consumers who purchase natural cosmetic products are between 26 and 45 years old, hold a postgraduate qualification and have a positive attitude towards the environment. The results also showed that consumers who are married or in a De facto relationship are more likely to purchase natural cosmetic products. It is possible that this group of consumers purchase natural cosmetic products because they care about the health status of
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their family including their future generations. Contrary to the expectation, ethnicity group did not impact consumers decision to purchase natural cosmetic products. This may be due to the unequal sample distribution in this research Higher price has a negative effect on the probability of consumers purchasing natural cosmetic products. Consumers are less likely to purchase natural cosmetic products if the products are more expensive. This is consistent with DSouza et al. (2006) and Blend and van Ravenswaays (1999) findings.

Unfamiliar brand also has a significant negative effect on the probability of consumers purchasing natural cosmetic products. Consumers are less likely to purchase natural cosmetic products if it is not from a brand that they are familiar with. This finding is consistent with previous studies (see Glegg et al., 2005; Johri and Sahasakmontri, 1998). DSouza et al. (2006) suggest in their study that consumers perceptions of natural cosmetic products as more expensive and inferior in quality are some reasons that cause their reluctance to switch brands.

Implications This research has provided both theoretical and managerial implications. In terms of theoretical implication, this research which showed that consumers are concerned about the environment, but they are not necessarily prepared to seek out or buy green products In addition, this research offers a theoretical basis for understanding the impact of product attributes on consumers natural cosmetics product purchasing behaviour and the important factors that motivate and/or create barriers towards products purchasing behaviour.

The result also showed that 37.6% knows about argan oil and the derived cosmetics product through other companies while the majority did not know much about the ingredient, which provide a positive point in terms of entry opportunities. In terms of managerial implication, the profile of natural cosmetics product purchasers provides the company an indication of their target consumers. The research reveals that traditional product attributes such as price, quality and brand are still the most important ones that consumers considered when making purchasing decision. In order to fulfil individual needs and wants, including ensuring
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customers satisfaction, the company need to make sure that their products are of high quality and competitively priced. It is important that Argania Cosmetics integrate green marketing strategies carefully into the company strategic plan.

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