Professional Documents
Culture Documents
By
Tanusree Bhowmick, Assistant Professor, Department of Business Administration Durgapur Society of Management Science
&
Subhojit Chakraborty, Assistant Professor Department of Business Administration, Durgapur Society of Management Science
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
INTRODUCTION
Ecological issues are, today, the concerns of all corporate, who are being called upon to maintain the ecological balance by ensuring that their products are bio-degradable or they do not involve indiscriminate use of scarce natural resources. Further, environmental activism has led to legislations and hence firms are now required to comply with regulatory mechanism. Thus, ecological marketing, also called green marketing or environmental marketing, or sustainable marketing is a buzz word today. Green products and services are today increasingly being accepted by both companies and consumers. It is gradually being realized that the decay in cities and urban areas can be prevented only by maintaining an ecological balance, which in turn can be achieved by making green products and services an integral part of ones life. Even from the health point of view, customers are realizing that by using chemical made products and those which emit harmful gases can lead to permanent physical disorder. Hence, todays ecologically conscious consumers are increasingly shifting to green air conditioners, refrigerators, automobiles, cell phones and even personal toiletries. Although environmental issues influence all human activities, few academic disciplines have integrated green issues into their literature. This is especially true of marketing. It is through several distinct phases that the concern for environment has evolved. From the 1960s ecology movement focusing on pollution and energy conservation to the recent use of environmental issues as a source of competitive advantage in business, individual and societal concerns over environmental issues have become increasingly apparent in the 21st century. Since United Nations Earth Summit Conference in 1992, an international consensus has been generated to integrate environmental issues into manufacturing procedures and also in consumption patterns to achieve sustainable development. Governments around the world have become so concerned about green marketing activities that they have attempted to regulate them. For example, in the United States, The Federal Trade Commission and the National Association of Attorneys-General have developed extensive documents examining green marketing issues. Many types of products from paint to paper to electronics are nowadays evaluated by eco-labelling organizations worldwide. Different Govt., non-profit and profit organizations have developed eco-label programs. Organizations can use eco-labels to inform purchasing decisions and procure greener products. With the growing awareness of the fragility of environment, marketers see increasing consumer interest in the environment as a marketing opportunity to target ecologically conscious consumers. As a result, they have begun to modify their behavior in an attempt to address the new concerns of these customers. Thus, growing number of firms are accepting environmental management systems and waste minimization and have integrated environmental issues into all organizational activities. Understanding attitude- behavior consistency helps marketers to link attitude to behavior and so assess the likelihood of purchase, target the types of consumers most likely to follow-through on their intentions and encourage planned purchase. The mushrooming environmental movement was christened the green movement; environmentally aware consumers called green consumers; products designed to protect the environment hailed as green products; and, not surprisingly, marketing that uses environmental claims called green marketing. Green marketing encompasses greening products as well as greening firms. In addition to manipulating the 4Ps of traditional marketing mix, it requires recognizing the fact that, the marketing actions of a firm have impact on the use of resources, generation of waste and subsequent pollution. Sustainable marketing by firms therefore require the development of a marketing mix compatible with the ecology, as successful integration of eco-system in marketing decisions creates a win-win situation. Further, ensuring customer satisfaction and retaining long term profitable customer relationship is the mantra to sustain business in the realm of survival of the fittest. This is possible through product and delivery system designs for environment protection. Firms can green themselves in three ways : a) value-addition process, b)
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 management systems and / or c) products. Greening the value-addition process would entail redesigning or eliminating them, modifying and / or inducting new technology etc. with a view to reduce environmental impact summative for all stages. Firms can adopt management systems accompanied by performance measures that create conditions for reducing environmental impact on the value-addition processes, for example, systems to promote environmental, health and safety objectives. Greening products may take place in ways like repairing or reconditioning products to extend its life, remanufacturing, reuse or recycling products so that it can be used multiple times or converted into raw material to be used in another or same product etc. The key issues to be addressed are thus : identification of the waste stream associated with the product in manufacturing and distribution stages, waste generated during use and product disposal, identification of the final disposal process, improvements that can be made in the existing manufacturing system and technology which help produce green products, the significance of green suppliers and customers perception of the product as eco-friendly or damaging. This paper is essentially exploratory in nature and focuses on two objectives. The first objective is to investigate the relationship between consumers attitude and perception towards green marketing and their buying intention of green products. The second is to identify the factors that influence consumers in their choice of eco-labelled or green products over other products. The paper begins with a theoretical background of the germane literature. Thereafter, the methodology and the results from quantitative study will be presented. The paper concludes with a discussion of the results and recommendations from the authors.
LITERATURE REVIEW
The American Marketing Association (AMA) held the first workshop on "Ecological Marketing" in 1975. According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities including product modification, changes to the production process, packaging changes, as well as modifying advertising. Philip Kotler and Kevin Lane Keller in Marketing Management has discussed about the relevance of green marketing in the past few decades and the explosion of environmentally friendly products. From the branding perspective green marketing programs have not been very successful. Marketers tried and failed with green sales pitches over the last decade because of certain obstacles which the movement encountered. The consumer behaviour is such that most consumers appear unwillingly to give up the benefits of other alternatives to choose green products. According to Peattie (2001), the evolution of green marketing has three phases - Ecological green marketing (all marketing activities were concerned to help environment problems and provide remedies), Environmental green marketing (the focus shifted on clean technology that involved designing of innovative new products, which take care of pollution and waste issues) and Sustainable green marketing (it came into prominence in the late 1990s and early 2000). Cateora Graham, in International Marketing, has drawn a parallel line between green marketing and product development. The author has used the term to identify concern with the environmental consequences of a variety of marketing activities. It very evident from the authors research and examples that packaging and solid waste rules are burdensome but there are successful cases of not only meeting local standards but also being able to transfer this approach to other markets. Polonsky (1994) finds world-wide evidence which indicates people are concerned about the environment and are changing their behavior accordingly. As a result there is a growing market for sustainable and
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 socially responsible products and services. Unfortunately, a majority of people believe that green marketing refers solely to the promotion or advertising of products with environmental characteristics and terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often associate with green marketing. Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment. Roberts and Bacon (1997) says in general green marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and even services. Anja Schaefer from The Open University (BBC) opines that green marketing is there in a sizeable market segment of green consumers who are willing to pay a little more for environmentally friendly products from environmentally friendly companies. Producers and retailers will react to this green demand and environmentally friendly practices will be pushed through the supply chain. Green marketing dates back several decades now, with specialist manufacturers and retailers such as Ben and Jerrys, the body shop and so forth, leading the way. Jacquelyn A. Ottman, the author of Green Marketing Opportunity for Innovation has explained green marketing from an organizational standpoint, environmental considerations should be integrated into all aspects of marketing new product development and communications and all points in between. According to the author, environment should be balanced with primary customer needs. The so-called green consumer movement in the US and other countries have struggled to reach critical mass and to remain in the forefront of shoppers minds. The lack of consensus by consumers, marketers, activists, regulators and influential people has slowed the growth of green products. DSouza et al. (2004) infers that hopes for green products also have been hurt by the perception that such products are of lower quality or don't really deliver on their environmental promises. And yet the news isn't all bad, as the growing number of people willing to pay a premium for green products from organic foods to energy-efficient appliances. Research on the demand of green products Jolly et al. (1989) report that, although the majority of consumers have a positive attitude towards green produce, this does not translate into purchasing behaviour. The main reasons are the price premiums and limited availability. The authors also point out that consumers only moderately or occasionally purchase these products. In another study, Grunert and Kristensen (1990) attempt to determine the factors that motivate Danish consumers to prefer green products. The results of their study suggest that life values, environmental consciousness, food consciousness and product-specific attributes are the most important factors. According to Mostafa (2007), green purchase behavior refers to the consumption of products that are benevolent or beneficial to the environment, recyclable or conservable and sensitive or responsive to ecological concerns. Based on the idea that attitudes predict actual behavior, several studies found that environmental concerns positively correlate with green purchase behavior where people with strong environmental concern are likely to behave environmentally responsible compared to those with less environmental concern. (Roberts, 1996; Roberts & Straughan, 1999; Schlegelmilch et al., 1996; Kim & Choi, 2005; Mainieri et al.,1997)
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 According to Hackett (2000) although public opinion polls consistently show that consumers would prefer to choose a green product over one that is less friendly to the environment when all other things are equal, those "other things" are rarely equal in the minds of consumers. Prothero and McDonagh (1992) suggests marketers to keep in mind that consumers are unlikely to compromise on traditional product attributes, such as convenience, availability, price, quality and performance. It's even more important to realize, however, that there is no single green-marketing strategy that is right for every company.
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
Companies use the term green to promote goods and services by making environmental marketing claims and with eco-labels.
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 no packaging, products made from natural ingredients and products that are made without causing pollution are all examples of eco-friendly products. The green consumer would be the type to drive a hybrid vehicle, buy products made with hemp or those made from recycled materials. Common attitudes and beliefs of these customers, as described by the International Institute for Sustainable Development (IISD), is as follows : Commitment to green lifestyles Critical of their own environmental practices and impact Looking for companies that incorporate green practices Want environment protection to be easy Tend to distrust companies environmental claims Eager to learn about environmental issues
There are numerous examples of firms who have strived to become more environmentally responsible in an attempt to better satisfy customer needs. Videocon, one of the largest Indian consumer durables manufacturer, announced green television sets with features like Digital Sensi Eye, SVMC Technology, Selectable sound etc. To communicate that it is a green product, the advertising copy was made green. With taglines Eco Logic for a Sustainable Life and Keeping products Eco-Fit, Videocon communicated the message in a loud and clear manner. Astonishingly, it offered substantial price reduction also on these products. McDonalds replaced its clam shell packaging with waxed paper in the face of increased consumer concern relating to polystyrene production and ozone depletion. Honda launched its Honda Civic hybrid car in India in 2006 as a symbol of responsible citizenship. Given these facts, as demands change, firms see these changes as opportunities to be exploited. Firms have started integrating environment issues into their corporate culture owing to the realization that they are members of the wider community and must behave in an environmentally responsible fashion, to achieve profit vis--vis environmental objectives. Firms may adopt two strategies in this context. They can either use the fact that they are environmentally responsible, as a marketing tool, as in the case of Nokia, or, can act responsible without promoting this fact, like Coca-Cola, who in spite of investing huge money in modifying its packaging and recycling activities do not promote it as a marketing tool. The Government of different countries have established regulations to protect both the consumer and the society. To control the amount of hazardous wastes produced by firms, the Government issues various environmental licenses, thus modifying organizational behavior. In some cases, it also tries to induce final consumers to become responsible citizens by imposing taxes and penalties on those who act in an
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 irresponsible fashion. The more recent Government regulation is the establishment of guidelines to control green marketing claims by firms, to ensure that consumers have the right information to assess a firms environmental claims and to make more informed decisions. Many companies are taking up green marketing to maintain a competitive edge. There are instances where by emulating its competitors, firms try to upgrade itself to eco-friendly behavior. The green behavior of many niche companies like Xerox, Body Shop and others, have prompted many mainline competitors to follow suit. Sometimes disposing of environmentally harmful by-products are not only difficult, but it also increase the cost. Therefore, firms that can reduce production of such wastes will incur substantial cost savings, since an attempt to diminish waste will require re-examining of the existing production process, which in turn may lead to developing more effective production processes that will curtail wastes and also raw materials. This would be a double-sided gain for manufacturers. Again, two or more firms may develop symbiotic relationship among themselves wherein the waste generated by one will be used by another as a costeffective raw material. For example, the fly ash generated by thermal power plants, which would otherwise contribute to a gigantic quantum of solid waste, is used to manufacture fly ash bricks for construction purposes.
Brand Name
Country of Origin
Japan United States Germany United States United States Germany Japan United States United States Japan
Sector
Automotive Diversified Diversified FMCG Electronics Automotive Automotive Electronics Business Services Electronics
Scores
64.19 63.33 63.08 59.41 59.06 58.90 58.85 58.81 57.66 57.32
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
Green Marketing
Starts with the identification of the needs of their target customers Environmental needs is at the centre point for decision making Social cost benefit approach with long term orientation and giving importance to environment Development of product as per their needs, Development of product by analyzing ecological delivering and providing the after sales services compatibility of the product, its raw material, packaging and reuses etc. With an aim of achieving satisfied customers Customer satisfaction in an environment friendly way Practicing is good for company as well as customers Remedy for mitigating climate change and global warming Practicing is good for mankind as well as environment Remain with satisfied customers Remain with satisfied eco-friendly customers Focus on tangible goods Focus on products as services Reactive approach to waste management Proactive approach to waste management Total quality environmental management Total quality management Use of strategic alliances to accomplish sustainable goals Use of strategic alliances to accomplish traditional goals
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
Product
Reduction of resource consumption and pollution are the ecological objectives in planning green products. Products are to be developed according to the customers who prefer environment friendly products to satisfy their needs. The marketer's role in product management includes providing product designers with market-driven trends and customer requests for green product attributes such as energy saving, organic, green chemicals, local sourcing, etc.
Price
Green pricing should be adopted in such a way that it not only ensures efficient productivity, but also takes care of the entire people, planet and profit. Most consumers will only be prepared to pay additional value if there is a perception of extra product value. This value may be in the form of improved performance, function, design, visual appeal, or taste. Green marketers should take all these into consideration while charging a premium price.
Place
Aiming to reduce carbon footprint, by way of managing logistics, to cut down on transport emanations, is at the core of green place. The preference of where and when to make a product obtainable will have major impression on the customers. Very few customers will go out of their way to buy green products.
Promotion
Green promotion involves re-shaping advertising, marketing materials, websites, videos and presentations to attract customers on the basis of performance, economy, health and convenience, or simply environmental friendliness, so as to target a wide range of green consumers. Three types of communication can be effective in this regard one which addresses a relationship between a product/service and the biophysical environment, one that promotes a green lifestyle by highlighting a product or service and one that present a corporate image of environmental responsibility.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 a substantial growth in ECCB across a range of markets. It has been demonstrated through case studies that how product developers and marketers have capitalized on this positive attitude and effectively differentiated their product in terms of their environment friendly character. The term environmental consciousness does not have a standardized definition in the body of academic literature; the reason can be due to arousal of the term out of political and ever yda y language. Environmental consci ousness is the desire to protect flora and fauna, a willingness to scrutinize the consequences of economic activity and a willingness to combine long-term with short-term planning. Research about the identity and nature of green consumer has been the central character in the development of green marketing, as business attempt to understand and respond to external pressures to improve their environmental performance. Marketing practitioners and academics are attempting to identify and understand green consumers and their needs, and to develop market offerings that meet these needs.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 green myopia. If a product is developed such that it is absolutely green in various aspects but does not stand tall in respect of customer satisfaction, it will be meaningless. In fact, marketers need to master many lessons to avoid the green marketing myopia, one of which is applying green marketing principles to deliver green products desired by customers. Ottman, Staford and Hartman emphasizes on the three Cs to avoid green marketing myopia : Consumer Value Positioning (promoting and delivering consumer-desired value of environmental products), Calibration of Consumer Knowledge (educate consumers with marketing messages that connect environmental product attributes with desired consumer value) and Credibility of Product Claims (employ environmental product and consumer benefit claims that are specific, meaningful, unpretentious and qualified). All said and done, the vital question that remains is what is the future of green marketing ? Though according to business scholars, green marketing is a fringe topic violating the traditional axioms of marketing like, give customers what they want and sell as much as you can, but in observance, the rise in prices of energy, increasing population and its pressure on consumption, growing awareness to save the planet and political pressures are driving to incorporate green elements in all marketing activities. However, steering business onto a more sustainable path, will require product dematerialization i.e., a shift of the focus from sale of goods to sale of services, and the success of product dematerialization and sustainable services will in turn depend on how plausibly consumer-desired value is communicated and delivered in the marketplace. Thus, green marketing should not be viewed just as an approach to marketing, but must be trailed with much greater verve, as it has an environmental and social facet attached to it.
METHODOLOGY
i)
Investigate the factors that influence consumers choice of eco-friendly or green products over conventional products, and ii) Find out the relation between consumers attitude and perception towards green marketing under four value-added areas of product, price, place and promotion, and their buying intention w.r.t. price sensitivity and quality consciousness. Research Design This study is prone to cross-sectional descriptive research design. Sources of Data The data presented in this study are both primary and secondary. Primary data has been collected by means of a structured questionnaire. Meanwhile personal interviews and observations were also made. In order to ensure an acceptable number of responses, a convenience sample was used. Data were collected through the self administrated questionnaires by the researchers themselves and trained field assistants. The questionnaire comprised 18 questions including close ended questions. Secondary data were collected by website published articles, research reports, newspapers, relevant journals etc. Sample Size, Sample Unit and Sample Design Data were collected from 150 respondents in the age group of 25-30 years by means of convenience sampling. Limitations of The Research The constraints to this research mainly pertained to the following : i) Data collection was restricted to City Centre and Bidhannagar region, and hence no generalization can be made. The accuracy depends upon the respondents information.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 iii) The time duration for doing an in-depth research and analysis on green marketing was limited.
ANALYSIS AND RESULTS Table 1 : Distribution of Respondents Based On Socio Economic Status Variables
Male
No. Of Respondents
82 68 12 26 68 44 40 20 43 36 11 34 68 30 18
Percentage
54.67 45.33 08 17.33 45.33 29.33 26.67 13.33 28.67 24 7.33 22.67 45.33 20 12
Gender
Female
Education
Occupation
It is understood from Table 1, that male respondents constitute 54.67 percent and remaining 45.33 percent were females. As far as occupation is concerned, 26.67 percent respondents are service holders, 13.33
14
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 percent are businessmen, 28.67 percent are home makers, 24 percent are students and only 7.33 percent of the respondents are unemployed. About 22.67 percent of respondents have a monthly family income below Rs.10,000, 12 percent have a monthly family income above Rs.30,000, 45.33 percent of respondents fall in the monthly family income group of Rs.10,000-20,000 and the rest 20 percent are in the category of Rs.20,000-30,000 family income per month. The classification of respondents based on education shows 29.33 percent are post graduates, 45.33 percent are graduates and 8 percent and17.33 percent of respondents have received education up to primary and higher secondary levels respectively.
Percentage
Familiarity through
Internet Friend/relative/associate
15
1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 In store On use 11 75 06 69 12.22 89.29 9.09 46
Data in the above Table 2, shows that 56 percent respondents have ever purchased a green product, whereas, 44 percent have not purchased yet and 75 percent of this 44 percent respondents who are yet to purchase green products may buy it in the future. 28 percent respondents always prefer buying green products over traditional products, 20 percent respondents frequently buy green products over traditional products, 8 percent sometimes buy green products over traditional products whereas 44 percent respondents never buy green products over traditional products. When it is the question to pay premium to purchase green products, only 35.33 percent are willing to pay. Regarding familiarity with green products, it has been reported that 24.44 percent of respondents have come to know about green products through magazines, the next highest familiarity is through newspapers 22.22percent, 15.56 percent have come across green products on the internet and 12.22 percent have been acquainted with it in store. Surprisingly, the role of electronic media (TV and Radio) is negligible in creating familiarity to green products. As far as recommending green products to others is concerned, 89.29 percent of green product users are willing to recommend, 9.09 percent of respondents would like recommending green products, though they themselves have not yet used, on account of factors like environment protection responsibility, safe for health etc. The rest finds green products not worthy of recommendation due to a host of factors like costlier, not much difference in performance or quality, customers are cheated by companies in the name of green products etc.
Table 3 : Ranking of Variables Influencing The Purchase of A Green Product Variables (xi) No.of Respondents in favour of Percentage Probability (Pi) Rank of Variables
Product 70 46.66 0.47 1 Price 50 33.33 0.33 2 Place 20 13.33 0.13 3 Promotion 10 6.67 0.067 4 Total 150 100 1 From the above table it is inferred that the quality of the product is the top most priority factor, then price, place and promotion respectively. The probability of quality of product is 0.47, which is much more higher than other three variables.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
Table 4 : Distribution of Environmental Aspect Variable Towards Purchase of Green Products Variable / Opinion Yes Percentage Probability (Pi) Ranking No Total Price
02 2.33 0.02 5 -
Quality
12 14.28 0.14 3 -
Ecofriendly
30 35.71 0.35 1.5 -
Certification
30 35.71 0.35 1.5 -
Total
84 100 1
06 150
If we go through the above table, it is clear that quality and certification are the two considerable variables (since got same rank with same probability) while purchasing green products. It is also clear that price is not at all a considerable variable for selection of green products, rather, being eco-friendly and good for health are much more important (according to probability and rank).
From the above fig. it is clear that, magazines, newspapers, internet and in store presentations and demonstrations are the main sources of awareness for green products and marketing among customers, of which magazines rank first (24.44 %), followed by newspapers (22.22 %) and internet (15.56 %).
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
Table 5 A): Ranking of Selected Variables Towards Willingness To Pay Premium Opinion / A Reason 08 Yes Percentage (15.09%) Rank
3
B
20 (37.73%) 1
C
10 (18.86%) 2
D
05 (9.43%) 5
E
05 (9.43%) 5
F
05 (9.43%) 5
Total
53 (100% ) -
In the above table, A stands for Environment Protection Responsibility, B stands for Saving Utility Bills, C stands for Eco-friendly, D stands for Enhanced Quality of Life, E stands for Free From Harmful Substances, F stands for All of These. The above table indicates that among 53 respondents who are willing to pay premium money for green features, 37.73 % of the total are in favor of saving utility bills and got Rank 1, 18.86 % respondents prefer paying premium because green features are eco-friendly and got Rank 2. 15.09% respondents are ready to pay premium as they feel responsible towards protecting the environment and got Rank 3.
Table 5 B ): Ranking of Selected Variables Towards Willingness To Pay Premium Opinion / Reason No Percentage (%) Rank A
12 12.37 3
B
10 10.30 4
C
20 20.61 2
D
01 1.03 9
E
07 7.21 6
F
02 2.06 8
G
31 31.95 1
H
08 8.24 5
I
06 6.18 7
Total
97 100 -
* A Cannot see the benefit of those features B - Prefer traditional products C Cannot afford more D Govt. should pay for them E Not much difference in performance
F Not much difference in quality G Developer should pay for them H Not value for money I Environmental issues are gimmic
In the above table, out of 97 respondents, 31.95 % respondents are not willing to pay premium for green features inherent in the product, because they think that developer should pay for the green features, not the consumers and so got Rank 1. 20.61 % respondents are unable to pay extra, because they feel green products are too expensive and was ranked second. 12.37 % respondents cannot see the benefit of green features and so doesnt want to pay more, as a result was ranked third.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
Table 6 : Degree of Relationship Between Testable Variables Variable-1 Variable-2 Pearsons Correlation Coefficient
Product Price Place/ Distribution Promotion Purchase decision Purchase decision Purchase decision Purchase decision .612 .510 .212 .428
As per the above table, independent variables are classified as Variable 1 category and the dependant variable - purchase decision as Variable 2 category. The above analysis clearly shows that environment friendly products and price make the significant impact on customer buying decisions. The marketing communication with the environment friendly product information will also significantly impact on the buying decisions.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
CONCLUSION AND RECOMMENDATIONS TO BUSINESS ORGANIZATIONS FROM THE VIEW POINT OF CUSTOMERS
Consumer behavior plays a major role in the choice of green products. The marketers of green products need to be innovative and dynamic in order to compete with the changing purchase behavior among customers. The importance of green marketing and green products was ignored for quite a long period. As a result of environmental sustainability, importance has shifted towards green products rather than conventional products. The study brought out the fact that the people are considerably well aware of green products, but not loyal entirely towards it due to a host of factors like expensive, not much difference when compared to traditional products in terms of performance and quality, commercials being perceived as gimmick only, etc. To attract customers more towards green products, the marketers must create promotions which are both realistic and have moral values and the product availability in terms of volume and variety are also important to become successful in marketing green products. Though considerable number of consumers are willing to purchase green products, many business organizations still lag behind the need of the eco friendly society. Therefore, business organizations should adopt following strategies, in order to get benefits from the eco-friendly approach, as green marketing offers business incentives and growth opportunities in the long term though it may involve start-up costs.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
will pay more for than the equivalent commodity. Consumers generally perceive that a green product would cost more, given the difficulty of making a product green.
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 to accelerate change in consumer behavior. For example, the adoption of fluorescent light bulbs by consumers has been slow for a variety of reasons -unconventional shape (though companies have started to change this) and high initial price (though bulbs last longer and save significant money on electricity bills over time). However, legislatures have stepped up to fill the green behavior void with legislation passed (EU, Australia) or up for consideration (California and Canada) to effectively phase out incandescent bulbs (by making efficiency standards higher than what can be currently achieved by current technology). In effect, regulation would force consumers to switch en masse to more efficient light bulbs and do so without first influencing consumer attitudes. It is therefore recommended that marketers should include consumer attitude measurement programme in their marketing plan and embrace all aspects of green marketing, to fulfill its corporate social responsibility. Not only that, they are also responsible to make customers understand the need for and benefit of green products, compared to traditional ones. Firms can also form strategic alliances, including product endorsements and corporate sponsorships from environmental groups that provide credibility to their environment claims. Also, firms willing to provide clear, comprehensive and credible information, must ensure that consumers have low cost access to it. Most striking finding is that, although significant, environmental concern does not play an integral role in ecologically conscious consumer behavior. A common mantra in green marketing is that if you want the masses to buy your product, focus your messaging on more traditional attributes such as price, quality or service. A products greenness is likely secondary for many mainstream consumers. For green marketers then, the holy grail may be to offer a product that is competitive on dimensions both traditional and ecofriendly. This would result in the greatest number of products sold and greatest impact on the environment.
REFERENCES
1. Coddington, Walter. 1993. Environmental Marketing: Positive Strategies for Reaching the Green Consumer.New York: McGraw-Hill Inc. 2. Davis, Joel J. 1992. "Ethics and Green Marketing." Journal of Business Ethics 11 (2): 81-87. 3. Henion, Karl E., and Thomas C. Kinnear. 1976. Ecological Marketing. Columbus, Ohio: American Marketing Association. 4. Ottman, Jacquelyn. 1993. Green Marketing: Challenges and Opportunities for the New Marketing Age. Lincolnwood, Illinois: NTC Business Books. 5. Gupta, S. & Ogden, T. D. 2009. To buy or not to buy? A social dilemma perspective on green buying. Journal of Consumer Marketing, 26/6, 376391. 6. Macdonald, S. & Oates, C. J. 2006. Sustainability: Consumer Perceptions and Marketing Strategies. Business Strategy and the Environment, 15, 157-170. 7. Ottman, J. A. (1993). Green Marketing: Challenges & Opportunities for the New Marketing Age. Chicago. NTC Publishing Group. 8. Ottman, J. A., Stafford, E. R., & Hartman, C. L., 2006. Avoiding Green Marketing Myopia. Issue of Environment, 48(5) 22-36. 9. Peattie, K. (2001). Golden Goose or Wild Goose? The Hunt for the Green Consumer. Business Strategy and the Environment, 10, 187199. 10. Polonsky, J. M., Alma, T. MA., & Mintu, W. 1995, Environmental Marketing: Strategies, Practices, Theory, and Research. Newyork: The Haworth Press, Inc. 11. Simula, H., Lehtimark, T., & Salo, J. 2009. Managing Greenness .Journal of systems and Information Technology, 11(4), 331-346.
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ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 12. Abdul-Muhmin, A.G. 2007. Exploring consumers willingness to be environmentally friendly. International Journal of Consumer Studies, 31, 237-247. 13. Chyong, H.T, Phang, G, Hasan, H. and Buncha, M.R. 2006. Going green: A study of consumers' willingness to pay for green products in Kota Kinabalu. International Journal of Business and Society, 7(2), 40-54. 14. DSouza, C., Taghian, M. and Khosla, R. 2007. Examination of environmental beliefs and its impact on the influence of price, quality and demographic characteristics with respect to green purchase intention. Journal of Targeting, Measurement and Analysis for Marketing, 15(2), 69-78. 15. D'Souza, C., Taghian, M. Lamb, P. and Peretiatko. R. 2007. Green decisions: Demographics and consumer understanding of environmental labels. International Journal of Consumer Studies, 31, 371376. 16. Elkington, H. and Makower. 1988. The green consumers. New York: Penguin Books. 17. Krause, D. (1993). Environmental consciousness: An empirical study. Journal of Environment and Behavior, 25(1), 126-42. 18. Mainieri, T., Barnett, E., Valdero, T., Unipan, J., and Oskamp, S. 1997. Green buying: The influence of environmental concern on consumer behavior. Journal of Social Psychology, 137, 189-204. 19. Ottman, J. 1992. Sometimes consumers will pay more to go green. Marketing News (July 6), 16. 20. Schwepker, C.H. and Cornwell, T.B. 1991. An examination of ecologically concerned consumers and their intention to purchase ecologically packaged products. Journal of Public Policy and Marketing, 10, 77-101. 21. Shamdasani, P., Chon-Lin, G. and Richmond, D. 1993. Exploring green consumers in an oriental culture: Role of personal and marketing mix. Advances in consumer research, 20, 488-493. 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. Straughan, R.D. and Robberts, J.A. 1999. Environmental segmentation alternatives: A look at green consumer behavior in the new millennium. Journal of Consumer Marketing, 16(6), 558-75. 24. Anderson, W. T., & Cunningham, W. H. 1972. The socially conscious consumer. Journal of Marketing, 36(3), 23-31. 25. Chitra, K. 2007. In search of the green consumers: A perceptual study. Journal of Service Research, 7(1), 173-191. 26. Follows, S. B., & Jobber, D. 2000. Environmentally responsible purchase behavior: A test of a consumer model. European Journal of Marketing, 34(5/6), 723-746. 27. Kinnear, T. C., Taylor, J. B., & Ahmed, S. A. 1974. Ecologically concerned consumers: Who are they? Journal of Marketing, 38(2), 20-24. 28. Laroche, M., Bergeron, J., & Barbaro-Forleo, G. 2001. Targeting consumers who are willing to pay more for environmentally friendly products. Journal of Consumer Marketing, 18(6), 503-520. 29. Mainieri, T, Barnett, E.. G. Valdero, T. R. Unipan, J. B., & Oskamp, S. 1997. Green buying: The influence of environmental concern on consumer behavior. Journal of Social Psychology, 137(2), 189-204. 30. Brown, Joseph D., and Russell G. Wahlers 1998, The Environmentally Concerned Consumer: An Explanatory Study, Journal of Marketing Theory and Practice, 6 (2), 39-48. 31. Ellen P, Weiner JL, Cobb-Walgren C. 1991. The role of perceived consumer effectiveness in motivating environmentally-conscious behavior. Journal of Public Policy and Marketing 10: 102117. 32. Arbuthnot, J. 1977. "The roles of attitudinal and personality variables in the prediction of environmental behavior and knowledge", Environment and Behavior, Vol. 9, pp. 217-32.
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ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26 33. Anderson, W.T. Jr, Henion, K.E. II, and Cox, E.P. 1974. Socially vs. ecologically concerned consumers, American Marketing Association Combined Conference Proceedings, Vol. 36 (Spring and Fall), pp. 304-11. 34. Coddington, W. 1993. Environmental Marketing: Positive Strategies for Reaching the Green Consumer, McGraw-Hill, New York, NY. 35. Dr. H.C.Purohit 2011. Consumer Buying Behaviour of Green Products, International Journal of Research In Commerce, Economics & Management.
REFERED WEBSITES
www.Forrester.com www.Wikipedia.com www.Scribd.com www.IndianMBA.com www.Google.com www.Siliconindian.com www.About.com www.Jasondmello.com www.CoolAvenues.com www.Emerald.com www.MarketingSherpa.com www.123Eng.com www.Scholarship.org www.SustainableMarketing.com www.interbrand.com
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1st International Conference on Business & Information Management By NIT, Durgapur, Emporia State University & TCRG, 9th 11th January, 2012,
ISBN No. 978-81-8424-744-2, Vol. I, Page 1-26
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