Customers’ Attitude and Purchase Decision towards Green Products at Chennai - An Analytical Approach

Abstract

The present study is to identify the attitude and purchase decision of customers towards green products at Chennai. The study includes six factors that influences the customers to take decision on purchase of green products. The research design was descriptive and analytical in nature. Data was collected using structured interview schedule method. Convenient sampling technique was used to collect data from 300 respondents. Statistical tools like descriptive statistics, chi-square, correlation and regression analysis was done to establish the relationship between socio-economic factors, awareness of customers towards green marketing, attitude of customers towards green marketing and purchase decision of customers towards green products. Based on the findings, it is found that majority of the customers are aware of green marketing and they have further decision to purchase green products. Further there is a significant positive relationship between customers’ awareness towards green marketing and attitude and purchase decision of customers towards green products.

Key words: Green Marketing, Attitude, Purchase Decision, Green Products.

Introduction

            In the modern era of globalization, it is the responsibility for each and every industry to protect our environment from pollution and energy depletion, global warming, hazardous waste disposal and water pollution. In most of the countries government is concerned about the environmental problems and insisting the industries to produce environmental friendly products to keep the customers as well as customers in fold and even keep our natural environment safe. Thus green marketing is one of the strategies a firm can adopt to product eco-friendly products namely using recycled materials in product production, using green energy (such as wind and geothermal), reducing production waste (in both energy and materials), including sustainable and organic agriculture, buy/sell locally, reducing transportation energy, reduce product packaging and making products reusable and recyclable. Adopting such practices may or may not be perceived as “green” depending upon customer perceptions of other aspects of the business. However, these actions can still be positioned as the company “doing its part” promoting positive reactions toward the company. Green marketing is a tool used by many companies in various industries to follow this trend. It is a phenomenon which has developed particular important in the modern market and has emerged as an important concept in India as in other parts of the developing and developed world, and is seen as an important strategy of facilitating sustainable development. It becomes a part of the new marketing approaches which do not just refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those approaches and provide a substantially different perspective. Today, customers are also aware of the environmental issues like; global warming and the impact of environmental pollution. They are aware that their individual consumption behavior affects the environment and these customers are more conscious of the seriousness of environmental degradation. Thus, customers are increasingly engaging in environmentally friendly behavior and are interested in supporting businesses that are engaging in green strategies. Green purchasing behavior can help achieve a sustainable environment. Thus the present study has been undertaken to identify the awareness of customers towards green marketing and its eco-friendly concept. The study includes six factors that influences the customers to take decision on purchase of green products namely  knowledge of the customers, effectiveness of green advertising, product attributes, product quality, brand image and eco-labeling and certification. It also finds out the impact of green marketing on purchase decision of customers towards green products at Chennai city.

Literature Review  -  Green Marketing

            According to Polonsky (1994), 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. Green marketing comprise of green products, green packaging, green prices; green communication and green distribution called as green marketing mix (Khan and Khan, 2012). A green product refers to a product that is typically nontoxic, originally grown, recycle/reusable, not tested on animals, not polluting the environment and minimally packaged; and contains natural ingredients, recycled content and approved chemicals (Ottman 1998; Pavan 2010).

Customer Awareness towards Green Marketing

A customer whose purchasing behaviour is persuaded by environmental concerns is known as a green customer (Shrum et al. 1995). Customers are less likely to purchase green products if they are unfamiliar with the brand (Glegg et al. 2005). Price is the attribute that customers reflect on when making a green-purchasing decision. Customers are less likely to purchase green products if they are more expensive (Blend and van Ravenswaay 1999; D'Souza et al. 2006).

Customer Attitude towards Green Products

Rashid (2009) has identified that when customers are aware of eco labels they react more positively towards knowledge of green marketing and the purchase of green products. The research by Kuhn (1999) also adds value to his research by identifying that the promotion of eco-friendly product manufacturing will definitely help improving a company's market share due to the ability of the company to present sustainable marketing strategies. The creation of a customer value and the subsequent translation into purchase of products is strongly identified by the impact of environmental advertisements (Baldwin, 1993).

Customers’ Purchase Decision of Green Products

According to the Theory of Planned Behavior by Ajzen (1991), the combination of attitudes towards the behavior, subjective norms, and perceived behavioral control guide the formation of a decision, and thus, decision is assumed to be the predecessor of the actual behavior. Roberts and Bacon (1997) have developed a conceptual model to explore the relationships between customers’ environmental concern and ecologically conscious customer behavior in the USA. Their study conceptualized the customer behavior variable in six-dimensional criteria with 30 measuring items. They ranged from the use of recycled products to customers green purchase behavior. In a similar study on customer behavior, (Chan, 2001) developed a conceptualized model that investigated the influence of various cultural and psychological factors on green purchase behavior among Chinese customers. The green purchase decision in the study was conceptualized as a single dimension variable and was measured by three items.

However, D’Souza et al. (2006) have developed a conceptualized model that consisted of seven variables in their study, which investigated the influences of multiple factors on green products for green purchase decision among customers in Australia. The green purchase decision in the study was conceptualized as two-dimension variables, with price and quality as the measurement for green purchase decision. Whereas the study by Nik Abdul et al. (2009) referred green purchase decision as the probability and willingness of a person to give preference to products having eco-friendly features over other conventional products in their purchase considerations. Likewise, Chen and Chang (2012) defined green purchase decision as the likelihood that a customer would buy a particular product resulting from his or her environmental needs.

Objectives of the Study

·               To study the socio-demographic factors of the respondents.

·               To determine the factors affecting customers attitude and purchase decision of green products.

·               To identify the awareness of customers towards green marketing.

·               To find out the relationship between customer awareness and their attitude and purchase decision of green products.

·               To offer suggestions to enhance the effectiveness of green marketing with strategic promotional tools.

Theoretical Framework

Based on the preliminary data collection and review of literature, the independent variables namely customer awareness towards green marketing, attitude of customers towards green marketing and factors affecting customer purchase decision of green products such as namely knowledge of the customers, effectiveness of green advertising, product attributes, product quality, brand image and eco-labeling and certification have been identified. The study finds out whether these independent variables have an effect on dependent variable namely customers’ purchase decision of green products at Chennai. The following diagram depicts the framework of the study.

Research Methodology

      This study scrutinized the customers’ attitude and purchase decision of green products at Chennai. The study is descriptive and analytical in nature. The target population of this study consists of customer of green products at Chennai city. The sample size was 300 customers. Convenient sampling technique has been used to collect data from the customers. The data was collected by using primary data source. The questionnaire consisted with four dimensions namely socio-demographic factors of the customers, customers’ awareness towards green marketing, attitude and purchase decision of customers towards green products. The questionnaire was developed by using a five point Likert scale. The secondary data used in the study have been collected from related articles, journals, thesis, books, newspapers and internet, etc. In this study, the statistical measures namely reliability, descriptive statistics, correlation, chi-square and regression were used.

Hypotheses

On the basis of theoretical perspective and objectives of the study, the following hypotheses are developed for the study:

H₁: There is an association between socio-demographic factors and customers’ attitude         towards green marketing.

H₂: There is a significant relationship between customers’ awareness, attitude and purchase        decision of green products.

H₃: There is a significant impact of customers’ awareness, attitude and purchase decision of        green products.

Data Analysis

a.  Reliability Test

          Cronbach’s Alpha Reliability test used to examine the internal consistency of variables in the construct. It states that reliability less than 0.60 are considered to be poor, while those in the 0.70 range are acceptable and those over 0.80 are considered good (George and Mallery, 2003 and Kline, 2000).

Table-1

Sl. No.	Scale	No. of Items	Cronbach’s Alpha (α)
I	Customers’ Awareness towards Green Marketing	10	0.851
II	Customers’ Attitude towards Green Marketing	10	0.962
III	Customers’ Purchase Decision towards Green Products
1	Knowledge of the Customers towards green products	8	0.940
2	Effectiveness of Green Advertising	6	0.900
3	Product Attributes	6	0.874
4	Product Quality	6	0.828
5	Brand Image	8	0.880
6	Eco-Labeling and Certification	10	0.955

From the above table, it is learnt that Cronbach’s Alpha reliability for all the factors was above 80 per cent which means that the variables produce consistent results if measurements are made repeatedly.

Descriptive Statistics

Table-2

Sl. No.	Scale	Mean	Standard Deviation
I	Customers’ Awareness towards Green Marketing	3.01	1.09
II	Customers’ Attitude towards Green Marketing	2.97	1.33
III	Customers’ Purchase Decision towards Green Products
1	Knowledge of the Customers towards Green Products	3.13	1.03
2	Effectiveness of Green Advertising	3.16	1.08
3	Product Attributes	3.18	1.20
4	Product Quality	3.12	1.00
5	Brand Image	2.99	1.11
6	Eco-Labeling and Certification	3.08	1.25

From the above table, based on mean value Product Attributes (3.18) is considered as a most significant factor which immensely affects the purchase decision of green products, followed by effectiveness of green advertising (3.16), knowledge of the customers towards green products (3.13), product quality (3.12), eco-labeling and certification (3.08) and brand image (2.99). It is also found that the mean values for all the statements are nearer to 3.00; which means that the customers were aware of green marketing and their attitude towards green marketing is said to be positive. As a result it is visibly revealed that they are taking precise decision towards purchase of green products.

b.    Chi-Square

This test is administered to ascertain the association between the socio-demographic factors and attitude of customers towards green marketing.

H₀: There is no association between socio-demographic factors and customers’ attitude towards green marketing.

H₁: There is an association between socio-demographic factors and customers’ attitude towards green marketing.

Table-3: Socio-Demographic Factors and Customers’ Attitude towards

Green Marketing

Socio-Demographic Factors	Chi-Square Value	P value	Conclusion
Gender	8.670	0.040*	Accepted
Age	22.063	0.005**	Accepted
Educational qualification	10.674	0.016*	Accepted
Occupation	15.828	0.008**	Accepted
Income	17.674	0.008**	Accepted
Marital status	6.802	0.270	Rejected

  ** Significant at 1per cent level      * Significant at 5 per cent level

Since the P value is less than 0.01, the alternate hypothesis is accepted at 1 per cent level of significance. Hence it is concluded that there is an association between age, occupation and income with customers’ attitude towards green marketing. Since P value is less than 0.05, the alternate hypothesis is accepted at 5 per cent level of significance. Hence it is concluded that there is an association between gender and educational qualification with customers’ attitude towards green marketing. Since P value is greater than 0.05, the alternate hypothesis is rejected at 5 per cent level of significance. Hence it is concluded that there is no association between marital status and customers’ attitude towards green marketing.

c.      Correlation

            In order to find the significant relationship between customers’ awareness, attitude and purchase decision of green products, correlation is used.

H₀₂: There is no significant relationship between customers’ awareness, attitude and purchase decision of green products.

H₁₂: There is an association between customers’ awareness, attitude and purchase decision of green products.

Table-4: Customers’ Awareness, Attitude and Purchase Decision of Green Products

Variables	Customers’ Awareness towards Green Marketing	Customers’ Attitude towards Green Marketing	Customers’ Purchase Decision towards Green Products
Customers’ Awareness towards Green Marketing	1
Customers’ Attitude towards Green Marketing	0.974**	1
Customers’ Purchase Decision towards Green Products	0.905**	0.945**	1

** Significant at 1 per cent level

Since the P value is less than 0.01, the null hypothesis is rejected at 1 per cent level of significance. Hence it is concluded that the independent factors namely customers’ awareness and customers’ attitude towards green marketing have a positive and strong relationship with customers’ purchase decision towards green products. This implies that as the level of awareness and positive attitude towards green marketing increases, the level of purchase decision of customers towards green products also increases. It is also clear from the above table that maximum correlation exists between customers’ attitude towards green marketing and customers’ purchase decision towards green products (0.945), followed by customers’ awareness towards green marketing and purchase decision of customers towards green products (0.905). From the above table, it is also evident that customers’ awareness and customers’ attitude towards green marketing are pair wise positively significant at 1 percent level.

d.    Regression

            In order to find the impact of customers’ awareness, attitude and purchase decision of green products, regression is used.

Table-5: Predictor Variables of Multiple Regression Analysis

Multiple R value	R Square value	Adjusted R2 value	F value	Standard Error	P value
0.913	0.834	0.831	316.872	1.846	0.001**

            ** Significant at 1per cent level

Table-6: Co-efficient between Customers’ Awareness, Attitude and

Purchase Decision of Green Products

Variables	USC	SE	SC	t value	P value
(Constant)	0.040	0.482		0.083	0.936
Customers’ Awareness towards Green Marketing	0.484	0.042	0.481	11.420	0.001**
Customers’ Awareness towards Green Marketing	0.268	0.051	0.211	5.279	0.001**

            ** Significant at 1per cent level

Dependent variable (Y)              = Customers’ Purchase Decision towards Green Products

Independent/predictor variable = Customers’ Awareness towards Green Marketing (X1) and   Customers’ Awareness towards Green Marketing (X2)

            The above table revealed that purchase decision of customers towards green products can be predicted at R² = 0.913. In this model, the value of R² denotes that 83.1 per cent of the observed variability in purchase decision of customers towards green products can be significantly explained by their awareness and attitude towards green marketing. The remaining 16.9 per cent is not explained which means that the rest 16.9 per cent of the variation of purchase decision of customers towards green products is related to other variables which are not depicted in this model. Since the p value is less than 0.01, the null hypothesis is rejected at 1 per cent level of significance. Hence the linear combination of customers’ awareness and attitude towards green marketing is significantly related to purchase decision of customers towards green products (F = 316.872 and P = < 0.001^**).

The Ordinary Least Squares (OLS) equation for predicting purchase decision of customers towards green products is:

Purchase decision of customers towards green products (Y) = 0.484X1+0.268X2

            The co-efficient of X1 is 0.484 which represents the direct relationship between customers’ awareness towards green marketing and purchase decision of customers towards green products. The estimated positive sign indicates that for each additional unit of customers’ awareness towards green marketing, there is a 0.484 unit increase in the purchase decision of customers towards green products and it is significant at 1per cent level.

            The co-efficient of X2 is 0.268 which represents the direct relationship between customers’ attitude towards green marketing and purchase decision of customers towards green products. The estimated positive sign indicates that for each additional unit of customers’ attitude towards green marketing, there is a 0.268 unit increase in purchase decision of customers towards green products and it is significant at 1 per cent level.

Findings

        The study found that, from the mean and standard deviation, customers’ are aware of green marketing and they have positive attitude towards it. There is a positive and significant relationship between customers’ awareness and attitude towards green marketing with purchase decision of customers towards green products. Further that the socio-economic factors except marital status have an association with customers’ attitude towards green marketing and it is significant at 1 per cent and 5 per cent level. It is vibrant that customers’ awareness and attitude towards green marketing have a positive impact on purchase decision of customers towards green products.

Suggestions

Today, new type of customers have emerged due to environmental concerns which indicates the importance of environment in decision making to buy green products. Concerning the results of testing research hypotheses, the customers were having positive attitude towards green marketing. Therefore if the companies take extra effort in providing effective marketing strategies, the attitude and perception of the customers towards green marketing may increase. It is also found that, based on mean value advertisement have great impact on purchase intention of customers towards green products. Therefore it is advised to make effective advertisement to increase the sale of green products. It is also recommended to the companies to modify the product attributes to differentiate it from other products which in turn aids in enhancing positive attitude and strong purchase decision towards green products.

Conclusion

            Since customers are more interested today in environmental issues and their environmental awareness is remarkably grown, one can observe incremental changes in their consuming behaviors. This study explains regarding the factors and variables do impact on consumers’ purchase decision towards green products. The study found that there is a positive impact of customers’ awareness and attitude towards green marketing on purchase decision towards green products. Therefore, it is mandatory for the organizations to focus on green marketing to increase the knowledge of customers towards green products which in turn enhances the sale of green products. It is also noted that advertising, product attributes, product quality and brand image also have positive impact on purchase decision of green products.

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