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Impact of Key Factors on Green Purchase Behaviour of Indian Consumers

Author

Abstract

Purpose –The purpose of this study is to identify factors that impact green purchase

behaviour of Indians.

Methodology/Approach- Exploratory research was conducted to identify the variables, afterwards variables were explored with the help of literature review further data was collected through self structured questionnaire and analysed through regression analysis on SPSS 20.

Findings-The findings of the study suggest positive impact of environmental knowledge, environmental attitude, and environmental value on green purchase behaviour.

Research Limitations-The sample size under the study was 192 and confined to the state of UP. Further purposive sampling technique was used. Only those respondents were considered who had enquired about LED bulbs in offline store.

Practical implications- The results of the study can be utilized in marketing of green products by the companies. Appropriate communication strategy may be designed to boost the sales of green products by converting non green purchases into greener one.

Keywords: Green Purchase, Green Products, Salesman Communication, Green Purchase Behaviour

INTRODUCTION

Technological advancements, increasing disposable income, availability of better featured products are making Indian consumers look for newer products and improve their lifestyles. However, one of the risks associated with this tendency is that of overconsumption which may cause environmental risk (Tucker, 2002). Considering that, the resources bestowed to us by nature are limited, they require controlled utilisation. Any uncontrolled exploitation may harm the balance of nature. We have already experienced consequences in the form of climate change, green house emission, pollution etc. The risk associated with over-consumption is not small and has raised worries in the minds of people, across the globe in different forms. The answer to this problem is generally accepted in the form of sustainability. A method of ensuring sustainability lies in the usage of green products, which are less harmful to nature when compared to their conventional counterparts (Dutta, 2009). ‘Green’ is a universal term associated with solar equipments, hybrid vehicles, energy efficient electrical equipments, natural products, etc. The middle class consumers in India are very attractive segment for many companies (MGI, 2007). In their urge to develop their lifestyle and consume more there is a great need to mitigate the risk associated with their indiscriminate consumption and convert their purchases into green purchases. The current study therefore, aims at identifying the key factors that have an impact on green purchase behaviour of Indian consumers. Though, there are many studies on green purchase behaviour in developed nations but it is not wise to apply their findings in India as the context is different.

At the initial stages of research work the authors visited the local stores selling electrical equipments and through observation and informal interviews of salespersons and visitors, we realised that the sales of green products is often hindered by lack of knowledge, gap between concern and action and negative perception regarding the claims made by the companies as far as performance of the products is concerned. So, in order to develop a better understanding of this behaviour we decided to explore the available literature and then collect primary data from the requisite respondents.

LITERATURE REVIEW

Sustainability

A suitable definition of sustainability could be given as "the need to ensure a better quality of life for all, now and into the future, in a just and equitable manner, whilst living within the limits of supporting ecosystems" (Agyeman, Bullard, & Evans, 2002, p.78) "to meet the basic needs of all” and “extend to all the opportunity to fulfil their aspirations for a better life." Sustainability thrives on controlling and conserving the use of limited natural resources. The role of sustainability becomes very important in handling threats from over consumption (Grimmer & Wooley, 2014). The rising concern for sustainability has also affected marketers who have started designing their products in accordance with the needs of the consumers. Many companies are reported to have redesigned their processes, packaging and overall offering in the direction of building and providing sustainability (Chan, 1999). Some consumers are also reported to have recognised the issue and started looking for green products (Laroche et al ., 2001). Products which have features like refillable, reusable, better potential to save energy, recyclable are gaining ground. (Banerjee et al ., 1995). Even consumers are reported to show willingness to pay extra for green products (Coddington, 1993) in some countries. Other studies have identified the impact of demographics on green purchase. Age, qualification and income level are found to have impact on green purchase. Educational qualification of consumer is also reported to have some positive impact on green purchase behaviour (Schwartz & Miller, 1991) and young consumers seem more interested in green purchases (Anderson & Cunningham, 1977; Roberts & Bacon, 1997).

Knowledge is one of the very crucial factors in purchase choice of consumers and their knowledge towards the issue of sustainability is likely to shape their decision making (Alba & Hutchinson, 1987). According to Vinning & Ebreo, (1990) sustainable behaviour is based upon the knowledge of consumers. Lack of adequate knowledge or blurred perception can hamper the choice and chances of green products. Consumers are, many a times, sceptical about green products because of their inadequate knowledge. Shwartz (1992) suggested that values guide people to form opinion about any product. Others have confirmed that values influence behaviour indirectly (Parsons et al., 2001). Value driven consumers are more concerned about the impact of their decision on others and society as a whole (Pinto et al., 2001).

Attitudes are also considered to be very consistent predictor of green purchasing behaviours (Schlegelmilch, Greg, & Diamantopoulos, 1996). Many studies have postulated that there is a positive correlation between concern towards the environment and pro-environmental behaviour (Roberts & Bacon, 1997). Berger & Corbin (1992) found that green purchase behaviour of consumers may be the result of their perceived notion (i.e. attitude) towards conservation of environment. Schlegelmilch et al. (1996) emphasises on the role of attitude in purchase choices. Attitude is also expected to shape the behaviour of consumers by building environmental knowledge.

. Hunt & Dorfman (2009) and Jones, Shrinivas, & Bezner-Kerr (2014) have stressed upon the role of environmental awareness in driving green purchase. However, Brown & Wahlers (1998) have reported that consumers show reluctance in making green purchases. Moisander (2007) has also reported that consumer have a tendency to avoid complexities and making green purchase is difficult for them as it entails a complex decision making process, dealing with apprehensions and dilemmas. Nakarado, (1996) confirms the reluctance of buyers towards green purchase. Sun (2012), has identified three factors which work as a barrier towards green purchase in USA. These factors are inadequate information, higher price and apprehension towards performance of the green product. These findings may have equal application in the Indian context as well. Mukherjee et al. (2011) has reported that price sensitive nature of Indian consumers is a factor which calls for adequate explanation of higher prices of green products. According to Aronson (2004), the behaviour of consumers is often influenced by some situational factors like information availability, prompt response, the conviction with which communication is made. Consumers may have a tendency to discount future gains for immediate benefits (Erasmus and Mathur 2011). Nevertheless it can be said that knowledge about an issue enables the consumer to think about the seriousness of any issue and its consequences and it plays vital role in purchase choice of consumers (Hunt & Dorfman, 2009).

GAP IN LITERATURE

On the basis of literature review, we have found that there are various studies pertaining to above mentioned variables in developed nations. However, Indian consumers are different from their counterparts in developed countries so it is important to conduct a study to understand the role of various variables in green purchase behaviour. When we talk about the availability of green products in India, green products are readily available and are not an issue as far as electrical appliances are concerned; whether it is low involvement lighting equipments or high involvement cooling equipments yet the customers are not completely inclined towards it. There is a need to analyse the impact of environmental value, environmental knowledge and environmental attitude on green purchase behaviour.

Based on the literature review, a theoretical model that seeks to understand the role of environmental value, environmental knowledge, and environmental attitude in product choice has been developed. It is shown in Figure.1. The proposed hypotheses are as follows:

H1: Environmental knowledge positively affects the environmental value

H2: Environmental knowledge positively affects the environmental attitude

H3: Environmental knowledge positively affects the purchase behaviour of green products

H4: Environmental value positively affects the purchase behaviour of green products

H5: Environmental attitude positively affects the purchase behaviour of green products

METHODOLOGY

The study was conducted in the cities of Noida and Lucknow in the state of UP in India. We have adapted established scale given by Segev (2015) to measure environmental knowledge (six items) and environmental value (four items) and suitable modifications were made to suit the needs for study. The scales developed by Segev (2015) for environmental knowledge covers items about ‘the awareness about the issue’, about ‘recycling and wastage’ about ‘understanding the labels and symbols’. The scale used to measure environmental value consists of four items focusing on ‘the harm to the environment’ by one’s action, the ‘willingness to get inconvenienced’ for using green products.

For the construct environmental attitude (seven items) and green purchase behaviour (five items), from Lee (2008) were adapted, scale adapted for measuring environmental attitude focused on the ‘need of environmental protection’ scale adapted for measuring green purchase behaviour focused on and for purchase behaviour of the customer their ‘behaviour while purchasing green products’, like ‘reading the information’, ‘preference of green product over conventional product’, ‘readiness to pay more for green products’. The responses on all scales were recorded on a 5- point Likert scale where 1 = strongly disagree, 2= disagree, 3 = Neutral, 4 = agree, 5 = strongly agree.

Electrical goods market in the cities of Lucknow and Noida were randomly selected for the study. Purposive sampling technique has been used to select the relevant sampling units because we want to approach people who had at-least visited a shop and enquired about LED bulbs. Data was collected from 220 respondents out of which 192 valid questionnaires were received back and used in the study. SPSS version 20 was used for performing all statistical analysis.

Factor analysis was performed on the adapted scales separately and the results for principal component extraction were within the acceptable limit. The KMO value was found to be .839 for environmental knowledge, .799 for environmental value, .798 for green purchase behaviour and .852 for attitude towards marketing while the Bartlett test of spherecity was found as significant (results of factor analysis are given in Annexure 1).

According to Nunnally and Bernstein (1994), reliability is considered sufficient when Cronbach’s α range from 0.7 to 0.8. The reliability of scale on ‘environmental knowledge’ was .783. While, it was .829 for the scale on ‘environmental value’. The reliability of the scale used for environmental attitude was .805, for its sub scale, it comes out as first component after varimax rotation .793 and second component after varimax rotation as .780. The scale used for green purchase behaviour reported reliability of .765.

The demographic information of the sampled respondents is presented in Table 1.Out of 192 respondents 38.5 percent were from service background and 26 percent from business background and rest were either students or unemployed. 63 percent of the respondents were male, 36.5 percent were females. As far as the education background is concerned majority of the respondents were formally educated break up is as 1.6 percent of the respondents were educated upto class 12^th, 6.8 percent were under graduate, 40.1 percent were graduates, 45.3 percent were post graduate. Majority of the respondents were young as the break up for age suggests 50.5 percent of the sample within 18-25, 38 percent were between 26-35, 6.58 percent between 36-45. 4.2 percent between 46-55 and rest 0.5 percent have age above 55 years, The data shows that 9.4 percent of respondents were from metro cities, 71.4 percent from city, 13.5 percent were from suburbs/towns and rest from village or village headquarters. Income was measured in INR, where 40.1 percent respondent fall within category of below 2 lac annually, 28.1 percent within 2-5 lac. 23.4 percent respondent belongs to 5-10 lac income and 8.3 percent belong to above 10 lac category.

Table: 1 Demographic Characteristic of the Respondents

Regression analysis was performed to examine the relationship among environmental knowledge, environmental attitude, environmental value, and green purchase behaviour. Standardized Coefficients Beta and t value were computed. The results are shown in Table 2.

Table 2: Results of Regression Analysis

The results reveal a positive significant correlation between environmental knowledge and environmental value and environmental knowledge and environmental attitude. Environmental knowledge has a positive significant relation with green purchase behaviour. Thus, H1, H2, H3 are accepted. Environmental value is found to have positive significant impact on green purchase behaviour. Similarly, environmental attitude has positive impact on green purchase behaviour. Thus, H4 and H5 are also accepted.

DISCUSSION

Among all the variables considered in the study environmental knowledge comes out as the most important variable which not only impacts the green purchase directly but also effects the other two variables namely environmental value and environmental attitude. This calls for more investment in building environmental knowledge. The analysis of data shows a positive significant relation between (p<.000) between environmental knowledge and environmental value. The value of constant is 7.408 and standardised β as .473 which indicates positive correlation between environmental knowledge and environmental value. Subsequently environmental knowledge has a positively significant impact on environmental attitude with (p<.000) and the value of constant is 4.437 and standardised β as .306. Results also shows a significant relationship (p<.000) between green purchase behaviour and environmental knowledge. The value of constant is 5.706 and standardised β as .382. which points out a positive relation between environmental knowledge and green purchase behaviour. Similar results have been reported by Laroche, Bergeron, & Barbaro-Forleo (2001) who have emphasised on the role of knowledge in influencing green purchase. Vining & Ebreo, (1990); Chan, (1999) also supported this finding. Therefore, we suggest that building environmental knowledge needs to be greatly emphasised upon by the companies in their marketing communications be it advertising or other BTL activities. The salesperson can also play an important role in imparting knowledge pertaining to the environment. The salespeople can act as guides for customers to improve their knowledge by complementing the advertising activities. We also feel that efforts in building environmental knowledge among consumers will yield dividends in the near future.

Further analysis of the data shows a significant relationship (p<.001) between green purchase behaviour and environmental value. The value of constant is 3.316 and standardised β as .234 which indicates at a positive correlation between environmental value and green purchase behaviour. This finding is supported by Shwartz (1992). Values are reported to be a key driver of behaviour (McCarty & Shrum, 1995). Role of values is crucial in influencing the consumers to go green (Peattie, 2001.; Wiener & Sukhdial, 1990). Bei & Simpsons, (1995); and Banerjee, & McKeage, (1994) have also emphasised upon the importance of role of values in purchase behaviour. The present study confirms the role of environmental value in influencing green purchase as vital. The values can be built through proper reinforcements at various points of learning of an individual.

The results shows a significant relationship (p<.007) between green purchase behaviour and environmental attitude. The value of constant is 2.733 and standardised β as .194. Which states a positive relation between environmental attitude and green purchase behaviour. Environmental attitude is accepted as one of the key driver of green purchases (van Liere, Dunlap Roberts & Bacon, 1997: Berger & Corbin, 1992) which is also supported by Straughan & Roberts, (1999); Guagnano, Stern, & Dietz, (1995). We found that in the context of Indian consumers environmental attitude is a key factor. Outcomes of previous researches held in other context support our findings. Building a positive attitude towards green products requires proper knowledge about the consequences and implications of one’s action on environment.

So, we assert the need for building environmental knowledge base and positive attitude towards green products to increase their acceptability among Indian consumers. The tools for building them could be proper communication through mass media with messages covering about results of their consumption habits, role which a consumer can play in improving sustainability. In the long run, how can they contribute in decreasing the impact of threats posed by over consumption, why they should invest today on green products in form of higher prices and how they can yield benefits in the long run, we further assert that salesman at the point of purchase specially in Indian context have a crucial role, he can act as a guide to the customers boosting their existing knowledge about the green products, consequently changing their perception towards green products and also by strengthening their environmental values. Salesman has an important role in converting conventional purchases to green ones. Companies may train and incentivise their sales persons for selling green products.

There is no doubt that the study has made a valuable contribution in the field of sustainability and marketing of green products but a size of 192 respondents requires great caution in generalisation. Further, the study was limited to only 2 cities of Uttar Pradesh which may further constrain the general applicability of findings to the entire state and country. More studies can be conducted in different parts of the state as well as the country to capture the complete scenario. Impact of other marketing variables such as price and marketing communication mix on customer purchase may also be studied.

It may be concluded, that there is an impact of environmental value, environmental attitude and environmental knowledge on green purchase behaviour of Indian consumers. Environmental knowledge has a pivotal role in green purchase behaviour and companies need to invest in building and developing knowledge and positive attitude towards green products, this may further increase green purchase and convert non green purchasers into green ones.

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Annexure.1

Environmental Knowledge

Environmental Value

Environmental Attitude

Green Purchase Behaviour