Exploration Of Green Shift

Published Date: 02 Nov 2017

Professor & Dean, Dept. of Commerce, Jiwaji University, Gwalior

Ms. Sweta Gupta

Assistant Professor, Dept. of Management, BIRT, Bhopal

Abstract

Today environmental protection is one of the biggest and most discussed agenda worldwide. All around the world, the people are talking about the environment and green marketing. Green marketing has become the important ingredient of the marketing process of the most of the companies. Figuratively the number of environmental advertisement has suddenly increased now-a-days. Environmental deterioration has been the matter of concern since the last three decades and environmental consciousness has been raised worldwide because of the rising evidences of environmental problems. Raised awareness has inclined consumers and marketers towards green marketing. The raised awareness should be translated into environmental purchases for the success of green marketing activities. The paper investigates the shift in the marketing trend from trendy or traditional marketing to green marketing from customer perspective as customers have the potential to change the trend of the markets. Various factors that are effectual in changing a trend are divided into individual and external factors. Factor analyses have been applied to find out which of the individual and external factors are essential for driving consumer green purchases. The relationships between income level, attitude, concern and consumers’ willingness-to-pay-premium for the green products have been studied in the paper. The result of this study will add new information and knowledge in the existing knowledge about green marketing and will definitely help marketers to analyze factors affecting green marketing shift and will definitely provide new panorama for future researchers. The consumer perspectives about the green marketing shift are exhumed, by the questionnaire. This research has surfaced some important implications.

Keywords: Green marketing, Green marketing shift, Trendy marketing, Green purchase behaviour, Customer perspective.

1.0 INTRODUCTION

Environment is the most pulsating issue of the present time. Societies, governments, non-governmental organizations in addition to business organizations are focusing their attention to overcome the escalating environmental degradation like global warming, ozone depletion, solid waste, e-waste, air pollution etc. Humans are the very cause of environmental degradation. It has been widely accepted that business are harnessing the environmental resources at a fast pace and their activities like procurement, manufacturing, logistics and marketing are imposing a very negative impact on the environment. Number of environmental issues have been recognized and broadly studied over the past few decades. People all over the world are aware of the environmental issues and are very concerned with environmental problems.

People understand the significance of protecting the environment. Today consumer health and well being is affected by the environmental alarming conditions. Therefore, the consumers of today are more environmental sensitive in their environmental attitudes, preferences and purchases. Customers are aware of the environmental degradation and are becoming more ecologically conscious resulting in raised desire for eco-friendly products and services. These sensitive consumers, governments, non-governmental organizations and business organizations have raised environmentalism an important subject of concern to marketers and to market place.

Developed countries are focusing more on the environment; environmental concern in developed countries is part of social, economical and political aspect of their life. While in case of developing countries people are not much concerned about the environmental issues because there are many other issues which stand at par with the environmental issues. Fastest pace of environmental deterioration has been successful in grabbing the attention of the governments worldwide and many international treaties have been signed for protecting the environment. Increased pressure of environmental deterioration has enforced many businesses to take steps to become socially responsible by developing products that meet the demand of environmentally conscious consumers. The companies are devising new ways and techniques of manufacturing green products and are also interested in finding the determinants of green purchase behaviour so as to implement the green marketing strategies.

Green marketing concept has gained momentum in the past few years but the pace has been very slow. Though marketers and governments are doing lot for promotion of green/environment friendly product but the tactical challenge faced by them is the acceptance of green products by the consumers. Though, the consumers are environmentally conscious but they do not always end up with purchasing the green products or environmental friendly products because of the indistinctness of green product in the market place. Researchers suggests that the pro-environmental behaviour is not always translated into environmental purchase and even the consumers are not engaged in pro-environmental behavior if they believe that their efforts will not make any difference in realizing positive environmental outcome.

Extensive focuses on environmental issues by the media, governments and environmental organizations have been successful in raising the awareness about the environmental issues in the public in general. Soonthonsmai (2007) defined green marketing as the process and activities taken by firms by delivering environmentally sound goods or services to create consumers satisfaction. One of the major trends of the current competitive modern businesses is the adoption of the green marketing and green marketing strategies. Firms adopting green marketing have to face numerous challenges like high cost of green products, varying customer demands etc.

Today more and more individuals believe that the very causes of environmental degradation are they themselves and they can take various steps that can be effective in pollution abatement. This has been successful in raising the numbers of customers desiring more and more environmental products in the market place. Concept of green consumerism and sustainable development are successfully and actively promoting the preservation of the planet earth.

In the current scenario, traditional or conventional marketing trends have gradually shifted to green marketing. Green marketing has now become a culture of today’s marketing place as more and more customers are demanding environmental friendly products and the manufacturers are abide to fulfil the raised environmental needs of customers in a sustainable way. Businesses are picking up this change and adopting green marketing models, practices and strategies for reaping the benefits from the future markets of environmental friendly consumers. The aim of the research paper is to examine the green marketing shift from the customer perspective as they have the potential to change the market trends. Previous studies suggest the fact that the determination and commitment is required from all the stakeholders of the companies for making green marketing successful. The green marketing is the utmost need of the time as it is attached with the environmental values and effective green marketing requires good marketing strategies and the development of products desired by the consumers.

2.0 REVIEW OF PREVIOUS STUDIES

Das Laxhminarayan (2012), the paper provides us insight about the green marketing practices in India. Numbers of companies in India are developing green marketing strategies to quench the raising demands of green consumers. It is assumed that green has the potential to uplift the economical sustainability of a nation. Government initiatives to promote greenness has been mentioned in the paper, most important one is introduction of CNG as a green fuel in Delhi. In a developing nation like India, where there are more important issues than environment, governments and people are doing their best to curb the detrimental impact on environment as well as to stand at par with the international needs of environment management. Paper suggests that more research has to be done in the field of green marketing in India for exploring the full potential of green markets.

Rezai G., Teng P. K., Mohamed Zainalabidin & Shamsudin Mad Nasir (2012), in the present scenario consumers tends to be more environments friendly and the same is reflected in the consumption pattern of the individuals. Today people are consuming nutritious, healthy, safe and environment friendly food. This paper focuses on the consumers’ awareness and intention towards green foods consumption in Malaysia. The results of the study suggests that the people are increasingly become aware of the green concept and socio-demographic variables such as education level, income and lifestyle have a strong relationship with the consumers’ intention to purchase green foods. Findings of the study underpins that education an high income level are more important factors in driving purchase of green foods because of the fact that they are more aware of the advantages of consuming green foods such as the health, nutrition value, little or no use of chemicals, safe, environment friendly etc. The paper suggests that understanding consumers’ awareness and intention towards green food consumption is of prime importance for food industry and food marketers before implementing green food production and marketing strategies.

Sharma S. C., Bagoria Harshila (2012), consumers’ environmental concern drags them to environmental purchasing; this fact has been elaborated by many researchers. Future of green marketing, targeting green consumers and the reasons for adoption of green marketing in India has been the focal point of the paper. The paper analyses the green marketing trends in India and draws close to the companies that are adopting green marketing practices like ONGC, Reva, Honda India, Mahindra Group, ITC, Suzlon Energy and many others. The paper draws attention towards the suspicious behaviour of Indian consumers towards green marketing and green products. It has been emphasised that the consumer awareness should be increased by large scale campaigns and by developing appropriate and affordable green technologies so as to achieve green products wider acceptance in the Indian society.

Shrikanth R., Surya D. & Raju N. (2012), Green marketing has gained momentum in India and in many other developed and developing countries of the world as it is viewed as a important strategy in facilitating sustainable development. The author tries to analyse the green marketing and strategies that could be used by business to best utilize the strategies of green marketing as a competitive edge. Paper tries to explore the current scenario, challenges and opportunities of green marketing in India. Customers are becoming more and more environment oriented and are willing to pay a premium for the environment, thus forcing businesses to inculcate green practices in their operations. The paper draws attention to the fact that the determination and commitment is required from all the stakeholders of the companies in order to make green marketing successful.

Verma Gargi., Agarwal Nisha. & Srivastava Anuj. (2012), the paper scrutinized the concept of green in Indian context and focuses on India’s Initiatives for Green Marketing. Indian government introduced the Eco-mark scheme in 1981. It is the need of the time that some concrete green marketing norms should be established to curb the prevailing environmental detrimental rate. The paper advices that the green marketing activities has to followed with dynamism in developing countries like India to improve the quality of the environment and to encourage the sustainable management of resources.

Raska David (2011), the study reveals the entwine component of corporate social responsibility, CSR is basically the improvement, development and welfare of society done by the companies. But the concept of corporate social responsibility has mingled to the environment protection concept. In the paper author discussed the current practices that focuses on the significance of firm’s environmental responsive behaviour. The results of the study substantiate that marketers might do best if they craft their environmental messages according to the environmental concerns of their target audience, that is, consumer who are not discouraged by the concept of "going green".

Sharma Yogita (2011), the paper underpin the fact the effective green marketing requires good marketing principles, green marketing strategies and the development of products desired by the consumers. The author outlines that green marketing is not an additional approach, but it is the utmost need of the time as it is attached with the environmental and social dimensions and values. The study advocates that green marketing activity has not to be taken lightly rather it should be pursued much rigorously. The study proposes green marketing-mix should consist of designing of green products, distribution with green criteria, pricing of green products and green publicity so as to realize the green marketing at its fullest.

Sheth, Jagdish N. Sheth & Sethia, Nirmal K. & Srinivas, Shanthi (2011), the paper highlights the deficiencies of the current sustainability strategies, the three main deficiencies are (1) sustainability strategies do not directly focus on the customer (2) sustainability strategies do not recognize the threats from rising global over-consumption (3) sustainability strategies do not take a holistic approach. The paper presented a new concept of mindful consumption (MC) and also a framework for a customer-centric (CCS) approach to sustainability. The foremost rationale is to maximize the adoption of green products that are lighter in their carbon footprint over the total life-cycle, including the production, usage and post-use phases. The combination of CCS and MC has the potential to convert sustainability as a global opportunity for businesses and governments and could provide solutions to the escalating environmental problems.

Tiwari Sandeep, Tripathi Durgesh Mani, Srivastava Upasana & Yadav P.K. (2011), paper underpins the fact that "the consumer want to buy more responsible environmental products due to the increased concern towards various kinds of environmental problems prevailing in the current scenario, but despite the inclination towards the green products consumers are confused about the green labelling, green certification and green advertising. The paper suggests that green product development could bring a systematic change in the society and the mercantile structure of the country. Governments should provide economic incentives to the major green players, so as to promote the green lifestyle in the society and the country.

Cronin J. J., Smith J. S., Gleim M. R., Ramirez E. & Martinez J. D. (2010), role of green marketing strategy is explained in this paper and the study show that basically three types of green marketing strategies exists in the market, these are green innovation, greening the organization, and green alliances. It has been focused in the paper that the green businesses are the results of the environment friendly efforts of the stakeholders.

Mishra Pavan. & Sharma Payal (2010), paper drag green marketing concept has resulted in re-marketing and packaging of the existing products which before now follow such directives. Many companies have now started to co-brand their products into separate segments acclaiming greenness benefits and these marketing activities are due to the environment friendly behaviours of the customers. Businesses have started targeting green consumers and are trying to integrate their environment concern in their purchasing decisions through the adoption of green marketing practices and strategy whichever is required for the product. The paper explore how businesses are expedite their target base of green consumer and also investigated current trends, the challenges and opportunities that businesses have with green marketing. Paper also attempts to explain the green marketing activities initiatives taken by the SBI- the nationalized bank, Nerolac Paints, Indian Oils, Thyagaraja Stadium- India’s first green stadium, Eco-friendly Rickshaws in Common wealth Games, Wipro's Green Machines (In India Only) – computer peripherals, Agartala- India’s first Green City, Going Green: Tata's new mantra- launching eco-friendly showrooms etc.

Prothero A., McDonagh P. & Dobscha S. (2010), paper explores that the basic discourse of green commodity has been changed gradually to sustainability towards a more holistic and global perspective. New typology of consumption has been identified in the paper that better represents the consumers who are willingly adopting greener lifestyles. The paper proposes that there should be a conflict exacerbation not conflict resolution for the advancement of ecological economy. It has been emphasized that environment curriculum should be included in the school for systematic change capable of promoting and enabling green life styles.

Andrews C. & De Vault D. (2009), the article inspects the emergence of niche markets for environmentally innovative products. Multi-agent simulation framework has been used for investigating the niche markets for environmentally innovative products. Governments need a better understanding of how they can intervene effectively in green niche market development. Multistage model as proposed in the paper could to be very useful in developing and designing policies for cutting through the uncertainty surrounding relative product greenness and for successful creation of niche market for green products.

Dimitri Carolyn. & Oberholtzer Lydia. (2009), it has been observed in the past few years that the numbers of consumers of organic food have gradually increased. Retailing of organic food started in 1997, when the foods were sold in the natural food stores. Till 2008 half of all the organic food purchases started in conventional supermarkets, club stores, and big-box stores. Despite the increased purchases of organic food it is difficult to categorize these consumers. One of the most important factors for organic food purchase is education which consistently influences the buying of the organic food products. It has been observed in the study that the consumers of all ages, races, and ethnic groups having higher levels of education buy more organic products than less-educated consumers. While factors like presence of children and income do not have a consistent effect on the buying of organic products.

Kulkarni S., Lassar W., Sridhar C. & Venkitachalam A. (2009), authors in their paper "McDonald’s Ongoing Marketing Challenge: Social Perception in India", draw closer to the unbeatable marketing strategy of global honcho McDonalds. The paper throw light on many of the strategies that McDonalds came up to capture the Indian market, but from the view point of environmental conservation and green marketing they are putting a lot efforts like recycling of the million ton of packaging, used for just a few minutes before being discarded. Company is spending a lot in upholding it as a environmentally friendly. One of the interesting concept introduced by the McDonald is ‘Litter Patrols’ where the employees of McDonald’s go around the market and picks up garbage left behind not only by customers from McDonald’s restaurants but also by other visitors in the area, thus promoting cleanness in the neighbourhoods.

Luck Edwina M. and Ginanti Ayu (2009), study explored thirteen prominent concepts of green marketing; which are as carbon, consumers, global and energy were the largest themes, while crisis, power, people, water, fuel, product, work, time, water, organic content and interest were the others. The study put forth the significance of green consumerism and also provides useful information that could be deployed by green marketing practitioners, policy makers and Government. The results of the study reflects that green consumerism promotes when the product if truthfully represented by the businesses.

Karna Jari., Hansen Eric. & Juslin H. (2003), forestry-wood value chain from four European countries namely Finnish, Swedish, German and UK companies were surveyed to examine social responsibility in values and environmental emphasis in the marketing planning of these companies. The author classified the companies into three categories namely proactive green marketers, consumption marketers and reactive green marketers on the basis of concept of redirecting customers towards sustainability. The result of the study proposes that proactive marketers voluntarily implement green marketing and seeks competitive advantage through environmental friendliness in comparison to the consumption marketers and reactive green marketers, thus directing towards sustainable development in business and society.

Pujaria Devashish, Wright G. & Peattie Ken (2003), the research findings are based on the large-scale research project on environmental new product development (ENPD) within British manufacturers. The authors attempt to integrate the new product development and environmental management philosophies to formulate a theoretical framework of environmental new product development (ENPD). The paper examines the relationship between the ENPD activities and the ENPD performance. The findings of the study suggests activities which are important for prediction of better performance of ENDP, like environmental benchmarking and performance measurement processes, effective environmental database management, effective groundwork, and cross-functional coordination etc.

Frank P. & Rubik F. (1999), Life cycle analysis survey carried out in the businesses of four countries, namely Germany, Italy, Sweden and Switzerland of European Union was carried out. The result of the study reports that there is a discrepancy between countries because of the difference in the level of environmental awareness. Regardless of discrepancies, there are some common factors one is cultural approach of LCA. The paper implies that the life cycle analysis should be used for assessing environmental aspects of product innovation.

3.0 OBJECTIVES OF THE STUDY

Following are the main objectives of the research paper:

3.1. To analyze the factors that drives consumers towards green purchases.

3.2. To study is there any relationship exists between the income level and willingness to pay for environmental product.

3.3. To open vistas for further researches.

4.0 RESEARCH FRAME WORK

A research framework is constructed to illustrate the factors that affect consumer green purchases, as the green consumerism is somehow accountable for green marketing shift. The framework as shown in Table 1, distinguishes between factors relating to consumers as individuals and some factors that are external i.e., not under the control of the consumer.

Individual Factors External Factors

Availability

Attitudeeeeee

Technology

Incentive

Investment

Motivation

s

Economy

Price

Concern

Income level

Product attributes

Mandatory Laws

Willingness to pay

Attitude

Economy

Figure 1: Research Framework "Factors Responsible for Green Shift"

The individual and external factors together are accountable for green marketing shift. Income level of consumer is an important link that translates consumer attitude and willingness to pay into green purchase behavior. In addition to the individual and external factors, income level is taken into consideration for the study as income level is likely to play a more significant role in consumer purchase decisions.

5.0 MATERIALS AND METHODS

5.1 Data Collection

The research study was exploratory in nature with survey method is used to complete the research study. Population included the consumers of Bhopal region. Individual consumers were the sampling element. Non–Probability purposive sampling technique was used to select the sample.

A questionnaire was developed for data collection covering all the aspects shown in the research framework. The questionnaire comprises of 21 questions. All the questions were measured on a five point Likert Rating scale, where 1 stands for minimum agreement and 5 stands for maximum agreement. Respondent category comprised of university students, academic staffs, office workers, housewives, business people and managers of several companies.

5.2 Data Analysis and Findings

5.2.1 Reliability measure

Cronbach alpha method has been applied to calculate reliability of all items in the questionnaire. Reliability test using SPSS software and the reliability test measures are given below:

Table 1: Relaibility Statistics

Cronbach's Alpha

N of Items

.977

21

It is considered that the reliability value more than 0.7 is good and it can be seen that in statistics, reliability value is quite higher than the standard value, so all the items in questionnaire are highly reliable.

5.2.2 Factor analysis

Factor analysis is used to identify which of the individual factors and external factors drags consumers towards green purchases. Factor analysis applies the extraction method of Kaiser-Meyer-Olkin (KMO) and Barlett’s Test of Sphericity in order to prove communalities among the constructs. According to most of researcher, KMO value must be more than 0.7 and the factor loadings for each item must be more than 0.5 and Barlett’s Test of Sphericity must yield a significance level of less than 0.05. The analysis is separately applied to the individual and external factors.

5.2.2.1 Factor analysis of individual factors

Table 2: KMO and Bartlett's Test for Individual Factors

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.716

Bartlett's Test of Sphericity

Approx. Chi-Square

178.084

Df

36

Sig.

.000

As shown in table 2, the KMO value is 0.716 and the Barlett’s test yields a significance level of 0.000, above mentioned criteria are met. Table 3 shows Extraction method of individual factors with factor loadings.

Table 3: Extraction Method for Individual Factors

Individual factor variables

Rank

Extractions

Ad encouragement

1

0.915

Reward incentive

2

0.891

Income level

3

0.845

NGO encouragement

4

0.765

Concern

5

0.734

Attitude

6

0.725

Govt. encouragement

7

0.718

Incentive for 3R

8

0.682

Media encouragement

9

0.577

Based on table 3, all the dimensions of the individual factors have the factor loading more than 0.5. Thus all the individual factors taken in the research framework like attitude, concern, motivation, and incentive and income level are important for green purchases.

5.2.2.2 Factor analysis of external factors

Table 4: KMO and Bartlett's Test for External Factors

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.717

Bartlett's Test of Sphericity

Approx. Chi-Square

356.216

Df

55

Sig.

.000

As shown in table 4, the KMO value is 0.717 and the Barlett’s test yields a significance level of 0.000, above mentioned criteria are met. Table 5 shows Extraction method of external factors with factor loadings.

Table 5: Extraction Method for External Factors

External factor variables

Rank

Extractions

Economy

1

.717

Single use

2

.678

Investment

3

.661

Clean technology

4

.609

Mandatory laws

5

.600

Durability

6

.559

Price

7

.519

New technology

8

.488

Availability

9

.471

Transportation

10

.467

Packaging

11

.367

Based on table 5, four dimensions of the external factors - new technology, availability, transportation and packaging are the factor loading less than 0.5, so these factors must be excluded. Thus the external factors capable of promoting green purchases are economy, investment, technology (clean), product attributes (durability and avoidance of single-use) and mandatory laws.

5.2.3 Correlation

Table 6: Correlations

Willingness

Incomelevel

Attitude

Concern

Willingness

Pearson Correlation

1

-.218*

-.055

-.054

Sig. (2-tailed)

.011

.524

.535

N

136

136

136

136

Incomelevel

Pearson Correlation

-.218*

1

.184*

.054

Sig. (2-tailed)

.011

.032

.531

N

136

136

136

136

Attitude

Pearson Correlation

-.055

.184*

1

.425**

Sig. (2-tailed)

.524

.032

.000

N

136

136

136

136

Concern

Pearson Correlation

-.054

.054

.425**

1

Sig. (2-tailed)

.535

.531

.000

N

136

136

136

136

*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).

Correlation analyses have been done to find out if any relationship exists between the attitude, concern, income level and willingness to pay. The results of correlation analysis as shown in the table 6, indicates that there exists a significant relationship between the willingness and income level as well as between income level and attitude at significance level of .05. The result also shows significant relationship between attitude and concern exists at the significance level of .01.

6.0 DISCUSSION

Factor analysis reveals various individual and external factors that have potential to drive consumers towards green purchases. Various individual factors proposed in the research framework drives green purchases while amongst the external factors - economy, investment, technology (clean), product attributes (durability and avoidance of single-use) and mandatory laws drives green purchases. This fulfils first objective. Correlation analysis shows there exists a significant relationship between willingness to pay and income level, income level and attitude, attitude and concern. This fulfils the second objective of the study.

7.0 LIMITATIONS AND FUTURE RESEARCH

In this research study, there are few limitations. The first restriction is about the use of samples, as research in conducted in Bhopal region only. Therefore, results must be used with caution before generalizing the result of the study. Considering this very limitation, future research might extend to the number of cities located in different areas of the country to assess more accurate and reliable results. The another limitation of the research is that, the research did not used any of the green products; it could be assumed that the respondent responses falls into different categories of the green products. This study can be used by different researchers to evaluate the different aspects of green products by different perspective that drives consumer purchases. Companies can make use of the study in concentrating on the overall aspects of the green products which can drive green product purchases.

8.0 CONCLUSION

The present study discussed in this paper investigated various individual and external factors that potentially drive consumers towards green purchases. All the individual factors taken in the research framework are found to contribute customer green purchases. External factors like economy, investment, technology (clean), and product attributes (durability and avoidance of single-use) and mandatory laws drives green purchases. Environmental attitude has significant correlation with the environmental concern and income level. Moreover, significant correlation exists between the income level and the willingness to pay. Therefore, it is established through this research that consumers are willing to purchase green products because the income level of people is satisfactory for environmental purchases, moreover, income level form environmental attitude and environmental attitude leads to environmental concern. Furthermore, these research findings may also benefit those companies who are offering environmental friendly products to consumers, as the results of the study provides important factors that drives green purchases. The results from this study show that these respondents have high positive attitude and concern regarding green products as well as their income level permits them and are willing to purchase green products.