Include Perceptions Of Ecofriendly Products In Qea

Published Date: 02 Nov 2017

ABSTRACT

INTRODUCTION

Green Products – "Any product that is environmentally preferable relative to its comparable products."

As it is very obvious from the extremely generic statement above, that happens to have been taken straight of the internet, the term "green" like most jargon used in the advertising and marketing industry has several definitions – Time and again this definition or explanation has been amended / revised to suit specific needs, to support a particular point of view or just simply to promote some product in the market.

Now, the most important question – Why does one need to go green? There are several reasons for the same, briefly and broadly classifying a few, Erosion of resources (excessive logging and mining), Environmental issues (Pollution), Energy crisis and Health concerns (pesticides, more complex maladies). The use of green produce will ensure that we continue to maintain the world we live in for the future generations also to enjoy the same.

In world that is fast hurtling towards its own destruction if its people don’t stand up and take notice there is no topic more relevant than the impact of green products in our lives and its impact on mother nature. This is precisely why we have chosen this topic for our survey and some of the results are really astonishing considering the high level of education, and knowledge imparted in urban cities around the world (case in point: India). People today care more about productivity and efficiency rather than protecting nature and using cleaner methods of manufacture.

There are lots of NGO’s that have actively taken up this issue and are forcing industries and large conglomerates to actively follow the green path. As a direct result of which some companies strive hard to produce ecofriendly products while others take it as another opportunity to fleece customers. All the years of industrialization have taken its toll on earth, several areas have become inhabitable, some species have become completely extinct, and there have been some drastic changes with respect to the climate around the world as well.

Consumers are starting to ask for ecofriendly products, therefore there is no demand related problems thanks to the growing awareness among people. There are a couple of points that are vitally important for every consumer to remember when he or she buys products at the market. One, he/she doesn’t just buy a product, but everything that went into the product as well, raw materials, process, energy as well as everything that will happen as a result of using the product. Secondly, every product ecofriendly or not has an impact on the environment, the basic idea is to keep this impact to a bare minimum.

LITERATURE SURVEY

The truth of the matter is that all is not lost; the current generations of people are stirring and hopefully will take it up on themselves to force companies and large conglomerates to go green by only consuming ecofriendly products. Several surveys and researches that have been done around the world bear testament to the above stated statement. There are a few reasons why eco-friendly products are not always mainstream; this is primarily because a lot of things that would have to be done involve going out of the way to look for and use renewable and green sources of energy and raw materials, use of costly equipment, discarding the use of items that are harmful to the environment and therefore greatly reducing productivity and so on. Another major problem, associated with green products is how some people among the younger generations consider the use of green, ecofriendly products as a fad. This means the demand for ecofriendly products, is not going to remain stable. This is a direct turn off for companies that strive hard to go green, it is important for the consumers to understand the importance of using ecofriendly products and support the companies that manufacture the same.

The Literature surveys conducted revealed several interesting bits of information;

Eco-awareness is on the decline in the US thanks to their loss of trust on companies producing ecofriendly products.

Several surveys reveal that people are not always ready to pay a premium to use green products and that people of Asian and or African origin (33%) are far more likely to pay a premium to use green products compared to their American (12%) and European counterparts.

Sustainable practices (usage of renewable clean sources of energy, organic foods), is one of the avenues explored by different companies when marketing ecofriendly products. People today are more wary of scams and therefore look with an inkling of suspicion on the sustainable practices of some companies. The effects are far greater in the Americas with only around 50% of the people being convinced that organic products help the environment, while the number rises dramatically to 75%+ in the middle east and Asian countries.

Another interesting learning from other sources and earlier surveys from around the world is that the foremost or rather most popular way to show eco friendliness is by using energy efficient electronics or recycled wrappers or covers for your products. Around 80% of the general population feel that if you use energy efficient electronics or recycled packaging you are doing your bit to save the environment this is followed at around 65% by Organic foods.

There have been several studies trying to pry into the mind of the consumer and simultaneously trying to typecast certain types of consumers into certain categories. Berkowitz and Lutterman (1968), as well as Anderson and Cunningham (1972), started their pioneering work on the study of the profiles of socially responsible consumers back in the 1970’s. Post their studies they arrived at the conclusion that "a highly socially conscious person as female, pre-middle aged, with a high level of education (finished high school) and above average socioeconomic status." Over the last two decades several researchers have postulated their own hypotheses regarding this issue, some cases support the findings of Berkowitz and Lutterman (1968) but a large chunk of them do not. Instances of a few include how Reizenstein et al. (1974) came to the conclusion that men were willing to spend more in order to control air pollution. Similarly Balderjahn (1988) reported that "the relationship between environmentally conscious attitudes and the use of non-polluting products was more intensive among men than among women." In the early days it was assumed that consumers with medium to high income would be more likely to behave in an environmentally friendly way but multiple studies prove otherwise, for instance Henion (1972) found that eco-friendly behaviors was actually consistent across salary/wage ranges. This was taken even further by Sandahl and Robertson (1989) who found that "the environmentally conscious consumer is less educated and has a lower income than the average American. This brought them to conclude that income and education are not good predictors of environmental concern or purchase behavior."

All this information made us curious to understand what the situation is in India regarding the usage of green products? What do people consider as ecofriendly? Or simply what are the consumers thought process before buying any product of the market.

Based on all of the data collected during the literature survey, in spite of the fact that the data was generic and not focused on the Indian market, we have formulated a couple of hypotheses, which we hope to prove or disprove.

H1: Indian people would not be willing to pay a premium for eco-friendly products.

H2: The role of the government in promoting the use of green products is understated.

H3: Eco-friendly products are easily available / accessible to the average Indian consumer for consumption.

The questionnaire/survey (see attachment) that we have prepared has been specially designed so as to offer us some more insight into the areas that our hypotheses focus on.

Concluding, the literature survey conducted gave us several insights in to the current situation in the ecofriendly product market around the world and also provided us with a direction to be pursued when we endeavor to carry out a similar survey in India, focused specifically on the urban community. It is our aim to make a comprehensive empirical study in order to understand the hypotheses that we have postulated and its relevance to the Indian consumer industry.

METHODOLOGY

To achieve the goals of this study, a questionnaire was developed. This questionnaire was designed solely on the basis of the initial learning’s from the literature survey. The survey went through several iterations so as to end up in its final format, once we were convinced that the survey would serve its purpose and give us some insights in to the thought process of Indian consumers with regards to ecofriendly products. The survey has been attached towards the end for your review as well.

The questionnaire was predominantly split into 6 different parts as detailed below:

Demographics

Awareness of Eco-friendly products.

Perception of Eco-friendly products.

Willingness to purchase such products.

Accessibility to Eco-friendly products.

External factors influencing availability and purchase of "Green" products.

Measurement

The first section of the questionnaire gathered information regarding the respondents such as age, sex, income, education and domicile. This sort of demographic information helps add more meaning to the data generated. Next we have tried to evaluate the awareness of the common man to the availability of eco-friendly products. Do people buy these products totally aware of the intricacies of these products? This was followed by an evaluation of their willingness to purchase eco-friendly products regardless of the premium attached to these products. Next, we try to gauge the kind of exposure that eco-friendly products are afforded in the shelves of the super and hyper markets and what is the people’s opinion regarding the publicity for these products? Finally, we try to understand the external factors the people consider to be of importance while buying eco-friendly products, what that role does the government play in these matters and what is the role that the people expect the government to play in the eco-friendly product market.

Data Collection

The survey was predominantly floated through online sources and social media websites, among peer and affiliate groups. Therefore the convenience method of sampling was followed. As a direct result of this due to the influence of most of the respondents being in the peer group the data collected now also seems to resemble a systematic sampling of a particular social segment, this has happened inadvertently.

INCLUDE PERCEPTIONS OF ECOFRIENDLY PRODUCTS IN QEA

Qualitative/Exploratory Analysis:

We employed the method of using questionnaires and conducted a survey among a sample of 200+ respondents (representative of the target population-‘urban educated crowd’) mostly in the age group of 25-35 on various aspects of choosing & using an eco-friendly product.

Through an e-survey, they were expected to recollect their shopping experiences of choosing a green product. However, since it is understandable that some memories may be distorted and could be only perceived responses, we also intercepted the customers at the supermarkets, the multi brand gadget store and in specific, the shops selling green products so that their experiences and thoughts are vivid.

Our questionnaire started with a few multichotomous questions to collect the preliminary data about the respondent. Then, we chose to move to questions rated on a "Summated Likert Scale" (of 5 from strongly disagree to strongly agree with neutral choice) that allowed capturing the expression of intensity of feeling. This served as a proxy of a person’s true attitude.

We measured the following aspects through the questionnaire:

awareness

willingness to purchase

Accessibility

Factors influencing the purchase of an eco-friendly product.

Awareness:

Creating a product is not sufficient. People need to be aware of its existence and benefits of its consumption to the environment. They hear words such as ozone-friendly, environment friendly and recyclable products that are emerging as an important brand differentiator these days.

Educated Shoppers come across a lot of claims from manufacturers on the Green Star Rating for electronic gadgets and other utility based items made of jute and cloth as a replacement for paper & plastic. They are still unsure of what is green and what the message on "Good for planet" means. Considering the overall sustainability of the planet, they are quite intrigued by these advertisements. They are continuously being educated by the media, their peers, and the papers and of course, the internet on the benefits and value. They are however confused by the multiple claims and messages.

All our respondents seem to be aware of what a green product is. There was a mix of graduates & post graduates and even a handful of doctorates who took this survey. This qualification didn’t seem to make a difference in terms of their approach to green products. However, when it came to buying the products for regular consumption, 72% were positive.

And 86% of this positive category belonged to the Monthly Income Group of less than 1Lac. It was also observed that despite managing family burdens after marriage and having kids, these green enthusiasts were twice the number of singles. However, coming to the awareness of brands that offer green products, a few names that popped up were Fab India, Toyota Prius Hybrid car and Gourmet Market’s organic vegetables. 50% of the people were clueless as to which brands offer ‘green’ products.

When it came to how people know of products supporting the green movement, advertisements on the media topped the charts. 50% contributions to awareness were from advertisements, and about 31% was through the word-of-mouth from friends, family & relatives. People don’t seem much aware of the energy ratings offered by various appliance manufacturers nor the claim from them on their packaging.

When queried about the products that came to their when we talk to green, it’s the jute/paper bags that we take to supermarkets these days topped the list with 42%. The appliances/hybrid/eco cars, and the organic fruits, vegetables & pulses direct from farms shared almost equal awareness & usage. And, the renewable source of energy, of course, was the other thought.

Despite having discussed about products that were green and the advertisements that popularized the concept and the subsequent products, it was felt by an alarming 33% of the respondents that the problem is inflated. This clears shows the lack of awareness even among the educated youth and that’s very disturbing. This is the group that can practice & preach this concept for the benefit of the globe and if the perception is gotten wrong, it is startling and we would need to work on this aspect for clarity in communicating & educating them.

They still do not seem to completely understand how one purchase could make an impact at the global level. They are still along the learning curve. Hence, they definitely seem to need help at the point of purchase.

Buyers today are less dogmatic and more open to trying new products. Some have the inner belief that environmental protection should not be left to be the job of government, environmentalists, businesses & scientists. They want their contributions to count. On the other end of the spectrum are the social status seekers who are ready to exhibit their purchasing power to showcase their contributions to a greener society.

Willingness to Purchase:

Even though, almost all of them surveyed seem to be aware of green products, only 62% were willing to purchase. The dominant driver here, being the expectations on price-performance parity. There is a notion as to why products claimed to be "green"’ are more expensive than the "usual" ones. They are also concerned about the credibility and concerns about product performance.

Almost 85% are aware of "carbon footprints" and are resorting to car-pooling to mark their contributions towards containing the emissions. Most of which is because of the awareness created by the respective corporates and their creation of conducive environment such as the websites, car pool bay etc. within their workplace.

It was observed that among those who were willing to pay a premium choosing a greener product over the usual one; it was a male-female contribution of 50% each. And the premium that they were willing to pay was 0-10% over and above the marked retail price of a non-green product.

The respondents were in the Income Group of 0-1 lakh, 1-2 lakhs and more than 2 lakhs. And it was the 0-1 lakh monthly income group that constituted 80% of the respondents enthusiastic about a green product with a slight mark-up price.

However, only 71% of the respondents who were willing to choose a green product were ready to pay the premium price. Rest of them sounded quite intrigued as to why a product marked ‘green’ has a mark-up price.

The "inclined/aware" segment is already leaning towards greener purchases and the "unsure" segment is open to be engaged. These consumers are willing to considering green as part of their purchases. Green Shoppers are not the austere minimalists. As they are aware of the effect of their contributions to the environment, they represent the high value & loyal user segment that do not hesitate to shed a few more for the benefit of the globe. They are proud of their small contributions and thus are not the typical bargain hunters.

We identified significant latent demand that could be unlocked with communication, education & improved visibility. It is with the manufacturers and the marketers to capitalize on this aspect for their own benefits and the larger benefit to mother earth.

Accessibility to green products:

Accessibility and Availability to green products plays a major role in the purchase decision. From the chart below, we can infer that ~50% of the respondents buy green products from the supermarket. Green products belonging to food and beverage sector comes under habitual buying of a consumer. If a product is unavailable, the consumers can switch to some other brand without hesitation. So it is essential to maintain an array of eco-friendly products readily available. We also see an emerging trend selling green products online.

For example e-bay an e-commerce giant has segmented their business to sell green products @ http://green.ebay.com

This website is an inspiration to buy, sell and go-green every single day!

The site has 300,000 registered buyers and sellers of green products which is a positive sign. Most of them are recyclable, eco-friendly items.

The second crucial thing for any product to be successful is based on the visibility/shelf space that it can get. While intercepting the customers with our green product survey, we also observed the following:

Some supermarkets had dedicated shelves in which the products were neatly arranged in the order of customer’s preference and buying frequency.

Few other supermarkets arranged brands wise and most often the green products are hidden behind.

Other supermarkets didn’t have well trained staffs to guide where the green products are and some didn’t recognize what the customer is looking for.

Inference from the survey shows a majority of the shoppers aren’t accessible to these products though they are aware of the existence and significance.

This is one point which needs more traction, because roping in new people to try green products become easy. They will be self-motivated while seeing others buying it.

The next important point to consider is the product range and product lines available in the green segment. Green Market is a budding one and not all product types are readily available. With more and more companies moving towards manufacturing eco-friendly products, this problem should eventually disappear. We consider this to be a temporary set-back only.

Factors Influencing/Affecting purchase of Eco-friendly Products

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Enforcing/promoting the use of Green / Eco-friendly products

The objective of the government was to promote:

Purchase of Environmentally Friendly Products

Resource Conservation and Recycling Promotion

The government issued "Blanket Ban" on the usage of plastic bags in the country. However it started with only the carry bags. This Act failed miserably due to lack of proper implementation. This did not encourage the shoppers to adapt to jute/paper bags instead they didn’t mind paying an additional Rs.5/ Rs.10 to buy plastic bags. This means, instead of law solving the intended problem, retailers are reaping more benefits.

Eco-friendly products can be defined as goods that possess the E-mark or GR (Goods Recycled) mark certification or meet equivalent certification standards. In the case of the public sector, public organizations are obliged to buy eco-friendly products when they seek to purchase products subject to eco-mark labelling system. One of the survey questions suggested that the government should enforce the selling and buying of only green products for which a majority of respondents agreed.

One of the major concerns in the consumer community is how to identify green products. Should they go by manufacturer’s claim or by their primary/secondary reference group suggestions etc.

Survey Question:

"I feel the government should intervene in providing certification marks / Quality Rating to the green products to increase reliability."

The intention of this question is to understand the ambiguities and get suggestions to alleviate the ambiguity and increase the reliability of the consumers to buy a particular brand or product,

The government should not only focus on promoting the purchase of green products, but also motivate manufacturers / retailers /dealers to manufacture and distribute them.

Tax rebates definitely has some benefits

Inviting new companies / industries

Motivating existing companies to produce more product varieties

Help to open up more stores (increasing availability).

Reduce the price (to some extent).

Close to 80% of the respondents agreed that the government should give some tax rebate/recognition to manufacturers.

CONCLUSION

ATTACH SURVEY QUESTIONNAIRE