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Consumer Behaviour – An Eco friendly approach Maneesha Patel, Namita Raina, Raj Patel
Maratha Mandir’s Babasaheb Gawde Institute Of Management,
Mumbai University, India
[email protected], [email protected], [email protected]
Abstract: Objective: The main objectives of the study
are to investigate the consumer attractiveness
towards eco- friendly products in FMCG
sector and their impact of purchasing
decision. Also to analyse if they are willing to
pay higher prices for the eco-friendly
products and to make the necessary
recommendations based on the finding about
their buying behaviour towards these
products. The Paper suggests that the
consumers who are highly concerned about
the environmental issues and its deterioration
are likely to pay higher price for such
products.
Methodology: Data for this study was
collected from all the segments of society, 70
respondents using a structured questionnaire.
The questionnaire contains questions to
measure awareness of eco-friendly products,
consumers’ environmental concerns, trust in
the quality of green products, & their
willingness to pay higher for the same.
Result: The results of the data analysis
indicate that few consumers are ready to pay
higher prices for these products as they are
more environment conscious where as some
consumers who are aware of environmental
degradation are of opinion that if the same
product is available at lesser cost then why to
pay the higher cost for it. The survey findings
disclose the consumers’ awareness about
green products and the impact of
environmental concerns on consumer’s
purchases.
Conclusion: Environmental concerns could
emerge as one of the powerful drivers that
influence purchase, but it has actually not
resulted in the ability to command a
sustainable premium: consumers are willing
to buy eco-friendly products, but not pay the
higher price. If the consumer’s demands
increases the costs of production of eco-
friendly products will reduce. Awareness
among consumers that their buying choices
can make a difference to the environment
should be promoted to accelerate the
consumption of eco-friendly products.
(Key words: eco-friendly products, consumer
behaviour, willingness to pay)
I. INTRODUCTION
Consumer’s consumption has been
changed due to rapid economic growth
which has resulted in environmental
degradation through over consumption &
utilisation of natural resources. If the
current trend of economic growth &
irresponsible consumption patterns
continues the environment deterioration
would be worsen. The consequences of
environmental degradation are global
warming, depletion of stratospheric ozone
layer, pollution of sea and rivers, noise and
light pollution, acid rain and desertification
(Ramlogan, 1997).
Hence, shift towards more
sustainable consumption patterns is
required and it is also important to increase
the environment awareness &
consciousness among the people.
Consumers can reduce their impact on
environment by their purchasing decisions.
The rising number of consumers who
prefer and are willing to buy eco-friendly
products are creating opportunity for
businesses that are using “eco-friendly” or
“environmentally friendly” as a component
of their value proposition.
Businesses that offer products
which are manufactured & designed with
an environmental marketing mix have a
long term competitive advantage.
Environmental issues are of importance to
consumers who are environmentally
conscious when making a purchase.
Hence, a better understanding of consumer
preferences in this case will allow
businesses to acquire more market-
applicable approach to sustain in the
competitive market.
But first let us know what is Green
Product- This is the product that will not
pollute the earth or deplore natural
resources, and can be recycled or
conserved. It is a product that has more
environmentally sound content or
packaging in reducing the environmental
impact (Elkington and Makower, 1988;
Wasik, 1996).
In other words, green product
refers to product that incorporates the
strategies in recycling or with recycled
content, reduced packaging or using less
toxic materials to reduce the impact on the
natural environment. Krause (1993), in his
research found that consumers were
becoming more concerned about their
everyday habits and the impact on the
environment. The outcome of this is that
some of the consumers translated their
environmental concern into actively
purchasing green products commitment
(Martin and Simintiras, 1995).
Eco friendly products are readily
available nowadays. These include small
articles from handmade papers bags, jute
bags, and recycled papers to Eco friendly
fuels and so on. However in spite of a
plethora of eco-friendly products being
made available, majority of the people are
still oblivious about the very existence of
such products, which is rather unfortunate.
The most important reason why
one should start using eco-friendly
products is because of the devastating
effect of harmful gases, non-biodegradable
plastics, dangerous gases which not only
pollutes the environment but also causes
respiratory problems in human beings.
Apart from humans, it could also lead to
complete extinction of various rare species
of animals and birds. It also increases the
earth’s temperature, which in turn causes
the greenhouse effect. The excess of
greenhouse gases especially carbon
dioxide in the atmosphere prevents the
earth’s heat from escaping the atmosphere
and radiates it back to the earth’s surface,
thereby increasing the global temperature.
There are lots of harmful effects
associated with the usage of plastics,
chemicals, non-biodegradable items,
which is why, it is high time that we start
using eco-friendly products as soon as
possible. Also, we should change our
lifestyle restricting the usage of coolers
only during their utmost need, replacing
plastic covers with jute and paper bags,
checking the carbon emission of our
vehicles and servicing them regularly.
Even the feminine products like
earrings, handbags, purses, chains, creams,
body wash, and scrubs are available as
handmade and handcrafted natural items
which can easily replace the artificial
plastics ones. There are also organic
clothes available in the market made using
natural cotton, environment friendly dyes.
These eco-friendly dresses and accessories
are more appealing as they set new trends
in the market and make one feel proud of
wearing it by helping in preventing
damage to our surroundings.
One can only hope that change is
the only thing that is constant, once we
decide protecting our nature thereby
ensuring our own safe future, and then the
rest of it follows. Let’s start using eco-
friendly products for a start now and turn
the vision of a lovely environment in the
future, a reality.
II. LITERATURE REVIEW:
Green purchase behaviour refers to
the consumption of products that are
benevolent or beneficial to the
environment, recyclable or conservable
and sensitive or responsive to ecological
concerns (Mostafa, 2007). As public
environmental concern has increased over
several decades, consumers who demand
products for immediate benefits toward
themselves and for the long term benefits
toward the environment have emerged and
increased (Follows & Jobber, 2000)
Following Berkowitz and
Lutterman’s (1968) study, Henion (1972)
also thought that consumers with medium
or high incomes would be more likely to
act in an ecologically compatible manner
due to their higher levels of education and
therefore to their increased sensitivity to
social problems.
Changes in the condition of natural
resources and their long term negative
impact has led to some realization about
human responsibility towards nature. This
realization has led to development of eco-
friendly consumption patterns among
consumers. Grunert (1993) reported that
about 40% of environmental degradation
has been brought about by the
consumption activities of private
households. The need for eco-friendly
products is gradually increasing on
account of persistent raise in the concern
for environment related issues.
Fortunately, eco-friendly consumption and
spending patterns has led the marketers to
understand the eco-friendly attitude of the
consumers and come up with the
marketing mix which preserves
environmental resources and at the same
time deliver value added products and
services (Chitra, 2007).
Belz & Peattie (2008) stated that
green marketing and environmental
marketing in the late 1980’s focused on
green consumers who would be willing to
pay premium prices for more
environmentally friendly products. Many
consumers choose products that do not
damage the environment over less
environmentally friendly products, even if
they cost more. With green marketing,
advertisers focus on environmental
benefits to sell products such as
biodegradable diapers, energy-efficient
light bulbs, and environmentally safe
detergents. Green marketing encourages
consumers to use eco-friendly products
and manufacturers to develop more
environmentally beneficial products.
Clem (2008) adds that going green
reflects a social consciousness around
saving and advancing the Earth’s natural
resources, preserving and protecting them
for the sake of civilization. As customers
become more aware of environmental
issues, there is an increase in the demand
for ecological products. This increased
awareness of and sensitivity towards
environmental issues places certain
demands on business functions to become
greener.
III. OBJECTIVES
The Main objective of the study is,
1. To investigate the consumer
attractiveness towards eco- friendly
products in FMCG sector and their impact
of purchasing decision.
2. To analyse if the consumers are willing
to pay higher prices for the eco-friendly
products.
IV. RESEARCH METHODOLOGY
70 questionnaires were distributed
to various educated segments of society.
63 total questionnaires were received back
with a respond rate of 90 per cent. After
going through it we found only 50
questionnaires usable of which 50 per cent
are males & 50 per cent are females with
mean age ranging from 20 to 38 years. The
questionnaire was structured as follows.
The questionnaire contained 14 questions.
All questions were close ended except the
last one i.e. Q.14. where we had asked for
their comments. These questions measured
consumers’ awareness, knowledge about
the environmental issues and eco-friendly
products, trust in the performance of eco-
friendly products and their willingness to
pay more for those products. The
questionnaire also included general
demographic questions such as age,
gender, sex, qualification & occupation
etc.
V. DATA ANALYSIS &
INTERPRETATION
Table:1 Survey Questionnaires provided to
respondents:
Questions Number %
Have you heard of any
FMCG eco-friendly
products?
Yes
No
47
3
94%
6%
Name any eco-friendly
products.
Answered
Unanswered
28
22
56%
44%
Through these above questions we got to
know that 94% people have heard about
the eco-friendly product but when we
asked them to name few products only
56% respondents were aware about the
eco-friendly products.
Table: 2 Survey Questionnaires provided
to respondents:
Questions Number %
Are you aware that purchasing eco-friendly products will contribute to the sustainable future? Yes No
42
8
84%
16%
Do you consider your effect on the environment as a consumer before purchasing general day to day products? Yes No
27
23
54%
46%
Do you consider your purchase friendly from the environmental point of view? Yes No
30
20
60%
40%
Do you consider if the product and its package are designed to be recycled before making a purchase? Yes No
27
23
54%
46%
If the product is labeled eco-friendly, would this information change your purchase? Yes No
38
12
76%
24%
Going through these questions we
came to know that people are aware that
their purchase decision will contribute to
the sustainable future but still they don’t
consider environment while making their
day to day purchases. 60% respondents
said that they don’t consider their
purchases friendly from the environmental
point of view. But 76% respondents
admitted that if the product is labelled as
eco-friendly so that information can
change their purchase decision.
Table: 3 Survey Questionnaires provided
to respondents:
Questions Number %
Have you bought or considered buying eco-friendly products available in the market? Yes No
36
14
72%
28%
Do you feel there is
enough information
about Eco-Friendly
features while buying
the Products? Definitely Yes Average Definitely Not Not sure
1
33
12
4
2%
66%
24%
8%
Do you trust the quality of eco-friendly products? Definitely Yes Average Definitely Not Not sure
10
29
5
6
20%
58%
10%
12%
It can be stated that many i.e. 72%
of buyers have bought eco-friendly
products but there is lack of information
about eco-friendly products in the market.
Because only 68% people have agreed that
there is enough information about those
product. 78% population believe that the
quality of eco-friendly product is supposed
to be high.
Table: 4 Survey Questionnaires provided
to respondents:
Questions Number %
Do you agree that the
price of eco-friendly
products is supposed to
be higher?
Yes
No
29
21
58%
42%
Are you willing to pay
more for eco-friendly
products?
Yes
No
31
19
62%
38%
If Yes How much are
you willing to pay
more for eco-friendly
products?
<5%
5-10%
10-20%
20-30%
11
10
7
0
22%
20%
14%
0%
42% of respondents believe that the
prices of eco-friendly products should not
be higher whereas 62% people are willing
to pay more for those products which
shows that the consumers are more
environment friendly and willing to
contribute in its sustainable growth.
VI. KEY FINDINGS
The study shows that majority of
sample respondents have heard of eco-
friendly products and have knowledge
about environmental issues.
Approximately 94% respondents stated
that they had heard of eco- friendly
products & 84% were aware of the fact
that purchasing eco-friendly products will
contribute to sustainable future.
More than 46% of respondents
stated that they did not consider the effect
on environment while purchasing general
day to day products where as 60%
considered that the purchases made by
them were correct from environment point
of view. A relatively higher proportion of
respondents (76%) stated that labelling a
product as eco-friendly would change their
choice of purchase. Further, 72% of the
sample respondents considered buying
eco-friendly products and 78% were found
to trust the quality of eco-friendly
products.
It is also found that the segment of
consumers who are willing to pay more for
eco-friendly products may not be very
large. Even the educated segment which
was chosen by us for this study has shown
underwhelms response for paying higher
prices for these products. Thus, the
environment concerns could come up as a
powerful drive for influencing the
consumers and changing their purchasing
behaviour.
VII. LIMITATIONS & FUTURE
RESEARCH
The sample size was very small
and it was particularly collected from
South Mumbai, India, so there was
geographical constraints too. The
questionnaires were distributed to highly
educated respondents so they tend to be
more eco-friendly as compare to others.
And also the present paper was conducted
using self-reporting questionnaire hence
the respondents may be biased especially
in regard to the willingness to pay higher
price for eco-friendly products.
VIII. SUGGESTIONS
The people are aware & concern
about the green products, so it creates an
opportunity for developing green market
focusing on more educated consumers.
Also consumers want eco-friendly
products from those companies which
have positioned themselves as Green
marketer or Eco-friendly Manufacturer.
The right combination of eco- friendly
products and service, sales, marketing, and
management expertise is needed to target
and attract the consumers who may be
willing to buy eco- friendly products.
Green marketers should identify such
segment of consumers and accordingly
design and market products at suitable
price levels. Since eco-friendly features
motivate consumers, hence companies
should focus on advertising eco-friendly
brand labels, in-store displays and
hoardings. Advertisements campaigns may
be used to further promote the use of eco-
friendly products. Such campaigns can be
directed at increasing concerns about
environmental issues among consumers
and publicize the use of eco-friendly
products.
The awareness about the products
should be done through advertising so that
individual buying behaviour can be
changed which can have an impact on the
welfare of the environment. It is also
important that companies aiming at
developing new eco-friendly products
should ensure that products perform
competitively.
IX. CONCLUSION
Environmental concern could
emerge as one of the powerful drivers that
influence eco-friendly purchases; it has
actually not resulted in the ability to
command a sustainable premium
consumers are willing to buy eco-friendly
products, but not to pay the higher price.
It may be important to examine in
future studies the effect of disposable
income on willingness to pay premium.
Increased consumer demand will help
reduce costs in production of eco-friendly
products. Awareness among consumers
that their buying choices can make a
difference to the environment should be
promoted. There is a scope for eco-
friendly marketers to capture this market
as it has long term scope & growth.
X. REFERENCES
Books:
1. Consumer Behaviour- M. Khan
2. Consumer Behaviour- Atul K. Sharma
3. Research Methodology- C.R. Kothari
4. The New Rule of Green Marketing-
Jacquelyn A. Ottman
Online:
http://greenliving.nationalgeographic.com/
going-green-home-products-2370.html
http://www.nytimes.com/2011/04/22/busin
ess/energy-
environment/22green.html?pagewanted=al
l&_r=0
http://www.thedailygreen.com/green-
homes/eco-friendly/green-products-
460514
