The Influence of Product Lifetime Labelling

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1 The Influence of Product Lifetime Labelling on Purchasing Electrical Appliances among German Consumers K Alanus University of Arts and Social Sciences (Alfter, Germany) Ecodesign Conference, Brussels: The ecodesign directive and the circular economy: How can we move forward? 1

2 Introduction Background Sustainable consumption aims at reducing the use of natural resources and toxic materials as well as emissions of waste and pollutants (Norwegian Ministry for the Environment, 1994) Changes in not only (energy) efficiency, but also in consumption levels and patterns are necessary (e.g. Lorek and Fuchs, 2013) Consumers can contribute to the lifetime of their products already at purchase by deciding for the longer lasting product variants However, a product s functional durability is an experience attribute and can only be evaluated after purchase (e.g. Darby and Karni, 1973) à Necessity of enhanced product lifetime information (e.g. Cox et al., 2013) 2

3 Introduction Research Gap & Questions First few studies on product lifetime labelling (e.g. EESC, 2016)! Hardly consider the various determinants of purchase behaviour and trade-offs with other product attributes Research on sustainable consumption of electrical appliances has focused on energy consumption and disposal so far (e.g. Prothero et al., 2011) Little empirical-quantitative research on purchase behaviour focusing on product longevity (e.g. Evans and Cooper, 2010) Research Questions? What are the determinants of purchasing long-lasting electrical appliances?? How does a product lifetime label influence purchase decisions towards electrical appliances? 3

4 Introduction Research Gap & Questions

5 Introduction Research Gap & Questions

6 Conceptual Model Theoretical Framework Theory of Planned Behaviour (Ajzen, 1991) = A person s intention to engage in a certain behaviour is determined by her/his attitude, social norm and perceived behavioural control Consumer Theory of Lancaster (Lancaster, 1966) = Consumer preferences are not directed to the goods themselves, but to their attributes ü Different psychological constructs Lack of psychological constructs Lack of explanatory power in consumer choice contexts ü Well-established for explaining decision-making of consumers perfect match (similar to Nocella et al., 2012) 4

7 Conceptual Model Sketch values (basic & materialistic) attitude (purchasing longlasting elec. appl.) consciousness (sustainable consumption) social norm (purchasing...) preference (long product lifetime of elec. appl.) behaviour (long product usage) perceived behavioural control (purchasing...) Other Theories & Concepts Theory of Planned Behaviour Consumer Theory of Lancaster 5

8 Methods Data Collection (Pilot Study) Data Collection Method Experimental online survey (choice-based conjoint analysis) Participants German consumers Sample Source Online panel & personal network Sample Size 409 usable questionnaires Survey Period Oct to Dec

9 Methods Sample Characteristics Characteristics Sample (n=409) German population 100% 100% Gender Female Male Age Under 20 years old to 29 years old to 39 years old to 49 years old to 59 years old years and older Highest educational achievement Size of place of residence No answer 1 0 No school qualification or still at school 0 3 Secondary modern school qualification 5 42 Secondary school certificate University entrance qualification University degree Doctorate or habilitation 6 1 No answer 0 0 Below 20,000 inhabitants ,000 to 99,999 inhabitants ,000 to 499,999 inhabitants ,000 inhabitants and more No answer 1 0 7

10 German population Characteristics Sample (n=409) 100% 100% Methods Gender Sample Female Characteristics Male Age Under 20 years old to 29 years old to 39 years old to 49 years old to 59 years old years and older Highest educational achievement Size of place of residence No answer 1 0 No school qualification or still at school 0 3 Secondary modern school qualification 5 42 Secondary school certificate University entrance qualification University degree Doctorate or habilitation 6 1 No answer 0 0 Below 20,000 inhabitants ,000 to 99,999 inhabitants ,000 to 499,999 inhabitants ,000 inhabitants and more No answer 1 0

11 Methods Sample Characteristics Characteristics Sample (n=409) German population 100% 100% Gender Female Male Age Under 20 years old to 29 years old to 39 years old to 49 years old to 59 years old years and older Highest educational achievement Size of place of residence No answer 1 0 No school qualification or still at school 0 3 Secondary modern school qualification 5 42 Secondary school certificate University entrance qualification University degree Doctorate or habilitation 6 1 No answer 0 0 Below 20,000 inhabitants ,000 to 99,999 inhabitants ,000 to 499,999 inhabitants ,000 inhabitants and more No answer 1 0 Sample: More women Younger Higher educated Larger places of residence 7

Methods Data Analysis Conjoint Analysis Multivariate analysis technique to assess consumer preferences based on the consumer theory of Lancaster (1966) Decompositional approach to analyse utility

12 Methods Data Analysis Conjoint Analysis Multivariate analysis technique to assess consumer preferences based on the consumer theory of Lancaster (1966) Decompositional approach to analyse utility structures of individuals à Relevance of single product attributes is derived from overall judgements on products Much more realistic than traditional marketing tools Choice-Based Conjoint Analysis Popular sub-type of conjoint analysis which is very close to real-life, trade-off-based purchase decisions through the implementation of choice experiments Lighthouse Studio Software 8

13 Methods Example Choice Task Expected Product Lifetime (Label) new Brand Energy Consumption Equipment Price 9

14 Introduction: ( ) Methods Example Choice Task 10/Nov/2017 PLATE

15 Preliminary Results Average Utility Values Brand new unkown brand 10

16 Preliminary Results Average Utility Values Expected Product Lifetime (Label) 11

17 Preliminary Results Average Utility Values Energy Consumption 12

18 Preliminary Results Average Utility Values Equipment Extended Premium Basic 13

19 Preliminary Results Average Utilities Price Level Utility Interaction effect with product lifetime label 14

20 Preliminary Results Average Importances Brand 33% 12% Expected Product Lifetime (Label) à 2 nd most important product attribute 31% Energy Consumption 10% Equipment 14% Price 15

21 Preliminary Results Purchasing Determinants values (basic & materialistic) attitude (purchasing longlasting elec. appl.) consciousness (sustainable consumption) social norm (purchasing...) preference (long product lifetime of elec. appl.) behaviour (long product usage) perceived behavioural control (purchasing...) 16

22 27/9/2016 Kathleen Krause, M.A. 22

23 Preliminary Results Purchasing Determinants values (basic & materialistic) attitude (purchasing longlasting elec. appl.) consciousness (sustainable consumption) social norm (purchasing...) preference (long product lifetime of elec. appl.) behaviour (long product usage) perceived behavioural control (purchasing...) 16

24 Implications For Practitioners & Policy Makers Information about consumer preferences, attitudes etc. on product lifetime in electrical appliance market Product lifetime (label) second strongest purchase criterion next to price à durability marketing Enhance drivers and reduce barriers of purchasing longer lasting electrical appliances (e.g. promotion of consciousness towards collaborative consumption and long product usage) For Researchers Extend research on sustainable consumption through the perspective of product longevity Test product lifetime labeling in different countries, for different products 16

25 To-Dos Willingness to pay analyses Trade-off analyses (energy efficiency, having up-to-date product) Validation of scales and test of hypotheses (other psychological constructs), structural equation modelling Adaption of survey as a basis for the main population representative study at the beginning of 2018 Label vs. non-label situation Label s potential of influencing pro-longevity values, attitudes etc. Influences on demand for second hand products 17

Thank you for your attention. kathleen.jacobs@alanus.

26 Thank you for your attention. Alanus University of Arts and Social Sciences Faculty of Business Management Alfter, Germany 18

CHAPTER - 3 RESEARCH GAP, PROBLEM STATEMENT, RESEARCH OBJECTIVES AND HYPOTHESES

CHAPTER - 3 RESEARCH GAP, PROBLEM STATEMENT, RESEARCH OBJECTIVES AND HYPOTHESES 3.1 Research Gap and Statement of Research Problem Review of literature suggests that a number of studies have been carried