ENVIRONMENT CONSCIOUS CONSUMER BEHAVIOUR IN AN EMERGING ECONOMY ABSTRACT

Transcription

1 ENVIRONMENT CONSCIOUS CONSUMER BEHAVIOUR IN AN EMERGING ECONOMY Devinder Pal Singh Faculty, Punjabi University Regional Centre, Mohali Punjab ABSTRACT The consumers today are increasingly being conscious of environment issues. This has positive impact on their attitude towards the eco-friendly companies and products. The level environmental consciousness is unknown in emerging economies like India. This study gives an insight into the environment consciousness among the Indian consumers. It investigates and identifies the important factors of environmental consciousness among the Indian consumers. Key words: consciousness, consumer behaviour, India, environment, green marketing. Introduction Ecological conscious consumer behaviour can be defined as the behaviour undertaken with the intention to change or benefit the environment (Stern, 2000). Environment will be widely discussed issue by governments, organizations and consumers, and the discussions will have a major impact on the thinking and behaviour of individuals and society (Paco and Raposo, 2008). This effect is already evident as environment friendly products are increasingly being sought after by consumers. The concern for environment is displayed in the consumers purchasing patterns, with consumers increasingly preferring to buy environmentally friendly products (Paco and Raposo, 2009). Environment conscious consumers are a great target market segment for whom environmental considerations are important purchase drivers (GMA and Deloitee, 2009). Green or environment friendly behaviour among the consumers has forced the companies to go green or environmental friendly (Kassaye, 2001). Exhibition of environmental care by the marketing companies helps in improving the product sales, product image, and also assist companies to improve all around environmental performance (D Souza, 2004). The industry for green products was estimated to over $200 billion in 2006 (Gupta and Ogden, 2009). There is unfulfilled demand for green products that can be fulfilled through increased product development, communication and availability (GMA and Deloitee, 2009). This necessitates understanding the level of environment consciousness among the consumers. Further this could be used as an effective segmentation criterion to segment the market (Paco and Raposo, 2009). India is one of the significant emerging economies of the world. McKinsey & Company s report (2007) shows that if India continues on its current high growth path for next two decades, the income levels will almost triple and the country will climb from its present position as the 12 th largest consumer market today to the world s fifth largest consumer market by This fifth largest consumer economy will bring significant benefits not only to India but also to the world as the country is going to be one of the largest markets of the next two decades (Bhardwaj, Swaroop and Vittal, 2005; Beinhocker, Farrell and Zainulbhai, 2007). The consumer demand is growing three to four times faster than the overall economy (Zainulbhai, 2005). By end of 2010 the retail sales in India s consumer market are expected to grow to 400 billion dollars (Bhardwaj, Swaroop and Vittal, 2005). The emergence of India as a viable profit destination has generated much interest among the multinational companies who are vying for a sizable share in this profitable market. Although there is interest and demand for overviews of Indian economy but the demand is not accompanied by a growth in Indian focused studies (Ganguly and Ayres, 2006). There is no significant study that explains the extent of environmental consciousness among the consumers in emerging economies like India. This study tries to segment the Indian market on the basis of environmental consciousness and gives an insight into the environment consciousness among the Indian consumers. Literature Review activists have been quite active since the last few decades and this has exerted significant influence on the consumer attitudes and behaviour (Paco and Rapaso, 2008). labeling on products is an effective way of communicating to the customer the specific benefits and characteristic of the product and the claim of safety (D Souza et al., 2006). communication helps companies to project a green image, which augments corporate environmental reputation by being environmentally sensitive to stakeholder groups (D Souza et al. 2006).

2 Hartmann, Iba n ez and Sainz (2005) find that there is positive influence of green brand positioning on brand attitude. Further findings suggest distinct functional and emotional dimensions of green brand positioning with the interaction of both dimensions in the formation of brand attitude. Highest perceptual effects were achieved through a green positioning strategy that combined functional attributes with emotional benefits. Therefore companies should deliver emotional benefits through the brand, and at same time make sure that the target customers receive environmental benefits. D Souza et al. (2006) opine that the central purpose of environmental labeling is to assist customers to make informed product choices but some customers appear to be unable to understand the exact meaning of some information on product labels as the information may not be transparent, truthful, or based on sound substantiated scientific evidence. Vlosky, Ozanne and Fontenot (1999) examine the relationships between intrinsic environmental motivations and the willingness-to-pay a premium for environmentally certified wood products. They propose a model that captures the effects of perceptions, awareness and price on consumer willingness to purchase and pay a premium for environmentally certified forest products. Hartmann and Iba n ez (2006) Green purchasing is central to this societal transformation. Probably on of the most critical issues in green marketing is the reduced individual benefit perceived by most consumers. Thus, the challenge for green marketers has so far been to increase the perception of individual benefits by adding emotional value to green brands, and will be even more so in the future. Phau and Ong (2007) observe that green issues spans an array of product categories, such as food (biodegradable packaging), hairspray (CFC-free), paint (biodegradable) and stationery (recycled paper) and the clothing industry. Baker and Ozaki (2008) posit that consumers would be more likely to choose environmentally friendly brands but they find it difficult to identify them. The consumers want that information about the environmental benefits of the product should be labeled on the products. Paco and Rapaso (2009) posit that certain demographic and environmental variables are significant for differentiating between the green segments and others. The green segment differs significantly in some aspects from the other market segments. Schlegelmilch, Bohlen and Diamantopoulos (1996) find that socio-demographic and personality indicators have limited success in profiling consumers and that attitudes have more consistent influence over environmental purchasing behaviour. They propose new segmentation approach, through the analysis of linkages between pro environmental purchase behaviour and measures of environmental consciousness. Research Methodology The study was undertaken to investigate the type of environmental consciousness among the Indian population and to identify important variables considered by environment conscious consumers. The study was initiated with extensive literature review and constructs employed by researchers in previous studies to segment the ecological consumer market was employed. Data was collected using a self-completion questionnaire administered to the respondents. The questionnaire composed of two sections. The first part examined the dimensions of environmental consciousness, which comprised of fifty two statements rated on five point likert scales ranging from strongly disagree to strongly agree. The second section comprised of questions related to the demographic characteristics of the respondents like age, gender, occupation, marital status and educational qualifications. The questionnaire was administered to 250 respondents but only 206 valid respondents were considered for data analysis. The data was factor analyzed using principal component analysis method, so as to identify underlying variables and to explain the pattern of correlations within a set of the 52 observed variables. Cronbach s alpha was employed to check the reliability of the various scales used in the study. Results The data collected was analyzed using SPSS 17.0 software. To check the reliability of the scale the various items were subjected to Cronbach s Alpha. The coefficient for alpha had a value of (Table 2); usually a value higher than.7 is regarded as reliable. As the number of variables was quite large, factor analysis was done using the Principal components method to extract the important components of environment consciousness among the consumers. Kaiser-Meyer-Olkin (KMO) test of sampling adequacy produced coefficient at.760 and the Barlett s test of sphericity showed a significance level of 0.00 (Table 1). Normally, a value higher than 0.5, is assumed to be a sound proof of sampling adequacy. Table 1: KMO and Barlett s Test of Sphericity Kaiser-Meyer-Olkin Measure of Sampling Adequacy.760 Barlett s Test of Sphericity Approx. Chi-Square Degrees of Freedom 861 Significance.000

3 The 52 items in the questionnaire were subjected to factor analysis and 12 principal components were extracted, which had eigen values more than 1 (Table 3). These factors accounted for percentage of variance. For better understanding and interpretation of the results, the factors were rotated using the Varimax method. The extracted factor 1 has higher factor loadings of five variables: knowledge that plastic bags cause pollution and difficult to decompose (.504); concern for the problem in general(.644); getting angry when one thinks about the harm caused to life by pollution(.732); getting frustrated when think that industries cause pollution (.793) and feel that government should pass a legislation making recycling mandatory(.546). These variables reflect the concern of the individuals for environment and can be termed as environmental concern. The second Factor which could be termed as recyclable behaviour has high loadings of factors like reading labels to see if the products are recyclable (.615); keeping separate piles of rubbish for recycling(.615), and convincing members of the family and friends to recycle(.730). Third factor could be labeled as environmental knowledge as it composes of variables that relate to the knowledge of the terms acid rain (.835) and global warming (.722). The fourth factor scores high on variables like environment is a serious problem (.791) and conservation of energy (.506), need for recycled paper (.737). This could be named as the resource saving. The fifth factor could be labeled as skepticism as it scores on three variables: environmental claims are false(.724); environmentally safe labels are just selling point(.501); check to see that package is made of recyclable material(.514). Table 2.Rotated Component Matrix FACTORS Variables Factor Concern Recyclable Knowledge Indifferent Skepticism Sacrificing Resource Saving Perceived Consumer Effectiveness Loadings When I think of ways in which industries pollute, I get frustrated.793 I become angry when I think about the harm caused by pollution.732 I am very concerned about the problem of pollution in general.644 I know the plastic bags take many years to decompose and cause.504 pollution I feel the government should pass legislation making recycling.546 mandatory I have convinced members of my family and friends to recycle.73 I usually keep separate piles of rubbish for recycling.685 I read labels to see if the products are recyclable.615 I know the meaning of acid rain.835 I know the meaning of global warming.722 In India, Pollution is not a serious problem, so I see no need to.791 worry Our country has so many trees that there is no need to recycle.737 paper When buying something packed, I check that it is packed in.514 material made of recycled paper Most of the environmental claims made on package labels or in.724 advertising are false Products labeled as environmentally safe are just another selling.501 point When buying something packed, I check that it is packed in.514 material made of recycled paper I buy products in refillable containers.654 I am willing to pay more taxes to protect the environment.640 I make special effort to buy biodegradable products.514 I try to reduce the amount of water I use.806 I try to buy energy efficient household.565 I believe environmentalists make a lot of exaggeration about the.729 environment When polluted river cleans itself through flow of the water, So.550 there is no need to worry Pessimistic Rubbish landfill sites are dangerous to the people living close to.755

4 M ea su Activism Choice Availability them Almost everything we do in modern life harms environment.503 Economic Development is least important than protecting the.685 environment I am willing to stop those who are guilty of polluting.568 When there is a choice, I choose the product that causes the least.809 pollution Factor six scores on variables like willingness to pay more taxes to protect the environment (.640), buying products in refillable containers (.654), and making special effort to buy biodegradable products (.514).This factor could be labeled as sacrifice as it involves sacrificing on the behalf of the consumers for environmental purposes. The seventh factor includes variables like buying energy efficient household appliances (.565), and reducing water consumption (.806). This could be termed as resource saving factor. Eighth factor scores on variables namely water gets cleaned by flow of river when contaminated (.550) and environmentalists exaggerate about the environment (.729). This is the consumers perceived consumer effectiveness which they believe individual efforts are ineffective for environmental care. The ninth factor is constituted of variables like every action in modern life harms the environment (.503), and landfill sites are danger to people living near them (.755).This reflects the pessimism for environmental efforts. The tenth factor is the consumers activism for environmental protection and they believe that environment protection is more important than economic development (.682), and are willing to stop the guilty from polluting (.562). Eleventh factor relates to lack of faith in individual efforts to care for the environment(.768) and the twelfth factor scores on variable that if choice available then the consumer buys product that causes least pollution(.809). The sample profile (Table 3) shows that the sample consisted of 51.9% males and 48.1% females. Further the age groups constituted of 81.1% of the respondents from age bracket of yrs, 4.3% constituted of age bracket of above 40yrs, 1.5% constituted of age group below 20yrs of age and age group of yrs constituted of 12.6% of the sample. Table 3. Sample profile Gender Age Income(in thousands) Male Female <20yrs 20-30y yrs < >75 No % Discussion The concern for environment is the factor of paramount importance for Indian population so the companies should incorporate green marketing mix for serving the population. The portrayal of green image in the market could be employed by businesses to differentiate their products, position them and communicate the environmentally friendly message and properties. Recycling is cherished and relished by the Indian consumers so incorporating recycling as part of product and package could be useful for promotion of the products. The Indian consumers have adequate knowledge of the environmental issues and are skeptical of the environmental claims of the companies advertisements. The veracity of environment friendly claims can be provided by obtaining third party ecolabels. The ecolabels could help to position the products better and be important unique selling propositions for the Indian market. The consumers save the energy resources and are willing to sacrifice for the environment on their part, and so the reciprocation on the part of the corporate would be appreciated. The factors related to lack of faith and pessimism on the individual efforts for environmental care are the last factors to be extracted. The sample constitutes 81.1% of youngsters between age group of years, so this shows the trend of that majority of the young population are quite environmentally conscious. This is the age group of consumers that are well educated and prospective customers for eco friendly products. Since more than ninety percent (91.3%) of the sample constitutes of graduates and post graduates, so the results could not be attributed to the uneducated consumers and population in general, but it provides an insight into the environmental consciousness of the educated consumers. Conclusions The Indian consumers are environmentally conscious and well informed about the environmental issues. So companies should project green image and incorporate friendly strategies related to products. The

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