The Consumer Preference On Green Product Marketing Essay

The Consumer Preference On Green Product Marketing Essay There has been a rising concern on environmental issues worldwide nowadays. Ministry of foreign affairs statistic shows that over the years, the temperature has been rise because of carbon dioxide trapped and green house gases have affected the global climate. This change will affect the people live all over the world. This also includes access to water, health, food and the well being of the environment. Todays consumers have started to recognize that their purchasing behaviors actually cause a big impact to the environment. Therefore, companies should practice offering environmentally friendly products and service to people to prevent this world become worse. Although, Malaysia has undergone an excellent development followed governmental efforts to attract foreign investor to come and invest for a green product development in Malaysia, the action of environmental responsible behavior among Malaysian consumers are still low. One of the examples of the lack of environmental responsible behavior is shown in an article in Bernama whereby garbage thrown by one of the state in Malaysia residents is the main cause of river pollution in the state. According to a survey which was handled on by global market insight and information group, only 8% of Malaysian respondents responded that they have changed their behavior in a greatest deal to benefit the environment on the aspect of eco-friendliness of habits and behaviors In addition 83% respondents reported that their views on a companys and their Colleges friendliness to the environment would influence them to purchases a green products and services. Studying the determinants of generation-Y consumers green purchase behavior will be definitely benefit green marketers. Generation-Y (also known as a millennial) is defined as A label attributed to people born during the 1980s and early 1990s. Members of Generation Y are often referred to as echo boomers because they are the children of parents born during the baby boom (baby boomers). Because children born during this time period have had constant access to technology (computers, cell phones) in their youth, they have required many employers to update their hiring strategy in order to incorporate updated forms of technology. In a simple word, generation-Y grew up with a technology and relies on those things to perform their job and their task. In addition, when going through a literature review in Malaysian context, there are still a gap existed between environmental knowledge, intention and behavior towards green product. [Said et al. (2005)]. Even though people that have vast knowledge about green products are not necessarily would buy a green product. Therefore, factors those determine and affect Generation-Y to purchase a green product would be worth to find out. 1.1 BACKGROUND OF THE RESEARCH Environment is defined as what surrounds a thing or an item or in other words it means the surrounding. It could be a physical element which is physical environment, that includes the built environment, natural environment such as air, water, land, atmosphere and etc or it could be human environment where people surrounding the item or thing which also known as the social environment. Today environment is getting worst and worst. Many environmental issues arise. Environmental concerns have been growing in recent years. One of the examples of environmental issue is global warming. Global warming and climate change refer to an increase in average global temperatures. Natural events and human activities such as burning garbage and waste are believed to be contributing to an increase in average global temperatures. This is caused primarily by increases in greenhouse gases such as Carbon Dioxide. The greenhouse effect keeps the earth warm when functioning normally. For the first time in h istory, human activities are altering the climate of our entire planet. According to (Jack, 2010), in less than 2 centuries, humans have increased the total amount of carbon dioxide in the atmosphere by 25% from the burning of fossil fuels and the destruction of forests. In addition to the natural fluxes of carbon through the Earth system, human activities, particularly fossil fuel burning and deforestation, are also releasing carbon dioxide into the atmosphere (The Carbon Cycle; the Human Role, Earth Observatory, NASA). Green product is define as a product that produce limited carbon footprints; they may require fewer resources to produce, consume less energy or emit fewer hazardous emissions.  Green product is also a product that is non toxic, water-efficient, and also recyclable and biodegradable. There are many green products that have been produce for people in the market. For example, a household cleaner. Nowadays its nearly impossible to go shopping without finding a plethora of products that claim to be environmentally and consumer friendly. Oddly enough, many cheap and eco-friendly substances, such as vinegar, have been used for years as home cleaners. Whether you buy a green cleaning product at a store or use something on hand in your pantry, you can reap the benefits of choosing products that are gentler on you and the environment. Phosphate-free dishwasher and laundry detergents are also consider a green product because they do not discharge environment-damaging phosphates into waterway s. Other examples of green cleaning products are those labeled certified biodegradable; these have passed several stringent tests relating to biodegradability and environmental impact conducted by an independent certifying agency. According to Consumer Reports, the certified biodegradable label is more meaningful than a general biodegradable label. Glass and metal cleaners, kitchen and bathroom cleaners, and laundry detergents are products that might carry this label. The rationale for going green is twofold. Clearly, the positive effects on the environment are a key driver for purchasing green product.  Green product provides myriad environmental benefits. They can replace toxic materials that may be harmful to people or animals. Also, some products save energy and water, while others limit solid waste and manufacturing releases. Green products create a healthier environment for people through reduced exposure to cleaners, solvents, paints and other hazardous substances. Green product also can reduce allergies. Many families find that their children are suffering from allergies, even though their family history does not necessary say that there are no allergies. In some situations, chemicals found within cleaning products contain allergens. Bleaches, toxic cleaning sprays and other chemicals used to clean the home commonly contain a variety of ingredients specifically able to cause or trigger allergies in people.   Generation Y are the cool generation, they embrace brand and live in the new world of digitize communication. Thus that might be interesting to find their perception and their level of awareness towards environmental issues that the world is facing nowadays. Gen Y has grown up in a very structure, busy and over planned world. Also, Gen Y is made up of confident, optimistic young people who feel valued and wanted. In a article of science daily, Gen-Y is a people that will go all the way when it comes to saving the environment as long as it benefit to world economic and environment. They are maturing into a pragmatic generation that wants to do the right thing for the environment but also has real economic concerns 1.2 PROBLEM STATEMENT Consumers or practically customers are the sellers and buyers that boost the countrys economy. Therefore, many firms are actually putting many efforts in order to attract more customers because these customers create businesses opportunities and generate profits to them. As the world nowadays facing so many problems regarding to an environmental issue, the consumers and their attitudes or behaviors to purchase a green product are the important factors to be considered. Consumers nowadays have more choices due to the effects of globalization. They will prefer the function of the product rather than the brand or whatsoever to ensure a healthier future. To determine the current level of Gen-y consumers preference towards the green products. To determine what are the determinants or factors of Gen-y consumer preferences towards the green product. To determine the consequences or effects of Gen-y consumer preferences towards the green product. To determine consumer level of awareness of Gen-y consumer towards green product. 1.3 RESEARCH OBJECTIVE Awareness towards environmental issue that the world nowadays facing play a major role encourage people to purchase a green product. Thus, this study is attempts to relate on the various variables that influence consumer especially generation-Y to purchase a green product. The objectives are as the following: * To study the factors affecting the consumer especially Gen-Y to purchase green product. Gen-y is a new generation and It is crucial to understand as they are more advance and modernize. Thus, several researches have been conducted in order to understand consumers in a way that how they behave, and what are the factors that cause them to behave or react to the responses of the products. Leading factors such as price and quality are always the top concerns to the consumers. Product attributes will moderate the effects of price on quality judgments. Partial of the consumers may focus on buying low prices goods and neglect the quality of the products. This group of consumers takes the price as a measure of sacrifice. For instance, consumers take the price served as the benchmark for comparing utility gains from the quality of the product. One the other hand, some portion of the consumers will be willing to pay a premium price for the quality and function of the products, as they are very sensitive to the signals of the quality of one product. Thus, it is hope that this stud y will contribute further to the understanding of factors of price and quality that may lead to the consumers prefer for a green product * To understand the awareness level of people about Go Green campaign. Nowadays, there are many environmental campaign have been organized by a government and private sector. This campaign is aim to encourage people to more concern about the environment. Thus, it is hope that this study will explore how people react to a environmental campaign and what is their level of awareness about the awareness campaign. * To examine the benefit for people involvement in Go Green program. We might be asking, how we will benefit from getting involved in this environmental campaign. Well, recently there has been an increase in events directly related to the availability of natural resources. For example energy shortages that resulted to load shedding, change in weather patterns and water shortages. As a result, civil society is recognizing the need to manage our natural resources more effectively and responsibly. In doing so, we can ensure positive effects on our health, quality of life and even the cost of living. Thus, this study will help people to getting known more about what they will gain if they participate in the environmental campaign. *To discover what consumer perception towards green product. In curiosity to identify what are the main components or criteria that consumer especially gen-Y are looking forward in order to purchase a green product. It is true that each and every one of us are special and unique in the way we are, thus, every consumer has their very own perception in purchasing a green product. Different people from different backgrounds may have different perceptions on these products. In addition to that, different demographic groups may have different perceptions to this kind of product as well. Thus, this study will help to identify whether the consumer especially gen-y prefer to buy a green product or not to safe a mother of earth. 1.4 SIGNIFICANCE OF STUDY This study is crucial as there are a lot of green products have been selling nowadays. Obviously, when we talk about green product, the price for that particular item might be so expensive. The study on factors affecting consumer especially Gen-Y buying a green product may allow us to know in depth why are previous efforts taken does not produce as it is thought it would be. Based on the study conducted, motivations towards the environment, knowledge on green product, social norm, awareness and self-image have an impact on the consumer especially Gen-Y buying a green product. Government may need to enhance its program in educating people green product. New and more interesting Go Green program and method is a definite necessity in motivating people to increase their interest/awareness on a green product and indirectly motivates them to purchase it. 1.5 SCOPE OF STUDY The research focus on students in Multimedia University (MMU) Melaka campus and teenagers from outside the campus which comes from various demographic backgrounds such as the faculty, ethnicity and nationality. The focused respondents are a great resemblance on the exact population in Malaysia. 1.6 ORGANIZATIONAL OF RESEARCH 1.6.1 Chapter 1: Introduction Regarding this chapter, it introduce the background of this research such as why do people as a consumer buy a green product. Thus, this will create a strong preference among the gen-y consumers locally and abroad to consume and purchase green products. These sections will explain in details in the of consumers preferences from the Malaysian perspective and as well from the global view for green products. This chapter also recognized the problem statement and the research objectives for this research. Finally, the justification of the research will help to justify the benefits and those who will gain in this research. Chapter 2 : Literature Review A thorough study will be conducted on the dependent variable and independent variables. The main purpose for this chapter is to weigh the pros and cons of the topic and to discuss in details on the ideas and knowledge concerned. In this chapter, every definition of the dependent variable and independent variables will be cited from the journals in order to strengthen every point mentioned. Several of arguments and various points of views from different authors in order to provide a stronger formation of each point can be founded in this chapter. In addition to that, this chapter explains the relationships on several independent variables relate to the dependent variables. 1.6.2 Chapter 3 : Research Methodology Research methodology is usually conducted after the thorough study of literature review. In this chapter, theoretical framework will be form to illustrate the relationships between the dependent variable and the independent variables. Hypotheses or a proposed explanation which were made on the basis of limited evidences will explain the relationships between two or more variables. All the hypotheses stated will be tested together with empirical data. This chapter also includes the description of the sampling data, data collections and as well as the development of the questionnaire for this research. Chapter 4 : Data Analysis After questionnaires are collected from all the respondents, then few tests will be conducted to test on the validity and reliability of the results. The responds of the questionnaires from the respondents are represented by a set of numbers that symbolize their own significant meanings. Whereas the tests that will be carry out are to analyze the responses from the respondents so that it will derive to a stronger conclusion at the end of this research. Chapter 5 : Conclusion This chapter will provide the final outcome of this research. Thus, the final results will be explained and we will be able to identify how the exact hypotheses that formed earlier are hold. Chapter 2 Literature Review 2.1 Environmental quality in Malaysia According to report from Department of Environment Malaysia, 2006, Malaysia experienced a short period of slight to moderate haze due to trans-boundary pollution from neighboring countries. Different states have the differed air quality status according to the geographical locations, the industrial and commercial activities, populated areas and the traffic conditions. During that period, especially in Klang Valley, one of the area in Malaysia was more exposed to be effects to air pollution than any other areas. Statistic shows that, the air quality there was good only 23% of the time, moderate 70% of the time and the remaining 7% at an unhealthy level. As a developing country, Malaysia faced in a numerous challenge to ensure a balance between environmental sustainability and development. River quality, urban air, deforestation, household and hazardous waste are some of the major serious and worrying environmental problems faced by the country According to The Ninth Malaysia Plan (2006-2010) report, Malaysian government allocated RM510 million for cleaning, preserving and beautifying rivers; RM530 million for coastal management; RM200 million for reforestation; and another RM70 million for the management of wildfire and protected areas to ensure environmental sustainability and resource management. In a global environment article stated that, Solid waste is one of the three major environmental problems in Malaysia. It plays a significant role in the ability of Nature to sustain life within its capacity. Currently, over 23,000 tonnes of waste is produced each day in Malaysia. However, this amount is expected to rise to 30,000 tonnes by the year 2020. The amount of waste generated will continues to increase. It is because due to the increasing population and development in this country. It will be assume that, it will be only less than 5% of the waste is being recycled. Rivers represent the lease of life which pulses through the earth. It is a finite and only source of water. In Malaysia, there are almost 1800 rivers. Sadly, more than half of these rivers have been polluted and destroyed. Improper solid waste management contributes greatly to river pollution. Improper solid waste management also contributes to climate change decomposing waste produces methane and production of new products to meet demand emits greenhouse gases and utilizes natural resources. Therefore, a change towards more sustainable consumption patterns is required. 2.1.1 Concern of environment There are many reasons and factors that affect consumer especially Gen-Y to buy a green product. According to  Mostafa (2007), green purchase behavior or environmental friendly buying behavior is the ingesting of products that are beneficial to the environment, recyclable or conservable, Sensitive and responsive to ecological concerns. Concern for the environment is perceived to be important in encouraging consumer to participate in green program and also buying a green product. Research finding suggest that, moral concerns determine several curtailment behaviors (Goldstein et al., 2008; Hage et al., 2009). However, studies on the influence of moral concerns on consumer high involvement buying decisions with environmental implications are rare (Thà ¸gersen, 2005). This is a problem since overlooking an influential determinant might hinder or delay successful diffusion of environmentally friendlier products and innovations. Consumer identify environmental protection as a priority f or governmental policies and this interest has led to an increase in ethical production-for both consumer and non-consumer products (  Finisterra do Paà §o  et al., 2009). Sensitivity to environmental issues shifts consumer behavior towards supporting the growth and diffusion of green marketing and ecologically-conscious consumer behavior including: consumer preference for greener firms, increase in demand for greener products. (Alsmadi, 2008; Finisterra do Pacao et al.,2009) found that greater awareness of environmental problems, increased media coverage, impact of major industrial disasters on public opinion, and the rise of pressure group activities are among the factors driving environmental concerns. 2.2 Green marketing Grant, John.(2008)define the green as a brand that that offers a significant eco-advantage over the incumbents and which hence appeals to those who are willing to making green a high priority. Soonthonsmai (2008) defined a green marketing as the activities that have been action by firms that are really concern about the environment by convey the environmentally sound goods or services to build and create consumers satisfaction. Other definitions of green marketing as suggested by marketing scholars are include social marketing, ecological marketing or environmental marketing. Harrison (2008) suggest that green marketing strategy by firms through positioning the environmental benefits of green products to consumers perception to influence their purchasing decision. Peatitie (2007) and Welford (2000) defined green marketing as the management process responsible for identifying and satisfying the requirements of customers and society in a profitable and sustainable way. In reality, comp anies that are going to pursue green marketing encounter various challenges mainly from the variability of demand, un-favorable consumer perception and high cost (Gurau and Ranchhod, 2008). The most key concern lies in an understanding of green consumers and their characteristics and it will help firm to enable and to develop a new target and segmentation strategies (DSouza et al., 2008). Dwyer (2009) defined green as the products to be designed, commercialized, and used which are capable of reducing sources of pollution and minimizing risks to human health and the environment. On the other hand, there are product sector speci ¬Ã‚ c examples of research on green buying process, such as food and household products (Vantomme et al., 2005) and clothes (Shaw et al., 2006) 2.2.1 Consumer preference on green product The dependent variable in this study is the factor that affecting consumer preferences for green products. Everyone in this Earth, play a major role as a consumer. Consumers are the main factors that boost a countrys economy. Each and every consumer has their very own perspective and preferences towards what they consume. Consumer from different demographic factors such as background and society may influence their behavior in making decisions while to purchase products. Thus, it is undeniable that consumers preferences and their perspective towards goods and services are hard to predict. DSouza  et al.  (2006a)  found out in their research that consumers perception on green products did not influence by any criteria such as packaging, label and ingredient of a product. The important finding from  DSouza  et al.  (2006)  was that green consumers will be rely more on their personal experience in using the green product rather than assess a green product base on marketers provided information. Interestingly, this finding however contradicts to Taghian and Lambs finding. They found that consumers are getting more environmental information by look at a product labels before deciding to purchase it. It is mean that, labels are important to capture consumer impression to buy a green product. Rashid (2009)  in his study stated that eco label is an important factor that would enable consumers to make the right purchase choice if they faced with a situation that required them to taking their consideration of the environmental impact on a product that they wish to purchase. The importance of consumers has lead to many researches to be conducted in order to study on their behavior and attitudes towards what they perceived on the products. Barr and Gilg (2006) was found that green purchasing behavior was the least popular activity alongside activities such as recycling and habitual household activities. However, not surprisingly, green consumers do consider environmental factors when purchasing products, but engaged more frequently in activities such as switching off lights and recycling paper (daily activities). Wheale and Hinton (2007) suggested that amongst the population of green consumers there is a hierarchy of importance of ethical drivers in the purchase decision-making process. The environment and the quality of the product was rated as the most important ethical driver during purchasing decisions. The finding from  DSouza  et al.  (2006)  was if product is lower in quality, consumers would not have interested to purchase the products eve n though they were always reading labels outside the product. Furthermore, if ordinary product is more expensive compared to a green product, consumers might have intention to buy green products because of the benefit and the cost. Therefore,  DSouza  et al.  (2006)  concluded from their study that consumers were not compromised to lower product quality. 2.3 Knowledge and attitude towards environment and green product Knowledge and attitude towards environment are very important to influcence consumer especially Gen-Y To purchase green products. There is a general belief among the researchers and also the environmental activists that by purchasing environmentally friendly products or green products, products with a recyclable packaging or properly disposing of non-biodegradable garbage, consumers indirectly can contribute significantly in order to enhance the quality of the environment (Abdul-Muhmim, 2007). The quality of the environment depends critically on the level of knowledge, attitudes, values and practices of consumers (Mansaray and Abijoye, 2005). Attitudes are the most consistent clarifying factor in predicting consumers willingness to pay for green products (Chyong et al., 2006). This means, price is not the main cause in avert consumers from purchasing green products if they are pro-environment. Researcher also found that Influencing consumer behaviour is a complex and difficult task r equiring knowledge of its determinants. The most convincing support of the growing influence of the ecologically-friendly consumer is the increase in the number of individuals that are willing to pay more for environmentally friendly products (Bang et al., 2005). 2.4 Social norm and value perception influence consumer to buy green product. Studies have also investigated the effect social influence has affect consumer especially Gen-Y purchase green product.The interest in green initiatives is not expected to emanate only from external impositions and inducements but also from the internal sense of responsibility of a firm towards the society in which it exists. For green issues, such sensitivity is intensified by increasing environmental problems such as global warming and pollution. Such problems may also raise awareness and interest of a firm to behave in a more socially responsible manner and reflect an image of due diligence and commitment to sustainability. Green purchasing is primarily motivated by a certain degree of consumer ecological consciousness. Frey and Stutzer (2006) identify a number reasons behind environmental motivation: intrinsic motivations, altruism, internalized norms and social norms. Social norms lead individuals to take into consideration the opinions of the other members of society when choosing a green product over another: if they think that their acquaintances approve of green product purchase and disapprove of standard product purchase, there are encouraged to buy green products. (Ewing, 2005) stated that social norms are an important motivator of ecologically responsible behaviour. The strength of the normative influence of the consumers family and social groups on purchasing decisions depends on the characteristics of the product (e.g. luxury rather than a necessity). Value perception is the conception one has of oneself. Study in marketing influence on consumer purchase decision on green product, value perception was influencing green behaviours. This agrees to Lee(2008) finding value perception as the third predictor of her study. Apart from behavioral aspects, numerous studies have also looked at the relationship between demographic and socioeconomic variables and purchase green product involvement. Kinnear, T. and Taylor, J. (1973) stated that there has been no signi ¬Ã‚ cant link found between demographic segmentation and green purchase. This could be due to the notion that different groups of people relate to different parts of the environmental agenda Peattie, K. (1995). There have been contradictory results of younger and older age groups concerns about environmental issues Peattie, K. (1995). There is, however, a belief that environmental concern is directly related to a consumers level of education Balderjahn, I. (1988). Based on four surveys, Hines et al. found no relationship with gender. Chapter 3 Research Methodology 3.1 Overview Methodology is a system of methods used in a particular research. Research methodology normally comes after defining the problems and completing the thorough of the literature review. Research methodology which has been implemented to collect, investigate and as well as interpreting data obtained for the testing of the hypothesis will be discussed. Theoretical framework will be formed in this chapter in order to illustrate the relationships in between the dependent variable and independent variables. Besides that, hypotheses were developed and will be discussed together with the explanations in conjunction with the dependent variable and the independent variables. On top of that, plans of the sampling method, data collection methods and as well as the development of the questionnaires are included in this chapter. Finally, the data analysis and the hypotheses testing will carry out to analyze the responses from the respondents so that it will derive to a stronger conclusion at the en d of this research. 3.2 Theoretical Framework Figure 3.1 below illustrates a theoretical framework that shows the relationships in between the dependent variable and the independent variables. Knowledge Country Factors affecting Gen-y consumer in Malaysia buying a green product Attitude Social Norm Value Perception 3.3 Explanation of Framework The preferences of consumers for green products are subjective. Consumer from different demographic factors such as background and society may influence their behavior in making decisions while to purchase products. Whether they have a greater of favor to green products or to ordinary products are just hard to predict. Thus, it is undeniable that consumers preferences and their perspective towards goods and services are hard to predict. The importances of consumers have lead to many researches to be conducted in order to study on their behavior and attitudes towards what they perceived on the products. The knowledge, which is one of the factors that might cause preferences for consumers to make purchases for green products. The first thing that came across consumers mind is the brands and firms that produce a green product. Thus, the brand image of the company has help by providing hints to the consumers in summarizing the information from that certain product. According to Grunert (1993), knowledge of the benefits of a green products use on the environment may have an impact on whether or not that product is purchased and used. Besides that, consumers also prefer to purchase a green product with a lower cost. The attitude is another most influential factor in consumer preferences for green products. Consumers normally are not really aware about our environment is