Consumer Buying Behavior and Attitudes Towards ...

2015 Cambridge Business & Economics Conference

ISBN : 9780974211428

CONSUMER BUYING BEHAVIOR AND ATTITUDES TOWARDS ECOFRIENDLY FAST MOVING CONSUMER GOODS – COSMETICS & PERSONAL CARE PRODUCTS

Pradeep Randiwela1 Faculty of Management and Finance, University of Colombo Sri Lanka [email protected]

P.M.N.Mihirani Institute of Human Resource Advancement University of Colombo Sri Lanka [email protected]

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Winner of Best Professor in Marketing, awarded by Asia's Best B-School' at Singapore CMO Asia 2010, former Dean/Faculty of Management and Finance, University of Colombo. July 1-2, 2015 Cambridge, UK

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ISBN : 9780974211428

CONSUMER BUYING BEHAVIOR & ATTITUDES TOWARDS ECO-FRIENDLY FAST MOVING CONSUMER GOODS: COSMETICS & PERSONAL CARE PRODUCTS ABSTRACT: Many manufacturing companies today, move towards green as the consumers are concerned about the natural surroundings. Natural environmental influence our day-today lives in many ways, yet only few academics have discussed green issues in Sri Lankan context. Hence, this paper is an attempt to investigate the consumers purchasing behavior and attitudes towards eco-friendly fast moving consumer goods (FMCG) with special reference to cosmetics &personal care products. The research was conducted in the Western Province of Sri Lanka employing a conceptual framework that identified four major factors that affect consumer green purchasing behavior such as; individual belief, environmental factors, socio economic characteristics, awareness &knowledge. Data collected from 153 respondents with the use of a questionnaires and this was done by way of judgmental sampling. Both descriptive and inferential statistical were used to analyze data. The “Lifestyles of Health and Sustainability” (LOHAS) model was utilized to measure the purchasing behavior. This study assessed the magnitude of LOHAS categories exists in the Western Province for environment friendly cosmetics and personal care products market along with an examination of the factors affecting purchasing behavior.

The results reveal that the majority of the respondents were environment unconcerned where as the miniature portion were in reality the active environment stewards. Results of the regression analysis reveal that among the variety of socio-economic factors considered, only gender, marital status and income level were significantly affecting the purchasing behavior. Key words: Green Marketing , FMCG, LOHAS, Cosmetics & Personal Care, Purchasing Behavior July 1-2, 2015 Cambridge, UK

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ISBN : 9780974211428

INTRODUCTION Communities all over the world are identifying the need of environmental safety where the “Green Marketing “as a concept which business organizations concerned to satisfy customer needs in an environmentally friendly approach. As a result of alarming rates of environmental lethal issues and emerging community pressure on protecting the environment, a variety of business entities globally have moved beyond simply adhering to environmental regulations. Many internationally reputed enterprises continue innovations and introducing environment friendly solutions as alternatives to traditional products. Moreover, business processes allied to product life cycles (i.e. from raw material acquisition to disposal of waste after consumer usage) have been re-engineered in order to reduce environment impacts.

Fast Moving Consumer Goods (FMCG) sector is a considerably large sector in Sri Lankan economy which the stakeholders have to open their eyes on eco-friendliness as it is one of growing industries which has focused on green marketing strategies all over the world. Since urban societies become more complex and prone to increasing problems due to environmental pollution and unethical business practices, there is a significant attention been drawn by both consumers and business organizations on natural environment. Consequently, some businesses have begun reform their behavior in an attempt to address this society‟s “new” concerns.

Nonetheless, at present lack of utilizing biologically degradable materials is a major observable issue in Sri Lanka which has already leaded to accumulation of solid waste. As well, materials such as polythene and plastics are still used as major packing and hauling materials of many FMCG products. Though some alternatives are in use, these may not be the best solutions for the prevailing environmental issues. Moreover, Western Province, Sri

July 1-2, 2015 Cambridge, UK

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ISBN : 9780974211428

Lanka which consists of Colombo, Gampaha and Kalutara districts has eventually become the most populated area both residentially and industrially. Consequently, problems allied with natural resources such as higher consumption levels of water, electricity, fuel and wood by both firms and general public are becoming a major issue with increasing population density in the above region. Thus innovations are of a great need where consumer inputs are needed to be incorporated. On the other hand, most of the marketing practitioners globally are using green elements as powerful marketing tools so that firms in Sri Lanka as well would have a greater potential to improve. RESEARCH PROBLEM AND OBJECTIVE Although environmental issues affect most of the activities in day-today lives, there were only few academic disciplines which have discussed green issues in Sri Lankan context. Since green marketing is an emerging field in Asian countries like Sri Lanka, consumer behavior towards this society‟s new concern is still in the understanding level. It has been proven by the findings of Jain and Kaur, (2004)where the results demonstrated that the majority of the consumers still lack „green knowledge‟ and due to such low awareness on green products, many organizations are neither yet motivated in pushing their businesses towards developing more green products nor are working hard on green packaging. Further it is also mentioned that a considerable number of consumers have an ideal concept of being environmentally responsible but may not necessarily implement this concept. Consequently, taking no efforts to move towards a lifestyle which is green was identified as a major issue.

Unlike the organic food market, being one of the major segments in FMCG sector, cosmetics and personal care products manufacturing and marketing firms may find difficult to develop new strategies since consumer behavior towards green products is still unknown. In line with


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ISBN : 9780974211428

the literature, though Sri Lankan consumer‟s interests for green products are gradually rising, the availability and awareness created by the marketers may be very less compared to the European countries. This knowledge gap alone with lack of information regarding consumer behavior which has contributed to lack of green movement in Sri Lanka can be bridged by means of understanding green consumers and their characteristics.

Therefore, overall, it is a major requirement to identify the consumer viewpoints in terms of attitudes, perception, environmental knowledge and socio economic factors in order anticipate different consumer needs so that firms would use these facts to modify their strategies accordingly through developing novel approaches to meet those needs. As well, it is important to identify doubts and misperceptions of consumers and thereby to suggest key areas which knowledge and awareness must be conferred in developing an appropriate green consumer mind set towards sustainable development of the country.

The Main objective of the study is, 

To examine whether the consumers are concerned about green environment when they buy FMCG and Personal Care products

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To understand consumers awareness about green products and environmental knowledge

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To evaluate consumer perception, attitude and purchasing behavior towards existing eco-friendly cosmetics and personal care products.

Green Marketing The negative impacts on the environment due to companies‟ and human activities have directed companies to develop eco-friendly products. The consumption of eco-friendly products and consumers‟ attitudes towards these products has led to the expansion of the


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green marketing mix “that preserves environmental resources and in the meantime deliver value added products and services” (Datta and Ishaswini, 2011). Green Marketing concept appeared at the end of the 1980‟sand it has been defined by many researchers. According to the Ghosh (2010) Green Marketing is defined as the marketing activities that facilitate exchanges to satisfy consumer needs and wants by minimizing the impact of these activities on the physical environment. Green Purchasing Behavior Green Purchasing Behavior (GPB) is conceptualized as the probability and willingness of a person to provide preference to products having eco-friendly features over other traditional products in their purchase considerations. According to Beckford et al., (2010) and Chan (2001) research findings, green purchase intention is a significant predictor of green purchase behavior, which means that purchase intention is positively affecting the probability of a customer decision that he/she will buy green products. Purchasing Behavior of Green Cosmetics & Personal Care Products These two products have not been considered together in previous research papers, but current study attempt to search the behavior intention of those two categories together, by identifying the significant of those product categories in FMCG sector. Two studies have examined green marketing strategies for eco friendly personal care products and later on discussed the research papers of cosmetic products. One focused on the product development of

green

cosmetics

and

toiletries

in

the

context

of

the

United

Kingdom

(Prothero&McDonagh, 1992), and the other focused on promotional advertisements of U.S. companies offering natural personal care products (i.e., Burt‟s Bees, Tom‟s of Maine, and The Body Shop) (Todd, 2004). Both studies revealed that consumers‟ ecological awareness


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ISBN : 9780974211428

has had a major impact on the cosmetics industry and suggested that personal care companies consider the protection of ecology as their business philosophy to satisfy consumer needs. Attitudes towards Green Purchase It has been believed that the actions of individuals can be predicted by their attitudes. Numbers of studies have been made towards improving the ability to predict an individual‟s actions. Mainieri et al. (1997) revealed that the consumers‟ attitude is associated with the knowledge and personal experience they possess. However inconsistencies were observed among the relationship between consumers‟ attitude and their behavior when it comes to green consumerism. Mainieri et al. (1997) found low correlation between consumers‟ attitude and green purchasing behavior. In order to predict specific behaviors, the measurement criteria of attitudes should be directed at a specific environmental issue like purchasing of green products (Mainieri et al. 1997).

CONCEPTUALIZATION By over viewing the investigations related to green behavior and purchasing intentions, it is identified that researchers with specific goals and perspectives have presented different models in this regard. After reviewing many researches in green purchasing and green intentions, the authors suggested following conceptual framework which is a modification of Hessami, et al., 2013 conceptual framework. (Figure 1). As it can be seen in the Figure1, there are four main indicators that are influencing the consumer attitudes and green purchasing intentions, namely, Individual‟s ecological beliefs, Environmental factors, Socio economic characteristics, consumer awareness on green products. Each of these variables is subdivided into various factors built upon the literature review. These factors play significant role in green purchasing decision and intentions and


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they have sufficient influence.

Perception on green concept Perception on green companies Individual‟s Beliefs

Environmental concerns Perceived Environmental Responsibility

Company/governme nt role/support

Environmental Factors

Social influence

Attitudes towards green purchase

Age, Gender Income Residence Socio Economic characteristics

Education Level Religion

Figure 1.Concep Occupation Material Status

Marketing Information Green Product, Price, place, promotion

Awareness & knowledge

Figure 1. Conceptual Framework of the current research


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Green purchase intention


ISBN : 9780974211428

Green Consumer Market (LOHAS Model) The major conceptual model used in this study to measure the green consumer purchasing behavior was “Lifestyles of Health and Sustainability (LOHAS)”. This is commonly used to refer the green consumer and represents the marketplace for the goods and services sought by these consumers (Mobium,2007). The Natural Marketing Institute (NMI) has identified five segments which categorize the greenness of the adult population based on attitudes and behavioral traits toward health, wellness and sustainability, rather than demographic characteristics. Revised and updated over time, NMI‟s current green consumer segments include (1) Active LOHAS, (2) Naturalites, (3) Drifters, (4) Conventionals, and (5) Green unconcerned. Consumers of the Active LOHAS market segment, purchase only eco-friendly products and play an active and loyal role in protecting the environment (Mobium,2007). This segment regularly consumes organic and natural products, particularly those in the food and beverage category. Naturalites are not, however, dedicated to the green movement or large consumers of environmentally friendly durable goods (e.g. hybrid vehicles, energy efficient appliances), rather they are focused more on personal health issues, such as holistic living (Mobium, 2007). Drifters are trend sensitive and more worried about image than actual execution, as well as eager to be seen in trendy eco-supermarkets such as Whole Foods, partly because it is a fashionable place to be. This segment is also fairly price sensitive (Mobium, 2007). Conventional consumer group does not have a green outlook but does practice some practical green behaviour, such as recycling and energy conservation. They want to conserve resources (i.e. energy and water etc.) because it is economical and sensible (Mobium, 2007). Unconcerned group does not practice environmental responsibility. This segment is therefore not a key target market for the LOHAS industry (Mobium, 2007). July 1-2, 2015 Cambridge, UK

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ISBN : 9780974211428

Sample: Sample was collected in Western Province of Sri Lanka covering Colombo, Gampaha and Kalutara districts which has become the most populated area both residentially and industrially. Since the number of individuals that possesses the trait of interest in Green marketing is limited whereas relevant information was obtained from a very specific group of people, Judgmental sampling which is a non probability sampling technique was used for the study where the units were sampled based on their knowledge and professional judgment. Two hundred consumers were selected for this study.

Data Collection: The study was mainly based on primary which data was gathered through a structured questionnaire based interviews. This phase was consisted of questionnaire design, verification, pilot survey and real survey.

Pilot survey: In order to validate the questionnaire in terms of clarity, adequacy and accuracy, a pilot survey was carried out as the first step of fact finding by conducting interviews among ten businesses in the designated region, involved in some form of green business practices (convenient sample). Additionally, the questionnaire was administered to several academics in the field of business management and to a statistical expert. Along with feedback gathered from the pilot survey, adjustments were made in selected areas. For instance, increasing the number of categories in the fields such as education level and monthly income are among the significant adjustments that are useful in identifying relationships with purchasing behaviors. As well, sequence and flow of questions were changed in order to minimize errors (i.e.


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influential feedback, avoidance and biasness). Consequently, the continuous feedback was used in adjusting an accurate, adequate and reliable questionnaire to be used to gather information on identified research problems.

Real Survey: The real survey was carried out as the second step during April and May 2014 by conducting a structured questionnaire based interviews and discussions among 200 consumers in Western province Sri Lanka according to a Judgmental sampling technique. From this sample, a total of 153 usable responses were received from interviewees in Colombo, Kalutara, and in Gampaha Districts.

Analysis of Data: Both descriptive and inferential statistical methods were used to analyze data. Major software packages used for the analysis were “Statistical Package for the Social Sciences (SPSS)” (Version 17), “MINITAB” (Version 12) and “Microsoft Excel” (Version 2007). In addition to the assortment of illustration methods used in descriptive statistics, the major inferential statistical concepts used were weighted likert scales, Chi- square analysis and regression analysis. Descriptive analysis was used in this study to simplify both qualitative and quantitative data so that it would be easy to understand and measureable. Both categorical and continuous data types were used so as to simplify demonstrations and to facilitate further analysis. These methods are further discussed in sections below. Classification of Customers based on LOHAS: 12 statements were used to evaluate the purchasing behavior of customers. These statements were developed based on the unique characteristics identified in the LOHAS model .


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ISBN : 9780974211428

Valuation Criteria of LOHAS Model: Each statement was given a defined score where the sum can be used to determine the segment which customers are belonged to. The scores were determined by considering the unique and common characteristics of different LOHAS groups (Table 1). Table1. Valuation Criteria of LOHAS Model Factor 01. 02. 03. 04. 05. 06. 07.

Description Unique characteristics of Active LOHAS Unique characteristics of Naturalities Common characteristics of Active LOHAS and Naturalities Unique characteristics to Drifters Unique characteristics of Conventionals Unique characteristics of Drifters, Conventionals and Unconcerned Unique characteristics to Unconcerned

Statements 3,5,6,7,8 9 2,3 4 10 11 1,12

Score 100 80 75 50 10 05 –500

Source:Mohan, G. & Denis, W. (2013)

Assessing the Factors Affecting Purchasing Behavior: Purchasing Behaviour is a function of (depends on) socio economic factors. Purchasing Behaviour = ƒ ∑ (Socioeconomic factors) Purchasing Behavior = ß0 + ß1 (AGE) + ß2 (GEN) + ß3 (RES) + ß4 (EDL) + ß5 (REL) + ß6(OCP) + ß7 (MAS) + ß8(INC) + e Where, AGE1 = Age; Dummy/ discrete variable (50=5) GEN2 = Gender; Dummy/ discrete variable (Female =1, else 2) RES3 = Residence (Region1=1, Region2=2, Region3=3 etc.) EDL4 = Education level (Ordinary; levels from 1 to 5) REL5 = Religion (Buddhist =1, Catholic = 2 etc. or Buddhist =1, Non Buddhist =2) OCP6 = Nature of occupation (Govt.= 1, Private =2, Self business =3, Daily wages=4, Unemployed =5, Other= 6) MAS7 = Marital status (Married =1, Unmarried =2, Other =3 or Married =1, else =0) INC8 = Gross monthly income (Rs., K=thousands) (