CONSUMER BUYING BEHAVIOR AND ATTITUDES TOWARDS ECO-FRIENDLY FAST MOVING CONSUMER GOODS
-
Upload
professor-pradeep-randiwela -
Category
Marketing
-
view
74 -
download
1
Transcript of CONSUMER BUYING BEHAVIOR AND ATTITUDES TOWARDS ECO-FRIENDLY FAST MOVING CONSUMER GOODS
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 1
CONSUMER BUYING BEHAVIOR AND ATTITUDES TOWARDS ECO-
FRIENDLY FAST MOVING CONSUMER GOODS – COSMETICS & PERSONAL
CARE PRODUCTS
Pradeep Randiwela1
Faculty of Management and Finance,
University of Colombo
Sri Lanka
P.M.N.Mihirani
Institute of Human Resource Advancement
University of Colombo
Sri Lanka
1 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.
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 2
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
INTRODUCTION
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 3
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 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
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 4
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
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
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 5
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
To understand consumers awareness about green products and environmental
knowledge
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 green marketing
mix “that preserves environmental resources and in the meantime deliver value added products
and services” (Datta and Ishaswini, 2011).
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 6
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 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.
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 7
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 they
have sufficient influence.
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 8
Figure 1.Concep
Figure 1. Conceptual Framework of the current research
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).
Individual’s
Beliefs
Environmental
Factors
Socio Economic
characteristics
Company/governme
nt role/support
Social influence
Age, Gender
Income
Residence
Education Level
Religion
Occupation
Material Status
Awareness &
knowledge
Marketing
Information
Green Product, Price,
place, promotion
Attitudes towards
green purchase
Green purchase
intention
Perception on green
companies
Perceived
Environmental
Responsibility
Environmental
concerns
Perception on green
concept
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 9
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).
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
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 10
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. 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:
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 11
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 .
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 12
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 Description Statements Score
01. Unique characteristics of Active LOHAS 3,5,6,7,8 100
02. Unique characteristics of Naturalities 9 80
03. Common characteristics of Active LOHAS and Naturalities 2,3 75
04. Unique characteristics to Drifters 4 50
05. Unique characteristics of Conventionals 10 10
06. Unique characteristics of Drifters, Conventionals and Unconcerned 11 05
07. Unique characteristics to Unconcerned 1,12 –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 (<20=1, 21–30=2, 31–40=3, 41–50=4, >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)
(<10K = 1, 10-20K = 2, 20-30K = 3, 30-40K = 4, 40-50K = 5, Over 50K = 6)
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 13
ß0-ß8 = Coefficients
e = Disturbance term
Analysis of variance (ANOVA) tables were obtained through the regression analysis in order
to interpret the significance of relationships between purchasing behavior and socio economic
factors. Further the significance and the reliability of the module used in the study were
evaluated through goodness of fit measurements.
RESULTS & DISCUSSION:
The results of the character evaluation of green consumerism reveal that the majority of the
cosmetics and personal care products consumers in the sample were belonged to
“Unconcerned” category (64%) where the second and third largest segments were “Drifters”
and “Naturalites” with percentages 39 and 23 respectively (Figure 2).
Figure 2. Distribution of LOHAS Segments among the Sample
The most important consumer segment which is “Active LOHAS” was conspicuously
diminutive (12%) when compared to the largest segment. The results illustrates that the
consumers are notably less focused on environment conservation in accordance with the
LO 18, (12%)
NA 23, (15%)
DR 39, (25%)CO 9, (6%)
UN 64, (42%) LO : Active LOHAS
NA : Naturalites
DR : Drifters
CO : Conventionals
UN : Unconcerned
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 14
evaluation criteria where merely 12% of the respondents is presumed to have a responsibility
on the environment and social well being. Regrettably, a percentage constitute for a total of
73% which represents the majority of consumers do not exactly purchase green products as
their first choice.
Residence:
Data collection was done in western province Sri Lanka which comprised of three main
districts of Colombo, Kalutara & Gampaha. The results of the survey further reveal that the
majority of “Active LOHAS” and “Naturalites” as important green consumer segments (15%
collectively) were in the Colombo district where Gampaha and Kalutara districts had the third
importance. Therefore, in general consumers in Colombo district are more adoptive towards
green consumption when compared to other two regions. However, the outcome of Chi-square
analysis demonstrates that there is no significant difference among the magnitude of LOHAS
segments among three districts (Table 2).
Table 2. Chi-square statistics for Socio Economic Characteristics with
magnitude of LOHAS segments
Variable C-Sq P-value
Residence 0.250
Gender 0.046*
Age 0.129
Education Level 0.129
Nature of Occupation 0.29
Level of Income 0.04*
Note: C-Sq – Chi Square Statistics,*Significant at 0.05 level
Gender:
The outcome of the Chi-square analysis discloses that the purchasing behavior significantly
differs among the gender (Table 2).
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 15
Age of Respondents:
The results of the Chi-square test reveal that the purchasing behavior and the adoption among
LOHAS categories do not significantly differ among age groups (Table 2). However, the
majority of “Active LOHAS” and “Naturalites” were found from consumer groups among the
ages of 21-30 (Table 2).
Education Level:
Results of the Chi-square analysis further demonstrate that the LOHAS categories do not vary
among education level of consumers (Table 2). This proves that education do not make any
effect on green consumption and life style.
Nature of Occupation:
Moreover, results of Chi-square analysis demonstrates that magnitude of LOHAS
segmentation does not significantly vary on nature of occupation of consumers (Table 2).
Level of Income:
Further, the results of Chi-square analysis demonstrate that there is a significant difference
between income levels and LOHAS segment distribution (Table 2). The statistical proof
exemplifies that at least one group of consumers in a particular income category differs from
others in adapting to a different behavior of LOHAS.
Environment Responsibility
The results reveal that the respondents had an average likert value of 3.99 (nearly 4.00) for
environment responsibility (Table 3). This proves that in general, the respondents were willing
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 16
to take environment related responsibilities in order to contribute to the society if better green
movements are available.
Table 3. ALV for variables considering under Individual Belief
Variable ALV
Environmental Responsibility 3.99
Perception on Green Concept 3.94
Perception on Green Companies 3.08
Environment Concern 4.20
Note: Average Likert Value
The Chi-square statistics obtained for the above evaluation further demonstrates that the
average likert values significantly differ among LOHAS segments (Table 4). Though all
segments reached a likert value score over the average amount of 3.0, Active LOHAS
consumers and Conventional possessed the most positive view on environment responsibility.
The least average value was notably reached by the unconcerned group.
Table 4. ALV on Environment Responsibility among LOHAS Categories
LOHAS Category C-Sq
LO NA DR CO UN Coefficient P-Value
4.35 4.21 4.19 4.29 3.76 39.93 0.000*
Note: C-Sq – Chi Square Statistics, FFisher’s Exact Test Coefficient, *Significant at 0.05 level
Perception on Green Concept:
It is evident that perception of green concept was slightly elevated and beyond the average
level (Table 3). This demonstrates that the group of customers considers that the green concept
as a vital notion for a country while a very few number of respondents considered that green
marketing is merely an idea where it has no true consideration about environment protection.
Results of the Chi-square analysis reveal that the ALV for perception on green concept
significantly differ among LOHAS categories (Table 5). Notably, the Active LOHAS group
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 17
possessed the most positive perception regarding the concept, whereas the unconcerned group
showed the least positive figure.
Table 5.ALV on Perception on Green Concept among LOHAS Categories
LOHAS Category C-Sq
LO NA DR CO UN Coefficient P-Value
4.32 4.33 4.07 4.31 3.74 38.96 0.000*
Note: C-Sq – Chi Square Statistics, FFisher’s Exact Test Coefficient, *Significant at 0.05 level
Perception on Green Companies:
The perception of consumers on green companies was roughly consistent with the average level
(Table 3). This demonstrates that the group of consumers considers that the function of a
company for green is considered on average among people. These average level figures may
lead to suspect that this group had a negative image on existing companies and their green
behavior.
Results of the Chi-square analysis reveal that the ALV for perception on green companies
significantly differ among LOHAS categories (Table 6) where the figures demonstrates that
the “Unconcerned” group had the worst perception on green companies.
Table 6.ALV on Perception on Green Companies among LOHAS Categories
LOHAS Category C-Sq
LO NA DR CO UN Coefficient P-Value
3.29 3.21 3.14 3.33 2.98 29.52 0.00*
Note: C-Sq – Chi Square Statistics, FFisher’s Exact Test Coefficient, *Significant at 0.05 level
Environment Concern:
The Likert values derived from consumer focus on environment disclose that the group of
respondents had concerned on the environment beyond an average consumer (Table 3). This
demonstrates that though the majority of respondent were belonged to the group of
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 18
“unconcerned” in the actual purchasing behavior, as consumers they had a good level of focus
on the environment.
Results of the Chi-square analysis reveal that the ALV for Environment concern significantly
differ among LOHAS categories (Table 7), where the highest figure was derived from the
“Conventional” group followed by “Active LOHAS” group.
Table 7. ALV on Environment Concern among LOHAS Categories
LOHAS Category C-Sq
LO NA DR CO UN Coefficient P-Value
4.56 4.28 4.39 4.61 4.03 44.48 0.00*
Note: C-Sq – Chi Square Statistics, FFisher’s Exact Test Coefficient, *Significant at 0.05 level
Company and Government Support:
Results of the survey demonstrates that consumers of cosmetics and personal care products had
an averagely fine impression that companies and the government take actions and supports
towards environment conservation (Table 8). However, it was notable that the ALV figure was
considerably low when compared to other factors.
Moreover, results of the Chi-square analysis reveal that the ALV computed for views of
consumers on company and government support were significantly differed among LOHAS
categories (Table 9).
Table 8. ALV for variables considering under environment Factors
Variable ALV
Company & Government Support 3.37
Social Influence 3.63
Note: Average Likert Value
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 19
Social Influence:
The Likert values derived regarding external influences on purchasing decision making
disclose that the group of respondents had a social pressure and a positive influence beyond
average, though actual buying behavior was distinct with a majority of unconcerned consumers
(Table 8).
Table 9. ALV on Company and Government Support among LOHAS categories
LOHAS Category C-Sq
LO NA DR CO UN Coefficient P-Value
3.73 3.38 3.54 4.00 3.26 35.67 0.00*
Note: C-Sq – Chi Square Statistics, FFisher’s Exact Test Coefficient, *Significant at 0.05 level
Further, results of the Chi-square analysis reveal that the ALV computed for consumers on
Social influence were significantly differed among LOHAS categories (Table 10). According
to the results, Active LOHAS consumers had a significantly higher influence for environment
concerns and lifestyle which had lead them toward practicing green consumer behavior.
Table 10. ALV on Social Influence among LOHAS categories
LOHAS Category C-Sq
LO NA DR CO UN Coefficient P-Value
4.06 3.78 3.91 3.97 3.48 37.78 0.00*
Note: C-Sq – Chi Square Statistics, FFisher’s Exact Test Coefficient, *Significant at 0.05 level
Awareness and Knowledge on Green Products, Price, Place & Promotion:
The results reveal that the consumers also had a beyond average knowledge and awareness on
green products (Figure 3). The most noticeable limitation among the majority of consumers
was that they are either unaware or had no idea about the clues given in the product package/
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 20
Figure 3. Awareness and Knowledge on Green Products
labels to identify possible environment or health hazards. Further, the majority had stated that
they had no clear understanding of all information given in the package material.
Figure 4. Awareness and Knowledge on Price, Place and Promotion
Results of the survey further illustrates that consumers had some dilemma on selections as they
had doubts and misconceptions regarding the features of the marketing mix. In case of place
and promotion, the consumers had limited awareness and knowledge on place and promotion
12
5
79
56
10
8
14
0
28
74
97
45
13
12
5
79
56
45
14
0
81
.70
%
51
.63
%
36
.60
%
29
.41
91
.50
%
0
20
40
60
80
100
120
140
160
1 2 3 4 5
Nu
mb
er o
f re
spo
nd
ents
/ P
erce
nta
ge
Statement
Yes No Correct Correct Percentage
50
26
13
0
67
55
30
14
3
86
11
0
23
86
97
12
2
10
50
26
13
0
67
55
30
14
3
32
.68
%
16
.99
%
84
.97
%
43
.79
%
35
.95
%
19
.61
%
93
.46
%
0
20
40
60
80
100
120
140
160
1 2 3 4 5 6 7
Nu
mb
er o
f re
spo
nd
ents
/ P
erce
nta
ge
Statement
Yes No Correct Correct Percentage
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 21
(Figure 4) where it can be suspected that the decision process could be affected. Results further
reveal that the consumers’ view associated to distribution and communication was somewhat
uncertain.
Figure 5. Information Sources Used by Consumers
Sources of Information:
The survey outcome reveals that the majority of the respondents (73.8%) were exposed to
information through media including television, radio and news papers. Internet in the modern
society is an exceptional tool to reach information from the market place. Nearly 34% of the
respondents have identified these resources as useful information stream (Figure 5). Moreover,
Personal experiences, retail shop/ super market displays, family members and friends were also
considered as information sources which consumers can acquire valuable information on green
marketing, products and companies. In addition to those streams,.
0
53
11
23
39
45
45
52
15
113
0.00
34.64
7.19
15.03
25.49
29.41
29.41
33.99
9.80
73.86
0 10 20 30 40 50 60 70 80 90 100 110 120
Other Sources
Internet based Sources
Magazines
Promotional Activities of Companies
Friends
Family Members
Retail Shop/ Supermarket Displays
Personal Experience
Company Representatives
Media (TV, Radio, News papers)
Frequency/ Percentage
Info
rma
tio
n
So
urc
e
Percentage Frequency
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 22
Figure 6. Consumer Rating on Most Available Information Source
consumers of cosmetics and personal care products have also recognized promotional activities
of companies, company representatives and different magazines as supplementary information
sources
Availability of Information:
The results reveal that the most available information source to consumers was the Media
(Figure 6). Nearly 40% of consumers reach information on cosmetics and personal care
products through television (TV), radio and news papers. The second major information source
is the internet and World Wide Web where the availability of useful information was
0.00
34.64
0.00
3.27
3.27
3.92
11.11
3.27
0.65
39.87
0
53
0
5
5
6
17
5
1
61
0 5 10 15 20 25 30 35 40 45 50 55 60 65
Other Sources
Internet based Sources
Magazines
Promotional Activities of Companies
Friends
Family Members
Retail Shop/ Supermarket Displays
Personal Experience
Company Representatives
Media (TV, Radio, News papers)
Frequency/ Percentage
Info
rma
tio
n
So
urc
e
Frequency Percentage
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 23
Figure 7. Consumer Rating on Most Reliable Information Source
rated as 35%. In addition to the third most available information source of retail/ supermarket
displays (11%), less than 10% of consumers rated the other streams as the most available
information sources.
Reliability of Information
The majority of respondents (42%) stated that personal experience is the best reliable source
of information, while as the second rating another group (27%) stated that promotional
activities of companies are mostly reliable. The other major reliable information sources were
family members, company representatives, friends and internet based sources where the
percentages were 23%, 19%, 18% and 13% respectively.
0
13
0
27
18
23
4
42
19
6
0.00
8.55
0.00
17.76
11.84
15.13
2.63
27.63
12.50
3.95
0 10 20 30 40 50
Other Sources
Internet based Sources
Magazines
Promotional Activities of Companies
Friends
Family Members
Retail Shop/ Supermarket Displays
Personal Experience
Company Representatives
Media (TV, Radio, News papers)
Frequency/ Percentage
Info
rma
tio
n
So
urc
e
Frequency Percentage
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 24
Table 11. Parameter Estimates of Multiple Ordinal Regression Model
Factor Description Estimate Std. Error Wald df Sig.
95% Confidence
Interval
Lower
Bound
Upper
Bound
[Age=1] 20 or Below -1.557 2.802 .309 1 .578 -7.049 3.934
[Age=2] 21 – 30 -1.888 2.377 .631 1 .427 -6.547 2.771
[Age=3] 31 – 40 -1.459 2.267 .414 1 .520 -5.903 2.985
[Age=4] 41 – 50 -.828 2.302 .129 1 .719 -5.339 3.683
[Age=5] 51 – 60 .272 2.455 .012 1 .912 -4.540 5.084
[Age=6] Over 60 0a . . 0 . . .
[Gender=1] Male 1.269 .492 6.664 1 .010 .306 2.233
[Gender=2] Female 0a . . 0 . . .
[Marital status=1] Single .142 .583 .059 1 .807 -1.001 1.285
[Marital status=2] Married 1.565 .756 4.280 1 .039 .082 3.047
[Marital status=3] Separated 0a . . 0 . . .
[Education level=4] Secondary level 1 -2.112 1.890 1.249 1 .264 -5.816 1.592
[Education level=5] Secondary level 2 20.637 .000 . 1 . 20.637 20.637
[Education level=6] Tertiary level 1 1.190 .810 2.155 1 .142 -.399 2.778
[Education level=7] Tertiary level 2 .499 .730 .467 1 .494 -.932 1.930
[Education level=8] Tertiary level 3 .856 .585 2.141 1 .143 -.290 2.001
[Education level=9] Tertiary level 4 0a . . 0 . . .
[Religion=1] Buddhism .097 .845 .013 1 .908 -1.558 1.753
[Religion=2] Christian .033 1.095 .001 1 .976 -2.113 2.179
[Religion=3] Catholic .896 .876 1.045 1 .307 -.822 2.613
[Religion=4] Muslim .488 1.171 .174 1 .677 -1.807 2.783
[Religion=5] Hindu 0a . . 0 . . .
[Occupation=1] Government 5.333 2.940 3.290 1 .070 -.430 11.096
[Occupation=2] Semi-gov. 5.206 3.034 2.944 1 .086 -.741 11.153
[Occupation=3] Private 5.533 3.070 3.249 1 .071 -.483 11.550
[Occupation=4] Self-employed 6.459 3.289 3.857 1 .050 .013 12.905
[Occupation=5] N.G.O. 4.613 3.332 1.916 1 .166 -1.918 11.144
[Occupation=6] Temporary Work 4.734 3.100 2.331 1 .127 -1.343 10.810
[Occupation=7] Daily Wages -17.628 .000 . 1 . -17.628 -17.628
[Occupation=8] Unemployed 4.811 3.158 2.322 1 .128 -1.378 11.000
[Occupation=9] Student 3.573 3.423 1.089 1 .297 -3.136 10.281
[Occupation=10] Other 0a . . 0 . . .
[Income level=1] Below 10 K -6.303 2.250 7.849 1 .005 1.893 10.712
[Income level=2] 10 – 20 K 3.397 1.743 3.800 1 .051 -.018 6.813
[Income level=3] 20 – 30 K 2.540 1.449 3.074 1 .080 -.299 5.379
[Income level=4] 30 – 40 K 1.928 1.364 1.997 1 .158 -.746 4.603
[Income level=5] 40 – 50 K 1.370 1.302 1.107 1 .293 -1.182 3.922
[Income level=6] 50 – 60 K 3.176 1.446 4.821 1 .028 .341 6.011
[Income level=7] 60 – 70 K .080 1.678 .002 1 .962 -3.209 3.369
[Income level=8] 70 – 80 K 3.220 1.640 3.854 1 .050 .005 6.434
[Income level=9] 80 – 90 K .213 1.553 .019 1 .891 -2.830 3.257
[Income level=10] 90 – 100 K .142 1.660 .007 1 .932 -3.112 3.396
[Income level=11] Over 100 K 0a . . 0 . . .
[Relation to Env=1] None .538 .837 .414 1 .520 -1.102 2.179
[Relation to Env=2] Society Member -.365 1.157 .099 1 .753 -2.633 1.904
[Relation to Env=3] Employee of GC -1.486 .961 2.392 1 .122 -3.369 .397
[Relation to Env=4] Env. Journalist -23.568 .000 . 1 . -23.568 -23.568
[Relation to Env=5] Env. Researcher -1.232 1.206 1.044 1 .307 -3.595 1.131
[Relation to Env=7] Env. Scientist 0a . . 0 . . .
Note: a-compared factor; GC – green company; *Significant at 0.05 level
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 25
Importantly, though consumers stated that Media and retail shop displays are mostly available
information streams, they were considered as least reliable sources. Magazines were not
considered by consumers as a reliable information sources (Figure 7).
Effect of Socio-economic Factors:
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 (Table 11). In fact, these factors were the ones which make the difference
between LOHAS categories where different mind-sets are focused on distinct purchasing
behaviors.
Table 12. Model Fitting Information
Model -2 Log Likelihood Chi-Square df P-Value
Intercept 420.671 Final Model 321.627 99.043* 41 0.001*
Note: *Significant at 0.05 level; **larger the value higher the fit
According to the statistical outcome of the analysis, male when compared to female were more
focused on green consumer behavior whereas respondents those who were married are also
oriented positively towards green consumerism. Further, Income levels 1, 6 and 8 were
significant in purchasing behavior.
Table 13. Model Goodness-of-Fit Measurements
Parameter Coefficient/ Value df P-Value
Pearson Chi-Square Statistics 536.830** 471 .019*
Cox and Snell Adjusted R-Square 73.06** 471 --
Note: *Significant at 0.05 level; **larger the value higher the fit
This exhibits that the respondents with an income level of 6 and 8 were keen in green consumer
behavior when compared to those who had an income level of 11. As well, those who belonged
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 26
to the level 1 were deviated from green behavior. Table 12 and 13 confirm the model fit indices;
Pearson Chi Square Statistics; Cox and Snell R-Square for the regression model. The value
indicated the reasonable model fit where it is fitted well in explaining the variation Socio
economic characteristics in adopting LOHAS categories.
CONCLUSION:
Green marketing is an important concept for both companies and customers where environment
protection is a major concern. Many manufacturing companies today, moves towards green as
the consumers are becoming more conscious about the natural surroundings. Green
marketing is the marketing of products that are supposed to be both environmentally and
individually beneficial. This practice adds in a broad range of activities in the marketing mix,
including product modification, production process changes, sustainable packaging,
distributing and communication etc. Linking with the marketing concept it do not just re-focus,
adjust or enhance existing marketing philosophy and practice, but also seeks to confront those
approaches and reach substantially in different outlook. Green marketing consists of a cluster
of approaches which strive to tackle the lack of fit among conventional marketing and the
ecological and social realities of the wider marketing context.
LOHAS classification, which a model used internationally, is useful to identify the magnitude
to which consumers are focused on natural environment and its conservation. This study
assessed the magnitude of LOHAS categories exists in the Colombo district for environment
friendly cosmetics and personal care products market along with an examination of the factors
affecting purchasing behavior.
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 27
The majority of the respondents can be considered as environment unconcerned where as the
miniature portion are in reality the active environment stewards. Though the results reveal that
consumers possess a considerable level of positive perception for green marketing concept,
products and for companies, practically, the purchasing behavior differ due to a variety of
reasons. It can be supposed that the consumers are all potential include “Suspects” who
evaluate those features in the buying decision process, “Prospects” who may attracted to the
concept and haven’t buy and finally “Customers” who are the actual buyers. In this scenario,
loyal customers are “Active LOHAS” and “Naturalites”. Though Drifters and “Conventionals”
as well can be good customers for green products the majority of them deviate from the interest
during the buyer decision making process.
One major reason for the above deviation, as revealed in the survey is that the inability of
consumers to trace information about products, where a considerable number of consumers had
no idea about the information given in the product. On the other hand the perception of
respondents on green companies was roughly hovering around the average level. Thus
consumers may have a negative image on companies regarding green marketing. Thus,
companies may provide necessary information via better promotions in order to educate
consumers to create a want by demonstrating the difference of their products.
The majority of respondents were in the ages between 21 and 30 years where among those a
major portion is environment unconcerned consumers. This is an indicator that the younger
generation as the future of a nation does not concern about the environmental issues allied with
cosmetics and personal care products. However, this may be merely for the context of
cosmetics and may be different for another kind of market.
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 28
Considering the education levels, it was revealed that though the majority over 70% had
reached their tertiary education, according to the statistical analysis, there was no significant
relationship among education level and the adopting in LOHAS categories. Thus education
may lead to change the mindset of those respondents in a way that they could make a sense to
create a burning need to protect the environment. Moreover, the consumers who had attended
an environment related education program were found making proper decision making in
purchasing. Therefore, it is recommended to include environment education and green
consumerism to the education system where younger generation can gain knowledge and apply
practically in their lives in decision making.
Importantly, unlike formal school or college education, these education programs can be used
to educate adults in the society who are not engaged in an environmentally and socially
responsible consumer behavior at present. However, these like education programs must be
promoted by the government and non-government organizations in order to increase the
literature and environmental knowledge of consumers so that they can actively participate in
valuable decision making allied to environment protection while improving the quality of their
lives. As per the “marketing concept and philosophy” today, consumers too could engaged in
marketing as participant of creating value, where society will benefit ultimately.
The consumers are less satisfied regarding the support given by companies and by the
government. Thus the interest can be given where people would be motivated towards green
consumption, if proper governmental programs are implemented with the support of the private
sector. Since statistics reveals that the contentment on the prop-up of government and non
government organizations is low, it can be concluded that the consumers may be expecting
more institutional support for a green movement. Currently, the support and influence, subsidy
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 29
schemes, loan facilities which may be required by companies are lacking in the country. Thus,
a proper research on companies to evaluate this need and to arouse the need of a green
movement must be managed trough a well establish national policy. Importantly, these set-ups
must assure that all organizations, society and the environment can be benefitted according to
the triple bottom-line concept.
On the other hand, attracting customers through managing a proper blend of the marketing mix
is important. Pricing is as decisive in green marketing as in conventional marketing. Most
customers will only be prepared to pay a premium if they recognize supplementary value such
as improved performance, functionality or usability. Environmental benefits alone may not be
a validation for elevated prices for all LOHAS categories. Thus, product aspects which give a
valuable outcome together with a realistic price are essential to attract and to convert
“Conventionals” and “Drifters” to effective LOHAS consumers. Proper marketing promotions
as communication may be used to draw attention of the “Unconcerned” group where perception
and attitudes can be challenged to be altered through providing awareness and knowledge.
However, there is a national need for communicating the potential benefits hidden savings in
green products. Though these there might be a need to promote aggressively with relatively
higher prices, environmentally responsible products may be comparatively less expensive
when whole life costs are taken into consideration. In terms of cosmetics and personal care, the
overall health benefits and environmental benefits must be communicated to the society.
In addition to the pricing and promotional difficulties, there many negative aspects allied to
green marketing where one of such worse phenomenon is “green washing”. In modern society,
corporations are ever more recognizing the benefits of green marketing “Green washing” refers
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 30
to businesses that espouse outwardly green acts with an underlying intention to amplify profits
through misleading consumers.
In conclusion, the study suggests a need of a national policy towards green marketing with
green consumerism and green production where regulation, education and awareness, subsidies
and aids are crucial elements for the betterment of cosmetics and personal care products
consumers in Sri Lanka. Further, involvement of both government and private sector where
consumers can be value creators may lead the society towards economic and environment
sustainability.
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 31
REFERENCES:
Beckford, C. L., Jacobs, C., Williams, N. and Nahdee, R. (2010). Aboriginal Environmental
Wisdom, Stewardship, and Sustainability: Lessons from the Walpole Island First
Nations, Ontario, Canada. The journal of environmental education, 41( 4), 239–248.
Chan, R. Y. K. (2001). Determinants of Chinese consumers’ green purchase behavior.
Psychology & Marketing, 18 (4), 389-413.
Datta, S. K. and Ishaswini, (2011). Pro-environmenatal Concern Influencing Green Buying: A
Study on Indian Consumers. International Journal of Business and management, 6 (6),
124-133.
Ghosh, M. (2010). Green Marketing – A changing concept in changing time. BVIMR
Management Edge,4(1),82-92.
Hessami, H. Z., Yousefi.P and Goudarzi, G. (2013). The Conceptual Model of Effective
Factors on Consumers, Green Purchasing Intentions. International Journal of
Engineering and Innovative Technology (IJEIT),2 (7).
Jain, S. K., and Kaur, G. (2004). Green marketing: An Indian perspective. Decision, 31(2),18-
31.
Mainiery, T., Barnett, E. G., Valdera, T. R., Unipan, J. B. and Oskamp, S. (1997). Green
Buying: The Influence of Environmental Concern on Consumer Behavior. Journal of
Social Psychology, 137(2), 189-204.
Mobium. (2007). Living LOHAS: Lifestyles of Health and Sustainability in Australia
Consumer Trends Report, Mobium Group, August.
Mohan, G. and Denis, W. (2013) Behavior modeling of green consumerism using LOHAS
classification: A Concept article. Social & Environment Marketing Research
Quarterly.20-23.
2015 Cambridge Business & Economics Conference ISBN : 9780974211428
July 1-2, 2015
Cambridge, UK 32
Prothero, A. and McDonagh, P. (1992). Producing environmentally acceptable cosmetics? The
impact of environmentalism on the United Kingdom cosmetics and toiletries industry.
Journal of Marketing Management, 8, 147-166.
Todd, J. T. (2004), The visual perception of 3D shape. TRENDS in Cognitive Science, 8(3),
115-121.
ABBREVIATION
FMCG: Fast Moving Consumer Goods
LOHAS: Lifestyles of Health and Sustainability
ALV:Average Likert Value
GAL: Grand Average Likert Value
SPSS:Statistical Package for the Social Sciences
NMI: Natural Marketing Institute
E&SR: Environment and Social Responsibility