Green product brm

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Green product brm

  1. 1. CONSUMER PREFERENCE TOWARDS GREEN RECYCLABLE PRODUCTS Submitted To: Prof: Vishal Submitted By: Section J, Group No. 10 Vikas Saini 11BSPHH010951 Piyush Chandak 11BSPHH011026 Ayushi Agarwal 11BSPHH011066 Rajan Singh 11BSPHH010640 1
  2. 2. INDEXS. No Particulars Page No. 1 Abstract 3 2 Introduction 3 3 Literature Review 4 4 Data, Variable and Methodology 6 5 Questionnaire 7 6 Working & Analysis 10 7 Assumptions 10 8 Discriminant Analysis 11 9 Results 15 10 Value addition 15 11 Limitations 16 12 Reference 17 2
  3. 3. ABSTRACTThe purpose of the study was to examine the variables that affect the consumer preferencetowards green recyclable products, and then differentiate the consumer in two different group ofbuyer or non buyer of green product on the basis of factors or variables.Initially we selected 12 variables and prepared a Questionnaire to measure the attitude ofcustomers towards green recyclable products through these variables but 3 variables were of notour use so we drop them. We conducted a questionnaire and focus group study to identifyvariables. The Questionnaire was designed based on Likert scale.The data collected and after coding used in SAS to analyze since our dependent variable is incategorical in nature we used discriminant analysis for our study, taking consumer purchasebehavior as our dependent variable.INTRODUCTIONGreen recyclable products are those products which are bio-degradable and reusable the othercharacteristics of these products are they are non-toxic, non corrosive, and non allergenic duethese characteristics these products have minimum or no harmful effect on the environment andtherefore these are also known as hygienic products. These are also known as eco-friendlyproducts made up of natural fibers and thus they help in saving the natural resources.Green recycled products can be broadly defined into various categories such as: Products That Conserve Natural Resources Products That Contribute to a Safe, Healthy Built Environment Products Made with Recycled, or Agricultural Waste Content-post and pre consumer Product Products That Avoid Toxic or Other Emissions.Some of the examples of green products are: cloth/paper/jute bags, recycled paper cartons, andrecycled paper notebooks, cola in recycled cans, green building products i.e. AAC (AeratedAerocon Cement Blocks, Flex-o-board) and other products which can be created through therecycling process. 3
  4. 4. LITERATURE REVIEWConsumers can degrade or uplift the environment, through their buying behavior, or moreprecisely: how customers evaluate recycled (green products) individually and with respect to nongreen products? When we buy products made from recycled materials, it is a crucial step insupporting recycling programs and resource conservation. Resources are saved only whenrecycled products are purchased. Olyne and Bryce (1990) highlight the fact that research atindividual level regarding factors that contribute towards the change in perception of consumerfor recycled products is important. The growing social and regulatory concerns for theenvironment lead an increasing number of companies to consider green issues as a major sourceof strategic change. In particular, this trend has major and complex implications on thetechnological strategy of a company and on its product innovations. Even though it is increasedeco-awareness of Sri Lankan customers during the past few decades, there are some barriers tothe diffusions of more ecologically oriented consumption and production styles. Therefore,companies are increasingly recognizing the importance of green marketing concepts. Thepurpose of study was to investigate the attributes which influence perceptions of customerstowards purchasing eco- friendly products and their willingness to pay on green products.The current rapid growth in the economy and the patterns of consumers‟ consumption andbehavior worldwide are the main cause of environmental deterioration. As the environmentcontinues to worsen, it has become a persistent public concern in the developed countries and hasrecently awakens developing countries to the green movement. This paper is essentiallyexploratory in nature and has two objectives. The „attitude–behaviour gap‟ or „values–actiongap‟ is where 30% of consumers report that they are very concerned about environmental issuesbut they are struggling to translate this into purchases. For example, the market share for ethicalfoods remains at 5 per cent of sales. This paper investigates the purchasing process for greenconsumers in relation to consumer technology products in the UK. Data were collected from 81self-declared green consumers through in depth interviews on recent purchases of technologyproducts. A green consumer purchasing model and success criteria for closing the gap betweengreen consumers‟ values and their behavior are developed. The paper concludes that incentivesand single issue labels (like the current energy rating label) would help consumers concentrate 4
  5. 5. their limited efforts. More fundamentally, „being green‟ needs time and space in people‟s livesthat is not available in increasingly busy lifestyles.Consumers psychological benefit from the purchase was added as part of the purchaseutility in this research study . The theory assumes that consumers always try to maximizetheir purchase utility which is the benefit received from the purchases good and the pricewhen they make purchase decisions. It has been found that manufacturers and marketershave responded to this environmental trend . The introduction of new and green producthas grown by 100% per year since 1985. However the environmental trend cannot ensurethe success of the green market because consumers purchase behaviors and attitude havenot changed as quickly as their environmental awareness. Consumers receive both qualitybenefits and psychological benefits by paying money and other costs such as time andefforts for each purchase transaction. The quality benefit is the received quality from aproduct itself or life improvement through using the product. On the other hand thepsychological benefit is the positive feeling about the purchase for example self imagebuilt from buying a special product or a feeling of getting a deal due to the lower price.Since consumers always try to maximize their purchase utility from the purchase of therecycled product they should perceive more purchase utility from the purchase ofrecycled products than the purchase of the ordinary product. The hedonic price techniquehas been applied extensively to housing markets and labour markets. Studies showed thatthey care that how good is produced and look to buy environmentally friendly productswhen possible. It is possible that some consumers might be willing to pay more for therecycled good to improve environment quality . Overall, environmental quality wouldimprove slightly, but the improvements would not necessarily be perceived by theindividuals making the purchaseIn this paper they have tried to study approaches regarding several aspects of the decisionmaking processes of the final consumer, analyzing, how significant their decision of buying wasthat prove themselves wrong later. Reusable alternative products points mostly to shopping bags.There are a number of reusable shopping bags available instead polythene bags such asrecyclable paper bags, jute bags, and bags made from synthetic like polypropylene, polyethyleneand nylon. 5
  6. 6. Data, Variables & MethodologyVARIABLES:Dependent: In our research the dependent variables is categorical in nature i.e. either consumerwill buy the green recycle product or they wouldn‟t buy. We take dependent variable as purchasebehavior and ask response on 5 point Likert scale, the responses on this are taken as „0‟ for 1 and2 and „1‟ for 4 and 5, the response „3‟ we did not consider in our study.So we classify it as:0 as consumers will not buy green recyclable products.1 as consumer will not buy green recyclable products.Independent: To find the independent variables we conducted interviews, focus group study.And we found the following independent variables. The independent variables are interval ofratio type.S. No. Independent Variable Source Relationship with dependent variable1 Price of product Direct2 Availability of product Inverse3 Awareness level among consumer Interview Direct4 Peer - effect (me too) Inverse5 Rules and regulations Direct6 Promotion Focus group study Direct7 Safety Direct8 Variety Direct9 Quality (Attractiveness) InverseSAMPLE AND DATA:Target population: Our major part of respondents are students from IBS Hyderabad as thestudents over here are from diverse background so it‟s good for our study and a minor part ofrespondents are other people who are in contact with us from various metro cities.Sample size: We got total of 183 responses out of which some responses are incomplete whichwe cannot use in our study so after eliminating those responses finally we left with 152responses. 6
  7. 7. We are getting the data through the primary data source for which we have prepared aquestionnaire that included a combination of open ended response question, fixed alternativequestion and Likert scale of 1-5 rating, which we have sent to our target population. Thedesigned questionnaire is given as below:QUESTIONNAIREConsumer preference towards purchasing of green recyclable products:Rate the following questions on the basis of following 5 point likert scale.1- Strongly Disagree; 2- Disagree; 3- Neutral; 4-Agree; 5- Strongly Agree 1. How significant do you think is to spread the awareness of the green recyclable products? 1 2 3 4 5 2. How significantly do the advertisements of these products help you to purchase these products? 1 2 3 4 5 3. Does the usage of green recyclable products help in the betterment of the environment in the long run? 1 2 3 4 5 4. Do you think that the green recyclable products are reliable? 1 2 3 4 5 7
  8. 8. 5. Does investing in paper bags a source of green recyclable product give a sense of contribution towards environment? 1 2 3 4 56. Durability is an issue while purchasing Paper Bags? 1 2 3 4 57. Paper Bags are easily available in the market for purchase? 1 2 3 4 58. Do you feel like purchasing a paper bags because your colleague/relatives/friends use it? 1 2 3 4 59. Do you think that the premium charged for paper bags are justified? 1 2 3 4 510. Safety is a concern when purchasing green recyclable products? 1 2 3 4 511. Do you think that paper bags are safe to use? 1 2 3 4 512. Promotion of bio-degradable products will help to increase awareness paper bags? 1 2 3 4 513. If the utility derived from Paper Bags is satisfactory will you go for repurchase? 1 2 3 4 5 8
  9. 9. 14. Does green recyclable segment market offer a variety of products? 1 2 3 4 5 15. Is Law and Regulations an effective way of forcing people to buy such green recyclable products? 1 2 3 4 5 16. Do you prefer to use or purchase paper bags instead of plastic bags? 1 2 3 4 5 17. Personal DetailsName: _____________________________________Age: ________Gender: M FMarital Status: Single Married OtherWhat is your educational level? Inter Graduate Post Graduate OthersWhat is your current occupation? * Employed Self-employed Students If others please specify..............................______________________________________________________________________________ 9
  10. 10. Working and Analysis:Assumptions1. First we filter the data as per our need or suitability for model and coded it into excel for dependent variables.2. Checked the independent variables whether normally distributed or not. (SAS describe distribution analysis) Tests for Normality - Shapiro-Wilk Test Variable W - Statistic p Value (Pr < W) Awareness 0.899638 <0.73451 Advertisements 0.880908 <0.68638 Availability 0.900095 <0.85730 Peer effect 0.908344 <0.82326 Price 0.899634 <0.80636 Safety 0.846804 <0.66401 Variety 0.899638 <0.76365 Law and Regulations 0.902982 <0.74553 Attractiveness 0.901717 <0.80042Since the p – value of Shapiro – Wilk test for all variables are more than (0.05) so we accept thenull hypothesis that the Independent variables are normally distributed. Therefore the I.Vs isnormally distributed.3. Checked the multicollinearity of independent variables with the help of VIF option of linear regression. Parameter Estimates Parameter Standard Variance Variable DF Estimate Error t Value Pr > |t| Inflation Intercept 1 -0.89299 0.12175 -7.33 <.0001 0 awareness 1 0.11189 0.02311 4.84 <.0001 1.59476 advertisements 1 0.08353 0.02701 3.09 0.0024 1.47141 available 1 -0.00705 0.02814 -0.25 0.8026 1.55550 friends 1 -0.02301 0.02726 -0.84 0.4002 1.38238 Price 1 0.09199 0.02944 3.12 0.0022 1.85939 Safety 1 0.04812 0.02304 2.09 0.0385 1.58013 variety 1 0.06105 0.02886 2.12 0.0362 1.75245 Law and Regulations 1 0.09122 0.02108 4.33 <.0001 1.19890 10
  11. 11. Parameter Estimates Parameter Standard Variance Variable DF Estimate Error t Value Pr > |t| Inflation attractiveness 1 -0.01168 0.02327 -0.50 0.6164 1.37534The Variance Inflation for all the variables is less than 5 therefore there is no multicollinearityexist between the independent variables. The data is free from multicollinearity.4. Test of Homogeneity of Within Covariance Matrices Chi-Square DF Pr > Chi Sq 100.959278 45 <.0001Since the Chi-Square value is very high than p – value so we accept the null hypothesis that thecovariance among variables of different group are same.4. Discriminant Analysis. a. Class level information: It shows us the proportion and weightage of sample belongs to different group i.e. out of 150 sample size 40.6% belongs to consumer not prefer green product while 59.33% belongs to consumer who prefer green products. Class Level Information Variable Prior Purchase Name Frequency Weight Proportion Probability 00 61 61.0000 0.406667 0.500000 11 89 89.0000 0.593333 0.500000 b. Univariate test statistics: Univariate Test Statistics F Statistics, Num DF=1, Den DF=148 Total Pooled Between Standard Standard Standard R-Square Variable Deviation Deviation Deviation R-Square / (1-RSq) F Value Pr > F awareness 1.3646 1.0614 1.2152 0.3992 0.6643 98.32 <.0001 advertisements 1.1216 0.9401 0.8691 0.3022 0.4331 64.10 <.0001 available 1.1070 1.0168 0.6281 0.1621 0.1934 28.62 <.0001 friends 1.0770 1.0740 0.1683 0.0123 0.0124 1.84 0.1769 Price 1.1566 0.9581 0.9200 0.3185 0.4673 69.16 <.0001 11
  12. 12. Univariate Test Statistics F Statistics, Num DF=1, Den DF=148 Total Pooled Between Standard Standard Standard R-Square Variable Deviation Deviation Deviation R-Square / (1-RSq) F Value Pr > F Safety 1.3627 1.1684 0.9976 0.2697 0.3694 54.67 <.0001 variety 1.1455 1.0162 0.7543 0.2183 0.2792 41.33 <.0001 Law and Regulations 1.2971 1.1883 0.7456 0.1663 0.1995 29.53 <.0001 attractiveness 1.2589 1.2571 0.1731 0.0095 0.0096 1.42 0.2349The above table shows that except friends and attractiveness all other variables are having p –value less than (.05) so for these variable null hypothesis is rejected and it can be said that thesevariables has significant impact on dependent variable i.e. consumer purchase preferencetowards green products. c. Canonical discriminant analysis: Adju Squa Eigenvalues of Test of H0: The canonical correlations in t sted Appr red Inv(E)*H he current row and all that follow are zerCano Cano oxima Cano = CanRsq/(1-CanRsq) onical nical te nicalCorr Corr Stand Corr Eige Diffe Prop Cum Likelihoo Approximatelatio elatio ard elatio nval renc ortio ulati d e Num Den Pr > n n Error n ue e n ve Ratio F Value DF DF F0.800 0.789 0.0294 0.640 1.781 1.000 1.000 0.3595008 27.71 9 140 <.000 312 218 51 499 6 0 0 1 1Because there are two groups in the dependents variable so only one discriminant function isestimated. The Eigen value of this function is 1.7816 which is much higher than 1 show thediscriminant analysis is good and it account for 100% of the explained variance.The canonical correlation of this function is 0.800312 and the square of this correlation is0.640499 indicates that more than 64% of the variance in the dependent variable purchasepreference is explained or accounted by this model.Also it may be noted that the Wilk‟s Lambda i.e. likelihood ratio is 0.3595 which transforms to achi-square of 27.71 with 9 degree of freedom, this is significant beyond the (0.05) level so wecan say that the model is a good one. 12
  13. 13. d. Standardized canonical coefficients: Total-Sample Standardized Canonical Coefficients Variable Can1 awareness 0.6434619752 advertisements 0.3948165697 available -.0328726322 friends -.1044201855 Price 0.4483738615 Safety 0.2763390554 variety 0.2946827865 Law and Regulations 0.4985865572 attractiveness -.0619717862This table helps us to differentiate the consumer to different group i.e. within dependent variable.The magnitude can1 values of the respective variable indicate the strength of that variable withwhich it influences the dependent variable. Therefore we can classify respondents who rate highon awareness, advertisements, price, safety, variety and L&R as group „1‟ who prefer to buygreen recyclable products and the other respondents who rate high on availability, friends andattractiveness belongs to group „0‟ which imply these respondents prefer not to buy greenproducts. e. Class means on canonical variables (Group Centroid) Class Means on Canonical Variables Purchase Can1 0 -1.601491616 1 1.097651557Here it shows the centroid of the two groups giving the value of the discriminant functionevaluated at the group means. For group „0‟ the centroid is negative i.e. -1.60 and group „1‟centroid is positive 1.097 their magnitude differs as the number of respondents in the group aredifferent. 13
  14. 14. f. Resubstitution summary: Number of Observations and Percent Classified into Purchase From Purchase 0 1 Total 0 59 2 61 96.72 3.28 100.00 1 9 80 89 10.11 89.89 100.00 Total 68 82 150 45.33 54.67 100.00 Priors 0.5 0.5The table gives us the hit ratio according to Resubstitution which develops the model consideringall the data which is to be analyzed. According to this method the total hit ratio (indentify theresponses correctly classified and misclassified) is 92.66% out of which 96.72% and 89.88%responses are correctly classified in group „0‟ and „1‟ respectively. g. Cross validation summary: Number of Observations and Percent Classified into Purchase From Purchase 0 1 Total 0 57 4 61 93.44 6.56 100.00 1 12 77 89 13.48 86.52 100.00 Total 69 81 150 46.00 54.00 100.00 Priors 0.5 0.5It develops model fixing one response which is to be analyzed and taking into consideration restof the responses. In this model total hit ratio is 89.33%, which is lower than Resubstitutionmethod and is better method to classify the response as correct or misclassified. 14
  15. 15. Results:Since the model fulfill all assumption of discriminant analysis and at the same time found goodmodel for the study, we can drawn following inferences: Except friends and attractiveness all other variables have significant influence on dependent variable. 64% of the variance in the dependent variable purchase preference is explained or accounted by this model. Group „1‟ favorable purchase behavior towards green products consists of respondents who rated high on awareness, advertisements, price, safety, variety and L&R Group „0‟ unfavorable purchase behavior towards green products consists of respondents who rated high on availability, friends and attractiveness Out of total responses 89.33% of responses are correctly classified.Value:The project generated following values: First of all this project gives us the practical exposure to carry out a research and it‟s different aspects like questionnaire design, methodology and tool, analysis and interpretation of result. The project can be used as a pilot study for the same purpose and can be exercise at greater level outside the campus or in the company. The project tells us about the factors which influence consumer preference towards green recyclable products 15
  16. 16. Limitations:There are following limitation of the project: The respondents are similar in characteristics in terms of age, education, experience and little exposure towards purchasing so the response might not be diverse in nature. Since major respondents are students therefore we could not include other important variables in our study e.g. income, age, education level etc. Due to above reasons we cannot generalize the result it may vary significantly if the respondents are really from diverse in nature. 16
  17. 17. REFERENCES: 1. William G. Zigmund, 7th Edition, Business Research Methods. 2. Marketing Research 6th Edition, Naresh K. Malhotra and Satyabhushan Dash 3. Article “New or recycled products: how much are consumers willing to pay?” Leila hamzaoui Essoussi and fonathan D. Linton Telfer School of Management, Canada. 4. Article “Targeting consumers who are willing to pay more for environmentally friendly products” Michel Laroche, Jasmin Bergeron and Guido Barbaro-Forleo Professor of marketing, John Molson School of business, Canada. 5. The Determinants of Consumers‟ Purchase Decisions for Recycled Products and Application Of Acquisition – Transaction Utility Theory, Lien- Ti Bei, Eithel M_Simpson.mht. 6. Tan Booi Chen, Lau Teck Chai, Attitude Towards The Environment And Green Products: Consumers‟ Perspective, 2010 (http://cscanada.net) 7. William Young, Kumju Hwang, Seonaidh McDonald, Caroline J. Oates, Sustainable Consumption: Green Consumer Behavior When Purchasing Products, 2009 (http://onlinelibrary.wiley.com) 8. W.M.C.B. Wanninayake, Pradeep Randiwela, Consumer Attractiveness Towards Green Products Of FMCG Sector: An Empirical Study, 2008 (http://www.docstoc.com) 9. Alternatives To Disposable Shopping Bags And Food Services, Prepared For Seattle Public Utilities Bags And Food Service Vol-I (www.seattlebagtax.org) 10. Public Attitudes Towards Recycling And Waste Management, The Strategy Unit, Cabinet Office 11. http://www.indiana.edu/~statmath/stat/all/normality/normality.pdf 12. http://www.uk.sagepub.com/burns/website%20material/Chapter%2025%20%20Discrimi nant%20Analysis.pdf 13. Article “The link between green purchasing decisions and measures of environmental consciousness Bodo B. Schlegelmilch” The American Graduate School of International Management, Glendale, Arizona, USA, Greg M. Bohlen and Adamantios Diamantopoulos 17

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