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The Extended Consequences of Greenwashing: Perceived Consumer Skepticism and Switching Intention

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This slide is based on my research paper presented at International Symposium on Business and Management, Kuala Lumpur-Malaysia (2015)

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The Extended Consequences of Greenwashing: Perceived Consumer Skepticism and Switching Intention

  1. 1. The Extended Consequences of Greenwashing: Perceived Consumer Skepticism and Switching Intention International Symposium on Business and Management 1-3 April 2015, Kuala Lumpur, Malaysia. Universitas Gadjah Mada Master of Science and Doctorate Program Hendy Mustiko Aji
  2. 2. Quick Overview Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program  Green Marketing  Greenwashing • What it is. • Why it happens. • Implications to customers and marketers?  Perceived consumer skepticism and switching intention as the extended consequences  Result  Implication
  3. 3. Research Gap and Problem Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program  Empirically The study of greenwashing is still limited in Indonesia  Theoretically  Not many researchers considered consumer skepticism as the consequences of greenwashing  Most existing researches stopped at green trust  Switching Intention as the final consequences of greenwashing
  4. 4. Why this topic is important and interesting? Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program  Consumers are becoming more and more aware of environmental issues (Chen, 2008)  Yet, over 1000 self-declared green products reviewed, all but one exhibited some form of greenwash  It has driven consumer to negatively intent to purchase the products or services (McGrath, 1992; Newell et al, 1998)  It could increase consumer confusion, skepticism, and risk associated with green products.  Therefore, those problems will likely encourage customers to switch to non-green products.
  5. 5. Perceived Consumer Skepticism Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program  Skepticism is dealing with disbelief of stated claims.  In compare with any other forms of communication, consumers are more skeptical toward advertising (Obermiller et al, 2005)  They don’t have the expertise or ability to verify green products’ environmental and consumer values, creating misperceptions and skepticism (Ottman et al, 2006).  Indeed, ad skepticism often refers to the consumer's lack of trust in advertising (Boush et al., 1993, 1994)  Consumers tend to distrust green ads (Wonnerberger, 2014)
  6. 6. Switching Intention Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program  If consumer perceives they are confused, they may abandon their purchase decision (Mitchell and Papavassiliou, 1999; Chen and Chang, 2012)  Therefore, will later resulted on disloyalty (Walsh et al, 2007) or switching to another product.  Skepticism influences negatively to purchase intention (Albayrak et al, 2011)  Items questioned by Albayrak et al, 2011):  “over the next one month, I plan to switch to a green version of a product”  “over the next one month, I will consider switching to other brands for ecological reasons”
  7. 7. Research Model Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program Greenwashing Green consumer confusion Perceived consumer skepticism Green Perceived Risk Green Trust Switching Intention H1 H2 H3 H4 H5 H6 H7 H8 H9 H10
  8. 8. Research Method Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program  Conducted in Yogyakarta, Indonesia  Purposive Sampling Technique  Back translation questionnaire  Structural Equation Modeling  Measurement Greenwashing : Laufer (2003) Green Consumer Confusion : Wash et al (2007), Wash and Mitchel (2010) Green Perceived Risk : Mohr (1998) Perceived Consumer Skepticism : Matthers and Wonneberger (2014) Green Trust : Chen and Chang (2012) Switching Intention : Burhnam et al (2003)
  9. 9. Result Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program Hypotheses Proposed effect Estimate Results H1 PCS <--- Greenwashing + 0,757 ** H1 is supported H2 GCC <--- Greenwashing + 0,503 ** H2 is supported H3 GPR <--- Greenwashing + 0,564 ** H3 is supported H4 GTrust <--- GCC - -0,212 * H4 is supported H5 GTrust <--- PCS - -0,613 ** H5 is supported H6 GTrust <--- GPR - -0,065 H6 is not supported H7 SwitchInt <--- GCC + 0,009 H7 is not supported H8 SwitchInt <--- PCS + 0,127 H8 is not supported H9 SwitchInt <--- GPR + 0,123 H9 is not supported H10 SwitchInt <--- GTrust - -0,432 * H10 is supported Note: **p < 0.01, *p < 0.05
  10. 10. Implication Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program  First, marketers must stop all deceptive advertisements and claims with respect to environmental protection.  Second, marketers must also enhance their green trust to hold customer to switch to other products (non-green products).  The market for green products is still potential as long as they avoid advertising deceptive and vague ads.
  11. 11. Universitas Gadjah Mada Faculty of Economics and Business - Master of Science and Doctorate Program Thank You

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