IDENTIFICATION OF GREEN CONSUMER PROFILE AND BEHAVIOR IN ORDER TO INCREASE GREEN BUSINEES MARKET SHARE IN INDONESIA
CISAK 2013 – 224Identification of Green Consumer Profile andBehavior in Order to Increase Green BusinessMarket Share in IndonesiaKhaira Al HafiIndustrial Engineering Department, Universitas Indonesia,Kampus UI Depok, Jawa Barat, Indonesia, firstname.lastname@example.orgAbstract. Indonesia’s long term development plan (2005-2015) claimed goal of “Green Indonesia”. This vision has also bees stated inthe 2010-2014 Medium-Term Development Plant that contains spesific rules and objectives related to sustainable development andmanagement of natural resources and environment. However, in order to develop industrial and friendly-environment business whichis not only depend on direct supporting from government, industry and business should have an understanding of green consumercomprehensively. This study aims to identify the segment of purchaser of green consumer and understand green consumer’s behaviorin Indonesia. By using self-administered questionaire and non probability sampling, researchers found that : decision of purchasinggreen products is not caused by only one product atribute, each category of product has spesific green features that influencesconsumer purchasing decision, and most consumers does not know in ditail how the green company actually implemented greendecision despite they considers that is important for the company to adopt green manufacturing system and campaign.Keywords: attribute, consumer, green, marketing, productA. INTRODUCTIONAffecting both in field of services and manufacturing, inorder do meet the needs of consumers with variety of products,Industrial and business expansion has initiated the opponentresult : consumer unrest around the world. Thats fact occureddue to the impact of product proliferation on the environmentcan threaten the existence of the population. According toGrewal et al , society has become anxious and scared whenthey saw the growing of waste produced, especially in developedcountries. The waste can be produced both from factory’sprocess and waste from consumer product package. Both ofthem are generally difficult to recycle. Meanwhile, in developingcountries, the main concerns are the amount of waste due to thelack of technology on processing product factories and the lackoof method for disposal purposes.Alibeli  studied that discussion of environmental issues indeveloped countries has been initiated since the 1990s whichstates that the habits and purchasing behavior of todaysconsumers are directed to the issue of environmentalpreservation. According to Shrum et al , in the United States,several studies polls consistently show that a majority ofAmericans see themselves as people who are environmentalists.Other study conducted by a polling organization, pointed to Frajet al  , Roper Organization showed that the segments most"green" among consumers has doubled in the period 1990 to1993. In another poll in 1990 by an advertising agency, WalterThompson points to the fact that 82% of respondents noted thatthey would pay at least 5% more for environmental-friendlyproducts, up about 49% from the previous year. Fraj also show arecent research conducted by Advertising Age magazine thatheld by Yankelovich Clancy Shulman. They found that 70% ofthe respondents mentioned the decision of purchasing a productor brand has been influenced by regular eco-friendly messages inadvertising apart from the label and packaging products.Meanwhile, Indonesia, as a developing country that still hasbeen spurring economic growth, is currently using a largeamount of natural resources that are still polluting theenvironment and lead waste from both industrial and domesticactivities. This is evidenced by the position of Indonesia is stillunder the criteria of green economy with a Human DevelopmentIndex (HDI) 6.17 and Ecological Footprint 1.2. Therefore, itshould take into account applying the concept of sustainableconsumption and production (Sustainable Consumption andProduction / SCP) and the green economy in the context of apro-poor, pro-jobs, pro-growth and pro-environment.Actually Indonesia’s commitment to support the implementationof a green economy is shown with a variety of policies.
CISAK 2013 – 224According to Environment Minister, Balthasar Kambuayawhen opening the 10th Conference of Asia Pacific Roundtablefor Sustainable Consumption and Production (APRSCP) inYogyakarta from 9-11 November 2011, Indonesia hasimplemented a green industrial policy such as program 3R(Reduce, Reuse, Recycle) , supervision of environmental-friendly industrial raw materials, cleaner production,campaigning balance exploration of natural forest,keeping thewater from pollution, and energy efficiency.However, in order to develop industrial and business-friendlyenvironment independently, businessman must have anunderstanding of demand or market orientation. Kim  studiedthat for more than four decades, market-oriented corporatestrategy is viewed by academics and practitioners as a key pillarto achieve superior performance in both manufacturing and inservice companies. Do Paco et al  also studied that themarketing concept states that in order to achieve organizationalgoals such as increasing market share and profitability, the mostinfluencing factor are ability of the company in determining theneeds and wants of target markets and satisfy them with moreeffective and efficient process than its competitors Therefore, toobtain a comprehensive understanding , required research andstudies of market segmentation and demographic profile inIndonesia related to green and non green consumers.B. ANALYSIS1. MethodologyThis study used a non-probability sampling as prochedure forgathering primary data. Cooper and Schlinder  defines a non-probability sampling as the sample size determination procedurein which each member of a research target population does nothave the same opportunities to be selected as the sample. Thisprocedure is appropriate because the target respondents surveyedmust meet certain criteria that are relevant to the researchundertaken.The population was urban communities scattered in severalmajor cities in Indonesia such as Padang, Batam, Jakarta,Bandung, Surabaya, Yogyakarta and Makassar. Deploymentquestionnaire is done online through social media : yahoo groupmailing list, facebook, google + and online media in twodirections: skype. The number of samples taken are 610samples. The number of samples being measured has exceededthe minimum number of respondents in studies using nonprobability analysis according to Hair et al 2. Types and Sources of DataThe data used in this study were obtained directly fromrespondents which is relevant to the research, therefore the typeof data to be processed is the primary data. Primary data waschoosed because of its proximity to the real facts and the heightcontrol that can be taken to avoid error at the time of datagathering3. Data Gathering proceduresThe survey was conducted by using the instrument of selfadministered questionnaire containing: a brief description of theresearch being carried out, questionnaire filling procedure, risksand benefits of participation, and willingness statement toparticipate in the study.After a brief introduction of research, on the issue ofenvironmental preservation and knowledge of green products,respondents were asked to give his opinion on the overallvariables in the study. Respondents were asked to give astatement regarding the intention to purchase green products forgreen identify purchasers. Respondents were asked to respond toall questionnaire items without leaving the items that can not beresponded.C. RESULTFig. 1. Percentage of Green Consumer and non Green Consumer inIndonesia56%44%GreenConsumerNon GreenConsumer
CISAK 2013 – 2241. Non Green Consumer DataFig. 2. The reason why customer does not have enough willingness topurchase green product2. Green Consumer Dataa. Moderate Green Consumer DataFig. 3. The percentage of Moderate Green Consumer’s GenderFig. 4. The percentage of Moderate Green Consumer’s AgeFig. 5. The percentage of Moderate Green Consumer’s EducationFig. 6. The percentage of Moderate Green Consumer’s IncomeFig. 7. The reasons purchasing green productsb. High Green Consumer DataFig. 8. The percentage of High Green Consumer’s Gender51%26%14%9%I got a little bit of information aboutvarious kind of green product offeredVariant of green product is difficult tobe foundGreen product has not been availablearound mePrice of green product is tooexpensive58% 42%GenderMan Woman51% 24% 25%Age18-35 years 36-45 years46-65 years8% 39% 7% 46%EducationMagister BachelorDiploma High School17% 37% 35% 11%Income0-Rp 1 millionRp 1 million - Rp 5 millionRp 5 million - Rp 15 million> Rp 15 million40% 17% 15%ReasonsI do care upon environment issueI just try itI care upon health of mine and my family53% 47%GenderMan Woman
CISAK 2013 – 224Fig. 9. The percentage of High Green Consumer’s AgeFig. 10. The percentage of High Green Consumer’s EducationFig. 11. The percentage of High Green Consumer’s IncomeFig. 12. The reasons purchasing green productsFig. 13. The situatuions that affect purchasing decison for green productsFig. 14. Constraint on purchasing green product35% 23% 42%Age18-35 years 36-45 years 46 - 65 years9% 26% 8% 57%EducationMagister Bachelor Diploma High School14% 31% 39% 16%Income0-Rp 1 millionRp 1 million - Rp 5 millionRp 5 million -Rp 15 million> Rp 15 million45% 9% 7%ReasonsI do careI just try itI care upon health of mine and my family39%15%10%When I am at shop orsupermarket and I see greenproductWhen I get informationabout their availability frommass mediaWhen I get somerecommendation to buy itfrom friends or family24%28%24%26%26%17%25%26%21%37%21%27%28%29%26%18%22%25%29%28%28%24%22%29%22%21%26%28%26%31%18%17%16%19%13%18%15%18%14%19%PaperFruit/vegetableElectronicCar/motor cycleHealth care & cosmeticSnack & packagesMeat/fishOffice toolsClothesHome FurnituresPrice of green product is too expensiveGreen product is difficult to be foundProduct review is the same with conventional productI do not need these green product
CISAK 2013 – 224Fig. 15. The level of important : companies must produce green productand use green manufacturing as wellFig. 16. Attribute of Green Company associated by green consumerTable 1. Knowledge about green inisiative conducted by Indonesia CompaniesAttributesUnilever(%)Toyota(%)SinarMas(%)Marthatilaar(%)Intel(%)Biofarma(%)Nestle(%)I do not haveany idea thatthis companyis a greencompany79.15 74.11 89.34 75.89 77.7679.1074.87I knew thatthis companyis a greencompany,still I do notknow inditail theirgreeninisiative 10.06 7.86 6.67 7.56 8.566.237.44Thiscompanyis sellinggreenproduct 3.248.89 1.32 8.79 6.847.559.97Thiscompanyadoptedenvironment-friendlyproductionsystem andmanufacturing process 3.44 5.56 1.44 6.67 4.443.675.59Thiscompanyconductedany greencampaign 3.20 3.58 1.23 1.09 2.403.452.13D. DISCUSSION1. Green consumers is divided into High Green Consumer whopurchase green products based on his choice at three customparameter: most of the purchased products are green products,buying many green products, or they have purchased greenproducts periodically. Moderate Green consumer is theconsumer who have purchased green products but have notbought it periodically.2. High Green Consumers are more committed and proactive inpurchasing, green product. They also have a betterunderstanding of green product, and concern on theenvironmental and health problems as a major factor supportingthe purchase decision. Moderate Green Consumer make adecision the first time to buy green product, largely driven bycuriosity. High Green Consumer is also older age, moreeducated and higher income than moderate green consumers..3. Green products does not automatically guarantee a purchasedecision. While in the store / supermarket, 41% green productconsumers compare prices with conventional products based onvarious perspectives such as health benefit (70%) and quality(66%).4. Most high green consumer make purchasing decisions whenviewing the product information whereas the moderate consumergreen did it by the recommendation of family / friends.5. 93% of consumers recommend that a company mustimmediately transformed into a green company. However, onthe other hand the majority of respondents were not aware or can11%43%46%Not importantLess importantImportant47%56%83%the company showstransparancy about risk ofproduct usagethe company pay attentionupon environment issuethe company usesenvironmental-friendlyproduction system and…
CISAK 2013 – 224not recall green company policy initiatives that have madebefore (the source of the companys website)a. Nestle  has been committed in producing greenproducts: Naturnes (products with a composition of 100%organic) and the latest Nestle packaging uses 25% of ingestedplastic that can be recycled.b. Unilever  has adopted green manufacturing systemin order to reduce water usage into 63% on each ton ofproduction and 39% reduction in CO2 emissions per ton ofproduction.c.Intel  has undertaken various green campaignsincluding: the Climate Savers Computing Initiative and plug into recycling campaign. Intel also has built cooperation withenvironmental organizations like Green Greed and the ChicagoClimate Exchange.d.Toyota  has built a supply system that promotesenergy efficiency for the entire network of factories throughoutthe world.e. Marthatilaar  campaign for a product with theoriginal organic composition.f. Sinar Mas  has been campaigning for forestrehabilitation program that has been done in Riau and EastKalimantan.6. Prices, Availability in the market, and the lack of instructionson the green product is a major obstacle that inhibits greenproduct purchasing decisions.7. the most Green company attribute associated in the minds ofconsumers is companies that have adopted green productionsystems and the companies that are doing green campaign aspart of a companys CSR policy.D. REFERENCES Grewal, Dhruv and Levy, Michael, 2010.”Marketing”.McGraw HillInternational Edition New York, USA Alibeli, Madalla A.2009.”Environmental Concern : A Cross NationalAnalysis”, Journal of International and Cross-Cultural Studies, Volume 3,1-10 Shrum,L.J.Mcarty,.John A, Lowrey.Tina M (1995).”Buyer Charactericticsof the Green Consumer and Their Implication for Advertising Strategy”.Journal of Advertising, Vol.XXIV,Number 2, 71-82 Fraj,Elena and Martinez, Eva.2006.”Influence of personality on ecologicalconsumer behavior”. Journal of Consumer Behavior 5, 167-181 Kim, Yeonshin.2005. “Antecedents of Green Purchase Behavior : AnExamination of Collectivism, Environmental Concern, and PCE”,Advances in Coonsumer Research Volume 32, 592-599 Do Paco, Armina M. Finisterra, Raposo, Mario Lino Barata, and Filho,dan Walter Leal, 2009, “Identifying the green consumer: A segmentationstudy”, Journal of Targeting, Measurement and Analysis for Marketing,Vol. 17, 1, 17-25. Cooper, Donald R. dan Schindler, Pamela S. 2008, “Business ResearchMethods”, McGraw Hill International Edition, New York, USA. Hair et al., “Multivariate Analysis”, Pearson Global Edition, Saddle River,New Jersey, USA. (2013) The Nestle website. [Online]. Available: http://www.nestle.com/ (2013) The Unilever website. [Online]. Available :http://www.unilever.com/ (2013) The Intel website. [Online]. Available: http://www.intel.com/ (2013) The Toyota website. [Online]. Available: http://www.toyota.com/ (2013) The Marthatilaar website. [Online]. Available:http://www.marthatilaar.com/ (2013) The Sinar Mas website. [Online]. Available:http://www.sinarmas.com/