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. INDEX
S. 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. ABSTRACT
The purpose of the study was to examine the variables that affect the consumer preference
towards green recyclable products, and then differentiate the consumer in two different group of
buyer 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 of
customers towards green recyclable products through these variables but 3 variables were of not
our use so we drop them. We conducted a questionnaire and focus group study to identify
variables. The Questionnaire was designed based on Likert scale.
The data collected and after coding used in SAS to analyze since our dependent variable is in
categorical in nature we used discriminant analysis for our study, taking consumer purchase
behavior as our dependent variable.
INTRODUCTION
Green recyclable products are those products which are bio-degradable and reusable the other
characteristics of these products are they are non-toxic, non corrosive, and non allergenic due
these characteristics these products have minimum or no harmful effect on the environment and
therefore these are also known as hygienic products. These are also known as eco-friendly
products 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, and
recycled paper notebooks, cola in recycled cans, green building products i.e. AAC (Aerated
Aerocon Cement Blocks, Flex-o-board) and other products which can be created through the
recycling process.
3

4. LITERATURE REVIEW
Consumers can degrade or uplift the environment, through their buying behavior, or more
precisely: how customers evaluate recycled (green products) individually and with respect to non
green products? When we buy products made from recycled materials, it is a crucial step in
supporting recycling programs and resource conservation. Resources are saved only when
recycled products are purchased. Olyne and Bryce (1990) highlight the fact that research at
individual level regarding factors that contribute towards the change in perception of consumer
for recycled products is important. The growing social and regulatory concerns for the
environment lead an increasing number of companies to consider green issues as a major source
of strategic change. In particular, this trend has major and complex implications on the
technological strategy of a company and on its product innovations. Even though it is increased
eco-awareness of Sri Lankan customers during the past few decades, there are some barriers to
the diffusions of more ecologically oriented consumption and production styles. Therefore,
companies are increasingly recognizing the importance of green marketing concepts. The
purpose of study was to investigate the attributes which influence perceptions of customers
towards 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 and
behavior worldwide are the main cause of environmental deterioration. As the environment
continues to worsen, it has become a persistent public concern in the developed countries and has
recently awakens developing countries to the green movement. This paper is essentially
exploratory in nature and has two objectives. The „attitude–behaviour gap‟ or „values–action
gap‟ is where 30% of consumers report that they are very concerned about environmental issues
but they are struggling to translate this into purchases. For example, the market share for ethical
foods remains at 5 per cent of sales. This paper investigates the purchasing process for green
consumers in relation to consumer technology products in the UK. Data were collected from 81
self-declared green consumers through in depth interviews on recent purchases of technology
products. A green consumer purchasing model and success criteria for closing the gap between
green consumers‟ values and their behavior are developed. The paper concludes that incentives
and single issue labels (like the current energy rating label) would help consumers concentrate
4

5. their limited efforts. More fundamentally, „being green‟ needs time and space in people‟s lives
that is not available in increasingly busy lifestyles.
Consumers psychological benefit from the purchase was added as part of the purchase
utility in this research study . The theory assumes that consumers always try to maximize
their purchase utility which is the benefit received from the purchases good and the price
when they make purchase decisions. It has been found that manufacturers and marketers
have responded to this environmental trend . The introduction of new and green product
has grown by 100% per year since 1985. However the environmental trend cannot ensure
the success of the green market because consumers purchase behaviors and attitude have
not changed as quickly as their environmental awareness. Consumers receive both quality
benefits and psychological benefits by paying money and other costs such as time and
efforts for each purchase transaction. The quality benefit is the received quality from a
product itself or life improvement through using the product. On the other hand the
psychological benefit is the positive feeling about the purchase for example self image
built 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 the
recycled product they should perceive more purchase utility from the purchase of
recycled products than the purchase of the ordinary product. The hedonic price technique
has been applied extensively to housing markets and labour markets. Studies showed that
they care that how good is produced and look to buy environmentally friendly products
when possible. It is possible that some consumers might be willing to pay more for the
recycled good to improve environment quality . Overall, environmental quality would
improve slightly, but the improvements would not necessarily be perceived by the
individuals making the purchase
In this paper they have tried to study approaches regarding several aspects of the decision
making processes of the final consumer, analyzing, how significant their decision of buying was
that 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 as
recyclable paper bags, jute bags, and bags made from synthetic like polypropylene, polyethylene
and nylon.
5

6. Data, Variables & Methodology
VARIABLES:
Dependent: In our research the dependent variables is categorical in nature i.e. either consumer
will buy the green recycle product or they wouldn‟t buy. We take dependent variable as purchase
behavior and ask response on 5 point Likert scale, the responses on this are taken as „0‟ for 1 and
2 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 of
ratio type.
S. No. Independent Variable Source Relationship with
dependent variable
1 Price of product Direct
2 Availability of product Inverse
3 Awareness level among consumer Interview Direct
4 Peer - effect (me too) Inverse
5 Rules and regulations Direct
6 Promotion Focus group study Direct
7 Safety Direct
8 Variety Direct
9 Quality (Attractiveness) Inverse
SAMPLE AND DATA:
Target population: Our major part of respondents are students from IBS Hyderabad as the
students over here are from diverse background so it‟s good for our study and a minor part of
respondents 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 which
we cannot use in our study so after eliminating those responses finally we left with 152
responses.
6

7. We are getting the data through the primary data source for which we have prepared a
questionnaire that included a combination of open ended response question, fixed alternative
question and Likert scale of 1-5 rating, which we have sent to our target population. The
designed questionnaire is given as below:
QUESTIONNAIRE
Consumer 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. 5. Does investing in paper bags a source of green recyclable product give a sense of
contribution towards environment?
1 2 3 4 5
6. Durability is an issue while purchasing Paper Bags?
1 2 3 4 5
7. Paper Bags are easily available in the market for purchase?
1 2 3 4 5
8. Do you feel like purchasing a paper bags because your colleague/relatives/friends
use it?
1 2 3 4 5
9. Do you think that the premium charged for paper bags are justified?
1 2 3 4 5
10. Safety is a concern when purchasing green recyclable products?
1 2 3 4 5
11. Do you think that paper bags are safe to use?
1 2 3 4 5
12. Promotion of bio-degradable products will help to increase awareness paper bags?
1 2 3 4 5
13. If the utility derived from Paper Bags is satisfactory will you go for repurchase?
1 2 3 4 5
8

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 Details
Name: _____________________________________
Age: ________
Gender: M F
Marital Status: Single
Married
Other
What is your educational level?
Inter
Graduate
Post Graduate
Others
What is your current occupation? *
Employed
Self-employed
Students
If others please specify..............................
______________________________________________________________________________
9

10. Working and Analysis:
Assumptions
1. 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 <0.80042
Since the p – value of Shapiro – Wilk test for all variables are more than (0.05) so we accept the
null hypothesis that the Independent variables are normally distributed. Therefore the I.Vs is
normally 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. Parameter Estimates
Parameter Standard Variance
Variable DF Estimate Error t Value Pr > |t| Inflation
attractiveness 1 -0.01168 0.02327 -0.50 0.6164 1.37534
The Variance Inflation for all the variables is less than 5 therefore there is no multicollinearity
exist 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 <.0001
Since the Chi-Square value is very high than p – value so we accept the null hypothesis that the
covariance 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. 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 0.2349
The 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 these
variables has significant impact on dependent variable i.e. consumer purchase preference
towards 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 zer
Cano Cano oxima Cano = CanRsq/(1-CanRsq) o
nical nical te nical
Corr Corr Stand Corr Eige Diffe Prop Cum Likelihoo Approximat
elatio 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 F
0.800 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 1
Because there are two groups in the dependents variable so only one discriminant function is
estimated. The Eigen value of this function is 1.7816 which is much higher than 1 show the
discriminant 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 is
0.640499 indicates that more than 64% of the variance in the dependent variable purchase
preference 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 a
chi-square of 27.71 with 9 degree of freedom, this is significant beyond the (0.05) level so we
can say that the model is a good one.
12

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 -.0619717862
This 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 with
which it influences the dependent variable. Therefore we can classify respondents who rate high
on awareness, advertisements, price, safety, variety and L&R as group „1‟ who prefer to buy
green recyclable products and the other respondents who rate high on availability, friends and
attractiveness belongs to group „0‟ which imply these respondents prefer not to buy green
products.
e. Class means on canonical variables (Group Centroid)
Class Means on Canonical
Variables
Purchase Can1
0 -1.601491616
1 1.097651557
Here it shows the centroid of the two groups giving the value of the discriminant function
evaluated 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 are
different.
13

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 0.5
The table gives us the hit ratio according to Resubstitution which develops the model considering
all the data which is to be analyzed. According to this method the total hit ratio (indentify the
responses 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 0.5
It develops model fixing one response which is to be analyzed and taking into consideration rest
of the responses. In this model total hit ratio is 89.33%, which is lower than Resubstitution
method and is better method to classify the response as correct or misclassified.
14

15. Results:
Since the model fulfill all assumption of discriminant analysis and at the same time found good
model 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. 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. 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