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A Report on Consumer Behavior towards Green products

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Dissertation Report

  1. 1. Attitude of Consumers towardsGreen Products and its translation into buying behavior By: Anupriya Verma 10PG(J)06 0
  2. 2. Flow of the presentation…• Introduction• Research Methodology• Results and Discussions• Recommendations• Conclusions• Q&A 1
  3. 3. Introduction about the study - Inspired from Consumer Behaviour How consumers behave towards a special category of products – “eco-friendly” or “green” products The translation of this feeling into buying behavior; whether positive, negative or neutral 2
  4. 4. Research Motivation -• Going “green” has become mandatory• Organizations are investing a lot• Are these initiatives being noted by consumers or not? 3
  5. 5. What are green products?• Do not harm the environment, whether in their production, use or disposal• Help conserve energy, minimize carbon footprint or the emission of greenhouse gases• Does not lead to substantial toxicity or pollution to the environment• Its manufacturing, purchase and use allows for economic development while still conserving, for future generations 4
  6. 6. Characteristics of Green products• Energy efficient and saving, durable, and have low maintenance requirements• Incorporate recycled content (post-consumer and/or post-industrial); or have been salvaged from existing or demolished products or buildings for reuse• Employ "Sustainable Harvesting" or "Sustainable Management" practices• Do not contain highly toxic compounds, and their production does not result in highly toxic by-products• Can be easily reused (either whole or through disassembly)• Can be readily recycled (preferably in a closed-loop recycling system)• Biodegradable• Made using natural and/or renewable resources• Do not contain ozone depleting substances• Obtained from local resources and manufacturers 5
  7. 7. Most popular category of greenproducts –• Consumer Durables: Refrigerators, Washing machines, Television, Mixer grinders etc.• Cosmetics & Apparels: Shampoos, Soaps, Make- up, Bags, Footwear, Belts, Clothes, etc.• Technology products: Laptops, PCs, Mobile phones, Music systems etc.• Stationery products: Books, Notebooks, Pencils, Pens, Ink, Erasers, etc.• House Decor: Lamps, Curtains, Paints, Furniture, Cups, Towels, etc.• Electronic Items: Fans, Lights, Fittings, etc.• Food products: Vegetables, Ice-creams,• Others: Bottles, Decorative items, Hand bags, Suitcases, etc. 6
  8. 8. Green products and Consumers• People are becoming aware of their roles and responsibilities towards protecting the environment• They are becoming knowledgeable about being associated with green companies• Words like “Consumer Activism” & “Greenwashing” are becoming popular amongst people 7
  9. 9. Green products and ConsumerBehavior• Since people are becoming more aware and conscious about what they use -• Different companies are working towards changing the trends in the lifestyle of consumers - decision making, and• playing an active role in changing their consciousness about the environment, thus, making them act more responsibly 8
  10. 10. Contd.• Consumed only by those consumers who feel responsible about the environment and feel that it is their duty to take care of it• May be well aware of eco-friendly products and the advantages of using them but they will never purchase them• Their behaviour can be modified through suitable means to support environmental growth 9
  11. 11. Factors which have a bearing on thebehaviour of consumers• The financial costs and benefits of making “greener” choices• Access to high-quality, reliable information about the environmental characteristics of products, which helps consumers express their demand for environmental quality in the marketplace• How much consumers know about environmental issues, the environmental impact of their consumption and lifestyle decisions, and the practical actions that they can take to support sustainability goals• The level of commitment to supporting green objectives• What impact behavioural biases have on the decisions and actions taken by consumers and households Hence, the problem statement can be defined as… 10
  12. 12. Problem StatementTo see if there is a difference between how consumers feel about green products and their purchase behaviour towards the same 11
  13. 13. Objectives• To see the awareness level of eco-friendly products amongst consumers• To see the impact (favourable or unfavourable feeling) of these on consumers• To see the translation of this feeling into buying behaviour• To identify the reason for the gap between the feeling and the actual buying behaviour, if any 12
  14. 14. Limitations of this study• It considers only tier-II and tier-III towns in its sample set• It covers respondents only above or equal to 21 years of age• It does not segment the respondents based on their occupation• It does not consider their educational qualification or their marital status• It does not take into account if the respondent was from a tier- I town in past and since how long has he been staying in the towns under consideration set• It does not account for any final solution to the problem identified because this study is concerned only with identifyng the problem. The solution may be studied in further research 13
  15. 15. Research MethodologyResearch design• This study is exploratory in nature i.e. it will tend to find out if their is a discrepancy between how people perceive green products and do they act accordingly while buying it 14
  16. 16. Contd.Data Collection and Research tools used• Collection of quantitative and qualtitative data along with secondary data• Primary data - questionnaire which contained both open-ended and close-ended questionsSampling Techniques• Covenience sampling and snowball sampling 15
  17. 17. Contd.Analytical tools• Analysis was done using SPSS 14.0 version and Microsoft Office Excel 2007 edition• Simple statistical analytical tools like cross- tabbing were used since the objective was to see how does affect of one factor alter another 16
  18. 18. Data AnalysisLIKING CROSS-TABS Liking vs. Category • Everybody knew about consumer durables being sold green • Consumers are most fond of energy saving products due to their unique positioning like CFL 62.5% bulbs, LEDs, etc. 78.6% 74.1% 72.6% • Next important segment widely 82.1% used and greatly liked by 100.0% consumers is the cosmetics & apparels segment which talks of clothes, footwear, make-up products, lip balms, powder etc. 37.5% 18.5% 19.4% made in eco-friendly way 16.7% 12.5% • The category which consumers 4.8% 7.4% 5.4% 8.1% rank third and fourth are food and 0.0% 0.0% others (bags, bottles, etc.) Technology Consumer Cosmetics and Food Energy Others • Technology products are found to Durables apparel be least popular among the green No Not sure Yes category which is liked 17
  19. 19. Contd. Liking vs. Willing to pay more • Majority of the people who like eco- friendly products are alright with their higher price and will buy the product for a premium. 54.5% • 75% of the respondents are not sure 75.0% whether they would ever pay any 83.8% premium for green products or not. This is because they must have failed to noticce any benefits of these over 18.2% non-green products or due to greenwashing • More than half of them were sure 8.1% 27.3% 21.9% that they will not create a dent in 8.1% 3.1% their pocket by paying higher price which can be procured at a much Yes No Maybe lower cost which might indicate that companies are not communicating No Not sure Yes their products well 18
  20. 20. Contd. Liking vs. Increase in Loyalty • Majority of the respondents who liked green products were either 33.3% not sure about their loyalty towards 52.9% the company or very sure. This is because they have tried different green products from different 85.7% 88.1% companies, hence, may take time 33.3% 100.0% to choose their most-preferred brand • Nearly 88% of the respondents 35.3% agreed that loyalty towards a brand increased if they liked green brands 33.3% • 85.7% of them had a strong loyalty 14.3% 4.8% towards the brand which is just a 11.8% 7.1% little less than those who merely 0.0% 0.0% agree Strongly Agree Agree Neither Agree nor Disagree Strongly Disagree Disagree No Not sure Yes 19
  21. 21. Contd. Liking vs. Pre-purchase thought • Majority of the people who like green brands agreed that they only sometimes 30.0% (78.9%) they put a thought before purchase as to whether the product is eco-frienly or not. This may be because it 78.9% is not necessary that they like it through usage. They may be liking it due to 100.0% 40.0% various other reasons like postioning, advertisements, utility, benefi ts etc. • 40% of them stated that they clearly did 30.0% 14.0% not like the idea of thinking about the 7.0% products they are buying. It can be due to 0.0% lack of their awareness as a responsible Yes No Sometimes citizen No Not sure Yes 20
  22. 22. Contd. Liking vs. Chances of purchasing if green • The results reflect that a major chunk of the consumers (83.3%) are extremely sure that if they come across a green 22.2% 22.2% product they will buy it even though they might have not planned for it • 90.3% resounded the same results that its very likely that they will purchase it 83.3% 78.8% • Only 22.2% were not incentivised to pick 44.4% 44.4% 90.3% up the products they like. This may be because they need and additional impetus like better price, btter offer, better category etc. to buy such products 33.3% 33.3% • 44.4% were slightly sure that they would 12.1% pick up a green product even though they 16.7% 6.5% 9.1% are not sure whether they like them or 0.0% 3.2% notExtremely likely Moderately likely Not at all likely Slightly likely Very likely • Even though some did not like green products echoed that they would buy one No Not sure Yes and the chances are moderately likely 21
  23. 23. AWARENESS CROSS-TABS Awareness vs. Pay Premium • Nearly half of the respndents who knew their current products were36.4% 40.6% willing to pay a premium 48.6% • Those who didn’t know also showed a positive sign • Very few people (13.5%) who were36.4% aware were reluctant to give more 46.9% amount (greenswashing or disbelief) 37.8%27.3% 12.5% 13.5% No Maybe Yes No Not always Yes 22
  24. 24. Contd. Awareness vs. Loyalty 0.0% 16.7% • 50% of people who knew what they use strongly agreed that loyalty towards 45.2% 47.1% 50.0% green companies eventually increases. This is because a period of time they become familiar and comfortable in using these products 66.7% 100.0% • 6.7% of those who did not know 23.5% disbelieved that awareness has anything 40.5% to do with loyalty towards the brand 50.0% • A surprising 47% were not sure that even if they use green 29.4% products, whether they feel more loyal 16.7% 14.3% towards that brand or not. This may be 0.0% 0.0% due to lack of connect with the brand Disagree Agree Neither agree nor Strongly Agree Strongly Disagree disagree No Not always Yes 23
  25. 25. Contd. Awareness vs. Pre-purchase • 62% people were always sure that they 0.0% think what they are buying before they do so. These were people who liked and 47.4% were aware about the products they use 61.5% 60.0% • An alarming 47.4% of them who knew what they consume, said that they only sometimes thought what they were buying and whether its eco-friendly or not. This can be due to lack of these 40.4% products going into the consideration 30.8% set 40.0% • Majority of those who were not always 7.7% 12.3% sure of what they use did not know either what they are buying. These Yes No Sometimes consumers are less informed and need No Not always Yes to be made more aware and conscious 24
  26. 26. Contd. Awareness vs. Chance of buying if green 0.0% 11.1% • 66.7% of respondents who knew what types of products they consume, also 35.5% agreed that it is extremely likely that if 57.6% they come across a product which is 66.7% green they will buy it wthout hesitating 55.6% • This was followed by slight decrease in 100.0% the probability by 10-15% • Not surprisingly it was also seen that all 58.1% of them who had no idea what they 27.3% were using will never fall for a product 16.7% just because it is green because this lot 33.3% is totally unaware and ignorant 16.7% 15.2% • While those who knew their choices 6.5% only sometimes will still buy greenExtremely likely Moderately likely Slightly likely Very likely Not at all likely products. Their is a slight possibility for this as reflected in the results No Not always Yes 25
  27. 27. Contd. Awareness vs. Company investment • Nearly half of the respondents who knew 40.0% 44.6% what their consumption basket is, also knew about what efforts companies put into it • As expected, a very small set of people 26.7% did not know the intensity of investments 44.6% put into making it green as they did not know what type of products they 33.3% consume themselves 10.8% No Yes No Not always Yes 26
  28. 28. Key highlights from the qualitativequestions• People like and use green products because they believe that environment is their responsibility and it is they who have to keep it safe• Others feel that future generations have to be provided for• Some say that since we have got whatever we need from nature, it is also our duty to give back what it needs for its survival• Some feel that it is a practice that should be enforced by law amongst common public in order to rescue the environment• Others opine that it is easier said than done. People do not “walk the talk”• People contribute in less than 1 green deed a day then how will they save the earth• Some respondents said that going green is all a hogwash and word-of-mouth cannot do anything much about it 27
  29. 29. Findings• Most (82%) of the consumers were comfortable with categories like energy sources and cosmetics & apparels when it came to popular green categories. But they had very less idea about the green-ness in their technology products• Many of them, although liked green products, need not necessarily put a thought before purchasing if its green or not. May be they need more incentive to put it into consideration set.• Many consumers agreed that they will pick up a product impulsively if its eco- friendly. On the face of it, it sounds good, but do they really walk the talk?• As far as awareness about the brands they were using is concerned, many of them did not know whether they are green or not• But in spite of that they agreed that they are comfortable in changing the product and are even ready to purchase it for a premium• Seldom did these consumers know that loyalty tends to increase if the product bought is green• But yes they did agree that company puts in alot of money to go green• They said that they hardly think before buying what they are buying 28
  30. 30. RecommendationsIncentivise the consumerMake it MassIf it is available, it will be invisible 29
  31. 31. Conclusion• There is a lot of favourism in consumers’ minds with respect to green products, green companies and green initiatives• Without the efforts of people, a progress at a global or national level can never be achieved• People are being reluctant either because its high prices of these products that are binding them or they are not that aware of the green-ness of the product themselves, at most of the times• Hence, it is suggested that these issues are addressed soon otherwise they may suffer hugely in terms of finance and otherwise. 30
  32. 32. Referenceshttp://www.conservationvalue.org/green_defined.shtmlhttp://articles.moneycentral.msn.com/CollegeAndFamily/RaiseKids/AreGreenProductsReallyGreen.aspxhttp://www.all-recycling-facts.com/eco-friendly-products.htmlhttp://www.epa.gov/greenpower/buygp/types.htmhttp://marketinggreen.wordpress.com/http://en.wikipedia.org/wiki/Ethical_consumerismhttp://usa.autodesk.com/adsk/servlet/pc/item?id=14984051&siteID=123112http://www.landor.com/?do=thinking.article&storyid=599http://www.greenexplored.com/2011/02/green-consumerism.htmlhttp://www.oecd.org/document/51/0,3746,en_2649_37465_47454963_1_1_1_1,00.htmlhttp://www.guardian.co.uk/environment/2010/mar/29/green-products-social-statushttp://www.sustainablemarketing.com/content/view/131/80/http://grailresearch.com/pdf/ContenPodsPdf/The_Green_Revolution.pdfhttp://csi.gsb.stanford.edu/cultivating-green-consumerhttp://www.bcg.com/documents/file15407.pdfhttp://www.emeraldinsight.com/journals.htm?articleid=1737910&show=htmlhttp://environment.nationalgeographic.com/environment/greendex/http://www.business-standard.com/india/news/green-signals-frommiddle-class/439659/http://www.business-standard.com/content/general_pdf/062011_02.pdfhttp://www.business-standard.com/content/general_pdf/062011_01.pdfhttp://www.indiaprwire.com/pressrelease/other/2011083096334.htmhttp://www.medianewsline.com/news/135/ARTICLE/4836/2009-07-22.htmlhttp://www.landor.com/index.cfm?do=thinking.article&storyid=616&bhcp=1http://www.globescan.com/news_archives/greendex10/http://www.ciol.com/News/News/News-Reports/Indian-consumers-are-most-eco-friendly-survey/137268/0/http://www.wbcsd.org/DocRoot/I9Xwhv7X5V8cDIHbHC3G/WBCSD_Sustainable_Consumption_web.pdfhttp://www.thedailygreen.com/green-homes/eco-friendly/green-products-460514http://cci.som.yale.edu/cci/sites/cci.som.yale.edu/files/4AGuptaDash.pdfhttp://www.uwex.edu/ces/cced/downtowns/ltb/lets/LTB1106.pdf 31
  33. 33. THANK YOU 32