Strategy of Creating Eco-Labeled Products - Case Study Example

Running Head: GREEN BUYING BEHAVIOR Green buying behavior Name Course Lecturer Date GREEN BUYING BEHAVIOR Introduction Green buying behavior also known as green consumerism is defined as purchasing and consuming products that are do not harm the environment (Kumar, 2011). Green consumers are willing to pay any amount of money for such products as long as they are eco-friendly. This is a phenomenon that has received an outburst amidst increasing recession and the purchasing behavior of consumers is increasingly being guided by sustainability, safety, animal welfare and health. Green labeled products are now receiving tremendous sales in comparison to the conservative ones. With the notable upstream green buying behavior, market researchers have attempted to find out what influences the green buying behavior. Literature review The purpose of creating eco-labeled products is to inform consumers about the environmental implications of their consumptions. In addition they are used to lobby the government and producers to raise the standards for production of more eco-friendly consumer goods. Eco-labels come in different forms, some are mandatory while some are voluntary. Mandatory labels are requirements by governments and are expected to outline specific standards as established by a written law. There are three types of voluntary eco-labels as categorized by ISO standards (Chen and Chai, 2010). In type I, the exact environmental quality of the product is described and it aims at persuading the buying of product based on the fact that it they are environmentally friendly. These labels are well known to consumers and they are usually made by a third party and monitored through an audit process or certification. The type II eco-label is created by the manufacturer, distributer or importer of the product. It describes the specific qualities of the product such as ‘free of chlorofluorocarbon, which destroys the ozone’. Type III gives environmental data of a product that is quantified and independently verified using present parameters. An example of such labels is the nutrition labels found in many food products detailing fat, vitamins and sugar contents (Abdul-Muhmin, 2007). Green buying is a practice in which people show their concern about environmental issues. Eco-labels enable these environmentally conscious consumers to make sound purchasing decisions by distinguishing products that are ecologically favorable from those that are not. They seek for products that are manufactured in sustainable and maintainable ways and those that will advance their personal health. Chitra (2007) refers to consumers with such behavior as LOHAS consumers; which stand for ‘Lifestyle of Health and Sustainability’. These consumers are mainly interested in organic clothing, health care products and they are generally investors of products that promote social responsibility. According to Frank-Martin and Peattie (2009), around 50% of Europeans buys green products; statistics that override America. This is attributed to the fact that Europe has more LOHAS products than America. Kassaye (2001) asserts that besides good attitude towards social and environment responsibility, there are other factors motivating green buying: social status, education, age of products and price of products. In the past, green products were mostly bought by young people but recent research indicates that more and more elderly people are accepting the reality of increasing environmental destruction and are moving towards green buying. In addition, women buy more eco-friendly products relative to men while the rich are frequent green buyers than the poor (Pickett-Baker and Ozaki, 2008). Of major concern to marketers is what makes people buy ecologically friendly products. One reason that influences this decision is the consumer’s perception that the products are good for their health. Another major driving force to green buying is customer’s desire to be environmentally friendly following the ongoing education about environmental destruction. Nevertheless, despite these compelling motivations, consumers remain to be price sensitive while purchasing (Laroche and Bergeron, 2001). As matter of fact, consumers sometimes purchase eco-friendly products without the knowledge that they are eco-friendly based on the prices. Besides providing the product with a distinctive feature, green labels serve as powerful marketing tools (Gan et al, 2008). Theory/Model/Framework The motivational model for product choice This model is mostly applicable in generic products (those with many product classes). The model distinguishes five utility needs which are also termed as motivational dimensions. Moisander (2007) associates these factors with basic needs expected in a product in order to satisfy customers. Functional motives: They are the physical attributes of a product and they are basically the technical functions that the commodity performs. Aesthetic-emotional motives: Includes the comfort, luxury or style offered by the product. They are determined by fundamental values of the consumer in emotive area such as religion, fear, social concerns, respect for quality life among others. Social motives: It relates to the impact the consumption of the product has on others and the surrounding environment. Situational motives: Selection of products is sometimes triggered by certain situations such as accessibility, price discount and availability. Curiosity motives: They are supposed to prompt trials for innovative or new products. Motive is a key aspect in green buying. Green labeled products inherently incorporate the dimensions of the motivational model. Green customers seek out for products that will advance their personal health (functional motive), satisfy their inner/religious being (aesthetic-emotional motive), is environmentally friendly (social motive), is pocket friendly (situational motive) and is quite innovative in terms of providing state of the art or modernized features. The motivational model is therefore applicable to consumers who are not only interested on the physical appearance or performance of the product but also on the effects it has on the environment when consumed and its price as well; these are characteristic of green buyers. Recommendations Importance and inconvenience are two main attitudes affecting green buying behavior. Kumar (2011) defines importance, as relating to the environment, as the degree to which consumers regard the environment thus express concerns towards it. Inconvenience refers to the degree to which the individual finds his behavior towards the environment inconvenient. For instance, a person may regard recycling a long terms benefit but might chose not to do it based on the fact that doing so is inconvenient. Therefore, it is essential for marketers to advertise the convenience of green products thus change consumers’ perception in a positive way. Companies need to promote environmentally friendly products with social and environmental sensitivity as the major themes. Window displays, information cards and videos can be used in retail shops to inform members of the public about the implications of their purchasing decisions towards the environmental. This kind of education is indeed an appropriate method of establishing credibility and increasing perceived convenience. Evidently, there is ongoing negative perception towards companies concerning their responsibility to the environment. The result is that consumer willing to pay large sums of money for the eco-friendly products, fail to do so based on the strong perception that companies do not act in the best interest to safeguard the environment; most of them are involved in pollution of the environment. Therefore, companies should strive to educate the public that environmental protection is not just the sole responsibility of companies but rather the collective effort of everyone in the society. Marketers ought to constantly supply positive feedback to consumers regarding matters of environmental protection so as to show their contribution towards the global initiative. Taking part in national and international environmental promotions will also serve to change the negative perceptions of consumers. These initiatives will not only reinforce positive green buying behavior but will also will also motivate less ecologically concerned consumers to become more environmentally conscious. The willingness or unwillingness of consumers to purchase a particular product is influenced by the severity of environmental problems. With the current heightened levels of campaigns to environmental curb these problems the world over, the expected benefits from reinforcing concern might be sometimes illusory. Thus, it is recommendable for promotional activities to be aimed at inducing individual concerns and not collective concerns. For instance, a company that adopts the slogan ‘think globally, act locally’ has a high potential of enhancing favorable behavior. Advertisements that show individuals making efforts to eliminate environmental ills have the potential of soliciting the desired behavior change. Security and collectivism are two fundamental guiding principles of ecologically conscious consumers. In actual fact, they are quite sensitive about their relationships with others thus they are concerned about their welfare. Laroche and Bergeron (2001) point out that such caring personality prompts a tendency to become environmentally conscious. In an attempt to encourage green buying, marketers should bring consumers to the realm of purchasing that focuses on security, warm relations and society welfare as merits of green consumption. Consumers who are concerned with environmental issues are more likely to spend more on green products than those who are not interested in environmental matters. Research indicates that about 80% of consumers have the likelihood to retrieve from buying products of companies associated with environmental pollution. Companies that ridiculously take advantage of green movements or do not comply with environmental regulations are prone to consumer boycotts. On the contrary, companies which are environmental conscious benefits from a competitive advantage. For instance, McDonald Corporation task to eliminate polystyrene clamshell and 3P’s Program by 3M have been commended for their exemplary and progressive initiatives in corporate environmental practice. Based on these findings, companies should strive to be on the forefront in ensuring environmental protection by all means possible. According to wide array of research, the groups of consumers willing to pay more for green products provide enough statistics for warrant the attention of marketers. Based on demographic research, women and children are more environmentally sensitive than men. Therefore, marketers should aim these segments as their prime targets. This means producing more eco-friendly women and children products. A compelling example is that of Small World Products Group which produced a new type of crackers which were in the shape of an endangered wild animal. The venture was a success and earned the company enormous profits. Sustainability is a key driver in green purchasing. For companies with green brands, integrating sustainability in the entire value chain from production, sourcing, distribution, consumption and disposal becomes part and parcel of the brand promise. It reduces the risk of consumer backlash. Companies should consider developing green products and marketing them to consumers as green alternatives. It is common to find some companies that produce products that actually do not back up the claim that they are greener than others. Essentially, creating green products requires a different approach not only to the kind of raw materials but also on production, packaging and distribution. Developing a green product without the support of the entire supply chain makes it difficult to justify the return on investment or the economic value of the product. Therefore, sustainability of the product should be embedded throughout the value chain. It should not be viewed as just a department task but an organization cross-functionality. Focusing on green as an integrated and not a separate issue will ensure success of the brand in the market. Preferably, a plan should be created to monitor and evaluate the progress of the sustainability efforts. References Abdul-Muhmin, A. (2007). Exploring consumers’ willingness to be environmentally friendly. International Journal of Consumer Studies. Volume 31, Issue, p. 237-247. Chen, T. and Chai L. (2010). Attitude towards environment and green products: Consumers perspective.Management Science and Engineering, Volume 4, issue 2, p.27-39. Chitra, K. (2007). In Search of the green consumers: A perceptual study. Journal of Services Research. Volume 7, Issue 1, p. 173-191. Frank-Martin, B. and Peattie K. (2009). Sustainability Marketing: A Global Perspective. John Wiley & Sons: West Sussex. Gan, C., Wee, H., Ozanne, L. and Kao, T. (2008). Consumers’ purchasing behavior towards green products in New Zealand. Innovative marketing. Volume 4, Issue 1. Kassaye, W. (2001). Green dilemma. Marketing Intelligence & Planning. Volume 19, Issue 6, p. 444-55. Kumar, S. (2011). Pro-environmental concern influencing green buying: A study on Indian consumers. International journal of business and management, volume 6, issue 6, p.124-133. Laroche, M. and Bergeron, J. (2001). Targeting consumers who are willing to pay more for environmentally friendly products. Journal of consumer marketing. Volume 18, Issue 6, p. 503-520. Moisander J. (2007). Motivational complexity of green consumerism. International Journal of Consumer Studies. Volume 31, issue 4, p. 404–409. Pickett-Baker, J. and Ozaki, R. (2008). Pro-environmental products: Marketing influence on consumer purchase decision. Journal of Consumer Marketing. Volume 25, Issue 6, p. 281-293. Read More