A STUDY ON FACTORS INFLUENCING CONSUMERS’

GREEN PRODUCT PURCHASE INNENTION IN FMCG

SECTOR

Submitted to

RAJAGIRI BUSINESS SCHOOL

In Partial Fulfillment of the Requirements for the Award of

POST GRADUATE DIPLOMA IN MANAGEMENT

(2015-17)

By
ARCHANA.P
Register No: P15110

RAJAGIRI BUSINESS SCHOOL

RAJAGIRI VALLEY
KAKKANAD, KOCHI – 682039
 DECLARATION

I, ARCHANA.P hereby declare that this report is a bonafide record of the dissertation programme,
done by me as a part of partial fulfilment of the award of the degree, Post Graduate Diploma in
Management from Rajagiri Business School, Kochi.

I also declare that this report has not been submitted to any other university/board for the award of
any degree/diploma.

Place: Kochi
Date: ARCHANA.P
Roll No. P15110
 ACKNOWLEDGEMENT

The gratification and elation of this report will be incomplete without mentioning all the people
who helped me to make it possible, whose guidance and encouragement were valuable to me.

First of all I thank the God Almighty for his immense grace and blessings at each and every stage
of my dissertation.

Then I would like to express my gratitude to the Executive Director Dr.Joseph I Injodey for
granting me the opportunity to do the study.

I would like to express my sincere gratitude to Dr. Binoy Joseph, Principal Rajagiri Centre for
Business Studies for showing overwhelming support and interest shown in the study

I am thankful to my Faculty Guide, Prof. Fr.Francis Sebastian, CMI, Rajagiri Business School,
Kochi, for giving me his valuable guidance to execute the study as per the university requirements
and for all the support he gave throughout my dissertation.

I would also like to thank my parents for their invaluable support and guidance, without which
this report would not have been possible.

I am also thankful to all other faculty and friends who had extended their support and contributions,
which helped me in improving my dissertation.

Thanking You

ARCHANA.P
 TABLE OF CONTENTS

ABSTRACT......................................................................................................1
CHAPTER 1:INTRODUCTION
1.1 Relevance….....................................................................................3
1.2 Background……………………………………………….…….…3

1.3 Research question ..........................................................................5

1.4 objectives ........................................................................................5

CHAPTER 2: LITERATURE REVIEW

2.1 Literature Review ………………..……………………………….7
2.2 Research Model…………………………………………………..13
2.3 Hypothesis………………………………………………………..14

CHAPTER 3: RESEARCH METHODOLOGY

3.1 Research Design …..……………………………………………...16
3.2 Variables of the study and their measurement ...............................17

CHAPTER 4: RESULTS
4.1 Sample Profiling ………………………………………………….20
4.2 Descriptive statistics ……………………………………………...21
4.3 Measurement model …………. …………………………………..22
4.4 Structural Model ………………………………………….………23

CHAPTER 5: DISCUSSION AND CONCLUSION

5.1 Findings of the study .....................................................................30
5.2 Limitations and Future Research……………………………….…31
5.3 Conclusion………………………………………………………...31
BIBLIOGRAPHY............................................................................................32

APPENDIX ……………………………………………………………...…...33
 LIST OF TABLES

Table 4.1 Demographic Break Up………………………………………………… ……….20

Table 4.2 Descriptive Statistics……………………………………………………………..21

Table 4.3 Measurement Model……………………………………………………………..22

Table 4.4 Model Fit and Quality Indices…………………………………………………....26

Table 4.5 R square coefficient………………………………………………………………28

LIST OF FIGURES

Figure 3.1 Research Model………………………………………………………….… …….13

Figure 4.1 SEM Model direct effect…………………………………………………………...22

Figure 4.2 Path coefficient and P-Values ………………………………………..……………23

Figure 4.3 SEM Model mediating effect………………………………………………………24

Figure 4.4 Path coefficient and P-Values ………………………………………..…………....25

Figure 4.5 Model fit and Quality Indices……………………………………………………...27

 ABSTRACT

Growing interest for green product has been created new trend in the market. Consumers are
becoming more environment friendly, as result marketers are changing their strategy to green
product from the conventional product line. The objective of this study is to identify the factors
influencing consumer’s green product purchase intention in FMCG sector. Which are factors that
a consumer will consider while making a green product purchase.

For the purpose of the study the factors which are chosen as determines of green purchase
intention are consumer’s environment knowledge, environmental concern, eco-friendly or green
advertising, price and value consciousness and green purchase attitude. The study was conducted
among 173 customers of FMCG products in Cochin. A structured questionnaire has been used to
collect data from the customer. The respondents were asked to indicate their state of
agreement/disagreement on a set of questions.

The collected data were analyzed using Structural equation modeling (SEM) through Warp
PLS 5.0 software. The result shows that environmental knowledge and environmental concern are
the major factor influencing the green product purchase intention, these factors have a direct effect
and green product attitude have mediating on these relationships. Price consciousness and value
consciousness as well as eco -friendly advertising does not have a direct effect on green purchase
intention.
 CHAPTER 1
INTRODUCTION
1.1 Relevance of the study

Increasing green product preference of consumer has made the markers to think differently. And
this made them to include environment as major factor for marketing their product and services.
Consumers are switching to green product from conventional product and they are more focused
on product which are less polluting and will have less negative impact on the environment. Thus,
the marketers are now concentrating on the green segment. And green marketing is becoming a
competitive advantage for the marketers. All around world the market share of green product is
increasing. Different marketers are searching proper location for introducing their green product,
this study is trying to identify the different factors that a consumer will consider while purchasing
green product. It will help to identify the different factors that influence consumers purchase
intention of green product in FMCG sector. The previous studies are mostly taken place on
cosmetics and agricultural products in the domain of green products. That will ultimately help the
marketers to find out the factors, on which they have to concentrate while introducing a green
product in the market. This study will also help to identify consumers’ environmental
consideration in choosing a product.

1.2 Background of the study

The rapid development of economy and advancement of technology is not only helped in progress
of the world but also for the increase in environmental pollution. The environment has become a
victim of the economic progress and advancement. The progressive changes and development in
the industry has made the environmental deterioration. As a result of this, the entire world is facing
different catastrophe. Statistics shows that around 40% of environmental pollution is because of
unfavorable consumption and disposal of products by consumers. Climate change, ozone layer
depletion, air and water pollution, deforestation, hazardous waste, acid rain as well as loss of flora
and fauna species are some of the examples of human carelessness. Hence it is necessary that both
consumers and manufactures have to look for environment friendly production and consumption.

The studies shows that there is a shift in consumer behavior that, consumers
are becoming more eco-friendly and they are trying to switch to product which are less polluting.
It has been made the marketers to re-invent their product according to the needs of the
consumers.so the demand for green or environment friendly products are increasing day by day.
Green consumerism is described as being a multifaceted concept, which includes preservation of
the environment, minimization of pollution, responsible use of non-renewable resources and
animal welfare and species preservation. Green or environmentally friendly products are broadly
defined as products that will not pollute the earth or deplore natural resources, and can be recycled
or conserved. A green product can be:

 Products those are originally grown,

 Products those are recyclable, reusable and biodegradable
  Products with natural ingredients,
 Products containing recycled contents, non-toxic chemical
 Products contents under approved chemical,
 Products that do not harm or pollute the environment,
 Products that will not be tested on animals,
 Products that have eco-friendly packaging i.e. reusable, refillable containers etc.

Studies evidenced that there is a high growth in hard core green consumers. Different studies have
been conducted in western nations to identify the growth in green consumerism and it has been
found that around 20 % of consumers in Europe and 50% US consumers are preferring green
products than conventional products.
As a result of the increasing number of green consumers, marketers are
targeting the green segment of the population. Marketers are also incorporating the environment
into many marketing activities, including product, package design and pricing. Marketers have
even gone as far as to develop specific models for the development of green advertising and green
marketing strategy. Today environmental consciousness is not only an ideology of activists, but
also a matter of competitive advantage for marketers.
Different scholars have been gone through analyzing different factors that
are affecting the green purchase intention of consumers, studies have been conducted all over the
world and it is found that green consumers are having more environmental knowledge and
consciousness and they have shown more concern towards the environment. Environmental
knowledge of the consumer and his concern will have an impact on his purchase decision. The
research’s shows that the purchase intention of consumers are also have a relation to the green
product advertisement. Environment friendly advertisements are those which will address the
relationship a product/service and the biophysical environment and will Promotes a green lifestyle
with or without highlighting a product/service. Consumers are always look for the benefit or
quality of the product that they like to purchase. Green product has an attribute of long term benefit
consumers who are able to identify the intangibility or who half the belief of “greenness” in the
product would be more attractive towards the green product, at the same time consumers purchase
decision will also influence by the price of the green product. Researchers have been identified
that consumers will have an assumption that green products are highly priced, people who are less
price conscious have a chance that they will be willing to buy green products even if it is highly
priced. Thus previous researches identified that the relevant factors that are Consumers
environmental knowledge, Environmental concern, Green advertisement, Consumers price and
value consciousness and green product purchase attitude.
The ultimate object of this study is to identify the factors that are determine the
purchase intention of green product. The study is conducting by in the area of FMCG sector,
FMCG products are those products. The market of FMCG products are increasing in all around
the world and a research of green product in FMCG sector is important because green products are
introducing in this augment. Fast-moving consumer goods (FMCG) or consumer packaged goods
(CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable
goods such as soft drinks, toiletries, over-the-counter drugs, processed foods and many other
consumables.

1.3 Research question

A study on the factors influencing consumers’ green product Purchase intention in FMCG sector.

1.4 Objectives of the study

• To study how environmental concern and environmental knowledge of a person effect

the purchase intention of green products

• To study the role of environment friendly advertisement in green product purchase

intention.

• To study how price and value relate the purchase intention of green products

• To study the effect green purchase attitude on green product purchase intention
 CHAPTER 2
LITERATURE REVIEW
Environment knowledge

Environmental knowledge have been one of the major factor in building ones environmental
friendly attitude.it can be defined as ‘a general knowledge of facts, concepts and relationships
concerning the natural environment and its major ecosystems’ (Fryxell and Lo, 2003, p. 45). Thus,
in simple terms, environmental knowledge involves what people know about the environment, key
relationships leading to environmental aspects or impacts, an appreciation of "whole systems", and
collective responsibilities necessary for sustainable development. There are two type of
environmental knowledge, Schahn and Holzer (1990) have distinguished two types of knowledge
when examining environmental action: abstract and concrete. The former relates to knowledge
concerning environmental issues: problems, causes, solutions and so on. There are some previous
studies have been conducted and the result of these studies shows that, abstract knowledge was the
most significant type when predicting environmental action. They have noted an average
correlation of 0.30 between ecological knowledge and behavior Hines et al. (1987).

The consumers behavior towards an environmental friendly product

purchase is depended on the environmental knowledge that a consumer have and the changing
state of environmental knowledge also will affect the purchase behavior, Polonsky,( 2011). An
environmentally conscious consumer is generally aware of the current environmental condition,
acts in an environmentally responsible manner, and prefers environmentally friendly products. In
sync with these studies, it is reasonable to suggest that consumers who are environmentally
conscious are likely to purchase green products, even if they are more expensive, because the green
products’ positioning corresponds with their values and beliefs. Clare D’ Souza (2007) in his study
reveals that consumers who are knowledgeable about the problems of the environment will be
motivated towards green purchase.

Environmental Concern

Environmental concern is all about how one person’s concern towards the environment, it shows
whether a person ready to change his or her behavior in order to reduce the adverse impact on the
environment. Schultz (2000) proposed that environmental concerns have three correlated factors:
concern for the self (egoistic), other people (altruistic) and the biosphere (biospheric). Academic
studies examining environmental concern include Fritzsche and Dueher (1982) the effects of
concern for the environment on the choice of deodorant container, and Kinnear and Taylor (1973)
who examined the effects of ecological concern on attitudes towards phosphates in laundry
detergents. This domain shows that have argued that environmental concern can have a significant
impact on the degree to which individuals are motivated to change behavioral practices so as to
attempt to alleviate the problems. In many studies it has been seen that buying organic food is
determined by the consumers environmental concern.it has been derived a major factor which is
contributing to the purchase intention of environmental friendly products. The areas of
environmental concern are many and deal with various environmental protection issues ranging
from conservation of natural resources and urban waste problems to the human population issues.
The environmental concern can be said as a consumers concern for cropland, range land and forest
abuse, preservation of land (wilderness) for its contained values in recreation, research, education
and amenity, preserving the world ocean, concern for fresh water contamination, concern for air
pollution, conservation of mineral resources; conservation of energy, concern for wastes and
poisons, protection of endangered species, concern for population explosion, Concern for the risks
of nuclear industry. In order to protect and practice these concerns in daily life they need to put in
the daily life by using products which will help them to ensure their concerns have a proper result
on the environment. It requires that consumers routinely deal with household waste and toxic
household substances in an appropriate manner as well as use sustainable purchase and
consumption of product and services. The environmental concern of consumers have been
influencing the purchasing behavior and purchase intention towards green products. Green product
purchase attitude is an after effect of environmental concern of the consumer, Johanna Moisander
,(2007).

The level of environmental orientation may vary from product or

issue under consideration. People are more concerned about using environmental friendly products
when it is regarding using household product and automobile. The level of environmental concern
is also can be seen in different product usage of consumer, Michael Jay Polonsky (2014).
Environmental concern refers to the attitude toward environmental issues. Although people do not
pay attention to environment protection itself, people tend to give consideration to environment
quality when their own well-being is at stake, such as in terms of health, protection from disasters,
etc. As environmental concern is believed to be the most important factor and principal
determinant of environment-friendly consumption Balderjahn 1988.

Price consciousness

Normally the assumption in green product is that it is high priced and it have a negative relation
on purchase intention when people are more of price conscious. Studies on environmental
sustainability have found that pro-environmental behavior is positively associated with personal
reward and negatively associated with personal cost (e.g., Frey & Oberholzer-Gee, 1997; Manning,
2009; Osterhus, 1997; Paladino, 2005). Since price is what consumers must give up for the reward,
it is generally agreed that for individuals who are price and value conscious, price has a negative
influence on purchase intention. This is pertinent in the case of green products, where the rewards
are often in the future (Gleim etal., 2013). Price consciousness is “the degree to which the
consumer focuses exclusively on paying low prices” (Lichtenstein et al., 1993, p. 235) and is
consistent with the notion of the negative effect of price. It can be argued that price-conscious
consumers are always more driven by price at any point of time, irrespective of whether the product
is green or not. Hence, they will be motivated against purchasing green products. They will simply
look for lower prices. Consumer’s price consciousness may vary according to the product category
and some consumers may be more or less price-conscious toward a particular product category
because of perceived risk or personal importance.
Green products are one of the category where consumers are less price
conscious. Byoungho Jin (2005). Clare D ‘Souza(2007) in his study he is tried prove that
consumers are price and quality sensitive when it comes to green buying. Some research clearly
indicates that committed environmentalists were more likely purchase products on their
environmental credentials, with price being less of a factor in the purchase decision. Price is often
cited as one of the inhibitors of green product purchase (Ewing 2009) although some consumer
surveys point to consumer willingness to pay a premium for the same. More importantly, it is
predicted that despite low motivation to process information, a green product at a high price will
be processed systematically, and its price will lead to perceptions of a high monetary sacrifice this
raises an interesting question pertaining to how consumers may trade-off green aspects of a product
when assessing its price. Specifically, we begin by asking if consumers expect to pay relatively
higher price for green products (R. Justin Goss).overall in terms green product purchase intention
consumers’ price conscious will not have a positive effect.

Green advertising

Increasing consumer sensitivity to environmental issues has dramatically affected how marketers
present advertising messages about their products and services. Consumers may choose one brand
over others because of the eco-friendly features of the product. Many advertisers, therefore, have
started incorporating environmental claims into advertising as a marketing strategy.( Fei
Xue,2015).It was found that negative frames and collectivistic appeal generated more favorable
advertising and brand attitude and a higher level of green trust and purchase intention. Interaction
effects suggested that, for ads with collectivistic appeals, there was no significant difference in
terms of message framing. However, when individualistic appeals were used, ads with negative
message frames generated more favorable responses than ads with positive frames. According to
Polonsky (1994), “green or environmental marketing consists of all activities designed to generate
and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction
of these needs and wants occurs, with minimal detrimental impact on the natural environment”.it
can be said as those advertisements with promotional messages that appeal to the desires of
environmental concerned consumers. Early work on green advertising primarily focused on
whether ads with environmental claims would generate more favorable attitude and increase
purchase intention compared to those without. The green segment in the market has been
developing day by day and number of environment friendly product has been capturing their
market, the environment concern of consumer has started increasing from 1990’s.
Correspondingly, green advertising is on the rise as more and more manufacturers are informing
their consumers about pro-environmental aspects of their products and services. H. C.
Purohit(2012),in his study he found that consumers are having a positive attitude towards green
product advertisement, And the attitude towards ecofriendly product of consumer can be helpful
in the prediction of consumer buying intention of the green products. The result confirms that
ecofriendly product positioning will be helpful in the buying decision of the consumers. The
studies shows that environment friendly advertisements were not able to claim the environment
friendliness of the product. Studies shows that the environmental friendly advertisements are not
up to the mark when it comes to believability claims. Study shows that no one consumer has been
tried to understand the content of the advertisement. Images of a green lifestyle can be linked to
product/ service choices. Advertisers can highlight the environmental benefits of their products
and services to tap the green segment of consumers. Alternatively, advertisers can strive to portray
an image of corporate environmental responsibility as a part of their overall company image
enhancement. The need to project a public image of environmental responsibility is an indication
of the influence of the environmental movement on corporate image advertising. According to
Subhabrata Banerjee, Charles S. Gulas and Easwar Iyer(1995)Green advertising is defined as any
ad that meets one or more of the following criteria:
1. Explicitly or implicitly addresses the relationship between a product /service and the biophysical
environment.
2. Promotes a green lifestyle with or without highlighting a product/service.
3. Presents a corporate image of environmental responsibility.

Value consciousness

We define value consciousness in this study as “the quality one gets for the price one
pays”(Lichtenstein et al., 1993;Zeithaml, 1988) Value consciousness refers to the consumers’
concern for the total benefits received in comparison to the price paid (calculated either as a ratio
or a difference) for a particular product. In other words, value consciousness is “a concern for
paying low prices, subject to some quality constraint”, in purchase of green products consumers
are equally concern about the value of the product with the price of the product. The success of
the product is also depended on the quality that a consumer will get by using a product. Value
consciousness of the consumer is another factor in purchase decision of green product. Studies
shows that consumer’s value consciousness has a greater and positive attitude towards purchasing
green product. Consumption values are created in a way to provide solutions to internal and
external causes or drive when consumer makes decisions and also this theory provide a foundation
for customer behavior study.
( Stephen L. Sondoh)(2013).in his study he has been defined functional
value as “The perceived utility acquired from an alternative’s capacity for functional, utilitarian,
or physical performance. Functional value is measured on a profile of choice attributes.”
Transaction value is focused on value in exchange, where value is determined primarily on the
basis of the price.In green product purchase the tangible and visible benefit are less so consumers
are looking at the “green” or in tangible quality or benefit of the product for long term. Consumers
may think about the long term utility of the green product and they will fell the intangible benefit
of green product and it will enhance their feeling that they are getting a high acquisition value.
Value-conscious consumers are likely to behave like price conscious consumers. According to
Arezoo Davari, Focusing solely on a price to quality ratio, even value-conscious consumers will
be motivated against purchasing green products, especially if the prices of such green products are
much higher than their alternatives and if the benefits are not easily discernible. Only very
enlightened consumers may be interested in purchasing green products. For most consumers, a
salient value consciousness will have no effect on purchase intention towards green products.

Green purchase attitude

Green purchase attitude is having a positive attitude towards an object

such as the environment should result in an increase in the targeted behavior (Armitage and
Conner, 2001; Pagiaslis and Krontalis, 2014). This is supported in much of the environmental
marketing research, which has found that higher levels of environmental concern leads to greater
intentions to undertake pro-environmental behaviors(Oreg and Katz-Gerro, 2006; Mostafa, 2007;
Grimmer andWoolley, 2012; Polonsky et al., 2012; Grimmer and Bingham,2013; Olson, 2013).
Belz and Dyllik (1996) found that individual purchases of environment-friendly products come
with an opportunity for the consumer to show their concern for the environment to others. In
general belief, the benefits of warm glow feelings may have a stronger impact than any other
factors on consumer attitude and purchase intention. Consumers having a greater environmental
concern and environmental knowledge will have a positive attitude towards purchase of green
product and thus will ultimately leads to the purchase of green product.
According to Eagly and Chaiken (2007), the definition of attitude is a
psychological tendency that is expressed by evaluating a particular entity with some degree of
favor or disfavor. Allport (1935) defined attitude as a mental and neutral state of readiness, which
exerts a direct influence upon the individual’s response to all objects and situations to which it is
related. Consumer’s attitude has been defined to be a learned factor in influencing the individual
to react positively or negatively with respect to the situation or product. Attitude can also be
defined as a learned predisposition to respond in a consistently favorable or unfavorable manner
with respect to a given object,( Stephen L. Sondoh,2013).in his study it is found that environment
concern and attitude having a significant effect and at the same time the attitude and purchase
intention also having a positive and significant relationship. His finding shows that attitude
towards green purchase is a determinant in purchase decision of green product. Soongil Choi
(2015), the relationship between green purchase attitude and green purchase Intention is also
evident from this study also, he found out that there is positive and significant relationship between
consumers green purchase attitude and green purchase intention.so it can be treated as a mediating
variable between the consumer’s environmental aspects and green purchase intention.
Green purchase intention

Purchase intention refers to the evaluation or attitude of consumers to the

related products, with the stimulation of the external factors, constitutes a consumer's willingness
to buy. While consumers are willing to buy some production, the higher purchase intention, the
greater the probability of purchase. The study shows that green product purchase intention is
dependent upon different factors such as ecological assumption and concern.( Ling-Yu Melody
Wen,2013). In other words, the personal willingness to buy green product is likely to be
consideration of personal reason and the level of interest in environmental values. Consumer’s
purchase intention is well-known as a subjective and broad field in consumer behavior and part of
purchase decision making.

Scholars by navigating the purchasing process, found one of the pillars

that make the whole purchasing process to be the purchase intention.(Brahim
Chekima1,2015).purchase intention has been defined by (Spears and Singh), as a consciously
decided plan to make an effort to purchase a particular product or service. With respect to this
definition Lee(2008)have been defined purchase intention as “the purchasing of procurement
efforts which give preferences to products or services which are least harmful to the environmental
and human health”.in his study he giving conclusion that green purchase intention is nothing but,
the probability and willingness of an individual to give preference to green products over
conventional products in their purchase considerations.In other words it can be stated as a specific
kind of eco-friendly behavior that consumers perform to express their concern to environment..

Chen & Chai,( 2010),in their study it is found that there is a

significant relationship between consumers environmental attachment and willingness to pay for
green products have a significant relationship to wards green product consumption.( Brahim
Chekima)The more a person is morally obliged to protect the environment and save the limited
natural source on earth, the more positive attitude will be expressed in behaviors or actions. In
other words, the more positive environmental attitude will lead to a stronger intention to perform
an environmental behavior and vice versa. From studies it is found that the greater the consumers’
ability to contribute to the improvement of the quality of the environment through purchasing
green products, the higher the consumers’ purchase intention toward green products is even if they
need to pay more than usual.
 2.2 Research model

Environment
al knowledge

Environment
al concern

H3- a Green
Green H6
purchase
Advertising intention
Green purchase
attitude

Price
consciousnes
s

Value
consciousness

Figure: 3.1
 2.3 Hypothesis

• H1-a: There is a significant positive relationship between environmental knowledge and

green product purchase intention.

• H1-b: There is a significant positive relationship between environmental knowledge and

green product purchase attitude

• H2-a: There is a significant positive relationship between environmental concern and green
product purchase intention.
• H2-b: There is a significant positive relationship between environmental concern and green
product purchase attitude.

• H3-a: There is a significant positive relationship between eco-friendly advertisement and

green product purchase intention

• H3-b:There is a significant positive relationship between eco-friendly advertisement and

green product purchase attitude
• H4-a:There is a significant negative relationship between consumers price consciousness
and green product purchase intention

• H4-b:There is a significant negative relationship between consumers price consciousness

and green product purchase attitude

• H5-a: There is a significant positive relationship between consumer’s value consciousness

and green product purchase intention.
• H5-b: There is a significant positive relationship between consumer’s value consciousness
and green product purchase attitude.

• H6 :There is a significant positive relationship between consumers green purchase attitude

and green purchase intention
 CHAPTER 3
RESEARCH METHODOLOGY
3.1 Research Design

Type of research: The research design followed in the study is descriptive and explanatory in
nature.

Sampling

 Sampling method: convenience sampling method is used for the purpose of drawing
sample from population
 Sample size: 173 customers of FMCG products in Cochin

Data collection

Source of data:

 Primary source: Data collected from the customers are the primary source for the study
 Secondary source: Data taken from various articles and journals.

Tool for data collection:

Structured questionnaire has been used for collecting data from the respondents.

Tool for data analysis

Structural equation modeling (SEM) analysis using Warp PLS.05

3.2 Variables of the study:

• Dependent variable - Green Product purchase intention

• Independent variable - Environmental knowledge

- Environmental concern

- Price consciousness

-Value consciousness

- Environment friendly advertisements

 Mediating variable - Consumers attitude towards green product

purchase
Definition of variables

 Environmental knowledge
Environmental knowledge can be defined as ‘a general knowledge of facts, concepts and
relationships concerning the natural environment and its major ecosystems.

 Environmental concern
The degree to which individuals are motivated to change behavioral practices so as to attempt to
alleviate the problems

 Green advertising
1. Explicitly or implicitly addresses the relationship between a product/service and the biophysical
environment.
2. Promotes a green lifestyle with or without highlighting a product/service.
3. Presents a corporate image of environmental responsibility.

 Price consciousness
Refer to the degree to which the consumer focuses exclusively on paying low prices.

 Value consciousness
Value consciousness is conceptualized here as reflecting a concern for price paid relative
to quality received.

 Attitude
Attitude can be defined as a composite of a consumer’s (1) beliefs about, (2) feelings about, (3)
and behavioral intentions toward some object.

 Green purchase intention

“The purchasing of procurement efforts which give preferences to products or services which are
least harmful to the environmental and human health”.
 Measurement and scale

 Purchase intention: 7 point Likert scale developed by (Coyle and Thorson ,2001)has been
used for the purpose of measuring purchase intention
 Price consciousness: this variable is measured using 7 point Likert scale. Which is adopted
from (Lichtenstein et al., 1993).
 Value consciousness: variable measurement is done using 7 point Likert scale. Which is
adopted from (Lichtenstein et al. ,1993)
 Environment knowledge – respondents environment knowledge has been measured by
using 7 point Likert scale adopted from (Mohamed M. Mostafa,2006)
 Environmental concern: This variable has been measured by using 7 point Likert scale
adopted from (Mohamed M. Mostafa,2006)
 Green advertisement :measured using 7 point Likert scale, adopted from (Subhabrata
Banerjee, Charles S. Gulas and Easwar Iyer,1995)
 Green purchase attitude: respondent green purchase attitude has been measured by using
7 point Likert scale adopted from (Mohamed M. Mostafa,2006)
CHAPTER 4
RESULTS
4.1 Sample Profiling

The survey was conducted among 173 people. The demographic variables considered in the study
include Gender, Age and Education. The demographic profile of respondent is as shown in the
table below.

Demographics

Variable Category Frequency percentage

Gender Male 45.6%

Female 54.4%

Age Less than 20 5.7%

20-35 49.4%

35-50 33.9%

Above 50 11.5%

Education SSLC 4.7%

Pre degree 12.4%

Degree 42.9%

Post-graduation 40%

Table: 4.1

The respondent’s demographics shows that 54.4% respondents were female while 45.6%
respondents were male. The respondents were falling under different category of age such as
49.4% of respondent were having an age of 20-35. 33.9% of respondents were having an age
between 35-50.there were respondents about 11.5% whose age was above 50 and 5.7%
respondents age was less than 20.the education background of the respondent shows that 42.9%
of respondents were having bachelor’s degree and 40% of respondents were having post-
graduation as their educational qualification. 12.4% and 4.7% of respondents were having pre
degree and SSLC as their educational background respectively.
4.2 Descriptive statistics

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
Environmental_Knowled 173 3.00 7.00 5.2632 .69839
ge
Environmental_concern 173 2.00 5.33 4.1423 .57556
Environmental_advertise 173 1.50 6.50 4.3114 .97763
ment
Price_consciousness 173 1.60 7.00 5.1637 .93549
Value_Consciousness 173 3.00 7.00 5.5833 .73665
Green_product_attitude 173 1.33 7.00 5.2144 1.15392
Green_Purchase_intentio 173 1.25 7.00 4.9722 1.19079
n
Valid N (listwise) 173
Table: 4.2

The environmental knowledge have mean value of 5.2 and a standard deviation of .69839 that
means the sample have responded from neutral to above that means strongly agree. Environmental
concern have a mean value of 4.14 and standard deviation of .57.similarly environmental
advertisement shows there is a mean value of 4.3 and standard deviation of .97. The price
conscious shows that it have a mean value of 5.16 and a standard deviation of .93. Value
consciousness shows a mean value of 5.58 and a standard deviation value of .73 similarly the green
purchase attitude shows a mean value of 5.2 and a standard deviation of 1.15.green purchase
intention has a mean value of 4.9 and a standard deviation of 1.19.

Analysis design

P value

The P value or calculated probability is the estimated probability of rejecting the null hypothesis
(H0) of a study question when that hypothesis is true. If P value is less than 0.05, hypothesis is
accepted or probability of rejecting is less.
Path coefficients

It is the fraction of the standard deviation of the dependent variable (with the appropriate sign) for
which the designated factor is directly responsible. It indicates the amount of expected change in
the dependent variable as a result of a unit change in the independent variable.
R-squared coefficient.

This is a measure calculated only for endogenous latent variables, and that reflects the
percentage of explained variance for each of those latent variables. The higher the R-squared
coefficient, the better is the explanatory power of the predictors of the latent variable in the
model, especially if the number of predictors is small.
Reliability

Reliability is a measure of the quality of a measurement instrument; the instrument itself is

typically a set of question-statements. A measurement instrument has good reliability if the
question-statements (or other measures) associated with each latent variable are understood in
the same way by different respondents.

4.3 Measurement Model

Case process summery

Case Processing Summary

N %
Valid 173 100.0
a
Cases Excluded 0 .0
Total 173 100.0
a. List wise deletion based on all variables in the procedure.
Reliability Statistics
Cronbach's Alpha N of Items

.797 36
Variables Cronbach’s Alpha

Environmental knowledge .871

Environmental Advertisement .709

Environmental concern .724

Price consciousness .773

Value consciousness .701

Green purchase intention .921

Green purchase attitude .915

Interpretation

The reliability coefficient is a measure of the internal consistency of the data which recommends
a value greater than 0.7.the reliability has been checked for the questionnaire using Cronbach’s
Alpha. The reliability for the entire questionnaire is showing .797 which means the questionnaire
is reliable. Each variables reliability has also been calculated which shows that environment
knowledge is having a reliability value of .871 and environmental concern and environmental
advertising is having coefficient values of.709 that means these variables are also reliable. Price
and value consciousness shows a reliability alpha value of .773 and .701 respectively. Green
purchase attitude and green purchase intention are also having a reliability value of .915 and .921
which means all the variables are having proper reliability.

4.4 Structural Model – Analysis of direct relationship

The direct relationship between the independent variables and dependent variable have been
evaluated using SEM analysis. The resulted diagram shows:

Figure:4.1
Figure:4.2

This diagram shows the result of direct relationship. From the figure following can be understood:

 Hypothesis H1-a is accepted (P<.01), that means Environmental knowledge has a

significant effect on Green purchase intention. And also the direction of relationship
between Environmental knowledge and green purchase intention is also positive.
(Beta=0.49)
 Hypothesis H2-a is accepted (p<.01) that means environmental concern has a significant
effect on Green purchase intention. And also the direction of relationship between
Environmental concern and green purchase intention is also positive.(Beta=0.19)
 Hypothesis H3-a is rejected (P=0.18) that means environmental friendly advertisement
doesn’t have a significant effect on Green purchase intention. The direction of relationship
between environment friendly advertisement and green purchase intention is
positive.(Beta=.07)
 Hypothesis H4-a is rejected (P=.30) that means price consciousness does not have
significant t effect on green purchase intention. The direction between price consciousness
and green purchase intention is relatively positive.(Beta=0.04)
 Hypothesis H5-a is rejected (P=0.19) that means value consciousness does not have a
significant effect on green purchase intention. The direction of relationship between value
consciousness is relatively positive.(Beta=0.7)
 From the result it is seen that a unit change in Environmental Knowledge (EK) will result
in 0.494 unit change in Green purchase intention. Similarly a unit change in Environmental
concern (EC) will leads 0.192 unit change in green purchase intention.

The direct relationship shows that environmental Knowledge and environmental concern
are only having significant effect on green purchase intention, so hypothesis H3-b,H4-b
and H5-b are got rejected. As there is no direct relationship between theses variables with
dependent variable, the scope of checking mediating effect on these relationship is not
possible.

Study on Mediating Variable

The following conditions must hold in order to establish mediation:

1. A significant relationship exists between the independent variable and the dependent
variable

2. A significant relationship exists between the independent variable and the presumed
mediator.

3. In the presence of a significant relationship between the mediator and the dependent
variable, the previous significant relationship between the independent variable and the
dependent variable is no longer significant or the strength of the relationship is significantly
decreased.

Evaluation of mediating effect of Green purchase attitude

Figure :4.3
Figure : 4.4

A. Evaluation of mediation significance between Environmental Knowledge and green

purchase intention using green purchase attitude as a mediating variable

Form the earlier evolution the direct relationship between environmental knowledge and
green purchase intention found significant. From the second figure, it can find that there is
positive significant relationship between Environmental knowledge and green purchase
attitude, (P<0.01 and Beta=0.39). The relationship between green purchase attitude and
Green purchase intention is also positively significant. (P<0.1, Beta=.75). The relationship
between environmental knowledge and green purchase intention is got insignificant. Thus
we could say that it fall under perfect mediation as it follows all the condition.

B. Evaluation of mediation significance between Environmental Concern and green

purchase intention using green purchase attitude as a mediating variable

The first figure proves the significant relationship between environmental concern and
green product purchase intention, further the second figure shows the mediation effect in
which, we could find that green purchase attitude and green purchase intention has
appositive and significant relationship(p<0.01,Beta=.75).the relationship between
environmental concern and green purchase attitude also found significant and positive
relationship(p<0.05,Beta=0.04).at the same time the relationship between environmental
concern and green purchase intention is significant but the strength of the relationship is
decreasing,(p=0.04,Beta=0.13).thus we could say that it is case of perfect mediation.
 From the analysis we can see that a unit change in environmental knowledge will leads to 0.588
units of change in green purchase attitude. Similarly a unit change in Environmental concern will
leads to 0.128 unit change in green purchase attitude. A unit change in green purchase attitude will
leads to 0.749 units change in green purchase intention.

From this it can be find that,

 Hypothesis H1-b is accepted (P<0.01, Beta=.59), that means there is significant and
positive relationship between Environmental knowledge and green purchase attitude.
 Hypothesis H2-b is accepted (P<0.01, Beta=0.13) that shows there is positive and
significant relation exist between environmental concern and green purchase attitude.
 Hypothesis H6 is accepted (P<0.01, Beta=0.75), that means there is a positive and
significant relationship exist between green purchase attitude and green purchase intention.

Model fit and Quality Indices

Figure 4.5

APC 0.214,P<0.001

ARS 0.509,P<0.001

AVIF 1.191,Acceptable If<=5 Ideally<=3.3

GoF 0.537 Large>0.36

Table: 4.4

To access model fit with data, it’s recommended that P values for the APC and ARS should all be
equal to or lower than 0.05; that is, significant at 0.05 levels. From the table it can be find that that
all the values are less than 0.05 which is significant. AVIF value is less than 3.3 that means the
value is ideal. The value of Goodness of fit shows that it is more than o.36 which means it is large
point for GoF.
R squared coefficient

The higher the R-squared coefficient, the better is the explanatory power of the predictors of the
latent variable in the model.

Green purchase Green purchase

attitude intention

0.37 0.65

Table: 4.5

From the table it can be derived that R square for green purchase attitude is 0.37.that means green
purchase attitude is influenced 37% by environmental knowledge and environmental concern,
while remaining is effected other variable. Similarly green purchase intention is having R square
of 0.65.that means 65% of green purchase intention is influenced by factors such as environmental
knowledge, environmental concern, Eco-friendly advertisement, price consciousness, value
consciousness and green purchase attitude while the rest is influenced by other factors. More
research needs to be done in identifying these factors so as to successfully understand both green
purchase attitude and green purchase intention in a more comprehensive manner.
 CHAPTER 5
DISCUSSION AND CONCLUSION
 5.1 Discussion

 R square for green purchase attitude is 0.37 that means 37 % of the green purchase attitude
is explained by two factors, that are environmental knowledge and environmental concern,
the rest of the value is influenced by other factors.
 Similarly green product purchase intention have R square of 0.65,that means 65% of green
purchase intention is influenced by consumers environmental knowledge, environmental
concern, eco-friendly advertisement, consumers price consciousness and value
consciousness and green purchase attitude. And the rest of the value is influenced by some
other factors.
 Through the path co-efficient, it is found that environmental Knowledge (EK) will result
in 0.494 unit change in Green purchase intention. Similarly a unit change in Environmental
concern will leads 0.192 unit change in green purchase intention.
 At the same time environmental friendly advertisement or green advertisement is having a
beta value of .07 in the relationship with green purchase intention that means green
purchase intention will have only .07 unit change as result of a unit change in eco-friendly
advertisement.
 Consumer’s price consciousness and green purchase intention is having a beta value of .04
that means a unit change in price consciousness will only result in .04 unit change in green
purchase intention. Similarly beta=.07 for value consciousness and green purchase
intention, that means a unit change in value consciousness will have a .07 unit change in
green purchase intention.
 Environment knowledge and green purchase attitude have a beta value of 0.58, that means
a unit change in environment knowledge will leads to 0.58 unit change in green purchase
attitude likewise the relationship between environmental concern and green purchase
attitude have beta value of .13, that means a unit change in environmental concern will
leads to .13 unit change in green purchase attitude.
 The relationship between green purchase attitude and green purchase intention is showing
a beta value of .75 that means a unit change in green purchase attitude will leads to .75 unit
change in green product purchase intention.

Through the P value significance it is found that,

 Environment knowledge have significant influence on green purchase intention(p<0.01)

 Environmental concern have a significant influence on green purchase intention (p<0.05)
 There is no significant influence of green advertising on green purchase intention (p=.18)
 The relation between price consciousness and green purchase intention is found
insignificant.(p=.29)
 The value consciousness have no significant relationship with green purchase intention
 It is found that green purchase attitude mediate the relationship between environmental
knowledge and green purchase intention
  Green purchase attitude mediate the relation between green purchase intention and
environmental concern.

5.2Limitation and future research

 The study was limited to Cochin alone.

 The Time available for carrying out the study was limited.

 The data collected pertain to the perception of respondents.

As this study is only focusing on green product in FMCG sector, there

green product available in different categories such as electronics, automobile etc.so there are
chances that the result may change when it is changing from low involvement products to high
involvement product, these products will be used by the consumer for long time. And consumer’s
cultural differences can also change the attitude towards green product.so conducting this study in
another geographical area will bring a different result for the study. The factors such as price
fairness, green washing can be included in the study.

5.3Conclusion
This research helped to draw a theoretical model of green purchase
intention.in which it is identified that, among the factors which are considered as determinants of
green purchase intention such as consumer’s environmental knowledge, environmental concern,
eco-friendly advertisement, price consciousness and value consciousness; environmental
knowledge and environmental concern are the major factor which consumers are considering while
purchasing green product. Green purchase attitude have perfect mediating effect on the direct
relationship between environmental knowledge as well as environmental concern to green
purchase intention. Eco friendly advertisement or green advertisement doesn’t play much role in
purchase decision of green product. They have a positive influence but there so significant
influence on green purchase intention. It is found that consumers are more price conscious and
they are not willing to purchase green product, it reduce the significance of purchase intention.

That price-conscious consumers are always more driven by price at any point of
time, irrespective of whether the product is green or not. Hence, they will be motivated against
purchasing green products. Consumers are only looking at the identifiable factors of a product they
are not looking at the intangible benefits of green product. This result is again matching the
previous studies conclusion that focusing solely on a price to quality ratio, even value-conscious
consumers will be motivated against purchasing green products, especially if the prices of such
green products are much higher than their alternatives. And if the benefits are not easily
discernible. Only very enlightened consumers may be interested in purchasing green products.
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APPENDIX
 QUESTIONNAIRE

Respected Sir/Madam,
I am Archana..P, student of Rajagiri Business School, pursuing my post-graduation in
management. As part of my post-graduation, I am doing a survey on the topic factors influencing
consumers green product purchase intention. I would request your active participation in filling up
the survey.

Thank you.
Demographics

Gender: Male Female:

Age:
Less than 20
20-30
30-40
Above 40

Education:
SSLC
Pre-degree
Graduation
Post-Graduation

Monthly Income:

Less than 10000

10000-30000
30000-50000
More than 50000

 Are you a consumer of FMCG products?

Yes No

 How often do you purchase FMCG products?

Every day
Every week
 Once in a month
Twice in a month

 As a consumer of FMCG Products please state your agreement to the following

statements given below
Strongly Disagree Somewhat Neither Somewhat Agree Strongly
Disagree disagree disagree agree agree
nor
agree

Environmental knowledge

I know that I buy products and

packages that are environmentally
safe

I know more about recycling more

than the average person

I know how to select product and

packages that reduce the amount
of waste ending up in landfills

I understand the environmental

phrases and symbols on product
packages

I am very knowledgeable about

environmental issues

Environmental concern

We are approaching the limit of

the number of people the earth can
support.

The earth has plenty of natural

resources if we just learn to
develop them. (r)

The earth is like a spaceship with

only limited room and resources

Humans have the right to modify

the natural environment to suit
their needs.(r)
Plants and animals have as much
right as humans to exit

Humans were meant to rule over

the rest of the nature. (r)

The balance of nature is very

delicate and easily upset.

Human ingenuity will ensure that

we do not make the earth
unlivable. (r)

Eco- friendly advertising

The content of the environmental

advertisements are of little
relevance to daily life

Environmental advertisements are

poorly produced and thus are not
attractive

Environmental advertisements are

always exaggerated

Arguments to substantiate the

environmental claim are not
convincing or vague

The manufacturer [advertiser]of

the advertised product does not
bear an Eco-friendly image

Price consciousness

I am not willing to go to extra

effort to find lower prices.(r)

I will shop at more than one store

to take advantage of low prices.

The money saved by finding low

prices is usually not worth the
time and effort.(r)
I would never shop at more than
one store to find low prices(r)

The time it takes to find low prices

is usually not worth the effort(r)

value consciousness

I am very concerned about low

prices, but I am equally concerned
about product quality.

In FMCG shopping, I compare the

prices of different brands to be
sure I get the best value for the
money

When purchasing a product, I

always try to maximize the quality
I get for the money I spend

When I buy products, I like to be

sure that I am getting my money's
worth

Generally shop around for lower

prices on products, but they still
must meet certain quality
requirement before I buy them

When I shop, I usually compare

the "price per ounce "information
for brands” I normally buy

I always check prices at the

FMCG store to be sure I get the
best value for the money I spend.

Green purchase attitude

I think my interest in green

products is relatively high
I have positive attitude towards
purchasing a green version of a
product

I like the idea of purchasing green

products

Green purchase intention

I am likely to use this green

product in the future.

I will probably use this green

product in the future

I will possibly use this green

product in the future.

I have every intention of using this

green product in the future