In this chapter, previous research surrounding the elements of green marketing, eco-labelling, consumer behaviour and the factors influencing green purchase decisions are discussed with the aid of existing literature. In this sense, there is a strong focus on the eco-labelling of products from the consumers’ perspective. This will allow the researcher to garner a deeper understanding about the influence of different factors on consumers’ green purchase behaviour in relation to eco-labelled products. Moreover, all these influencing factors can possibly affect the final product choice when evaluating and choosing a product in the store.
2.2 Green Marketing
According to Peattie and Crane (2005), the idea of green marketing is a global concept that erected in the late 1980’s when firms as well as consumers began to show concern about Corporate Social Responsibility (CSR). Green Marketing, as a newly introduced concept, was quickly the topic of a great deal of market research and a lot of different aspects of green marketing were discussed academically (Peattie ; Crane, 2005). Moreover, consumers’ environmental awareness reached new heights therefore leading to an increase in the interest of green products (Peattie & Crane, 2005). Moreover, Peattie and Crane (2005) state that consumers’ willingness to buy green products increased.
During recent times, the term and concept of green marketing has been largely used in the marketing discipline to describe the promotion of green activities in companies (Ward, 2018). Ward (2018) states that there is a strong link between the concept of green marketing and sustainability. This is due to the fact that green marketing aids firms in achieving their sustainable goals by integrating sustainable solutions into business practices to further meet customers’ and stakeholders’ green needs (Ward, 2018).
According to Dangelico and Vocalelli (2017:1263-1279), green marketing refers to businesses using environmentally friendly production, distribution and sourcing practices that aid companies in satisfying customer needs. In some instances, business must use specific manufacturing techniques to earn the right to advertise their products as green and eco-friendly (Dangelico and Vocalelli, 2017:1263-1279).
On the other hand, Polonsky (2017) observes that unfortunately a majority of people believe that green marketing refers solely to the promotion or advertising of products with environmental characteristics and benefits. Ward (2018) states that many green marketing strategies fail due to the fact that some companies use the environment for promotional means however they do not analyse how their products are impacting the environment. Therefore, Ward (2018) further states that they do not modify the product in compliance to the environment. However, in the context of all of this, defining green marketing is not an easy task as it consists of many dimensions.
According to Polonsky (2017), from the concept of green marketing, one can extract three key components. Polonsky (2017) maintained that the green marketing is a subset of the overall marketing activity, examining positive and negative activities but also examining a narrow range of environmental activities. Polonsky’s definition (2017) is a useful foundation to build on however a universal definition has not been accepted yet due to the fact that this is still such a new concept which requires extensive research.
Even though many authors are known to positively review the benefits of green marketing, the concept of marketing and the environment do not correlate well together with each other all the time (Dangelico and Vocalelli, 2017:1263-1279). This is due to contrasting objectives (Dangelico and Vocalelli, 2017:1263-1279). According to Glorieux-Boutonnat (2004), marketing’s main focus is to entice consumers in order to grab their attention and drive sales to a profitable level. Therefore, Glorieux-Boutonnat (2004) points out that in the contect of marketing, the environment is only taken into account if it can aid the firm in reaching this objective. However, Ward (2018) states that when companies do consider the environment they aim to minimise the effect of production on natural resources by using more eco-friendly materials and using less energy. On the other hand, many marketers are so focused on expanding their customer base with attention grabbing items that they increase their use of materials for eye-catching packaging disregarding the impact it may have on the environment (Glorieux-Boutonnat, 2004). However, various authors notice that some brands have made successful use of green marketing and that it can bring a lot of advantages to companies (Kaman, 2008).
In this day and age, green marketing can be regarded as a necessity rather than a possibility (Kaman, 2008). Moreover, Kaman (2008) states that many consumers are conscious of this. To support this claim, a 2014 Nielsen report showed that 52 percent of consumers investigate whether a product’s packaging is eco-friendly prior to purchasing and 55 percent stated that they would pay a premium price for eco-friendly products (Martinez, 2015: 896-917). In this sense, firms are obliged to take issues that are related to the environment into account if they want to remain on good terms with consumers and keep the market sustained (Martinez, 2015: 896-917).
2.2.1 Importance of Green Marketing
According to Edmunds-Ashe (2018), when companies integrate green marketing into their business activities, they are exposed to various internal as well as external benefits.
With regards to internal benefits, green marketing starts before a business begins advertising or promoting its products. Furthermore, product development strategies are implemented as well as strategies that cover pricing and distribution (Edmunds-Ashe, 2018). In addition, green marketing helps to boost sales and reduce costs in relation to operations and production by reducing the volume of energy used (Jaideep, 2016). Moreover, companies who take the environment seriously are not only attractive to consumers but also to future employees and stakeholders (Jaideep, 2016). Jaideep (2016) states that green marketing provides businesses with many opportunities to enhance their image and reputation.
On the other hand, with regards to external benefits, when a business uses energy efficient lighting, heating and cooling, reduces its water use, recycles office materials, organizes employee community clean-up activities, uses recycled materials and creates less waste, it generates positive public relations in its community, industry and resonates well with customers (Mishra & Sharma, 2014:78-86). Mishra and Sharma (2014:78-86) state that in order for a company to reap these external benefits they need to ensure that they portray themselves as an eco-friendly company through advertising or on their packaging and corporate website. In turn, this would generate large profit potential, increase sales and induce a sense of brand preference and loyalty (Edmunds-Ashe, 2018). Green marketers can also qualify as vendors or suppliers with government agencies and businesses that prefer to do business with these types of businesses thus enhancing potential stakeholders (Edmunds-Ashe, 2018).
Polonsky (2017) adds that green marketing is important because it persuades marketers to find ways to reduce waste which would ultimately lead to much more effective production processes.
A product that exhibits an eco-label shows that it correlates with environmental standards and is eco-friendly (Global Ecolabelling Network, 2018). The Global Ecolabelling Network (2018) states that the roots of eco-labelling are found in the growing global concern for environmental protection on the part of governments, businesses and the public. With this growing concern, businesses have identified that environmental issues can be advantageous for certain products and services in the market (Global Ecolabelling Network, 2018). In this context, labels and claims that support the maintenance of the environment have emerged such as recyclable and natural content (D’Souza, 2014:179-188). D’Souza (2004:179-188) states that even though consumers are attracted to these claims and labels because they believe this purchase decision will help sustain the environment, they are also sceptic. This is due to the fact that some claims have failed to offer empirical evidence to support them therefore leading to accusations of greenwashing on the part of companies (D’Souza, 2014:179-188). A practice that promotes inauthentic claims in relation to products or services offering environmental benefits is called greenwashing (Watson, 2016). Therefore, in partaking in this, a company wrongly portrays itself as being more environmentally friendly than it actually is (Watson, 2016).
2.3.1 The Importance of Eco-labelling in the Food Industry for Consumers
According to Manage (2017), an enhancement of customer awareness through eco-labelling has paved the way towards more sustainable industry practices. Eco-labelling informs consumers of specific characteristics of products and has been used to market greener products. Manage (2017) states that eco-labelling in the food industry is mainly focused on the promotion of organic farming. Strategies that include eco-labelling are known to enhance the value of products and services in cognisance of consumers therefore firms are driven to integrate more sustainable models into their practices (Ackerman ; Pantel, 2017: 814-824). In the food industry, this has led to important environmental impact improvements at the agricultural stage, while most other stages in the Food Supply Chain (FSC) have continued to be designed inefficiently (Ackerman ; Pantel, 2017: 814-824).
According to Mishra and Sharma (2014:78-86), when companies implement the use of eco-labels, they open themselves up to the possibilities of differentiating their products and providing consumers with more product choices in a supermarket that is becoming more eco-friendly. In this sense, eco-labels aid consumers in their decision-making process in relation to eco-friendly food products Mishra and Sharma (2014:78-86). However, Manage (2017) states that even though a consumer may make use of eco-labels in their decision-making process, this does not guarantee that they will invest in it. This is due to the fact that different eco-labels provide information pertaining to different environmental outcomes and this affects consumers’ product preference (Manage, 2017).
Ackerman and Pantel, (2017: 814-824) further state that eco-labelling on its own cannot be relied upon to modify the behaviour of consumers and eliminate detrimental environmental effects because it needs to be paired with environmental legislation and measure to be effective.
2.4 Benefits of Ecolabelling for Organisations
According to the International Institute of Sustainable Development (2013), eco-labelling has a number of major benefits, namely:
Informing consumer choice
Eco-labelling can be deemed as an effective tool that can be used to offer consumers information about the impacted certain products have on the environment and dissuade them from purchasing products that harm the environment (Rubik & Frankl, 2017). Rubik and Frankl (2017) further state that this also provides consumers with the ability to easily distinguish between products that are harmful and not harmful towards the environment. Furthermore, an eco-label enhances customer awareness in relation to product benefits (Rubik & Frankl, 2017). For example, paper that is recycled contributes towards minimising waste and preserving (Rubik & Frankl, 2017).
Promoting economic efficiency
Banerjee and Solomon (2003:109-123) reveal that eco-labelling helps firms reduce regulatory control costs as it is cheaper. This is due to the fact that when customers and manufacturers are motivated to make decisions that are environmentally friendly, the demand for regulation is low (Banerjee and Solomon, 2003:109-123). The government as well as the industry should note that this is beneficial towards to them (Banerjee and Solomon, 2003:109-123).
Stimulating market development
Supply and demand is directly impacted by consumers choice to invest in eco-labelled products (May, 2016). May (2016) states that this shifts the market towards a higher level of environmental awareness.
The implementation of programs that drive environmental certification allow organisations to garner approval for their products in relation to correlating with specific eco-label criteria (International Institute of Sustainable Development, 2013). Therefore, customers can visually observe that companies are doing their fair share to protect the environment from detrimental effects (International Institute of Sustainable Development, 2013). Furthermore, this provides a firm’s products with a higher sense of distinguishability on shelves (International Institute of Sustainable Development, 2013).
2.5 Ecolabelling Challenges for Organisations
According to the International Institute of Sustainable Development (2013), ecolabelling has a number of major challenges, namely:
Misleading or fraudulent claims
When a company uses an inauthentic eco-label on a product, it will lose its credibility and sense of trustworthiness in the eyes of the consumer (International Institute of Sustainable Development, 2013). Therefore, an eco-label must embody the company’s sustainable values and they must use environmentally friendly terms very wisely when promoting their products (International Institute of Sustainable Development, 2013). It is imperative that company’s do not take advantage of consumer’s trust and loyalty (International Institute of Sustainable Development, 2013).
Many companies portray themselves as being inauthentically environmentally friendly in order to gain a competitive advantage (International Institute of Sustainable Development, 2013). As a result, unfair competition arises because other companies must incur costs in order to abide by regulations (International Institute of Sustainable Development, 2013).
The International Institute of Sustainable Development, 2013) that the challenge with eco-labels is that in reality not a large number of products will be approved as being environmentally friendly. There are many regulations to consider and it is tough to abide by them all with every single product (International Institute of Sustainable Development, 2013). In this regard, organisations still have a long way to go.
2.6 Consumer Behaviour
According to Chand (2016), consumer behaviour can be referred to as the selection, purchase and disposal patterns of consumers and organizations in relation to their wants and needs. In other words, Chand (2016) elaborates that consumer behaviour describes the way consumers act in the marketplace and what the reasons are behind these behaviours. Schiffman and Kanuk (2000) offer some enlightenment with a similiar explanation in which they state that consumer behaviour refers to the feelings consumers exude when they use resources that are available to them to purchase products or services that encompass their desires and meet their needs. Stallworth (2008) states that consumer buying behaviour occurs when consumers buy or make use of products or services that satisfy their mental and emotional needs. However, Dudovskiy (2013) suggests that these set of activities may be modified with time due to the fact that customers’ physical and psychological needs are constantly changing. Moreover, it is imperative for marketers to thoroughly understand what consumers motives are in relation to purchasing certain goods and services (Stallworth, 2008). In this context, marketers will be able to easily determine how to cater towards consumers’ specific needs and segment the market appropriately (Chand, 2016).
2.7 Green Purchasing Behaviour
According to Joshi (2015) green purchasing behaviour can be observed to be the act of buying products that are environmentally friendly and dissuading from products that contribute towards the depletion of natural resources in the environment. Chauhan and Bhagat (2018:46-55) state that green purchase intention and behaviour are often measured as green purchasing. However, according to Chauhan and Bhagat (2018:46-55) green purchase intention refers to consumers’ willingness to purchase green products. Intentions capture the motivational factors that influence green purchase behaviour of consumers (Joshi, 2015).
Chauhan and Bhagat (2018:46-55) add that green purchase behaviour surrounds the idea of being socially responsible and ethical during the decision-making process. As a result, when individuals are making a choice as to what product to purchase, they constantly deliberate if it would bring about social change in a positive light and what type of consequences their green purchase decisions will have both publicly and privately (Chauhan and Bhagat, 2018:46-55).
2.8 Green Purchasing and its relationship with demographic variables
A research of Australian green consumers shows that their demographic profile was connected to their attitude and towards green labels. The results show, that to some extent, eco-labels were linked to the demographic variables. The demographic factors included in this study were: age, gender, income and employment (D´Souza, Taghian, Lamb ; Peretiatko, 2007: 371-376). These factors will be further discussed below.
With regards to the factor of age, it was observed that older consumers tended to invest more in eco-labels than younger consumers (D´Souza, Taghian, Lamb ; Peretiatko, 2007:371). To justify this with statistics, 53.8 percent of the older consumers in the 50-60+ year old age group stated they had a sense of satisfaction with eco-labels whilst only 3.8 percent of the younger consumers expressed their preference for eco-labelled products (D´Souza, Taghian, Lamb ; Peretiatko, 2007:371).
According to Chekima, Wafa, Igau, Chekima, ; Sondoh (2016:3436-3450), with regards to gender it was found that only a slight correlation existed in relation to green purchasing. Therefore, even though it is a small effect, gender does have an influence on the purchasing of eco-labelled products (Chekima et al, 2016:3436-3450). In context of this, women were more aware of and had a higher understanding of eco-labels than men (Chekima et al, 2016:3436-3450). However, different research provided different result and it leaned to a more neutral outcome with men and women having the same level of understanding and satisfaction in relation to eco-labels (D´Souza, Taghian, Lamb ; Peretiatko, 2007: 373). Therefore, it can be said that gender is a subjective demographic variable and requires further investigations.
Income portrays a difference between low and high-income individuals in green purchasing behaviour especially with attitude (D´Souza, Taghian, Lamb ; Peretiatko, 2007: 374). Low income individuals tend to dissuade from eco-labelled products as they are normally premium priced (D´Souza, Taghian, Lamb ; Peretiatko, 2007: 373).
According to Johnstone and Tan (2015:311-328), taking into account the employment demographic variable, it can be noted that employees who work full time require less information on their products in relation to recycling. However, in another study, where researchers measured different factors that could affect consumer behaviour towards environmental concern, the correlations with different background factors such as income and education were shown to be weak (Devinney, Auger ; Eckhardt, 2011:14). This result was quite similiar to another study comparing consumer ethics and demographics such as differences influenced by gender, education, income, culture, domicile and so on proved similarly unfounded (Devinney, Auger ; Eckhardt, 2011:14).
2.9 The Factors Influencing Green Purchase Decisions
According to Dagher and Itani (2014:188-195), several factors have been found to affect the attention and purchase of eco-labelled products, namely:
Social Pressure and Attitude (Pro-Environment)
According to Dagher and Itani (2014:188), consumers possess the ability to affect behaviour as they own a large amount of power. In this sense, consumers influence each other to purchase products with opinions and suggestions (Dagher ; Itani, 2014:188). In other words, they can dissuade or persuade each other’s final choices through social pressure (Dagher & Itani, 2014:188). With regards to peer influence and social pressure, consumers are especially easily persuaded to change their minds when purchasing eco-labelled products (Young, Hwang, McDonald & Oates, 2010:21). This is due to the fact that if a certain group strongly believe in the conservation of the environment, they will try to instil this belief in others by convincing them that eco-labelled products are a healthier option (Young, Hwang, McDonald & Oates, 2010:21). Other consumers may begin to feel a sense of guilt for buying products that deplete the environment and will alternatively shift to buying eco-labelled products which do not harm the environment (Young, Hwang, McDonald & Oates, 2010:21). This claim is supported by Kotler (2011) as he states that social factors such as family or peers largely influences consumer and purchase behaviour.
Consumer Awareness and Knowledge
When consumers are deciding on whether to purchase green products, Young, Hwang, McDonald and Oates (2010: 23) state that the factor of understanding and knowledge plays a huge role in influencing their decision. In this sense, consumers need to have relevant knowledge about environmental issues when deciding on whether or not to invest in green products such as the concept of eco-labels (Young, Hwang, McDonald & Oates, 2010:23). As stated earlier by Rubik and Frankl (2017), the benefit of eco-labelling is that it provides consumers with information on how a product abides by environmental regulation. In this case, an eco-label can also aid in enhancing the consumer’s knowledge during the green purchase stage as they will be able to see the information on the label which is displayed on the packaging (Rubik ; Frankl, 2017).
However, Young et al (2010:23) argues that if the information is ambiguous, this may stunt the consumer’s ability to decide on whether or not to buy a green product therefore information must always be accurate and comprehensive, especially in relation to environmental issues. Another factor to consider is that although consumer awareness in relation to eco-labelled products may be high and substantial, they may lack an understanding as to what the actual eco-label means (D´Souza, Taghian, Lamb & Peretiatko, 2007:371). Furthermore, D´Souza, Taghian, Lamb and Peretiatko (2007:372) state that a problem to consider is that many consumers are aware that eco-labelled products exist but they choose not to buy. Moreover, Dudovskiy (2013) states that the prerequisite to enabling greener decisions are informed product choices.
2.10 The Difference Between Eco-labelled and Conventional Products
Products that display an eco-label are items that correlate with the standards and regulations of the environment therefore, they do not harm the environment or deplete its resources (Kumar, 2014). In relation to consumption of food, these products are deemed as being organic and healthy to eat (Kumar, 2014). On the other hand, conventional products are products that are the typical products in the market, and which do not meet the ecolabel criteria (Kumar, 2014). Therefore, in some cases, these products are manufactured and sold without considering how they impact the environment and its resources (Kumar, 2014).
In this chapter the researcher has observed existing literature to discuss the study’s variables and objectives in a broader light. This should, in turn, enhance the reader’s understanding of the study and what it is trying to achieve.
In the next chapter, chapter three, further insight into the methodology will be provided.