GREEN CONSUMERISM VERSUS GLOBAL - PDF document

1 GREEN CONSUMERISM VERSUS GLOBAL WARMING
GREEN CONSUMERISM VERSUS GLOBAL WARMING: ROLE OF GREEN EXPERIENTIAL VALUES AND GREEN TRUST, CASE OF GREEN HOTELS IN INDIA 1 ANSH GUPTA ( E - mail: ansh.gupta@iiml.ac.in ) and Prof. S.B DASH Indian Institute of Management Lucknow Acknowledgement for Support 2 CII - Sohrabji Godrej Green Business Centre “.usiness is the only mechanism on the planet today powerful enough to produce the changes necessary to reverse the environmental and social degradation” - Paul Hawken (an environmentalist, e

2 ntrepreneur, and author) Co - author :
ntrepreneur, and author) Co - author : The Ecology of commerce Co - founded : Smith & Hawken 3 Scenario A • An eco - friendly product • Saves environment 4 Scenario B • An eco - friendly product � Imagery re - calls of nature • Good for health � Economical in long - term • Beneficial for other stake holders in the society � Saves environment • Consumers of this product will be tagged as “ ECO - BENEFACTORS ” on FB • The product carries the label - certified by the

3 environmental ministry Presentatio
environmental ministry Presentation Structure • The Context • Need for the study • Research Objectives • Research Hypotheses and Framework • Research Design and Methodology • Research Implications • Expected Limitations and Future Research Directions 5 The Context • Negative Impacts of human activities on environment and society are more perceptible than before 6 The Context (Cont…) • Growing awareness about environmental issues • People are also voicing their concern

4 for our planet 7 The Context (Contâ
for our planet 7 The Context (Cont…) • Environmentalism has become a major issue in the marketplace 8 The Context (Cont…) • ‘Green marketing’ is the trend at present 9 Need for the study • Despite 4 decades of extensive research in green marketing, only handful of green products/services has been successful (terrachoice report, 2010) • A serious disconnect between what marketers are offering as benefits of green consumption to the consumers and what consumers are looking for . â

5 €¢ Benefits sought from consumption of
€¢ Benefits sought from consumption of green products/services are not immediate and are intangible • But, Certain green products are highly successful . Why? 10 New Age Consumers • Experience is more important than just a good product or service • Looking for “meaningful” consumption experiences with minimum negative impact on environment • Becoming increasingly concerned about environmental issues 1 • Many individuals now realize that their

6 purchasing decisions directly i
purchasing decisions directly influence the environment 2 • Willing to consider and pay more for Green Products/services 3 • Lack of trust about green claims of the products/services 4 11 Research Objective 1. To study relationship between green experiential values and intention to buy green product/service. 2. To examine the role of green trust in the relationship between green experience and intention to buy green. 12 13 Customer Value Dimensions Extrinsi

7 c Intrinsic Self - oriented Econom
c Intrinsic Self - oriented Economic Value Hedonic Value Other - oriented Social Value Altruistic Value Ref: - Holbrook, 2006 Green Experiential Value • Defined as the customers’ perceptions of Green products or services based on interactions involving either direct use or indirect observation of its eco - friendly aspects. 1. Economic utility theory (Stigler,1950) – Consumers perceive that the consumption of green products/services deliver additional benefit (value) of not harming the environme

8 nt / better health/ saving cost (Hartman
nt / better health/ saving cost (Hartmann et al. 2005) 2. Biophilia hypothesis (Wilson, 1995) – Aesthetic pleasure and emotional enticement associated with nature is the "central issue of biophilia." 3. Costly Signaling Theory (Grafen 1990;Zahavi, 1975) – People engage in buying green products/services to attain status (Griskevicius, 2010) 4. Theory of Warm Glow giving (Andreoni, 1990) – Customers experience an intrinsic value in using green products/services, and individual motivation is driven by a “warm glow of

9 giving” (Iartmann et al. 2006) 1
giving” (Iartmann et al. 2006) 1 3 4 2 Green Trust • “a willingness to depend on one object based on the belief or expectation resulting from its credibility, benevolence, and ability about environmental performance” (Chen ,2010) • Because of non - immediate and intangible benefits of ‘green’ features, trust is more important. • According to Youl Ha and Perks (2005), customers’ brand experiences directly affect trust. • Customer trust can influence their purchasing decisions (Gefen and Strau

10 b, 2004). 14 Relationship between Gr
b, 2004). 14 Relationship between Green Experiential Value, Green Trust and Purchase Intention • Positive green experience with a product is influential in developing trust about environmental claims and will results in increased probability of purchase of green brand (Baker and Ozaki, 2008) • Hypotheses – H1: The green trust mediates the relationship between green experiential value dimension economic value and intention to buy green. – H2: The green trust mediates the relationship between green experiential value

11 dimension hedonic value and intention to
dimension hedonic value and intention to buy green. – H3: The green trust mediates the relationship between green experiential value dimension social value and intention to buy green. – H4: The green trust mediates the relationship between green experiential value dimension altruistic value and intention to buy green. 15 Hypotheses and Framework 16 Economic Value Social Value Hedonic Value Green Experiential Value Altruistic Value Green Trust H1 H2 H3 H4 Intention to Buy Green

12 Research Design • To achieve our re
Research Design • To achieve our research objective we have chosen the context of ( green )hotel services which are highly experiential in nature. • Both Qualitative and Quantitative approach were used. • Survey instrument was designed to test the hypotheses • Data was collected at various green hotels in India . 17 Methodology - Summary 18 Qualitative • In - depth Interviews with 25 guests (Delhi, Jaipur , Mumbai) • Male - 64% ; Female - 36% • Age: - (5) - 12% ; (26 - 35) - 24% ; (35

13 - 45) - 16% ; (46 - 55) - 16% ; (56 - 65
- 45) - 16% ; (46 - 55) - 16% ; (56 - 65) - 24% ; (�65) - 8% • Type of traveler: • Leisure - 42%; Business - 46%; Both - 12% • Domestic - 32%; Foreigner - 68% Quantitative • Convenience sample - 315were usable (Delhi, Jaipur , Kochi, Ahmadabad, Chandigarh and Mumbai) ; 46% response rate • Demographic details - 67% male, 33% Female; 42% foreigner, 62% age band of 30 yrs to 50 yrs, and 52% business trip • Structural Equation Modeling • The mediation hypotheses are tested using 4

14 step mediation analysis suggested by B
step mediation analysis suggested by Baron and Kenny (1986). Survey Items • Green experiential value dimensions items were developed frm qualitative study and some were adopted from the perceived environmental benefits scale by Hartmann et al. (2011). • The green trust items were adopted from Chen’s (2010) Consumers’ Insights 19 “I think hoosing this hotel which is doing something for the environment, I feel good about contributing my bit towards environmental well being.” “ The environmenta

15 l focus of this hotel is visible the
l focus of this hotel is visible the moment you enter the hotel, in the lobby, in the rooms. I feel fresh and charged up. I think its value for money. ” “I always stay in this hotel when I visit this city. I feel relaxed, at ease and enjoy that feeling of being an environmentally responsible traveler.” “ Everyone talks about being eco - friendly these days. It feels good to be associated with the brand which focuses on protecting environment. I have already made a FB update ” SEM Results â

16 €¢ CFA results were found to be satisfac
€¢ CFA results were found to be satisfactory with Chi - sq= 431.6 , df=137, p.001, CFI= 0.95 , NFI= 0.93 , RMSEA= 0.074 , SRMR= 0.03 . • Construct Validity • Composite reliability value for all the constructs were 0.7 and AVE above 0.5 . (Fornell & Larcker, 1981) • Structural Model - Chi - sq= 506.3 , df=141, p.001, CFI= 0.93 , NFI=0.91, RMSEA= 0.079 , SRMR= 0.04 . All of the hypothesized links were significant and positive. 20 Results (Cont..) • Mediation Analysis – Step 1: All zero - order relati

17 onships between experiential values (ec
onships between experiential values (economic, hedonic, social and altruistic) and Intention to purchase green were found significant 21 Green Experiential Value Dimensions Standardized Coefficients t Sig. Beta Altruistic .585 11.231 .000 Hedonic .100 1.925 .057* Social .430 8.269 .000 Economic .438 8.425 .000 Adjusted R2 = 0.718 (F=67.299; p0.001) [* significant at p0.1] Table 1: Dependent Variable - purchase intention Results (Cont..) – Step 2: All zero - order relationships

18 between experiential values (economic,
between experiential values (economic, hedonic, social and altruistic) and green trust were found significant 22 Green Experiential Value Dimensions Standardized Coefficients t Sig. Beta Altruistic .298 7.794 .000 Hedonic .258 6.736 .000 Social .550 14.390 .000 Economic .629 16.466 .000 Adjusted R2 = 0.848 (F=146.075; p0.001), Table 2, Dependent Variable - Green Trust Results (Cont..) – Step3: The relationship between green trust and green purchase intention were observed as

19 significant . – Step4:
significant . – Step4: Relationship between green trust and intention to buy green found to be significant whereas relationship between economic, hedonic and social dimension of green experiential value and intention to purchase green found to be insignificant when controlled for green trust . – In case of altruistic dimension of green experiential value and intention to purchase found to be significant (p) when controlled for green trust. Relationship between green trust and intention to purchase green a

20 lso observed as significant. 23
lso observed as significant. 23 Standardized Coefficients t Sig. Beta Green Trust .735 11.011 .000 Adjusted R2 = 0.536 (F=121.235; p0.001) Table 3 Findings • H1, H2, H3 are supported • H4 is partially supported - means green trust partially mediates relationship between social dimension of green experiential value and green purchase intention. • Green trust has been shown to play a mediating role in relationship of green experiential value and intention to purchase • Thus, gives a new

21 framework to analyze the frequently hi
framework to analyze the frequently highlighted gap between pro - environmental attitude and purchase of green brands. 24 Implications • Disintegrating green experiential value into 4 dimensions offers rich insights to the practitioners & academicians about the various kinds of benefits that seek from eco - friendly product/services. • The marketing researchers can appreciate the motivations and drivers behind consuming green/sustainable brands. • The study offers managers a model for analyzing various dimension

22 s of green experiential value and how
s of green experiential value and how relatively these impact the green consumption. • The study suggests that companies should invest more resources in enhancing the green experiences of the consumers and built the trust in green claims . • In the era of experiential economy, this study offers maiden framework to enhance green consumption. • Research results are helpful to managers, researchers, practitioners, and governments, and provide useful contribution to relevant studies who are trying to make this world gre

23 ener. 25 Limitations and Future Work
ener. 25 Limitations and Future Works • This study is examined general lodging customers’ eco - friendly experience and its effect on purchase intention – future research should examine the relationships among study constructs in other products/services context to validate the current model. • There may be more existing variables that are important in explaining relationship between green experience and green consumption not considered in the present study (e.g. personal characteristics, environmental consci

24 ousness and values etc.). • Lastly
ousness and values etc.). • Lastly, for future research, cross - cultural studies using the proposed model are recommended to validate the results of this study across nations and cultures. 26 THANK YOU 27 • Feedback • Suggestions • Comments Green Marketing in Hospitality Industry • The hotel industry , due to its very specific operating characteristics and the services it provides, consumes substantial quantities of energy, water and non - durable products ( Robinot and Giannelloni , 201

25 0). • Following Green marketing pra
0). • Following Green marketing practices (e.g. Reducing utility usage) is not only about helping save our environment ; there are also financial gains to be realized( PKF Hospitality Research, 2007) • Thus, for hoteliers the concept of Green marketing is the way to ensure sustainable growth of the industry and gain competitive advantage (Porter and van der Linde , 1995) 28 BACK Consumer Experiential Value Dimensions 29 Green Experiential Value 5efined as customers’ perceptions of Green produc

26 ts or services based on interactions in
ts or services based on interactions involving either direct use or indirect observation of its eco - friendly aspects. Economic value refers to the case in which a green consumption experience serves as a means to a consumer's own objectives — to protect the environment for better and healthy future so as to have reduced cost of health and enjoying nature (in context of present study ) Social value occurs when one's own consumption behavior serves as a means to shaping the responses of others — as when I con

27 sume anything green that makes a status
sume anything green that makes a status - enhancing favorable impression or bask in the reflected glory of my esteem - evoking eco - friendly consumption (in context of present study) Hedonic value arises from my own pleasure in consumption experiences appreciated for their own sake as ends in themselves — as in the fun that I might derive from being in coherence with nature or the aesthetic enjoyment that I might feel in closer to nature, or a beautiful scenic vista of natural surroundings or décor (in context of pres

28 ent study) Altruistic value entai
ent study) Altruistic value entails a concern for how my own consumption behavior affect others where this experience is viewed as a self justifying end - in - itself — as when engaging in ethically or environmentally desirable practices in which “virtue is its own reward” (e.g., contributing to a charity, being no damaging to environment) Holbrook, 2006, Journal of Business Research 30 Green Brand Equity Definition: - ‘a set of brand assets and liabilities about green commitments and environmental concer

29 ns linked to a brand that enhance or det
ns linked to a brand that enhance or detract from the value provided by a product or service’ (Kang and Hur , 2011; Chen, 2010) Overall Green Brand Equity Construct Validity : Discriminant Validity, Alpha and CR No. of Items Mean SD Alpha CR GExE GExH GExS GExA G_trust RPI GExE 3 5.84 0.86 0.86 0.89 0.74 GExH 3 5.94 0.85 0.88 0.89 0.71 0.74 GExS 3 5.71 1.02 0.86 0.89 0.62 0.66 0.74 GExA 3 5.94 0.90 0.91 0.92 0.71 0.71 0.76 0.80 G_trust

30 4 5.55 0.98 0.90 0.92 0.45 0
4 5.55 0.98 0.90 0.92 0.45 0.44 0.44 0.41 0.74 RPI 4 5.94 0.75 0.82 0.87 0.49 0.56 0.52 0.52 0.61 0.64 31 Φ( GExAI , GExE ) - �  2 (UM) =3491.4(1061),  2 (CM) = 3518.0(1062), Δ  2D =26.6,p=.000 Φ( GExAI , GExH ) - �  2 (UM) =3491.4(1061),  2 (CM) = 3520.2(1062), Δ  2D =28.8,p=.000 Φ( GExS , GExA ) - �  2 (UM) =3491.4(1061),  2 (CM) = 3513.8(1062), Δ  2D =22.4,p=.000 Φ( GExE , GExH ) - �  2 (UM

31 ) =3491.4(1061),  2 (CM) = 3544.
) =3491.4(1061),  2 (CM) = 3544.5(1062), Δ  2D =53.1,p=.000 Φ( GExE , GExA ) - �  2 (UM) =3491.4(1061),  2 (CM) = 3516.8(1062), Δ  2D =25.4,p=.000 Φ( GExE , GExA ) - �  2 (UM) =3491.4(1061),  2 (CM) = 3532.6(1062), Δ  2D =41.2,p=.000 Bagozzi and Phillips (1982) DV =� Comparison of with Sq - Correlations with other constructs ( Fornell and Larcker, 1981) AVE All Items measured on 1 ( strongly disagree) to7( strongly agree) likert