A study on eco-friendly purchase behavior with special reference to Fab India.

Susan Mathew; Vinod R R Correspondence: Mathew Susan, Department of Business Administration, Rajagiri Centre for Business Studies, Cochin-682039. Kerala. E-mail- susanmathew@rajagiri.edu;vinurr1@rediffmail.com Mathew. Susan has obtained her MA (Literature), B.Ed & have to her credit with over 3 years of international teaching experience & around 10 years of teaching experience in reputed colleges in Kerala. She has also completed up to level 6 in the French programme from Alliance Francaise, Bahrain and is a Presenter for Cambridge University U.K.and is an experienced corporate trainer. Currently she is a member of faculty in General Management group, Rajagiri Centre for Business Studies, Cochin. Vinod R R is a post graduate diploma in management (Financial Management) holder has to his credit 6 years of industry experience & 3 years of teaching. Presently he is a member of faculty in finance group, Rajagiri Centre for Business Studies, Cochin. Key Words:- Green Purchase Behavior, Social Influence, Consumer preference, Skepticism, Man-nature, Self image. The earths physical & biological systems came under great strain leading to a large number of environmental problems like global warming, stress & damage on bio-diversity. The market place is greener now than ever before and will become even more responsive to products and services promising environmentally responsibility well into the 21st century. The most important role that individuals play is not simply reducing their own environmental impacts but building support for leadership from government and business. The growing number of organizations entering the green product market also indicates the need for suitable segmentation and positioning strategies. One such company is Fab India & through this paper we try to assess the consumers purchase behavior of Fab India Products. The results showed that Social Influence & age are the two dimensions that influence the green purchase behavior of Fab India products from this study.

1. Introduction
Public concern for environmental issues has gradually increased over the past three decades since the inception of Earth Day. With an increasing pressure of environmental deterioration affecting numerous businesses, many firms have taken the step to become more socially responsible through developing products that meet the demand of environmentally conscious consumers. Marketers have reacted to consumers growing environmental consciousness by developing environmentally friendly products (Kohl 1990). A new paradigm for green consumers is now emerging and marketers have to take the initiative to take advantage of this change and stay in the lead (Peattie, 1997).

Of all the new products introduced in 1991 in the Industrialized economies of Canada, USA, and UK, were green products.(Das, 2002) In Indian context the environmental concerns to the Indian consumer is on the rise. Examples for green products are: cycle rickshaws as non-polluting means of transport, hydropower (electricity), automobiles powered by electricity, air-conditioners and refrigerators with environment friendly refrigerant, etc. It has been reported that Corporate Roundtable on Development of Strategies for the Environment-a body to promote environmental practices- had successfully brought together 16 leading corporates including Ashok Leyland, BHEL, IOC, ONGC, Telco, Reliance Petroleum, ICI India, etc. to identify and incorporate conservation measures (Anonymous, 2001 a). However, only a few green products have been successful (Reitman 1991) despite the vast majority of consumers reporting that their purchases were influenced by environmental concerns (Chase and Smith 1992). One such success story is Fab India.-Indian chain store retailing garments, furnishings, fabrics and ethnic products handmade by craftspeople across rural India. Their current philosophy is Ecofriendly, ethical & hand crafted Indian products. This study focuses on the consumers green purchase behavior with special emphasis to Fab India.

2. Background of the study

The earths physical & biological systems came under great strain leading to a large number of environmental problems like global warming, stress & damage on bio-diversity. Trade & businesses resisted environmental protection & resource conservation fearing that money spent on such efforts would diminish their profit. Businesses which maximized profit had excellent economic performance & businesses which did not care for social responsibility had poor economic performance despite good environmental & social record. Neither of these business models were unsustainable. The success mantra of any business is to ensure that their activities are sustainable keeping in view the economic, social & sustainable aspects. The market place is greener now than ever before and will become even more responsive to products and services promising environmentally responsibility well into the 21st century. In survey after survey, consumers have expressed strong concerns about the environment, along with a willingness to purchase products that they believe will contribute to a healthier planet. In the 1990s, consumers are voicing their concerns in the shopping market and they are shaping a new trend called environmental consumerism or green consumerism (Ottman, 1992).

3. Green Purchasing
Green purchasing is the abbreviated term for environmentally preferable purchasing. It refers to the consideration of environmental impacts in the procurement of goods and services. It is not limited to the purchase of green products alone, but deals more broadly with the full range of procurement alternatives. For example, the purchase of a more fuel-efficient vehicle in preference to a less fuel-efficient one can be considered a green purchase, without the smaller vehicle necessarily being a green product.

4. Green Purchasing and Sustainable Procurement

In contrast to green purchasing, which focuses on environmental impacts, sustainable procurement considers the triple bottom line (social, environmental, and economic) implications of procurement. Procurement can encompass two areas: 1. The transactional component or the purchase itself. 2. Other considerations such as those noted by the United Nations Environment Programme (UNEP) timeliness, effectiveness, efficiency, competition, transparency, equitable distribution and development.1

Sustainable Social Transaction Other Considerations Green Purchasing Environmental Economic

5. Consumer Approach to Green Purchasing

The most important role that individuals play is not simply reducing their own environmental impacts but building support for leadership from government and business. Recent consumer research suggests that there is an established and growing number of consumers looking for more sustainable products and services.2.3 Although this report does not directly focus on consumer purchasing, it is an important part of the supply chain and has a strong influence on organizational decisions.

6. Green Consumer
Environmentally preferable purchasing, or green purchasing, and the broader practice of sustainable procurement, have become a priority for organizations seeking to respond to growing societal demands for reductions in environmental impacts, improved efficiency and reduced resource use. Green consumer is a person who seeks to buy only environmentally friendly products. In the existing literature, a green consumer is often defined as a person who shows a form of pro-social consumer behavior (Wiener and Doesher, 1991) or is an environmentally conscious consumer (Schwepker and Cornwell, 1991; Bohlen et al., 1993) or shows pro-environmental
1

UNEP (2008) Sustainable Procurement: Buying for a Better World, p. 8.

Mobium Group (2008) The LOHAS (Lifestyles of Health and Sustainability) report. Net Balance Foundation and AccountAbility (2008) What Assures Consumers in Australia on Climate Change?.

2
3

purchasing behavior (Schlegelmilch et al., 1996). This is basically people whose behavior reflects a relatively consistent and conscious concern for the environmentally friendly purchase, use or disposal of particular products. According to Webster (1975) defined a socially conscious consumer (green consumer) as a consumer who takes into account the public consequences of his/her private consumption or who attempts to use his/her purchasing power to bring about social change, i.e., consumers incorporate social/environmental issues (eg.; an individual concerned about the amount of garbage generated) into their purchase decisions by evaluating the environmental consequences (e.g., could consider the recyclable packaging) associated with the purchase of a product. Basically, these products not only satisfy a consumers instant needs and wants, but also serve to benefit to the environment in the long run. Further, Strong (1996, P.5) defines that green consumers are those who avoid products that are likely to endanger the health of the consumers or others; cause significant damage to the environment during manufacture, use or disposal; consume a disproportionate amount of energy; cause unnecessary waste; use material derived from threatened species or the environment. In line with the above definitions, operational definition of green consumer for this study is used as consumer who purchases products and services which he/she perceives to have a positive impact on the environment or pro-environmental attitudes. However, in the market, there appear more and more so called green consumers who cannot be disregarded by modern companies striving both to maximize profit and to search for solutions to society problems (DSouza et al 2006). Thus, knowledge, awareness and changing preferences of consumers are also driving forces for business to become better environmental stewards (Olson, 2009). A recent study on consumer perception and purchasing behavior shows an increasing interest in purchasing from environmentally sustainable companies.4 The survey polled over 9,000 people in eight countries, including the US, UK, France, Germany, China, India, Brazil, and Australia. The majority of consumers-over 60 percent-in all countries want to buy from environmentally responsible companies, but the cost of green products continues to be a hurdle in developed countries. Selection and labeling are the biggest challenges in developing economies. The 2010 data indicates that the majority of consumers plan to spend the same or more money on green products in the coming year, with more than 70 percent of consumers in China, India and Brazil saying they will spend more.

7. The Organizational Approach to Green Purchasing

The organizational approach to green purchasing has multiple dimensions. These extend beyond personal choice and the individual ramifications associated with consumer purchases. Organizational approaches to green purchasing range from strategic, organization-wide commitments, to small-scale single purchases. The range of approaches includes:
4

2010 Image Power Green Brands Survey

strategic commitments such as green purchasing policies targets and public reporting of progress supplier strategies and strategic supply chain management green contracts and tenders strategic assessment of purchasing and priority spend areas highlighted green purchasing action teams and action plans communications to support and promote green purchasing measurement and review mechanisms specific projects and/or initiatives

Many organizations have green purchasing initiatives in place but fewer have undertaken strategic assessments of their green purchasing practices or have action plans in place. Those organizations that are most advanced have made progress towards embedding green purchasing into general purchasing practices. One such an organization is Fab India.

8. Fabindia Overseas Pvt. Ltd.

Fabindia is India's largest private platform for products that are made from traditional techniques, skills and hand-based processes. The company promotes inclusive capitalism, through its unique COC (community owned companies) model. The COC model consists of companies, which act as value adding intermediaries, between rural producers and Fabindia. These are owned, as the name suggests, by the communities they operate from; a minimum 26% shareholding of these companies is that of craft persons. The companys products are natural, craft based, contemporary, and affordable.

9. Problem Statement
Understanding consumer behavior is important for any marketer and it is especially critical for environmental products (Widger, 2007). Off late the demand for greener products has been increasing. The Natural Marketing Institute reports that the USD$200+ billion Lifestyles of Health and Sustainability (LOHAS) market is expected to double by 2010 and quadruple by 2015 (Wigder, 2007). Consequently, the dynamics of this buyer-seller interaction will lead to further advancement of the green revolution across the whole country (Othman, 1992; Salzman, 1991). There are a number of researches being done on green purchasing behavior (Chan & Lau, 2000; Soonthonsmai, 2001; Tanner & Kast, 2003; Kamal & Vinnie, 2007; Lee, 2008). How the consumers in a country view ecological issues and how these views are reflected in consumer behavior on green issues has been researched by Cheah Ching Mun, 2009. Therefore in order to better understand the green purchase behavior as a good starting point we are trying to assess the consumers purchase behavior of Fab India Products Pvt Ltd.

10.Purpose of the study

10.1 Research Objectives:a. To determine whether age influence the customers purchasing behavior of Fab India Products. b. To determine whether social-influence influence the customers purchasing behavior of Fab India products. c. To determine whether self-image influence the customers purchasing behavior of Fab India products. d. To determine whether man-nature orientation influence the customers purchasing behavior of Fab India products. e. To determine whether skepticism influences customers purchasing intention of Fab India products. 10.2 Research Framework:

This study was based on the Theory of Reasoned Action by Ajzen and Fishbein (1975 & 1980). According to Ajzen and Fishbein (1975 & 1980), Theory of Reasoned Action suggests that a persons behavioral intention depends on the persons attitude about the behavior and subjective norms. This study examined green purchasing behavior Lee (2008); D'Souza et al. (2006a) of consumers which served as the dependent variable and social influence Lee (2008); self-image Lee (2008); man-nature orientation Chan (2001). skepticism Mohr et al. (1998) as independent variable. 10.3 Hypothesis:-

H1: There is a relationship between age & green purchasing behavior of Fab India Products. H2: There is relationship between social influence and green purchasing behavior of Fab India Products. H3: There is relationship between self-image and green purchasing behavior of Fab India Products. H4: There is relationship between man-nature orientation and green purchasing behavior of Fab India Products. H5: There is relationship between skepticism & green purchase behavior of Fab India Products.

11.Significance of the Study:This study would help business to understand the trend of green purchasing behavior among the youth, thereby providing an insight on how to position their products in an environmentally friendly manner. A company taking strategic decisions to project itself as a green company would be able to differentiate itself from competitors in a highly competitive market.

12.Methodology
12.1 Research design

This study used a causal research design. A causal explanation exists when there is a correlation between an independent variable and a dependent variable (Wikipedia, 2009). In this study, the independent variables are social influence Lee (2008), self-image Lee (2008), man-nature orientation Chan (2001) & skepticism Mohr et al. (1998) while the dependent variable is green purchasing behavior Lee (2008); D'Souza et al. (2006a). 12.2 Measurement of variables

Data can be primarily collected in different methods such as questionnaires, interviews & observations. Among these methods, questionnaires are a popular means of collecting data because it can cover a large number of people or organizations and relatively cheap (de Vaues, 2002; Zikmund, 2000).Hence, a validated questionnaire is used in this study for getting the data. A 5 point Likert scale is used in this study to generate statistical measurements of peoples attitude & opinions. 12.3 Research Sample

200 graduate students from a large south Indian University participated in the survey in exchange for a class credit. Business students are chosen as surveys indicated that most of the business students are knowledgeable and concerned about the environment (Lawrence, 1992). Previous studies on green purchase behavior (GPB) show that research results obtained from university students correspond to general consumer behavior in the marketplace (Schultz, 2000; Schultz, 2001). Convenience Random sampling was used in this study. Convenience random sampling is one of the main types of non-probability sampling methods. A convenience random sample is made up of people who are easy to reach. According to Changing Minds (2009), convenience random sampling generally assumes a homogeneous population that one person is pretty much like another. 12.4 Data Collection Procedures

Students who are undergoing Environment Management were identified .A questionnaire was given to capture their responses.

13

Data Analysis Techniques

The data collected from the survey was tested using statistical techniques such as correlation and multiple regression analysis using SPSS 17. 13.1 Data Analysis

Descriptive statistics are methods used to organize, display, describe and explain a set of data with use of tables, graph, and summary measures (Norusis, 1999: Johnson & Christensen, 2000).

Table no 1.1 Descriptive Statistics Variables Gender Age Green Purchase Behavior Self Image Skepticism Man-Nature Social Influence Mean 1.495 22.095 4.025 3.99 3.2088 2.679 3.6483 Std. Deviation 0.50123 1.3804 0.54392 0.36745 0.4572 0.50521 0.33906 N 200 200 200 200 200 200 200

Higher means & lower level of standard deviation of the scores indicate that the respondents have understood the questions the questions in the same manner & the questions have been answered properly. The Green Purchase behavior variable has the highest mean value amounting to 4.025 with a high standard deviation of 0.54392 & Social Influence variable has a mean of 3.6483 with the least standard deviation of 0.33906. 13.2 Correlations Analysis & interpretations

In line with the studies conducted by Lee (2008),Cheah (2009) & Wahid et.all. (2011) there is a positive correlation between social influence & green purchasing behavior at .05% level of significance. There is positive correlation between age & green purchase behavior & a positive correlation between Skepticism & Man-Nature dimensions.

Table 1.2
Correlations Gender 1 Age ** -.185 .009 200 -.185
**

Gender

Pearson Correlation Sig. (2tailed) N Pearson Correlation Sig. (2tailed) N Pearson Correlation Sig. (2tailed) N Pearson Correlation Sig. (2tailed) N Pearson Correlation Sig. (2tailed) N Pearson Correlation Sig. (2tailed) N Pearson Correlation Sig. (2tailed) N

GPB -.027 .702 200 .215

**

SM -.009 .895 200 .131 .065 200 .124 .080

SKEP -.124 .080 200 .014 .842 200 .019 .786 200 .057 .420

SI -.040 .574 200 .045 .528 200 .301

**

MN * -.147 .037 200 .035 .620 200 -.015 .838 200 .011 .872 200 .658
**

200 1

Age

.009 200 -.027 .702 200 -.009 .895 200 -.124 .080 200 -.040 .574 200 -.147 .037 200
*

.002 200 .215

**

200 1

GPB

.002 200 .131 .065 200 .014 .842 200 .045 .528 200 .035 .620 200 200 .124 .080 200 .019 .786 200 .301
**

.000 200 .122 .086 200 .113 .112

200 1

SM

200 .057 .420 200 .122 .086 200 .011 .872 200

200 1

SKEP

.000 200 .000 .997

200 .113 .112 200 .658

**

200 1

SI

.000 200 -.015 .838 200

200 .000 .997 200

200 1

MN

.000 200

200

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

13.3

Regression Analysis & interpretations

The results of five (5) independent variables against green purchase behavior can be seen in the table 1.4. The first table in the output is Model Summary which displays 5 independent variables that are entered into the regression model; the (R) is (.369). The R square value comes is .136. This is the explained variance. Thus only 14% of the five variables influence the dependent variables.

Table 1.4 titled Coefficients, helps us to see which among the five independent variables is the most important in explaining the variance in green purchase behavior. The Social Influence dimension has the highest beta under Standardized coefficients amounting to .291followed by age dimension which is significant at .000 level. It may be seen that apart from the rest, Social Influence dimension & age are the only independent variables which is significant.

Table 1.3
Model Summary Model 1 R .369 R Square .136 Durbin-Watson 1.690

Predictors: (Constant), Age, Skepticism, Social Image, Self Image, Man Nature Dependent Variable: Green Purchase Behavior

Table 1.4
Coefficients Unstandardized Coefficients Std. B Error (Constant) .358 Self Image Skepticism Social Influence Man Nature Age .096 -.010 .457 -.018 .077 Standardized Coefficients Beta .769 .100 .107 .109 .096 .027 .065 -.008 .285 -.017 .195 t Sig. .465 .953 -.093 4.193 -.186 2.891

Model 1

.642 .342 .926 .000 .853 .004

Predictors: (Constant), Age, Skepticism, Social Image, Self Image, Man Nature Dependent Variable: Green Purchase Behavior

13.4

Summary

The five hypotheses proposed were tested from a sample of 200 respondents with a main objective to study the factors influencing green purchase behavior of Fab India. Basic descriptive statistics helped to get an overview of the basic characteristics of the data & we used correlation & regression to test the validity of the proposed hypothesis. Based on the test outcome, only 2 hypotheses namely H1 & H2 were accepted & others H3, H4 & H5 were rejected.

Table 1.7
Summary Number H1 Details Status Accepted

There is a relationship between age & green purchasing behavior of Fab India Products. There is relationship between social influence and green purchasing behavior of Fab India Products There is relationship between self-image and green purchasing behavior of Fab India Products.

H2

Accepted

H3

Rejected

H4

There is relationship between man-nature orientation Rejected and green purchasing behavior of Fab India Products. There is relationship between skepticism & Rejected green purchase behavior of Fab India Products.

14. Limitations of the study

Due to limited resources, the sampling frame for this study was confined to the students of large south Indian University. Therefore, the findings of this study could not be generalized to large consumer population. The study has taken only five dimensions .However, these are not the only determinants. There are yet a lot of purchase considerations for consumers to decide whether or not to buy green products. Future research is thus can consider other demographic factors and purchasing considerations as determinants of green purchasing intention.

15. Conclusion
Going green has become the new success mantra & is being discussed by people from all walks of life. Fab Indias success story reveals the boom in the green marketing area. The findings of study reveal that young consumers have more concern for green products. Fab Indias products strengths are targeted for youth, having an ethnic style & yet contemporary. Fab India is a rarity that has both the posh, downtown crowd & the suburban set clamoring for its products. Even though it seems contradictory that social goal & profit goal cannot be pursued along, this company seems to be an exception. The success is because of the elaborate community owned model adopted in Fab India.

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