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27,3 “Green” segmentation:
an application to the Portuguese
consumer market
364
Arminda do Paço and Mário Raposo
Research Unit NECE, Department of Business and Economics,
Received October 2008
Revised December 2008 University of Beira Interior, Covilhã, Portugal
Accepted December 2008
Abstract
Purpose – The purpose of this paper is to identify distinct market segments based on several
environmental variables. Given the complexity and the range of variables that may determine the
characterisation of these groups, as was made evident in the literature review, it was decided to focus
this research mainly on analysing the environmental and demographic criteria.
Design/methodology/approach – The data were collected through a survey of Portuguese
consumers, aged over 18. The model of data collection was a survey conducted by self-administered
questionnaire. A total of 887 were considered valid (the final sample). The questionnaire is
composed of two sections. In the first part, data are collected about the demographic characteristics
of respondents. The second part examines the environmental dimension (concern, affect, knowledge,
environmentally friendly behaviours, information search, activism, green products buying
behaviour, sensitivity to price, waste separation/recycling, perceived efficiency, scepticism, etc.).
After collection, the data were statistically analysed and interpreted using the statistical software
Statistical Package for Social Sciences 15.0. The data obtained were submitted to a multivariate
statistical analysis, which included the following sequence of statistical treatment: factor analysis,
cluster analysis and discriminant analysis. After this, a characterisation was made of the segments
found.
Findings – The results of this study show that there are consumers who buy green products
and that certain environmental and demographic variables are significant for differentiating
between the “greener” segment and the other segments. Yet, generally speaking, one is left with
the impression that the Portuguese, despite their support for policies designed to improve the
environment, do not translate their concerns into actions: they rarely join environmentalist
associations and they do not take part in policy making. Their participation is often based on
protecting the environment by saving electricity and water, which shows that these concerns may
be more closely related with economic factors than with an environmental consciousness. It can
be concluded that Portuguese consumers understand the challenges currently placed before the
environment, and that they are aware of the existence of environmental problems, even though
their concerns are not always translated into environmentally friendly behaviour. It was also
noted that there are consumers who are prepared to base their buying decisions on purchasing
products that do not harm the environment. In fact, it was seen that there is a segment of
“greener” consumers in the sample that differs significantly in some aspects from the other
market segments.
Originality/value – The importance of market segmentation is highlighted, together with a
presentation of the most relevant criteria for differentiating individuals in terms of their environmental
behaviour. The results of this study show that there are consumers who buy green products and that
Marketing Intelligence & Planning certain environmental and demographic variables are significant for differentiating between the
Vol. 27 No. 3, 2009 “greener” segment and the other segments.
pp. 364-379
q Emerald Group Publishing Limited Keywords Consumer behaviour, Market segmentation, Green marketing, Portugal
0263-4503
DOI 10.1108/02634500910955245 Paper type Research paper
Introduction “Green”
Expressions such as “decade of the environment” or “the Earth decade” have been segmentation
associated to the 1990s. During this decade, social and environmental concerns took on
great importance for consumer purchasing decisions (Prothero, 1996; Menon et al.,
1999). At the same time, firms seeking to remain competitive started to incorporate
these newly-emerging concerns in their management and marketing decision-making
(Straughan and Roberts, 1999; Rivera-Camino, 2007). 365
Recently, increasing attention has been paid to the relationship between consumer
behaviour, marketing and the environment. Such attention has been manifested in two
ways: on the one hand, there has been an increase in public awareness about
environmental aspects, and, on the other hand, an increase in the evidence of
environmental responsibility or green marketing activities.
Nowadays also the consumers seem to be more concerned about the environment.
Such concerns have begun to be displayed in their purchasing patterns, with consumers
increasingly preferring to buy the “environmentally friendly products”. This trend
favoured the emergence of a new segment of consumers: the green or ecological
consumers.
The study here reported applies the green market segmentation concept to
consumer market in Portugal. The paper starts by presenting a brief contextualisation
of the concept of green marketing, as well as some alternative ways of characterising
this concept. Next, the importance of market segmentation is highlighted, together with
a presentation of the most relevant criteria for differentiating individuals in terms of
their environmental behaviour. Relevant aspects of the research methodology are
afterwards presented, as well as the empirical results and respective conclusions.
Demographic Age, gender, family dimension, Anderson et al. (1974), Banerjee and
religion, subculture, education, job or McKeage (1994), D’Souza et al. (2007),
occupation, income, social class, Jain and Kaur (2006), Laroche et al.
habitation type (2001), Mainieri and Barnett (1997),
Roberts (1996), Samdahl and
Robertson (1989) and Webster (1975)
Psychographic Lifestyle, personality, motivation, Cornwell and Schwepker (1995),
values McCarty and Shrum (1994), Straughan
and Roberts (1999) and Vlosky et al.
(1999)
Behavioural Knowledge, attitude, product usage, Alwitt and Berger (1993), Balderjahn
purchase behaviour, brand loyalty, (1988), Cornwell and Schwepker
benefits (1995), Kinnear et al. (1974), Rios et al.
(2006) and Schuhwerk and
Lefkokk-Hagius (1995)
Environmental Concern, PBC, knowledge, affect, Antonides and van Raaij (1998), Chan
commitment, ecological consciousness, and Yam (1995), de Pelsmacker et al.
subjective norms, activism, (2002), Maloney and Ward (1973),
environmentally friendly behaviour, Maloney et al. (1975), Martin and
green products buying behaviour, Simintiras (1995), Mostafa (2007) and Table I.
information search, willingness to pay, Schlegelmilch and Bohlen (1996) Segmentation studies
recycling, scepticism towards of the green consumer
environmental claims market
MIP Research methodology
27,3 What the previous bibliographical study of the segmentation of the green market has
highlighted is the fact that the various types of consumers may have different concerns
and emotional attachments towards the environment, different environmental
knowledge and different environmentally friendly behaviours.
As was mentioned earlier, this paper seeks to identify different segments of
370 consumers. Given the complexity and the range of variables that may determine the
characterisation of these groups, as was made evident in the literature review, it was
decided to focus this research mainly on analysing the environmental and
demographic criteria.
The choice of the proper segmentation base depends on, as Wedel and Kamakura
(2000) state, the purpose of the study and the market in question, as well as the
selection of segmentation methods. The behavioural variables related with the
environment can be an efficient predictor of future consumer behaviour.
The data were collected through a survey of Portuguese consumers, aged over 18.
The model of data collection was a survey conducted by self-administered
questionnaire. The questionnaire was administered by a group of well-trained
research assistants (university students) to a convenience sample. A total of 887
questionnaires were considered valid (the final sample).
The questionnaire is composed of two sections. In the first part, data are collected
about the demographic characteristics of respondents. The second part examines the
environmental dimension (concern, affect, knowledge, environmentally friendly
behaviours, information search, activism, green products buying behaviour,
sensitivity to price, waste separation/recycling, perceived efficiency, scepticism, etc.).
After collection, the data were statistically analysed and interpreted using
the statistical software Statistical Package for Social Sciences 15.0. The data obtained
were submitted to a multivariate statistical analysis, which included the following
sequence of statistical treatment: factor analysis, cluster analysis and discriminant
analysis. After this, a characterisation was made of the segments found.
Results
Based on the fact that there are differences between individuals in regard to their
pro-environmental behaviour and attitudes, and that the number of variables used in
this research is quite extensive, an exploratory factor analysis was used to simplify the
interpretation of the variables.
In order to carry out the factor analysis, the principal components method was used
to extract the factors. The variables were grouped into nine factors and, all together,
account for 57.37 per cent of the total variance. In order to facilitate the understanding
and interpretation of the results, the factors were rotated using the Varimax method.
The description of the factors is shown in Table II.
As can be seen, according to the score obtained in the Kaiser-Meyer-Olkin measure,
the results of the analysis can be considered excellent (Kaiser, 1974). Bartlett’s test of
sphericity has a significance level of 0.000, showing that there is a high degree of
correlation between the variables, which means that the factor analysis was suitable
(Hair et al., 1998).
After using factor analysis to determine the factors that were relevant to the study,
these were then used as inputs in later analyses. Choosing the number of individual
“Green”
Factors Description
segmentation
Environmentally friendly The first factor reflects a tendency for consumers to be careful
buying behaviour when shopping, buying more energy-efficient, less polluting,
environmentally friendly, recycled and biodegradable products, as
well as products whose packaging causes less harm to the
environment 371
Environmental activism The second factor essentially brings together the variables related
with the interest in and search for information, collaboration with
environmentalist organisations and an active participation in
protests held in defence of environmental causes
Environmental knowledge In the third factor, the variables are related with the knowledge of
practices that do not harm the environment, knowledge about
aspects as the “greenhouse effect”, “acid rain” or the “hole in the
ozone layer”
Environmental concern The variables presented in the fourth factor are related with the
concern about the various aspects of pollution (air pollution,
problem of ozone depletion, pollution caused by industries, etc.)
Recycling The variables include in this factor are related with the separation
of packages, the availability/willingness to take them to recycling
collection points and the attempt to encourage others to behave in a
similar way
Perceived consumer The sixth factor presents a mixture of variables which, on the one
effectiveness hand, relate to the concern about environmental problems and the
unwillingness to believe that such problems will sort themselves
out alone and, on the other hand, the personal stance that is linked
to the propensity to believe that individual action can help to solve
these problems
Resource saving The seventh factor includes variables that may reflect an
environmentally friendly behaviour, since they relate to the saving
of energy resources and the attempt to reduce the quantity of
rubbish produced
Economic factor The variables related to the willingness to pay a higher price for
green products and to pay more taxes in order to protect the
environment, as well as the greater concern with the environment
in detriment to the economy, are grouped together in the eighth
factor
Scepticism towards In the case of the ninth factor, it can be seen that the emphasis is
environmental claims laid on consumer reactions to the promotional messages and claims
made by firms at the level of advertising, packaging and labelling
Kaiser-Meyer-Olkin measure of sampling adequacy 0.9291
Bartlett’s test of sphericity 8743.1 Table II.
Significance 0.000 Description of the factors
segments to break out of the collected and analysed data is one of the most complex
decisions to be made in segmentation. The most important consideration is that the
resulting segments should be comprehensible and usable in practice.
After analysing the percentage variation of the agglomeration coefficient, it was
decided to opt for a three-cluster solution (Table III). The cluster method used was
Ward’s method and the interval measure was the Squared Euclidian distance.
The variables showing the highest positive or negative scores in absolute terms
help to explain the inclusion of consumers in the different groups or clusters.
27,3
MIP
372
Table III.
Cluster analysis results
Cluster 1 Cluster 2 Cluster 3
n ¼ 319 (36.0%) n ¼ 311 (35.1%) n ¼ 25 (29.0%)
Variables Mean SD Mean SD Mean SD
Environmentally friendly buying behaviour 2 0.3432 1.1392 0.4424 0.7501 20.1094 0.8781
Environmental activism 2 0.3455 0.8244 0.1938 1.0843 0.1943 0.9802
Environmental knowledge 0.3075 0.8940 0.2168 0.7613 20.6441 1.0839
Environmental concern 0.0317 1.0134 0.1512 0.8345 20.2224 1.1239
Recycling 2 0.3128 1.1556 0.3094 0.7576 0.0139 0.9320
Perceived consumer effectiveness 2 0.0166 0.9422 0.4651 0.7838 20.5423 1.0276
Resource saving 2 0.2660 1.0856 0.2740 0.7895 20.0014 1.0309
Economic factor 2 0.1732 1.0146 0.2865 0.9656 20.1317 0.9480
Scepticism towards environmental claims 0.0085 1.0168 20.0643 1.0640 0.0673 0.8923
After the “optimum” number of clusters had been found, several tests were carried out “Green”
in order to discover if there were any significant differences between the groups. For segmentation
this reason, it was decided to use one-way variance analysis and discriminant analysis.
By observing the results in column F of Table IV, it can be seen that these allowed us to
reject the null hypothesis of equal means among the groups and to accept the alternative
hypothesis, since the groups displayed different means. Excluded from this situation was
the variable “Scepticism towards environmental claims”. All the other variables, when 373
considered individually, are significant for differentiating between the groups.
The Wilks’ l test statistic is designed to determine the discriminant function that
maximises the quotient between the variation explained by the difference between the
group means and the variation within these groups. The result obtained suggests that
the variable “Environmental knowledge” is the one that provides the greatest
difference between the means of the clusters, since it presents the lowest score.
The discriminant analysis that was undertaken made it possible to find two
discriminant functions (Table V). The differences between the clusters may be
analysed on the basis of the loadings of these functions.
The statistical significance of the functions is represented by the value of the Wilks’
l test statistic, which, when transformed into a x 2, has a significance level of 0.000.
This shows that the functions are significant for discriminating between the groups
found (Mitchell, 1994).
Table VI presents the classification results, in which the number of individuals
correctly and incorrectly classified is shown for each group. The correctly classified
cases are to be found by reading the table diagonally from left to right. The number
of incorrectly classified individuals is relatively small, whereas it can be seen that
77.3 per cent were correctly classified.
In order to complement the characterisation of the groups found, a bivariate
analysis was undertaken, in which various cross-tables were carried out. In order to
Conclusions
This study can make a contribution to the implementation of segmentation strategies
based on specific environmental variables, by helping academics and practitioners to
better understand, explain and predict patterns of consumer behaviour.
As it was possible to observe that there are Portuguese consumers used to buy green
products and that certain environmental and demographic variables are significant for
differentiating between the “greener” segment and the other segments. These
consumers, despite their support for policies designed to improve the environment, do
not translate their concerns into actions: they rarely join environmentalist associations
and they do not take part in policy-making. Their participation is often based on
protecting the environment by saving electricity and water, which shows that these
concerns may be more closely related with economic factors than with an environmental
consciousness.
It can be concluded that Portuguese consumers understand the challenges currently
placed before the environment, and that they are aware of the existence of
environmental problems, even though their concerns are not always translated into
environmentally friendly behaviour. It was also noted that there are consumers who
are prepared to base their buying decisions on purchasing products that do not harm
MIP the environment. In fact, it was seen that there is a segment of “greener” consumers in
27,3 the sample that differs significantly in some aspects from the other market segments.
These segments should be analysed by firms in order to assess their attractiveness,
adopt a correct positioning towards them and define suitable marketing programmes.
The identification of the three market segments may make it possible to implement a
complex segmentation strategy, as this provides a differentiated range of consumer
376 perceptions and choices in relation to the target market.
It is therefore to be concluded that those firms that do not respond to the “green
challenge” with products that are safer for the environment will risk losing some
credibility in the eyes of those consumers who are more concerned with environmental
issues. In turn, those firms that use green marketing strategies will be able to take
advantage of the countless opportunities presented by environmental consumerism.
The results did demonstrate the suitability of the traditional K-means cluster
analysis, within the context of the current study. But more research is necessary, to be
confident about the most appropriate segmentation method and design for other
situations and contexts.
As in many research studies of consumer markets, a truly representative sample
was difficult to achieve. It cannot be claimed that there was no sampling bias. The size
of the sample was acceptable, and similar to other studies about consumer research.
Given this context of the study, its outcomes and implications must be generalized
cautiously.
Note
1. National average 840e in 2007.
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Corresponding author
Arminda do Paço can be contacted at: apaco@ubi.pt