Marketing Research on Green Marketing

EXECUTIVE SUMMARY

Green marketing has been the latest trend in marketing and it has been a hot topic for research. There has been increasing importance for green marketing and firms being green. However, is that a success formula? Some researchers have shown that consumers are willing to pay more for green product; however there are other researchers who show that people do not behave as they say. There is clearly a gap in the research, if people do not buy green products as much as they say they would. What is the attribute of a green product that will motivate consumers to make their purchase decision? This provides us the opportunity to explore the gap in research and to come up with some quantitative analysis to show what will change the behavior of the consumers'. This leads us to the objective of this research to find what consumers' value in green products, which will help management design their promotion accordingly. In order to make the research easy and clear to the respondent, coffee mug which are considered as environmental friendly green product was chosen. In order to find the difference in attitude, an online experiment survey was conducted. The online survey was the most flexible and friendly approach that was appropriate for the research. Three scenarios were created to measure the difference in attitude of consumers for each scenario. A convenience sampling technique was used to collect data from the sample. The data was analysis using statistical tool (SPSS), to find pattern and relationship. The data analysis showed that consumers are willing to pay more for green products if they get a monetary incentive like cost saving. The suitable recommendation was provided to managers to consider cost saving as an important factor in design promotion of their green products.

BACKGROUND INFORMATION

Since 1960s, human beings began to keep their eye on environmental issue in business world. A series of research were done around 1990s. The results of those research showed that nearly 87% of U.S. adults are concerned about the condition of the natural environment (Philips, 1990), 80% believe that protecting the environment will require major changes in current life-styles (Ottman, 1996) and 75% consider themselves to be environmentalists (Osterhus, 1997). "Greening marketing" came into the existence then.

Green marketing subsumes greening products as well as green firms (Prakash, 2002). Greening products means that the process of a company manufacture the products has to be environmental friendly and harmless to the society (Prakash, 2002). There can be several reasons for the management decision to produce green products. Firstly, government may implement the policy to force companies to adopt the green marketing, so it's true that the company who adopt the green marketing early then competitors may have first mover advantage. Secondly, if competitors produce green products before the firm, they will be forced to follow them. Thirdly, it can be due to the changing behaviour of consumers towards green products.

Recent years, more and more company tried to differentiate each other by fulfilling consumers' needs and wants. For companies who adopt the green marketing strategy, management are concerning about the real reason that drives consumers to purchase the green products. Previous research already indicated that there is a gap between what people say and what people do towards the green products (Ottman, 1996). Company that adopt the green marketing strategy tried to fully understand the reasons that people buy green products, so that organization can better promote their products.

This paper mainly focuses on some of the reasons why the gap exists between what people say and what people do towards green products.

DESK RESEARCH

Green Marketing has been a very popular marketing differentiation tool over a decade; more and more companies are investing resources to create green marketing products, services and processes to attract their consumers. The consumers value green products and services, and are willing to pay a premium for it. The researches show that green marketing is appreciated by consumers, however that does not mean green marketing is profitable. The benefits to the companies using green marketing initiative, how much premium consumers are willing to pay, is still a question.

PURPOSE

In our examination of secondary data, we are trying to collect data from previous marketing research in the field of green products, services and green marketing. We are trying to develop and refine our research objective to understand how much incentive customers' are willing to pay for green marketing products and services. They say they are willing to pay, however are they paying? Is a green Product or green marketing more profitable? What is the consumer's response to companies who support environment but directly they are not involved in green products and services? Is benefit from the product or services, or concern for environment lead customers to pay extra for green products/Services?

PROCEDURE

In our desk research, we are first examining results of other research studies conducted in the same area and then we would try to establish refined research objectives and direction of further research. First, research findings of the research study conducted by Ginsberg, in their article "Choosing the Right Green Marketing Strategy", concludes that green marketing has not fulfilled its initial promise, but companies can take a more effective approach if they realize that a one-size-fit -all strategy does not exist. In lieu of green marketing concern, for most of green products, consumers are unlikely to compromise on product attributes such as convenience, availability, price, quality and performance to buy green products. According to Roper survey, consumers can be divided into different customer groups based on their environmental values and their motivation to buy green products. These customers can be segmented into different groups. A very small proportion of the population, almost 6%, is willing to pay a premium for the green products just based on environment concerns, however, a large group, almost 31 %, who value green products and services, do not want to pay extra for environmental friendly initiatives taken by the company. Decision