CRITICAL FACTORS AFFECT CONSUMERS’ PURCHASE INTENTION TOWARDS GREEN PRODUCTS IN HO CHI MINH CITY

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TRAN HUY BAO CRITICAL FACTORS AFFECT CONSUMERS’ PURCHASE INTENTION TOWARDS GREEN PRODUCTS IN HO CHI MINH CITY ID: 22120003 MASTER OF BUSINESS (HONOURS) SUPERVISOR: Dr Vo Xuan Vinh Ho Chi Minh City – 2015 ACKNOWLEDGEMENTS I would like to express my greatly appreciation in thanking people who helped me to complete this thesis Firstly, I am very grateful to my advisor, Dr Vo Xuan Vinh, for his valuable advices I especially appreciate his continual support in responding, reminding, and assisting in all aspects of this endeavor On the other hand, I would like to thank my colleagues, friends and classmates for their valuable encouragement during months that I was working on this thesis Special thanks for people who spent their precious time with me in both pilot and main surveys Finally, I would like to express my heartfelt thanks to my family for their support, their encouragement, and their faith during the time I accomplish my thesis ABSTRACT One of the largest and the most urgent problems that the world is facing today is the environmental pollution which both the government and civilians contribute to solve this issue In fact, the injurious smoke emitted by cars, buses, trucks, trains, and the wastes from factories, namely sulphur dioxide, carbon monoxide or nitrogen oxides have been creating more bad effects on environment For this reason, corporations must find effective environmental solution in reducing the pollution Therefore, green product is one of the suitable solutions which are applied in many countries over the world There are also many researches about green product studies; however, it is still rather new in Vietnam and green products have not yet approached to Vietnamese consumers Moreover, the corporations in Vietnam have not had a thorough grasp of this kind of product and how consumers reach with green product Thus, this research needs to be profoundly supported This paper is researched based on the theory and the foundation from the study of Wilson King, Amran Harun, Rini Suryati Sulong and Jaratin Lily (2014) In that, there are five factors including eco-label, green packaging, green corporate perception, green product value and green advertisement which are considered in order to test influence on consumers’ purchase intention This research aims to find out which and how factors of green product affect purchase intention and from that, give recommendations By applying both qualitative and quantitative method, the data is collected through in-depth surveys Then, the collected data is analyzed by SPSS software According to reliable results, this paper proposes recommendations for corporations which want to develop green product line Keywords – Purchase intention, eco-label, green packaging, green corporate perception, green product value, green advertisement TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES CHAPTER 1: INTRODUCTION 1.1Research Background 1.2Research gap 1.3Research Objectives 10 1.4Research scope 10 1.5Research structure of thesis 11 CHAPTER 2: LITERATURE REVIEW 12 2.1 Green product 12 2.2 Purchase intention 13 2.3 Eco - label 15 2.4 Green packaging 16 2.5 Green corporate perception 17 2.6 Green product value 17 2.7 Green Advertisement 18 2.8 Conceptual model 19 CHAPTER 3: RESEARCH METHODOLOGY 20 3.1 Research approach 20 3.2 Sampling 20 3.3 Data collection methods 21 3.4 Measurement scales 22 3.4 Data analysis methods 24 CHAPTER 4: DATA ANALYSIS AND RESULTS 26 4.1 Respondents’ demographics 26 4.2 Reliability Analysis 28 4.3 Exploratory Factor Analysis (EFA) 31 4.3.1 EFA for independent variables 31 4.3.2 EFA for the dependent variable 33 4.4 Correlation Testing 34 4.5 Multiple Regression Analysis 35 CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATIONS 40 5.1 Main findings 40 5.2 Managerial implications 43 5.3 Limitations and future research 44 REFERENCES 46 APPENDIX A 52 APPENDIX B 58 APPENDIX C 63 APPENDIX D 65 LIST OF FIGURES Figure 2.1: A Research Model………………………………………………………… … 19 LIST OF TABLES Table 2.1: Objectives for a green product……………………………………… 13 Table 4.1: Respondents' characteristic…………………………………………… .27 Table 4.2a: Reliability Statisticsa………………………………………………… 29 Table 4.2b: Reliability Statisticsb……………………………………………………………30 Table 4.3: KMO and Bartlett's Test of Independent Variables………………… 31 Table 4.4: Rotated Component Matrix for Independent Variable……………… 32 Table 4.5: Table KMO and Bartlett's Test………………………………………………… 33 Table 4.6: Rotated Component Matrix for The Dependent Variable……………………….33 Table 4.7: Correlations…………………………………………………………………… 34 Table 4.8: Model Summary……………………………………………………………… 35 Table 4.9: ANOVA…………………………………………………………………………36 Table 4.10: Coefficients…………………………………………………………………….36 Table 4.11: Summary of hypotheses testing result…………………………………………39 Table 5.1: Research questions, related hypotheses and results………………… 40 CHAPTER 1: INTRODUCTION 1.1 Research Background Nowadays, modern industry develops with gigantic growth rate Along with both population and economic growth, the world is facing environmental degradation including Vietnam The Doi Moi policy which was started by government in 1986 has brought high economic growth rate but it also causes harm in environment Evidently, ten years later, Quy Vo (as cited in Mai & Nguyen, 2003), who is president of the Center for Natural Resources and Environmental Studies at the National University in Hanoi, stated that “Vietnam is being confronted with a number of serious Environmental problems, including deforestation, degradation of land resources, shortages of fresh water, over-exploitation of biological resources, threats to ecosystems, and increasing pollution” Because modern industry brings many problems; hence, it is responsible to find out solution Government appeals incessantly to everyone for environmental protection which contributes to increase people’s awareness “The mass media in Vietnam have recently begun to distribute a large quantity of news related to various environmental problems” (Pham & Rambo, 2003) For this reason, people might be aware of the associations between major environmental issues, such as water and air pollution, land degradation and chemical contamination, and everyday consumption items, such as clothing, food, housing and transport (Adams, 1990; McKusick, 1990) Simultaneously, people increasingly recognize environmental problems which increase by manufacturing activities in the world (Chen, 2011) Therefore, people take consumptions not only for needs but also green, cleanliness and environmental friendliness of products, guarantee for future life of their progeny “More and more consumers have started to assess the environmental impact of product/service choices and to change their behavior in purchasing, consuming and dispensing of the product” (Ting, 1991) For instance, over 70 percent of Americans reported that they contributed to protect environment, and 49 percent said that they would avoid buying harmful environmental products (Hueber, 1991) Especially, in Vietnam, people have recently begun to pay attention to environmental issues A research refers that “Respondents’ concerns about the environment are based primarily on their own personal experiences and observations In other words, they are concerned about environmental problems that they can directly sense (e g., smell, see, hear) or that directly affect their health and lives.” (Pham & Rambo, 2003) Indeed, in the case of Vedan, consumers immediately ostracized Vedan when that company eliminated harmful toxic for health of people living near Thi Vai River (Ngo, 2011) To put forward an effective solution, marketing researchers appreciate consumers’ growing environmental consciousness and begin to recognize the value of green products Based on the findings of the previous articles, the researcher comes to the point that people become more concerned about the environment as well as green products Actually, people are becoming more knowledgeable about nature and ecology and the positive impact of the green products on nature There are so many articles, comments, evaluations, definitions or issues that concern green products topic Conceivably, “More and more companies are involved in turning the region’s growing environmental awareness into an expanded business opportunity rather than an obstacle.” (Barrett, 1990) Consequently, in early 1980s, green marketing began in Europe and became more and more popular in other continents (Preece, Pheng, Padfield & Padfield, 2011) For the time being, green products are brought into the world such as recycled paper, environmentally-friendly packaged products, energy-efficient light bulbs, electric steam irons, cleaning goods as well as organic foods 1.2 Research gap Around the world, green marketing developed with many practical activities and was also a field research in many companies Foreign countries like Europe and North America conducted many researches about green marketing, especially consumers’ green purchase behavior, in order to support for marketers (Afzaal, Ali, Israr & Waseem, 2011) Furthermore, previous researches conducted to identify young consumer intention buying green products in Hong Kong (Lee, 2010) or investigated green products through green energy, consumption, constructional materials in Sweden (Haraldsson, 2001; Rex & Baumann, 2007; Emilsson, 2008) However, this is still rather new form of marketing and has not yet been researched much in the context of Vietnam The consumer purchase intention on green products are also not involved in Vietnam Hence, companies are discreet in manufacturing “Green” for their products accordingly because of special process which guarantees low pollution, resource saving and safety for health If any company takes the lead in the application of this kind of marketing, it will attain competitive advantages as well as positive evaluation from consumers “Not only does environmental responsiveness help organizations to remain competitive and increase market share but also there is some evidence showing increases in customer loyalty” (D’ Souza et al., 2006) In general, green products are not only unfamiliar to consumers in Vietnam but also rare researched in the awareness of consumer purchase intention Therefore, there is an urgent quest to investigate the critical factors affect green purchase intentions of consumers in order to fill in the research gap in developing green marketing 1.3 Research Objectives By improving environment in Vietnam and achieving the success in green products, this research is to support for corporations which find out the relationship between specific factors and consumers’ purchase intention of green products in Ho Chi Minh City In order to evaluate problems above, this study aims to answer for these following research questions (RQ) below: RQ1: Is there a positive relation between eco-label and consumers’ purchase intention in Ho Chi Minh City? RQ2: Is there a positive relation between green packaging and consumers’ purchase intention in Ho Chi Minh City? RQ3: Is there a positive relation between green corporate perception and consumers’ purchase intention in Ho Chi Minh City? RQ4: Is there a positive relation between green product value and consumers’ purchase intention in Ho Chi Minh City? RQ5: Is there a positive relation between green advertisement and consumers’ purchase intention in Ho Chi Minh City? 1.4 Research scope The research attempts to cover all aspects of the problem However, there are some limitations about times, geography, human resources, and finances For that reason, it leads to scopes in the research Firstly, due to the limitation of finance and geography, this research 10  Green products are Products which are manufactured with recycled materials or more compact, more energy efficient and less wasteful of materials in general Green products bring safe and healthy environment for human beings instead of traditional toxic products For instance, green products include energy – efficient light bulbs, eco bags, electric steam irons, recycled paper, organic foods, etc… (Source: Vietnam Ministry of Natural Resources And Environment) If yes, please answer the following questions: Your gender: Male Female Your age: 18 to 24 25 to 39 40 to 54 Over 55 Your marital status: Single Married Married with children Others Education level: High school diploma or less education College Bachelor’s degree  Master’s degree Your career: Student Office staff Worker Teacher Businessman Doctor/Engineer Home-maker Others……………… Your income (VND): 53 < millions 5 – 15 millions 15 – 30 millions 30 – 50 millions > 50 millions PART II INFORMATION ON PURCHASE INTENTION AND FACTORS AFFECTING PURCHASE INTENTION There are items of purchase intention towards green product and factors impacting on purchase intention included: eco-label, green packaging, green corporate perception, green product value, and green advertisement  Purchase intention: the purchase probability and willingness associated with an intention category at the percentage of individuals that will actually buy a product (Whitlark et al., 1993)  Eco-label: the mean of information tool that usually utilized logo to convey information to consumers on the environment implications of buying a product (Tang et al., 2004) For example, “eco-friendly”, “environmentally safe”, “recyclable”, “biodegradable” and “ozone‐friendly”  Green packaging: to contain, protect and present the green information through sequence of producing, handling and transporting good to the point of arrival with state of good as the moment of production (Panwar, 2004)  Green corporate perception: the companies have strategic targets which make a profit not only for the day but also for long-term profitability and environmentally friendly sustainability (Aysel, 2012)  Green product value: the way consumer perceives about safe of product in aspect of quality and price Companies develop products with both green features and high-value attributes to attract consumers (Chen & Chang, 2012) 54  Green advertisement: the attributes of the advertised product or associated production process contributed to environmental protection or with other positive effects to the environment (Chan, 2004) Please indicate your how much you agree/ disagree with following statements (1= strongly disagree, 2= disagree, 3= neutral, 4= agree, 5= strongly agree): Strongly Disagree Strongly agree PURCHASE INTENTION (Wilson et al., 2014) – items I would buy green products that are not harmful to the environment I plan to switch to a green version of a product I consider switching to other brands for ecological reasons I consider buying green products because they contribute to less pollution ECO – LABEL (Wilson et al., 2014 & Thanika et al., 2012) – items I consider what is printed on eco-labels to be accurate The information on eco-labels is usually easy to understand Green label is prerequisite criteria to consider a green product Green advertisements are always trustworthy Sufficient information is provided on eco-labels GREEN PACKAGING (Wilson et al., 2014) – items That the packaging is made from recyclable materials 55 That the packaging is biodegradable That the packaging is recyclable That the packaging is reusable That the product has no excessive packaging GREEN CORPORATE PERCEPTION (D’Souza et al., 2006; Smith & Perks, 2010) – items Companies should place higher place priority on reducing pollution than on increasing their own profitability Companies should place higher place priority on environmental protection than on increasing their own profitability Companies create byproducts, recycle and re-use to eliminate waste Companies use alternative energy sources in production and manufacturing processes Companies use space - saving warehousing or storage facilities to reduce environmental impact GREEN PRODUCT VALUE (Wilson et al., 2014) – items This product’s environmental performance meets my expectations This product’s environmental functions provide very good value for me I purchase this product because it has more environmental benefits than other products I purchase this product because it has more environmental concerns than other products I purchase this product because it is environmentally friendly GREEN ADVERTISEMENT (Wilson et al., 2014 & Thanika et al., 2012) – items Green advertisements are attractive 56 The contents of green advertisements are of great relevance to my daily life Green advertisement should promote environmental friendly products in a credible manner Environmental advertisements are not exaggerated for Green Products Overall, I’m satisfied with the information currently available on the eco-label of the products I purchase Thank you for your contribution 57 APPENDIX B QUESTIONNAIRE DESIGN (VIETNAMESE VERSION) BẢNG KHẢO SÁT VỀ NHÂN TỐ ẢNH HƯỞNG ĐẾN Ý ĐỊNH MUA SẢN PHẨM XANH CỦA NGƯỜI TIÊU DÙNG Ở THÀNH PHỐ HỒ CHI MINH Thân chào anh/chị, Tôi Trần Huy Bảo Tôi học viên Viện đào tạo Quốc tế thuộc trường Đại học kinh tế TP.HCM Hiện làm đề tài nghiên cứu “Những yếu tố ảnh hưởng đến ý định mua sản phẩm xanh người tiêu dùng thành phố Hồ Chí Minh.” Mục đích nghiên cứu để có phản hồi từ khách hàng ý định mua Sản phẩm Xanh, nhằm cung cấp thơng tin cho doanh nghiệp có ý định phát triển tiếp thị xanh vào chiến lược công ty hiệu quả, góp phần cải thiện mơi trường đồng thời tạo Sản phẩm Xanh tốt cho sức khỏe người tiêu dùng Ở khơng có quan điểm hay thái độ hay sai, mà tất thơng tin hữu ích cho nghiên cứu Vì vậy, tơi mong anh/chị dành thời gian trao đổi số suy nghĩ anh/chị vấn đề Cảm ơn hợp tác anh/chị !  PHẦN I THÔNG TIN CÁ NHÂN Anh chị sinh sống ở: TP.Hồ Chí Minh Các tỉnh khu vực khác Anh/chị nghe Sản phẩm xanh chưa? Đã nghe Chưa nghe  Sản phẩm xanh 58 sản phẩm sản xuất từ nguyên liệu tái chế sản phẩm tiết kiệm lượng gây lãng phí nguyên liệu nói chung Sản phẩm xanh mang đến mơi trường thân thiện sức khỏe cho người tiêu dùng thay cho việc sử dụng sản phẩm truyền thống có chất độc hại Ví dụ, bóng đèn tiết kiệm điện, túi sinh học, bàn ủi nước, giấy tái chế, thực phẩm hữu cơ,… (Nguồn: Bộ Tài nguyên Môi trường) Nếu nghe, anh/chị vui lòng trả lời câu hỏi sau: Giới tính anh/chị: Nam Nữ Tuổi anh/chị: 18 đến 24 40 đến 54 25 đến 39 Hơn 55 Tình trạng nhân anh/chị: Độc thân Đã kết Đã có Khác Trình độ học vấn anh/chị: Tốt nghiệp THPT trở xuống Đại học Trung cấp/ Cao đẳng  Cao học Nghề nghiệp anh/chị: Học sinh/ sinh viên Công nhân Doanh nhân Nội trợ Nhân viên văn phòng Giáo viên Bác sĩ/ kỹ sư  Khác (ghi rõ cụ thể)…… Thu nhập anh/chị (VND): 50 triệu 5 - 15 triệu 30 - 50 triệu 59 PHẦN II THÔNG TIN VỀ Ý ĐỊNH MUA SẢN PHẨM XANH VÀ NHỮNG NHÂN TỐ ẢNH HƯỞNG ĐẾN Ý ĐỊNH MUA SẢN PHẨM XANH Có bốn tiêu chí ý định mua sản phẩm xanh nhân tố ảnh hưởng đến ý định mua sản phẩm xanh: nhãn sinh thái, đóng gói sản phẩm xanh, nhận thức xanh doanh nghiệp, giá trị sản phẩm xanh quảng cáo xanh  Ý định mua sản phẩm xanh: thực tế có khả sẵn lòng mua sản phẩm xanh với ý định cá nhân mình,  Nhãn sinh thái: cơng cụ hữu hiệu việc sử dụng dán nhãn truyền tải thông tin đến người tiêu dùng ngụ ý môi trường mua sản phẩm  Đóng gói sản phẩm xanh: chứa đựng, bảo vệ giới thiệu thông tin xanh thơng qua quy trình sản xuất, chun chở hàng hóa đến địa điểm giao hàng  Nhận thức xanh doanh nghiệp: hãng sản xuất có mục tiêu chiến lược làm lời cho doanh nghiệp không cho mà hướng tới lợi nhuận dài hạn trì việc tạo sản phẩm thân thiện với môi trường  Giá trị sản phẩm xanh: người tiêu dùng nhận thức sản phẩm có đáng tin cậy hay khơng khía cạnh chất lượng giá Các hãng sản xuất phát triển sản phẩm với đặc điểm xanh thuộc tính mang giá trị cao để thu hút người tiêu dùng  Quảng cáo xanh: quảng cáo sản phẩm đóng góp việc bảo vệ mơi trường hay có tác động tích cực đến mơi trường Anh/chị vui lịng cho biết mức độ đồng ý/ khơng đồng ý anh/chị với phát biểu (Đánh dấu  vào trịn; đó, 1=hồn tồn không đồng ý, 2=không đồng ý, 3=phân vân, 4=đồng ý, 5=hồn tồn đồng ý) Hồn tồn khơng đồng ý Ý ĐỊNH MUA SẢN PHẨM XANH Tôi mua sản phẩm xanh khơng độc hại đến mơi trường 60 Hồn tồn đồng ý Tơi dự tính chuyển qua sử dụng sản phẩm mang đặc tính xanh Tôi xem việc chuyển qua dùng sản phẩm mang nhãn hiệu xanh lý sinh thái bảo vệ mơi trường Tơi mua sản phẩm xanh làm giảm ô nhiễm môi trường NHÃN SINH THÁI Tôi thấy nội dung in nhãn sinh thái xác Thông tin nhãn sinh thái thường dễ dàng hiểu Nhãn sinh thái điều kiện tiên để xem sản phẩm xanh Quảng cáo xanh luôn đáng tin cậy Những thông tin đầy đủ cung cấp nhãn sinh thái ĐÓNG GÓI SẢN PHẨM XANH Đóng gói làm từ vật liệu tái chế Đóng gói sản phẩm xanh tự hủy Đóng gói sản phẩm xanh tái chế Đóng gói sản phẩm xanh đươc sử dụng lại Khơng đóng gói thừa sản phẩm xanh NHẬN THỨC XANH CỦA DOANH NGHIỆP Doanh nghiệp nên trọng ưu tiên việc giảm ô nhiễm môi trường (chất thải từ khói, bụi, nước,…) gia tăng lợi nhuận Doanh nghiệp trọng ưu tiên việc bảo vệ môi trường gia tăng lợi nhuận Doanh nghiệp tạo sản phẩm phụ, tái chế sử dụng lại chất thải 61 Doanh nghiệp sử dụng nguồn lượng thay quy trình sản xuất chế tạo sản phẩm xanh Doanh nghiệp sử dụng kho chứa hàng tiết kiệm chỗ phương tiện lưu kho phù hợp để giảm thiểu tác động môi trường GIÁ TRỊ SẢN PHẨM XANH Tính sản phẩm xanh đáp ứng kỳ vọng tơi Các tính thuộc mơi trường sản phẩm xanh có giá trị với tơi Tơi mua sản phẩm xanh có nhiều lợi ích môi trường sản phẩm khác Tôi mua sản phẩm xanh liên quan đến mơi trường nhiều sản phẩm khác Tơi mua sản phẩm xanh thân thiện đến mơi trường QUẢNG CÁO XANH Quảng cáo xanh thu hút cách ấn tượng Nội dung quảng cáo xanh có liên quan mật thiết đến sống thường ngày Quảng cáo xanh nên quảng bá sản phẩm thân thiện với môi trường cách đáng tin cậy Sản phẩm xanh quảng bá quảng cáo kêu gọi bảo vệ mơi trường có TPHCM thể cách trung thực Nói chung tơi hài lịng mua sản phẩm xanh với thơng tin sẵn có nhãn sinh thái XIN CHÂN THÀNH CẢM ƠN ANH CHỊ ĐÃ HOÀN THÀNH BẢN KHẢO SÁT ! 62 APPENDIX C TOTAL VARIANCE EXPLAINED IN EXPLORATORY FACTOR ANALYSIS Table C1: Total Variance Explained of Dependent Variables Total Variance Explained Initial Eigenvalues Component Total Extraction Sums of Squared Loadings % of Cumulative Variance % Total % of Cumulative Variance % Rotation Sums of Squared Loadings Total % of Cumulative Variance % 5.061 22.005 22.005 5.061 22.005 22.005 3.529 15.343 15.343 3.186 13.851 35.856 3.186 13.851 35.856 3.303 14.361 29.704 2.807 12.203 48.059 2.807 12.203 48.059 3.158 13.732 43.436 2.680 11.651 59.710 2.680 11.651 59.710 3.016 13.115 56.551 2.003 8.707 68.417 2.003 8.707 68.417 2.729 11.867 68.417 877 3.814 72.231 697 3.030 75.261 667 2.900 78.161 544 2.364 80.525 10 519 2.258 82.782 11 467 2.028 84.811 12 439 1.910 86.720 13 426 1.851 88.571 14 393 1.707 90.278 15 381 1.657 91.936 16 325 1.412 93.348 17 288 1.252 94.600 18 262 1.139 95.738 19 252 1.097 96.835 20 229 996 97.831 21 197 856 98.687 22 172 748 99.435 23 130 565 100.000 Extraction Method: Principal Component Analysis 63 Table C2: Total Variance Explained of Independent Variable Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Component Total % of Variance Cumulative % Total % of Variance Cumulative % 2.953 73.826 73.826 2.953 73.826 73.826 459 11.471 85.297 348 8.710 94.007 240 5.993 100.000 Extraction Method: Principal Component Analysis 64 APPENDIX D HISTOGRAM, NORMAL REGRESSION & SCATTER PLOT OF DEPENDENT VARIABLE Figure D1: Histogram of PI 65 Figure D2: Normal Plot of PI 66 Figure D3: Scatter Plot of PI 67