CHAPTER I

INTRODUCTION

Background of the Study

Increasing amounts

of

evidence indicate

that societies are

having an unprecedented and dangerous impact on the global environment

(Dunlap and Catton, 1979).

In response to the continued detrimental impact on the natural

environment and the individuals living within that environment, our social
framework has begun to change. Recent issues, like climate change and the
energy crisis, are speeding up that social shift as caring for our environment
has taken center stage in the media, politics, and around family dinner tables.
Most of the environmental crises that we face today will continue to impact
our lives indefinitely, many with an increasing sense of urgency. In light of
these disturbing developments in our environment many individuals, and
businesses, have begun to make behavioral changes to lessen their impact
on the natural world.

The increasing awareness of environmental issues has led to many new

developments in the consumer goods marketplace. Environmentally friendly
alternatives in many product categories are becoming commonplace in

commercial outlets at an unprecedented rate, from household cleaning

supplies, foodstuffs, recycled paper, and organic cotton clothing, to high
involvement purchases such as household appliances, utility service
providers, and automobiles.

Green products are defined as products that minimize the

environmental impact of their consumption (Janssen and Jager 2002). Often,
green products are identified as being
phosphate free, recyclable, refillable, ozone friendly or environmentally friendly
(Polonsky

2002).

Because

consuming

products

often

involves

the

consumption of energy and depletion of natural resources, consumption

generally hurts the environment. Green products minimize the environmental
impact of product use, making consumption less harmful to the environment.

Environmental

Propensity

Framework

(EPF),

which

segments

consumers based upon the degree to which they hold environmental values
and a belief in environmental self-efficacy is a useful way of understanding
their actions and lack of actions toward green products. They are classified
as true greens that have strong environmental values and try to educate and
induce positive change, low potency greens which are not politically active
but do consume environmentally friendly products more often than the
average consumer, moderate greens that believe in green consumption
theory, but not in practice, modest greens which are uneducated about
environmental issues and dont believe their behavior will make a difference

and lastly, non-greens that do not care or modify their behavior due to
environmental or social issues (Oliver and Rosen, 2010). This classification
instrument adds to green marketing research through the identification of
consumers who are not green, and the source of resistance that lies within
these groups of individuals.

An emerging trend in the transportation system nowadays is the

operation of electric vehicle. This represents an important innovation in
environment. Market analysts predict that electric vehicles will become the
new trend in automobiles by replacing gasoline- powered vehicles in the near
future. (Hybridcars, 2006). Common transportation mode in the provinces is
the tricycle and this study will focus on Batangas City.

Batangas City, as the largest and capital city of the Province of

Batangas, Philippines, known as the "Industrial Port City of Calabarzon",
Batangas City is currently classified as one of the fastest urbanizing cities of
the Philippine. According to the 2010 census, the city has a population of
305,607 people.It is subdivided into 105 barangays. Land transportation
services in the city are readily available through public utility buses, public
utility jeepneys, privately owned cars, vans, jeeps, and tricycles. With the
implementation of the Citys New Traffic Ordinance, public utility jeepney
routes thru color and number coding scheme have been enforced. Parking
areas and PUJ terminals have been designated for the different routes. With
the devolution of power to grant franchises for tricycle operation from the
Land Transportation Franchising and Regulatory Board (LTFRB) to the
Batangas City Government, tricycle operators can now apply for their

franchise from the Transportation Development and Regulatory Office under

the Office of the City Mayor. Like the public utility jeepneys, tricycles plying in
the poblacion operate also through a color coding system. Because of the
increasing levels of pollution and demand for gasoline, one alternative for
public transportation in Batangas City is the electric tricycles. Electric tricycles
use a system that leverages gasoline and electric power to increase
efficiency while maintaining the performance similar to traditional tricycles.
They are example of environmentally friendly product, defined as a product
designed to minimize the environmental impact of its consumption (Janssen
and Jager, 2002). This will increase the environmental awareness of the
Local Government Unit (LGU) and the tricycle drivers and owners association
in Batangas City towards their intention to invest in electric tricycles.
According to Tricycle Franchising Board, there are total of 2,164 units of
tricycles operating in Batangas City but only 1,339 units are with mayors
permit as of September 2014.

This study aimed to determine and identify the target market by

consumer segmentation and their intention to invest in the electric tricycles in
Batangas City. This research proposes appropriate policy and marketing
techniques to motivate consumers within each of the five segments to
consider and invest in electric tricycles in Batangas City.

Statement Research Problems

This research paper entitled Ecological Values and Self-Efficacy of

TODA in Lipa City and Their Demand to Invest in Electric Tricycles seeks to
answer the following questions:

1. What is the socio-economic profile of the respondents in terms of:

a. gender;
b. age;
c. income;
d. vehicle ownership;
e. usage of tricycle; and
f.

consumption of gasoline

2. What are the respondents environmental values (EV) in terms of attitudes

towards protecting the environment?

3. What are the respondents environmental self- efficacy (ES) in terms of

willingness or readiness to environmental change?

4. What is the level of demand on the respondents to invest in electric

tricycles?

5. How are the respondents segmented according to Environmental

Propensity Framework?

6. What is the relationship of profile to EV, ES and demand to invest in

electric tricycles?

7. What is the relationship of EV and ES in demand to invest in electric

tricycles?

8. What is the effect of EV, ES on demand to invest in electric tricycles?

9. Is there a significant difference in respondents EV, ES, and demand to

invest in electric tricycles when grouped according to profile?

Theoretical Framework

Environmental Propensity Framework (EPF)

The EPF, which segments consumers based on their environmental values and
environmental self-efficacy, aims to provide a more complete picture of how consumers
should be classified. Both environmental values and environmental self-efficacy have
been researched as individual theoretical dimensions and provides an important
foundation for the framework that carry the two dimensions together to segment
customers (Oliver, 2007).

Environmental values

According to Kaiser, Wolfing and Fuhrer (2004), attitudes toward the environment
or environmental values can be powerful predictors of consumers actions to protect the
environment. The link between environmental values, or attitudes toward protecting the
environment, and subsequent behaviors may be constrained by things that are outside
the consumers control, such as not having the means to get what they want or a product
being out of stock or not available (Kaiser, Wolfing, and Fuhrer 2004). Banerjee and
McKeage (2004) stated that many of the scales that capture environmental attitudes
include behaviors, along with beliefs, knowledge, and intentions. These attitudes are
usually asked in reference to pollution, conservation, and preservation (e.g., Brown and
Wahlers 2003). However, Banerjee and McKeage (2004) do not agree that behavior
should be part of attitude, and their scale captures beliefs as opposed to behaviors.

Because this paper is focused on exposing when attitudes do not lead to behaviors,
capturing beliefs separately from behaviors is important.

Therefore, environmental values will be conceptualized according to Banerjee

and McKeage (2004), who said environmental values include (1) beliefs about the
relationship of humanity and nature, (2) beliefs about the importance of the environment
to the self, (3) beliefs that current environmental conditions are a serious problem facing
the world, and (4) beliefs that some radical changes in current lifestyle and economic
systems may be required to prevent environmental damage. This conceptualization
allows people to vary in the strength of their beliefs, which may or may not drive
consumer behaviors, including hybrid car adoption. It is likely that peoples
environmental values, like other values they hold, have developed over time. As a result,
values are often difficult to change (Burroughs and Rindfleisch 2002). Even if individual
environmental awareness or concern does exist, it does not guarantee that a person will
act according to his or her value system. Consumers may be concerned about the
environment but may feel that it is someone elses job to act (Maibach, 2004). This leads
to the need to consider a construct that captures the degree to which people feel they
can make a difference.

Environmental Self-Efficacy

According to Oliver (2007), one of the reasons consumers choose not to adopt
environmentally friendly products, even if they want to help the environment, is lack of

efficacy. Essentially, this is the idea that one person is not going to make enough of a
difference, so why bother? In environmental terms, one expression of self-efficacy is:

Im not recycling because one person recycling is not going to save the planet. From this
example, it would appear that self-efficacy is the same thing as resistance to change.
This is not the case. Self- efficacy represents the belief that one person cannot make a
difference and does not address the issue of willingness/ readiness for change.

One of the first attempts to identify this phenomenon in marketing was made by
Kinnear, Taylor, and Ahmed (2004). They called this phenomenon perceived consumer
effectiveness (PCE). It was found that PCE moderated the relationship between
intentions and behavior. As in the findings by Kinnear, Taylor, and Ahmed (2004),
Webster (2005) demonstrated that consumers need to both recognize the need to
consume in an environmentally friendly manner and feel that it is within their power to
have a favorable influence on the problem. Berger and Corbin (2002) and Weiner and
Doescher (2003) also provided evidence that PCE affects the consumers likelihood of
performing environmentally friendly consumer behaviors. Roberts (2003) further
illuminated the role of self-efficacy as a key driver in the behavior of environmentally
conscious consumers when he profiled green consumers in the 1990s to see how they
would respond to advertising appeals. He found that consumers who believed that they
could make a difference were more likely to respond favorably to environmental
advertising appeals. Therefore, the authors believe that putting these two key constructs
together to create an EPF provides a more comprehensive picture of consumer
segments. Segments are developed based on the two factors that are expected to drive

the EPF using a survey of consumers who drive automobiles. This audience is selected
to examine how the segments differ in their intentions to purchase a hybrid vehicle.
Therefore, it is important to understand how different segments, identified through the
EPF, intend to act toward hybrid cars.

Theory of Reasoned Action

The Theory of Reasoned Action (TRA) (Aizen, 2002) assumes individuals make
rational decisions that guide their behavior. When faced with a decision making situation,
an individual will evaluate the behavior (purchase of an environmentally friendly product,
in the case of this research) and often the opinions of others, then decide whether or not
to engage in the behavior. Specifically, the theory posits that an individuals behavioral
intention is the primary determinant of actual behavior (Aizen, 2002). Behavioral
intention itself is predicted by an individuals attitude toward the behavior and subjective
norms. Two aspects of beliefs are measured to determine an individuals attitude toward
the behavior. The first aspect is the individuals beliefs about engaging in the behavior;
and the second is the individuals evaluation of these beliefs (whether they are
considered positive or negative by the individual). These two measures multiplied across
each belief give a measure of attitude toward the behavior.

This research analyzed behavioral intention with respect to purchasing/product adoption

behaviors. The terms were used interchangeably so that consumers who intend to
purchase a product for the first time can still be classified as innovative.

Figure 1. Theory of Reasoned Action

Source: Aizen, I. (2002). The theory of planned behavior. Organizational Behavior and
Human Decision Processes.

Operational Framework

The operational framework of this research is obtained from the Environmental

Propensity Framework (EPF) and Theory of Reasoned Action (TRA) where variables in
the EPF are anchored with TRA such as attitude toward the behavior and perceived
behavioral represents environmental values and environmental self- efficacy respectively
for the consumer segmentation towards intention to invest electric tricycles in Batangas
City. It attempts to determine the respondents environmental value in terms of attitudes
towards protecting the environment, respondents environmental self- efficacy in terms of
willingness or readiness to environmental change and respondents intention to invest in
electric tricycles. The two independent variables which are environmental values and
environmental self-efficacy, profile which represents the intervening variable will
determine if it affects dependent variable which is the intention to purchase and invest in
electric tricycles. Respondents will be segmented using the EPF.

Intention, in this model, is typically measured by one to eight questions that

address the likelihood that the individual will engage in the particular behavior being
examined. This research operationalizes intention by presenting consumers a new
product which they can intend to purchase now or later. Applying the Theory of
Reasoned Action to this research allows the flexibility to reliably measure behavioral
intention, in this case, purchase intention, as opposed to having to measure the behavior

itself. Behavioral intentions have been most predictive of actual behavior when the
related attitude is general in nature, such as the value an individual places on Consumer
Environmentalism.

Figure 2. Operational Framework of Environmental Values and Self-Efficacy of TODA in

Batangas City and their intention to invest in Electric Tricycles: A Segmentation

Analysis

Independent

Variables

Dependent Variable

Intervening

Variable

Hypotheses:

Ho1: The profile of the respondents have no significant relationship on the respondents
perception of environmental values.

Ho2: The profile of the respondents have no significant relationship on the respondents
perception of environmental self- efficacy.

Ho3: The profile of the respondents have no significant relationship on the respondents
perception of intention.

Ho4: There is no significant relationship on environmental values and environmental selfefficacy to intention.

Ho5: Environmental values has no significant effect on intention to invest in electric tricycles.

Ho6: Environmental self efficacy has no significant effect on intention to invest in electric
tricycles.

Ho7: There is no significant difference on the respondents perception on environmental

values, environmental self- efficacy and intention when grouped according to profile.

Significance of the Study

The results of this study will cater the potential market such as LGUs and the
tricycle owners and drivers in Batangas City.

The industry

Industry could benefit from the substance of this as they could also align and
enhance their marketing strategy or make further research for improvement of their
existing practices. Industry could generate more employment that will have an impact on
their expansion and in effect will help boost the Philippine economy in general.

TODA in Batangas City

TODA will benefit in this study because this can increase their awareness in
environmentally friendly products particularly the electric tricycles. This will increase their
knowledge towards protecting their environment and their readiness and willingness to
change.

The Local Government Unit (LGU)

The study would be beneficial to LGU because this can help them to be part of
their investment and project in coordination with the Manila Electric Company
(MERALCO). This can boost their environmental knowledge and concern for the
environment.

The company

Manila Electric Company (MERALCO) will benefit from the results of the study.
Specifically, the study would enable the company to determine the specific needs of
respondents based on the intention to purchase electric tricycles.

This would in turn; help the company develop strategies in response to the
growing demand of the electric tricycle. Similarly, the company can set the appropriate
price of its product for its chosen market, thereby giving them the opportunity to increase
the company sales and market share. As a result, profits could be enhanced, maximizing
the manufacturing volume capacity, new product line- up will be rolled out and expanding
the business.

The researcher

Indeed, the study would be a big help to the researcher being involved primarily
in Marketing, Customer Solutions and Product Development Department. She could
review the market requirements and align the embedded product solution on the
technological side.

Scope and Limitations

This study deals with the environmental values and self-efficacy of tricycle
owners and drivers association (TODA) towards investing electric tricycles in Batangas

City. Respondents will be the tricycle owners in Batangas City. Specifically, this will focus
through segmentation using EPF and will also determine the intention to invest in electric
tricycles anchored with the theory of reasoned action.

Operational Definition of Terms

Electric Tricycle (ETrike). leverages gasoline and electric power to increase efficiency
while maintaining the performance similar to traditional tricycles. They are example of
environmentally friendly product, defined as a product designed to minimize the
environmental impact of its consumption.

Electric Vehicles. new trend in automobiles by replacing gasoline- powered vehicles in

the near future.

Environmental

Propensity

Framework.

segments

environmental values and environmental self-efficacy.

consumers

based

on

their

Environmental Self-Efficacy. represents the belief that one person cannot make a
difference and does not address the issue of willingness/readiness for change.

Environmental Values. attitudes toward the environment or environmental values can be

powerful predictors of consumers actions to protect the environment.

Hybrid Automobile. a hybrid vehicle or gas-electric hybrid powered vehicle uses a mixture
of technologies such as internal combustion engines, electric motors, gasoline, and
batteries.

Intention. cognitive representation of a person's readiness to perform a given behavior.

TODA. Tricycle owners and drivers association. Group of tricycle drivers in Batangas

City.

CHAPTER 2
REVIEW OF LITERATURE

This chapter will present literature reviews related to current understanding of the
market