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Targeting Consumers Who Are Willing to Pay More for Environmentally Friendly
Products
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more likely to be females, married and with at least one child living at home. They
reported that today's ecological problems are severe, that corporations do not act
responsibly toward the environment and that behaving in an ecologically favorable
fashion is important and not inconvenient. They place a high importance on security and
warm relationships with others, and they often consider ecological issues when making a
purchase. Managerial implications for green marketers and suggestions for future
research are discussed.
Concerns related ot the Concerns related to the environment are evident in the increasingly
environment environmentally conscious marketplace. Over the years, a majority of
consumers have realized that their purchasing behavior had a direct impact
on many ecological problems. Customers adapted to this new threatening
situation by considering environmental issues when shopping (e.g. checking
if the product is wrapped in recycled material) and by purchasing only
ecologically compatible products (e.g. biodegradable paint, CFC-free
hairspray or unbleached coffee filters). Perhaps the most convincing
evidence supporting the growth of ecologically favorable consumer behavior
is the increasing number of individuals who are willing to pay more for
environmentally friendly products.
In 1989, 67 percent of Americans stated that they were willing to pay 5-10
percent more for ecologically compatible products (Coddington, 1990). By
1991, environmentally conscious individuals were willing to pay between
15-20 percent more for green products (Suchard and Polonsky, 1991). By
1993, Myburgh-Louw and O'Shaughnessy (1994) conducted a mail survey
of female consumers in the UK to examine their perceptions of
environmental claims on the packaging of clothes detergents. They found
The authors gratefully acknowledge the financial support of the Fonds FCAR
(Quebec), and the able assistance of Isabelle Miodek.
JOURNAL OF CONSUMER MARKETING, VOL. 18 NO. 6 2001, pp. 503-520, # MCB UNIVERSITY PRESS, 0736-3761 503
that 79 percent of their sample agreed to pay up to 40 percent more for a
product which was identical in every respect to their own brand and which
had been proven to be green.
An important challenge facing marketers is to identify which consumers
are willing to pay more for environmentally friendly products. It is
apparent that an enhanced knowledge of the profile of this segment of
consumers would be extremely useful. The closer we move to an
understanding of what causes individuals to pay more for green products,
the better marketers will be able to develop strategies specifically targeted
at these consumers.
Our purpose in this study was twofold:
(1) to identify a profile of consumers who are likely to pay more for
environmentally friendly products; and
(2) to elaborate marketing strategies that arise from an improved under-
standing of the profile of this segment of consumers.
Corporate focus Given the shifts in customer buying criteria toward environmental
responsibility, corporate focus on this segment may provide a source of
distinctive competitive advantage in the future. It is conceivable that at some
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Consumers' attitudes
The two most studied The two most studied attitudes in the ecological literature, with respect to
attitudes environmentally friendly behavior, are importance and inconvenience. Amyx
et al. (1994) define perceived importance, with respect to the environment,
as the degree to which one expresses concern about ecological issues. In
other words, importance is simply whether consumers view environmentally
compatible behaviors as important to themselves or society as a whole.
Inconvenience refers to how inconvenient it is perceived for the individual to
behave in an ecologically favorable fashion. For example, a person may feel
that recycling is important for the long-run good of the society, but he or she
may also feel that it is personally inconvenient. Similarly, a consumer may
know that single-serve aseptically packaged juices or puddings will harm the
environment, but still buy them because they are convenient.
McCarty and Shrum (1994) studied the impact of importance and
inconvenience of recycling on the behavior of recycling. They found that the
relationship between inconvenience and recycling was in the expected
direction, that is, the more individuals believed recycling was inconvenient,
Consumers' behaviors
Suchard and Polonski (1991) stipulate that ecologically conscious consumers
will try to protect the environment in different ways (e.g. recycling, checking
that a package is made of recycled material, purchasing only green products).
However, it is not clear how consumers' willingness to spend more for green
product will be correlated with other ecologically favorable behaviors.
Pickett et al. (1993) state that marketers must exercise caution when
attempting to extend environmental initiatives from one ecologically
conscious behavior to another. For example, those consumers who recycle
paper may not be the same consumers who purchase recycled handwriting
paper.
Methodology
Exploratory research Our research is exploratory in nature because, as far as we know, no study
ever investigated factors that influence consumers' willingness to pay a
higher price for environmentally friendly products.
Measures
Questionnaire A structured non-disguised questionnaire was designed to gather the data
required for this research. Prior to sending the survey, a pre-test was done
and minor modifications were made. The questionnaire was divided into five
parts. The first part measured ecoliteracy with seven questions (Appendix).
The answers given by the respondents indicated how much they knew about
environmental issues. The second part measured attitudes of consumers
toward a variety of topics related to the environment. Respondents were
asked to read 17 statements and specify on a nine-point Likert scale whether
they agreed or disagreed with each one. Most items were adapted from
previous studies (McCarty and Shrum, 1994; Roberts, 1996).
The third part of the questionnaire measured behaviors of respondents toward
the environment. This section contained five questions asking the respondents
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Table II. Questions used to measure consumer's willingness to pay more for
environmentally friendly products
Frequency Percentage
Would pay Would not Would pay Would not
Respondents' gender more pay more more pay more
Female 75 58 57 43
Male 43 63 40 60
Total 118 121
w2 of Pearson = 5.91 (p = 0.015) V of Cramer = 0.15
Table III. Respondents' gender and their willingness to pay more for
environmentally friendly products
Table IV. Respondents' marital status and their willingness to pay more for
environmentally friendly products
Frequency Percentage
Number of children living Would pay Would not Would pay Would not
with the respondent more pay more more pay more
No child 54 71 43 57
At least one child 54 42 56 44
Total 108 113
w2 of Pearson = 3.71 (p = 0.037) V of Cramer = 0.13
Table V. Number of children living with the respondents and their willingness to
pay more for environmentally friendly products
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indicates that 57 percent of females would pay more for green products,
while this percentage is only 40 percent for males. This result finds ample
support in the literature. Most studies have identified females as being more
environmentally concerned than males (Berkowitz and Lutterman, 1968;
Webster, 1975; McIntyre et al. 1993; Banerjee and McKeage, 1994).
As expected, individuals who are married (56 percent) and have children
living at home (57 percent) are more willing to pay a higher price for green
products. It may be suggested that these individuals are more inclined to
think of how a ruined environment may negatively impact not only on their
partner, but on their children's future. This could be a strong motivation for
married couples to behave in an ecologically conscious fashion. Overall, it
seems that married people with children may be more prone to put the
welfare of others before their own. Brooker (1976) came up with similar
findings.
Consumers' demographic The other variables used to define the consumers' demographic profile did
profile not differentiate consumers who are willing to spend more for green products
from their unwilling counterpart. In other words, the age of the respondent
(p = 0.97), his level of education (p = 0.97), his household income (p = 0.76),
the fact that he is a home owner or not (p = 0.32) and his work status
(p = 0.25) do not influence the consumers' willingness to pay a higher price
for ecologically safe products in a statistically significant way.
a
Classification was based on a validation sample (30 per cent of the original sample)
t-tests
Meansb
Would Would Discriminant analysis
pay not pay Value Wilks' Loadings
Factorsa more more of t Lambda (L)
1. Considering environmental
issues when making a
purchase 5.81 3.89 ± 7.16c 0.83c 0.57
2. Inconvenience of being
environmentally friendly 1.73 3.05 6.36c 0.73c ± 0.56
3. Importance of being
environmentally friendly 8.37 7.36 ± 5.60c 0.68c 0.47
Severity of environmental
problems 1.14 1.70 4.64c ± 0.33
6. Level of responsibility of
corporations 3.72 4.60 3.30c 0.62c ± 0.29
5. Collectivism value 8.08 7.64 ± 2.99c 0.64c 0.23
4. Security value 8.29 7.87 ± 2.19d 0.66c 0.20
Recycling behavior 8.45 7.99 ± 1.75 0.34
Individualism value 8.30 8.23 ± 0.52 0.03
Fun/enjoyment value 6.73 6.66 ± 0.34 0.12
Buying environmentally
harming products 6.93 6.98 0.21 ± 0.08
Environmental knowledge 7.23 7.23 ± 0.14 0.07
Notes:
a
Numbers represent the factors' order of entry in the discriminant analysis
(a = 0.05)
b
Items were measured on a nine-point Likert scale, except the knowledge construct,
which was evaluated on a scale from 0 (poor knowledge) to 1 (excellent knowledge)
c
Statistically significant (a < 0.01)
d
Statistically significant (a < 0.05)
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Appendix.
&
(A preÂcis of the article ``Targeting consumers who are willing to pay more
for environmentally friendly products''. Supplied by Marketing Consultants
for MCB University Press.)
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