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This chapter starts by presenting a background discussion of the selected topic of this thesis. At the end of this discussion the research objectives and hypothesis is formulated and the main purpose of this report are established. What this research hopes to contribute and the delimitation’s of this study are also discussed.
1.1 Background of the Study
Over many centuries, the issue of environmental preservation has been on the top of the agenda of global and international concerns as one of the most important issues at both the national and international levels (MSEA, 2005). Man has limited resources on the earth, with which she/he must attempt to provide for the worlds’ unlimited wants. There is extensive debate as to whether the earth is a resource at man’s disposal. In market societies where there is “freedom of choice”, it has generally been accepted that individuals and organizations have the right to attempt to have their wants satisfied. As firms face limited natural resources, they must develop new or alternative ways of satisfying these unlimited wants. Ultimately green marketing looks at how marketing activities utilize these limited resources, while satisfying consumers wants, both of individuals and industry, without sacrificing the business objectives.
The past decades are witness to the rapid economic growth through increasing consumers’ consumption worldwide. This is turn causes environmental deterioration through over-consumption and utilization of natural resources. The consequences of environmental degradation are global warming, depletion of stratospheric ozone layer, pollution of sea and rivers, noise and light pollution, acid rain and desertification (Ramlogan, 1997). Grunert (1993) reported that about 40% of environmental degradation has been brought about by the consumption activities of private households. As the environment continues to worsen, it has become a persistent public concern in developed countries. Furthermore it has also awakens developing countries to the green movement for preservation of the environment.
Creating customer satisfaction and building long-term profitable customer relationship are some of the primary objectives firms try to achieve to sustain their businesses in the competitive business world. With an increased in the social and political pressures, many firms embraced green marketing strategies and exploited these environmental issues as a source of competitive advantage. Profit driven firms are usually motivated to adopt the concept of green marketing in their businesses provided that consumers demonstrate a high degree of environmental attitude and hence translate this into environmental friendly purchasing commitment. Hence many companies started to be more socially responsive in addressing pollution and waste disposal by developing environmentally friendly packaging and putting in numerous efforts to keep in-step with the environmental movement. However, some of the greatest challenges faced by these firms are changes in consumer preferences, suspicion of green advertising claim, unfavorable consumer perception of green products and the high cost invested in developing green products. As a result, it is vital to explore how consumers view the environmental issues, and how they behave, especially in their attitudes towards green products or environmental friendly products. It is widely accepted that the development of such awareness and attitude can be possible through environmental education. Education is an important social instrument and means, which act as a catalyst in improvement of different aspects of life. Knowledge, awareness, skills, values and attitudes acquired through education help one to lead a desired quality of life. Present study is an attempt to explore the consumers’ attitude towards the environment and green products. Accessibility to the consumers of Mumbai, Maharashtra has been the key motivation to select them as the sample of the proposed study.
1.2 Statement of Problem
The issue of eco-consciousness among customers is said to be a major concern for marketers. Although many environmentally friendly products with green attributes have been introduced in the markets, consumers have not changed their taste and old habits completely. Today, even ordinary people are well informed regarding the threats that endanger their environment. Environmentally related terms such as air or water pollution, sound pollution, and the unexpected climate change, the ozone layer’s problem and its undesirable effect on environment are quite well known to individuals. Many people believe that these problems are the side effects of marketplace factors such as high technologies and growing consumptions that are related to marketing activities intending to satisfy consumer’s needs and wants. Consumers around the world have become more environmentally aware recently, leading to a green revolution and demands to prevent further damage to the environment. This study, conducted in Mumbai in Maharashtra, a state in India, explores whether consumer attitudes on environmental protection have an impact on their purchase behavior. The study also investigates whether consumer knowledge of environmental issues results in environmentally-friendly behavior.
1.3 Significance of the Study
The researchers in green marketing area primarily focus on examining green consumers’ demographic profile. While there is significant knowledge that such studies have produced, an important research gap in Indian context has emerged by not assessing any predictive relationships that may govem green buying behavior in the process of adoption of eco-friendly products. The previous researches have not highlighted the predictive relationship of pro-environmental concern to green buying behavior in Indian context. This study attempts to find out if consumers’ pro-environmental concerns, awareness and knowledge about environment related issues impact their buying behavior to prefer and buy eco-friendly products and pay a premium price for such products.
1.4 Objectives of the Study
This paper is essentially exploratory in nature and is focused on three main objectives.
- The first objective is to study the relationship between the gender and the attitudes towards the environment and green products.
- The second objective is to investigate the consumers’ attitude towards the environment and green products.
- The third objective is to know the consumers sensitiveness towards green product and environment and their willingness to pay extra premium for eco friendly product.
1.5 Hypotheses of the study
Based on the previously cited theoretical and empirical literatures, the following hypotheses referring to the attitudes towards the environment and green products were proposed.
Hypothesis 1: There is a significant difference between male and female in their environmental attitudes on green product.
Hypothesis 2: The different factors influencing customers towards green product and environment do not differ significantly across their occupation and education levels.
Hypothesis 3: Customers’ willingness to pay extra for eco-friendly products does not differ significantly across the education level of respondents.
Hypothesis 4: The mean of different factors building perception and attitude towards green product and environment does not differ significantly across gender category, level of education and occupational category of respondents.
1.6. Limitations of the Study
This research was conducted by generating a non-random sample and hence the results may not be generalized beyond the sample frame. These results, however, support a generally prevailing notion that more educated people tend to be green buyers and hence warrant a larger study conducted on a randomly selected sample. Also, the present research was conducted using a self-reporting questionnaire and hence respondents’ bias may be a concern, especially in regard to the willingness to pay premium.
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