7ps of green marketing as factors influencing willingness to buy towards environmentally friendly...

Proceedings of the International Conference on Business Management & Information Systems, 2012

7Ps of Green Marketing as Factors Influencing Willingness to Buy Towards Environmentally Friendly Beauty Products

Heldira Larashati, Herry Hudrasyah and Novika ChandraSchool of Business and Management, Institut Teknologi Bandung, Bandung, IndonesiaE-mail: [email protected]; [email protected]; [email protected]

ABSTRACT

With society increasingly conscious to the environment, it affected consumers’ decision in choosing a product. For business producers, this phenomenon is seen as opportunities to attract consumers by implementing green values in the marketing process. In this research, the product discuss is environmental friendly beauty product. The 7Ps framework of marketing that has been implemented in The Body Shop Indonesia modified with green values of producers may be a useful tool as consumers’ willingness to buy factors. Each elements of 7Ps green marketing are evaluated based on its importance and effect in willingness to buy for woman consumers in Indonesia. This study aims to determine which attributes of 7Ps green marketing that perceived as important and affect most Indonesian consumers’ willingness to buy for environmentally friendly beauty products (The Body Shop Indonesia) and also the relationship in between. This research is conducted by distributing questionnaires that was addressed to woman age between 19-27 years old and the data was analyzed using frequency and factor analysis, and MANCOVA. Results indicate that attribute in “People” dimension of 7Ps green marketing is considered as the most important and most affecting in consumers’ willingness to buy. It is also found that there is relationship between importance levels of each 7Ps dimension with its degree of influence towards willingness to buy. Furthermore, there is also relationship between consumers’ environmental knowledge with level of importance of each 7Ps green marketing dimension. The findings can be used as suggestion for managers and producers to generate the 7Ps green marketing strategy for their environmental friendly beauty products.

Keywords: Willingness to Buy Factor, Green Marketing, 7Ps, Environmental Friendly Beauty Products

Introduction

In recent years, news of the growing environmental damage show many evidences found by the scientists such as sea level rise caused by melting of the ice surface in Antarctic. Exposure from the media involves in the spread of information and supported by technology development; internet. Many business people apply awareness towards those problems in their strategy, as they are competing to portray themselves “Green” to attract the consumer into buying their products and feel of having contributed to the environmental restoration efforts. However, the author noticed that there is no exact indicator from the concept of green marketing that applied in Indonesia, which dimension and attributes that are actually affecting consumers’ willingness to buy, or not. When the attributes of 7Ps green marketing that cause most on consumers’ willingness to buy and perceived as most important are found, then it can help companies/producers of beauty product with green value to develop and update their strategy in order to gain consumers’ willingness to buy. In addition, this research also conducted to find relationship between consumers’ environmental knowledge and the level of importance of each 7Ps green marketing dimension. This research uses The Body Shop Indonesia as the case study.

7Ps of Green Marketing as Factors Influencing Willingness to Buy Towards Environmentally Friendly Beauty Products 277

Literature Review

7Ps Marketing MixThis marketing framework invented by Booms and Bitner (1981) which is an extension of the 4Ps theory by McCarthy (1960) [1]. An exploratory survey of using 7Ps marketing mix as generic framework was conducted by Mohammed and Pervaiz (1995). Research was conducted on respondents UK’s Marketing Education Group (MEG) Conference in Salford (1992) and the European Marketing Academy (EMAC) Conference held in Aarhaus, Denmark (1992) and got the result that there is a high degree of dissatisfaction with the 4Ps among European academics [2].

7Ps of Green MarketingPranam Dhar and Soumyajit Das (n.d) described the 7Ps of green marketing as follows:

1. Product Variety of green products:

– Products are recycled from the former goods– Products are able be recycled or reused– Efficient products to save water, energy or gasoline, save money, and reduce environmental

impact– Products with environmentally friendly packaging– Product with green labels (with proved evidence)– Organic products– A service that rents or loans product

It is vital to ensure the product meet or exceed consumers’ expectation.2. Price Since people tend to put price as a critical consideration, it is important for marketer to provide

additional values that improve many aspects of the products. It may be developed performance, function, design, visual appeal, or taste. The consumers will only want to pay the premium price when the extra value of products (for example: green benefits) is attracting. Environmentally responsible products are often less expensive if the product life cycle is taken into consideration.

3. Place The choice of where and when to make a product available have significant impact to attract the

consumers. Very few customers will go out of their way to buy the green products. Moreover, the location must also be consistent with the image which a company wants to project.

4. Promotion Sustainable marketing and communication tools and practices are should be used by smart green

marketers to reinforce the environmental credibility. There are several examples that had been done by several companies:

5. People People are those who are involved in establishment of green services/products. The provider should

have green mindset to be implemented in their activities.6. Process In this section, the process refers to the methodology the services will be provided. It should be

given a serious attention, so the process can be executed in the right way with the main objectives.

278 Business Management and Information Systems

The greenness of entire system is also should be kept in mind to establish a comprehensive green marketing implementation.

7. Physical Evidences The physical evidences must ensure that the greenness for every part of system is implemented, so

it should be implemented from holistic point of view.

Green KnowledgeGreen knowledge is also called as “ecological knowledge” or “environmental knowledge”. Fryxell and Lo (2003) defined green knowledge as “the general knowledge of facts, concepts and relationship concerning the natural environment and its major ecosystem”[3].

In addition, on the topic of consumer green purchasing behavior, Kaufmann, Panni, and Orphanidou (2012) stated that “Environmental knowledge involves what people know about the environment, key relationship leading to environmental aspects or impacts, an appreciation of “whole systems”, and collective responsibilities necessary for sustainable development.” [4]

According to Darnall, Pointing, and Vazquez-Brust (n.d), there are two types of environmental knowledge; general knowledge and action based knowledge. General knowledge is consumers’ basic knowledge and understanding towards environmental issues. It is including basic terminologies and concepts understanding of consumers. Furthermore, action based knowledge refers to consumer understanding of the activities required to reduce environmental problems. It is including understanding about consequences and solution for environmental problems [5].

Methodology

The methodology of this research consists of nine main stages; problem identification, research planning, literature collection, research design, sampling design, variable identification, questionnaire design, questionnaire distribution, and data collection and analysis. To determine the variables of questionnaire, author conducted interview with The Body Shop Indonesia’s executive and beauty expert and literature research. The questionnaire consists of three parts. The first part measures the attributes of 7Ps green marketing based on its level of importance according to consumers. The second one measures degrees of influence of each 7Ps green marketing attributes on consumers’ willingness to buy. The last one measures consumers’ understanding on green knowledge. All of the questions are measured using likert scale that has tendency of:

Level of Importance Section Willingness to Buy Factors Section Knowledge Section

1 – 1.86 = Very Unimportant1.86 – 2.72 = Unimportant2.72 – 3.58 = Less important3.58 – 4.44 = Indifference4.44 – 5.3 = Somewhat Important5.3 – 6.16 = Important6.16 – 7 = Very important

1 – 1.86 = Very Influential1.86 – 2.72 = Not Influential2.72 – 3.58 = Less Influential3.58 – 4.44 = Indifference4.44 – 5.3 = Somewhat Influential5.3 – 6.16 = Influential6.16 – 7 = Very Influential

1 – 1.86 = Very Suitable1.86 – 2.72 = Not Suitable2.72 – 3.58 = Less Suitable3.58 – 4.44 = Indifference4.44 – 5.3 = Somewhat Suitable5.3 – 6.16 = Suitable6.16 – 7 = Very Suitable


Table 1. The Variables/Attributes of 7Ps Green Marketing

Table 2. The Variables/Attributes of Green Knowledge


The questionnaires then distributed to 250 women who at least had visited The Body Shop Indonesia’s store in this past year.

Analysis

Frequency AnalysisAccording to the result of frequency analyses, there are three variables that considered as the most important by woman consumers age 19-37; company’s honesty towards environmental friendly claim in the Promotion dimension, natural and vegetarian ingredients from Product dimension, and staffs’ awareness and behavior toward environmental protection from People dimension. Being considered as the most important factors, it is better for producers of environmental beauty product should give special attention in these areas. By giving maximization on the area that considered as important it will be easier to attract woman’s shopper willingness to buy.

In measuring the level of consumers’ environmental knowledge, the frequency analysis indicates that the respondents already have understanding towards Environmental Knowledge. Result of the analysis shows that the statements in Knowledge section have means of 5.3391 which indicates the statement; that demonstrates knowledge about facts, issues, regulations, terminology, and causes and impact, are fit with respondents.Furthermore, the frequency analyses are also conducted to find the variables that considered as most influent towards consumers’ willingness to buy for The Body Shop products. The three variables are the same as the variables; company’s honesty towards environmental friendly claim in the Promotion dimension, natural and vegetarian ingredients from Product dimension, and staffs’ awareness and behavior toward environmental protection from People dimension. It can be concluded that The Body Shop Indonesia has successfully implement those three variables to attract consumers’ willingness to buy. This means that what The Body Shop Indonesia has done in these three variables; it should be maintained.

MANCOVA

Figure 1. MANCOVA Analysis Framework


MANCOVA analyses were conducted to find effect of consumers’ environmental knowledge on 7Ps green marketing’s level of importance and the 7Ps green marketing’s importance level on their degree of influence. The result indicates that there are effects of consumers’ environmental knowledge towards 7Ps’ level of importance. In the other words, every shifting on consumer’s level of environmental knowledge, it has impact for every 7Ps’ importance level. The higher level of consumers’ environmental knowledge, the more every 7Ps green marketing is perceived as important by consumers.

Figure 2. Summary of MANCOVA Analysis

The other MANCOVA analysis resulted that there are also effects of every 7Ps dimension’s importance towards the 7Ps degrees of influence on consumer’s willingness to buy. Here is one example; when a consumer thought that variables in Product dimension are important, it will affect Product as their willingness to buy factor. The more important variables in Product are perceived, the more variables in Product attract consumers’ willingness to buy. This conclusion also stands for the other dimensions such as Price, Place, Promotion, People, Process, and Physical Evidences.

MappingMapping is performed to see the position of each dimension 7Ps level of green marketing on the level of importance and influence on the willingness to buy. The dots resulting position is the result of scoring calculations by calculating the average of the scores of each variable in each dimension. Score was obtained by multiplying number of respondents with the choices in the questionnaires.

Figure 3. 7Ps’ Level of Importance and Degrees of Influence Mapping


Recommendations

Recommendations for Environmental Friendly Beauty Products ProducersThe biggest levels of importance belong to People, Promotion, and Product dimension of green marketing. Furthermore, results indicate that there are effects of level of importance towards 7Ps as willingness to buy factor. From that point, producers should be more aware to factors that perceived as important by consumers in order to enhance their willingness to buy. In addition, environmental knowledge of consumers also should be taken into consideration, because it affects the importance level of green marketing strategy (7Ps), and the importance levels also affects the degree of influence of each 7Ps elements.

Recommendations for the Body Shop IndonesiaThere are three dimensions that are perceived as most affecting the willingness to buy for consumers of The Body Shop; which are People, Promotion, and Product. For The Body Shop Indonesia, these factors are already well-performed to attract consumers’ willingness to buy, so it should be maintained, and the other four dimensions are should be enhanced.

Recommendations for Further ResearchThe author limited this research only to find the factors that influence consumers’ willingness to buy, not influence their buying decision. Further research that discovers this area might be interesting.

This research was limited to women because it fits the company’s target market, but other research that covers man respondents might be possible to do.

The variables in Knowledge section that have been conducted the factor analysis only explain 52.710%. It indicates that there are parts of knowledge are not included in this research as the rest percentage. Adding the variables may improve the accuracy of things researcher want to measure.

References [1] Bitner, J. and Booms, B. 1981. Marketing Strategies And Organizational Structures For Service Firms. In:

Donnelly, J. and George, W, Marketing of Services, Chicago: American Marketing Association, 1981, IL, pp. 47-51.

[2] Dhar, Pranam and Das, Soumyajit., n.d. Green Marketing: Challenges and Opportunities for Innovation and Sustainable Development. [online] Available at: <http://www.indianresearchjournals.com/pdf/IJMFSMR/2012/May/6_IJM_MAY12.pdf > [Accessed date: 21 May 2012].

[3] Fryxall, G. and Lo, C., 2003. The influence on environmental knowledge and values on managerial behaviours on behalf of the environment: An empirical examination of managers in China. Journal of Business Ethics, Iss. 46, pp. 45-59.

[4] Kaufmann, Hans Ruediger., Panni, Mohammad Fateh Ali Khan,. and Orphanidou, Yianna., 2012. Factors Affecting Consumers’ Green Purchasing Behavior: An Integrated Conceptual Framework. [online] Available at: < http://www.amfiteatrueconomic.ro/temp/Article_1100.pdf> [Accessed date: 8 May 2012].

[5] Darnall, Nicole., Pointing, Cerys., and Vazquez-Brust, Diego. n.d. Why Consumers Buy Green. [online] Available at: <http://asu.academia.edu/nicoledarnall/Papers/548176/Why_Consumers_Buy_Green> [Accessed date: 10 May 2012].

7ps of green marketing as factors influencing willingness to buy towards environmentally friendly...

Documents