Green products and corporate strategy: an empirical investigation

Abstract

Purpose: The purpose of the study is to examine the influence of multiple factors on the green purchase intention of customers in Australia. Design/methodology/approach: A conceptual model is proposed and was subjected to empirical verification with the use of a survey of metropolitan and regional households in Victoria, Australia. The data were analyzed using both descriptive measures and exploratory factor analysis to identify and validate the items contributing to each component in the model. AMOS structural modeling was used to estimate the measure of respondents' overall perception of green products and their intention to purchase. Findings: The results indicate that customers' corporate perception with respect to companies placing higher priority on profitability than on reducing pollution and regulatory protection were the significant predictors of customers' negative overall perception toward green products. The only positive contribution to customers' perception was their past experience with the product. Other factors including the perception of green products, product labels, packaging, and product ingredients did not appear to influence customers' perception. The results also indicate that customers are not tolerant of lower quality and higher prices of green products. Research limitations/implications: The knowledge of the overall perception formation about green products and its predictors provides management with the facility to identify and implement strategies that may better influence the change of attitude by customers. Corporations can also benefit from the identification of the types of information required to enable management to influence this process of perception formation. Originality/value: The present findings contributes to an understanding of the antecedents of green purchasing and highlight that green customers rely more on personal experience with the product than the information provided by the marketer.