The Impact Of Environmental Advertisement, Health Consciousness And Personal Norm On Organic Food Consumption In Shanghai, China

2012 Cambridge Business & Economics Conference ISBN : 9780974211428 The Impact of Environmental Advertisement, Health Consciousness and Personal Norm on Organic Food Consumption in Shanghai, China

Bing Zhu Department of Marketing Assumption University Thailand Email: [email protected]

ABSTRACT

The consumption of organic food has risen due to consumers’ concerns over issues regarding the environmental problems, food safety and health. This study explores the effects of factors (environmental advertisements, health consciousness, and personal norms) on organic food consumption in Shanghai. The data was collected from 400 consumers at 4 Carrefour supermarkets in Shanghai who purchased organic food. All hypotheses were analyzed by SEM (structural equation model). The research outcomes revealed that organic food consumption was positively related with environmental advertisement (β=0.56 p<0.001), health consciousness (β=0.19, p<0.01), and personal norm (β=0.22, p<0.001). The results imply that environmental advertisement is the chief factor for consumers to purchase organic food, and it is the most effective tool to reach those consumers who are aware of environmental and health issues.

Keywords- Organic food, Environmental Advertisement, Personal Norm, Health Consciousness

Paper type- Research paper

INTRODUCTION

With the development of technology and the improvement of living standard,, as well as an increase in environmental problems, Chinese consumers’ concern over food quality and usage of chemical residues has been accumulated (Sternfeld, 2009). Doubtless, Chinese people recently pay increasingly attention to what they have eaten every day. However, to a certain extent, the safety of the food products in the market is not really labeled by manufacturers. It is somewhat difficult for consumers to obtain sufficient knowledge of

June 27-28, 2012 Cambridge, UK 1 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 food quality and safety due to asymmetric information on food production methods, processes and even distribution (Casell & Mojduszka, 1996). Therefore, there is a need to call for participation, support and cooperation from both the government as well as the general public to build a qualified system to keep eying food detection and certification, through which the accessibility of food information in terms of quality, safety and legitimacy will be extended (Choi & Jesen, 1991).

The China Organic Food Certification Center (COFC) was established in 2002, which has supervises the process of organic farming and production. Organic products are identified as products that do not contain any conventional pesticides, fertilizers or irradiation throughout the production and process (NOP) and also through organic farming, biodiversity, biological circulation and ecological harmony are able to be enhanced and improved(NOP). In China, products that contain more than 95 percent organic ingredients are labeled as “organic”, and processed food that contain less than 95 percent but more than 75 percent organic ingredients are labeled as “manufactured with organic ingredients”(Sternfeld, .2009)

Recently Chinese consumers concern more on environmental friendly products. Therefore, China has shown its significant growth through both production and consumption of organic products (Ip, 2003;

Sanders, 2006; Willer& Yussefi, 2006). Beijing, Shanghai and Guangzhou at present are the major markets for organic food due to higher living standards, where the supermarkets such as Carrefour and Wal-Mart are major channels for the sales of organic food (Sternfeld, 2009). As compared to conventional food, organic food is marketed as high quality and at a premium price. According to Kan (2010), income level is a key factor that determines the demand for environmental friendly products. Chinese consumers in second-tier and third-tier cities have less interest in purchasing environmental friendly products than those in wealthier cities such as Shanghai, Guangzhou, Beijing, etc. In other words, organic food is perceived as a high-priced specialized food for a niche market in China. It is interesting to note that the sales of organic food have soared by 50 percent due to the recent food scandals reported by public media (Baer, 2007), which implied that with a higher consumer awareness of food safety and environmental issue, there is a big opportunity for June 27-28, 2012 Cambridge, UK 2 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 organic food industry to fill the gap through sustainable development.

In this study, mainly the researcher first studies the influence of media effects on consumers’ purchase of organic food through environmental advertising effects (Environmental Advertisement). The researcher focuses on traditional mass media such as television, radio and print. Second, as consumers’ awareness of health has increased, the researcher tends to investigate the impact of health consciousness on consumers’ purchase of organic food (Health Consciousness). Third, the researcher aims to study how personal moral obligation influence consumers’ purchase of organic food (Personal Norm).

LITERATURE REVIEW

Organic Food Consumption (OC): The term “Organic” refers to the products that do not contain any fertilizer pesticide or other chemicals throughout the farming, production and process (Hutchins &

Greenhalgh, 1997). From foreign perspective, consumers have generated understanding and knowledge of

“organic” which has boosted the consumption in foreign countries (Hutchins & Greenhalgh, 1997).

According to Manget, et al. (2009), organic foods were ranked 20 out of 108 product categories, and consumers believed that organic foods represent superior quality as compared to conventional foods. Rahbar

&Wahid (2011) conducted a research in Malaysia to study the impact of publicity on consumers’ perception and awareness of green products. As for Chinese market, organic food has been more available in the market than before. The government has strived to popularize environmental protection knowledge among Chinese people and raise their consciousnesses about environmental preservation and health issues in order to cultivate fine environmental ethics and codes of conduct. Affluent Chinese people are willing to pay premium price for the foods that contain natural ingredients, and they prefer purchasing organic foods at supermarkets. However, there is no specific empirical research about consumers’ purchase of organic food in

China.

Environmental Advertisement (Eads): As the general public is now more aware of environmental issues than before, environmental advertisements are chosen by organizations that have a concern for the green

June 27-28, 2012 Cambridge, UK 3 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 movement as an effective means to promote environmental-friendly products in the market. The purpose of launching an environmental advertisement campaign is to encourage consumers to purchase products that are environmentally-friendly, and to make the consumers be aware of the outcomes from their consumption habits (Rahbar &Wahid, 2011). Baldwin (1993) found that environmental advertisement is an effective tool for consumers to convert their values and beliefs into actual purchase of green products. More importantly, environmental advertising is able to strike a chord with audiences and customers who may be able to build up a firm sense of duty towards environment (Ong et al., 2007). The manufacturers and retailer will also foster a positive corporate image.

Health Consciousness (HC): At this moment, health has become a hot issue as Chinese people are aware of the negative impact of environment degradation. At the same time, Chinese people also realize that the biggest threat to their health is unhealthy lifestyle, and maintaining a healthy diet is fast gaining support among young people. Eating organic food and green food stand for a healthy diet. Health concern more likely becomes a powerful motive for consumers to buy organic food (Davies et al., 1995; Tregear et al.,

1994; Wander & Bugge, 1997; Magnusson et al., 2003). Health, to a great extent, is perceived as a chief factor for the acquisition of organic food (Lockie et al., 2002; Grankvist & Biel, 2001).

Personal Norm (PN): A personal norm reflects people’s moral obligation which is a very influential factor for environmental buying behavior (Hopper & Nielson, 1991; Stern & Dietz, 1994; Stern, Dietz &

Black, 1986; Vining & Ebreo, 1992). Based on the study of recycling consumerism (Ebreo et al., 1999), consumers have generated a sense of obligation to recycle, which is associated with product attributes that are designed for environmental preservation. In other words, moral demand can be perceived as a motive for consumers’ buying behavior towards environmental-friendly products.

CONCEPTUAL FRAMEWORK

The modified research conceptual framework (Figure 1) was developed based on the previous studies of

Rahbar& Wahi (2011), Tanner & Kast (2003), Pieniak et al., (2008), and Ahmad et al (2010). The research

June 27-28, 2012 Cambridge, UK 4 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 aims to identify how environmental advertisement, health consciousness and personal norm affect consumers’ consumption of organic food in Shanghai. In addition, the research intends to investigate the interrelationship among environmental advertisement, health consciousness, and personal norm.

Hence, based on the conceptual framework and the objectives of this research, the researcher has developed a set of seven hypotheses to support this research.

H1o: There is no relationship between environmental advertisement and consumers’ organic

consumption

H2o: There is no relationship between health consciousness and organic consumption

H3o: There is no relationship between personal norm and organic consumption

H4o: There is no relationship between environmental advertisement and personal norm

H5o: There is no relationship between environmental advertisement and health consciousness

RESEARCH METHODOLOGY

400 respondents who have bought organic food from 4 branches of Carrefour supermarkets in Shanghai participated in this research. The researcher sequentially went through three processes to obtain the data, which are simple random sampling, quota sampling, and convenience sampling. Simple random sampling was applied by the researcher, through which the researcher used drawing technique in order to give every member of the population an equal chance to be selected in the sample (Zikmund, 2003). 4 branches out of a total of 19 Carrefour branches in Shanghai city were chosen, which approximately accounts for 21 percent of the total number of branches. Quota sampling was used to determine the number of respondents assigned to each Carrefour branch selected since the data was collected from 400 respondents in 4 branches. 100 respondents were assigned to each branch. Convenience sampling was used for distributing questionnaires to the respondents who were available during opening hours in 4 Carrefour branches.

The Five-point Likert scale was also applied in a four-part questionnaire ranging from strongly disagree

(1) to strongly agree (5) was applied. In addition, a structural equation model was employed, and overall fit

June 27-28, 2012 Cambridge, UK 5 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 of the model was indicated by Chi-square (x2), Goodness-of-fit index (GFI), Root mean square error of approximation (RMSEA), Adjusted goodness-of-fit index (AGFI), TUCKER-Lewis index (TLI), Normed fit index (NFI), and Comparative fit index (CFI).

RESEARCH FINDING

The majority of respondents were males that account for 54.7 percent. Most of the respondents (49 percent) are in the age group of 31 to 35 years old. In terms of educational level, the highest percentage was bachelor’s degree with 47.9 percent. In addition, 42.2 percent of the respondents have their monthly income between 3,001 RenMinBi and 4,000 RenMinBi. Moreover, 40.9 percent of the respondents are employed in private sector.

In addition, as the research applied SEM (Structural Equation Model) to test the hypotheses, the results of overall fit statistics for seven factors and path analysis is shown on Table 1 and Table 2. Overall fit statistics for seven factors indicated the model in this study provided an adequate fit to the data (p<0.01).

The hypotheses testing results shown in Table 2 support that all hypotheses are found at significant levels, in which hypotheses 1, 3,4,5 are statistically significant at .001 level (p<.001), and hypothesis 2 is statistically significant at.01 level (p<.01). Therefore, all the null hypotheses are rejected, which indicates that there are significant relationships between variables (Figure 1).

CONCLUSION AND DISCUSSIONS

As the issues of suitability and food safety have exploded into popular media in China in recent years, the main objective of the study was to explore the impact of environmental advertisements, health consciousness and personal norms on organic food consumption in Shanghai, China.

For the consumers in Shanghai, environmental advertisement is the chief factor to buy organic food products. Environmental advertisement positively influences consumers’ organic consumption as environmental advertisement is an effective tool that can arouse general public’s awareness of environmental problems. This finding corresponds with Baldwin (1993), Chase & Smith (1992). Also, environmental

June 27-28, 2012 Cambridge, UK 6 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 advertisement can help consumers to form value and convert it into their purchase behavior by stressing powerful benefits of consuming environmental friendly products. Based on the message that environmental advertisement sends to the general public, consumers’ buying decisions have been influenced. Personal norm has a significant impact on consumers’ consumption of organic food in Shanghai, which reflects that moral thinking is involved in consumers’ purchase decisions in Shanghai. This finding is in line with Hopper and

Nielson (1991), Stern et al. (1986), Stern and Dietz (1994), Vining and Ebreo (1992), Ebreo (1999) and

Tanner and Kast (2003). The statement of “everybody has a responsibility to contribute to environmental preservation by buying food products that do not contain any conventional pesticides, fertilize and chemical residues” gained a mean score of 4.01 out of 5, which can be interpreted that consumers in Shanghai contribute their efforts to environmental improvement and preservation by consuming more organic foods products. Health consciousness also positively influences consumers’ purchase of organic food. This finding is in line with Davies et al. (1995), Tregear et al. (1994), Wandel and Bugge (1997) and Magnisson et al.

(2003). It can be interpreted that even though people pay attention to health more than before, the importance of health consciousness as a motive of organic food consumption in Shanghai is less than other factors that are environmental advertisement and personal norm. When people make a buying decision regarding organic food, mostly they are influenced by the information exposed to the environmental advertisement rather than health consciousness.

In addition, environmental advertisement has significant impact on personal norm and health consciousness, which means that environmental advertisements have instilled an awareness of environment preservation and health lifestyle to consumers’ daily lives. Consumers have gradually converted their concerns over environment and health issues to the environmental buying actions. They have perceived buying environmental friendly products as an environmental responsible manner.

IMPLICATIONS AND RECOMMENDATIONS

Hypothesis 1, Hypothesis 4, and Hypothesis 5: The products should be advertised with specific, detailed June 27-28, 2012 Cambridge, UK 7 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 and transparent information. For example, how many percent of emissions will be reduced by consuming environmental-friendly products as compared to conventional products? What particular or real benefits will consumers get from consuming environmental-friendly products? Once consumers have a clear understanding about the impact of their consumption, consuming environmental-friendly products such as organic food will be perceived as a merit to the environmental improvement. Moreover, the manufacturers, advertisers, marketers should stress products attributes which are “better for health” so that consumers can see benefits from consuming organic food products.

Hypothesis 2: Chinese consumers keep eyes on food production due to the food scandals in recent years, so the most important thing for them before making buying decision is to check ingredients and production methods. Many consumers try to purchase the products that are antibiotic-free, hormone-free and gluten- free. In addition, safety of food storage and delivery are other issues that the consumers pay an ever- increasing attention to. The marketers and advertisers should truthfully give accurate information regarding to the production methods, ingredients, product storage and delivery to eliminate consumers’ worries over the potentiality that the products may be polluted. In addition, the nutrition level and insightful recommendations regarding to healthy lifestyle should be stressed in order to improve consumers’ knowledge and understanding of organic food consumption.

Hypothesis 3: Moral consideration is a driving factor for Chinese consumers to buy organic food. The marketers and advertisers should highlight the significant impact of environmental buying behavior on the environmental improvement as exhaustive as possible to activate consumers’ moral obligation. For example, the consumption of organic food should be perceived as a contribution from the consumers, and the impact of purchasing recycle, energy efficient product or hazard-free products on development of low-carbon society and green environment should be emphasized.

June 27-28, 2012 Cambridge, UK 8 2012 Cambridge Business & Economics Conference ISBN : 9780974211428

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Table 1: Fit indices

Fit Indices Recommended Value Structural Model Measurement Model X2/df ≤5.00 (Hair et al., 1998) 2.237 1.345 RMSEA ≤0.08 (Hair et al., 1998) 0.056 0.029 GFI ≥0.90 (Hu and Bentler, 1999) 0.930 0.954 AGFI ≥0.80 (Segars and Grover, 1993) 0.908 0.940 NFI ≥0.90(Hair et al., 1998) 0.932 0.959 TLI ≥0.90(Hair et al., 1998) 0.954 0.987 CFL ≥0.90(Gefen et al., 2000) 0.961 0.989 June 27-28, 2012 Cambridge, UK 12 2012 Cambridge Business & Economics Conference ISBN : 9780974211428 Table 2: Path analysis by Structural Equation Modeling

Hypothesis β t-value p-value supported H1: EA  OC 0.56 8.101 *** Yes (P<.001) H2:HC  OC 0.19 3.241 .001** Yes (P<.01) H3:PN  OC 0.22 3.361 *** Yes (P<.001) H4: EA  PN 0.44 7.568 *** Yes (P<.001) H5:EA  HC 0.40 6.747 *** Yes (P<.001) Notes: *** p < 0.001; ** P<0.01

Figure 1: Modified conceptual framework

OC H3 H1

H4 PN Eads

H2 H5 HC

Hypothesis Results H1o: There is no relationship between environmental advertisement and Reject organic consumption (P<.001) H2o: There is no relationship between health consciousness and concern Reject and organic consumption (P<.01) H3o: There is no relationship between personal norm concern and Reject consumers’ organic consumption (P<.001) H4o: There is no relationship between environmental advertisement and Reject personal norm (P<.001) H5o: There is no relationship between environmental advertisement and Reject health consciousness (P<.001)

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