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Green Marketing & Ethical Consumerism Lisbeth Alvina Urzua Green Marketing & Ethical Consumerism Shaping Consumer Behavior Business Administration Master’s Thesis 15 ECTS Term: Spring 2014 Supervisor: Inger Roos Acknowledgment I would like to thank my supervisor Inger Roos for her valuable advice and guidance, which have been greatly appreciated. Further I would like to thank the respondents and the interviewees who took the time to answer my questions. Finally, I would like to thank my family for their unconditional love and support. Karlstad, May 2104 ________________ Lisbeth Alvina Urzua 3 4 Abstract Marketers have found new ways of thinking leading to a development within the marketing area, the concept of green marketing has emerged and aims to improve communication in terms of ethically conscious products. Consumers are at times skeptical and companies need to be aware of the fact that trust is a main issue. However, along with the concept of green marketing, companies are sometimes misleading the consumers on their true intention, this phenomenon is called Greenwashing. This occurs when companies portray themselves to being greener than they actually are. The purpose of this thesis is to explore how consumer behavior is affected by green marketing and exploring whether or not knowledge has an effect. It will try to show the standpoint of the consumer and show what they strive for regarding ethical and green consumption. This research has been conducted through a deductive approach. The data collected are both gained from a qualitative and a quantitative method, however the analysis has been conducted in a qualitative way. Moreover the findings collected from this research have been retrieved from six semi-structured interviews as well as an online questionnaire. Keywords: Consumer behavior, Sustainability, Green marketing, Ethical consumption, Green- & Ethical consumerism, Greenwashing. 5 Table of Contents 1. Introduction .................................................................................................... 8 1.1. Background ................................................................................................ 8 1.2. Purpose and Problem identification ......................................................... 10 1.3. Delimitation .............................................................................................. 10 1.4. Thesis Structure ........................................................................................ 11 2. Theoretical framework................................................................................. 12 2.1. Consumer behavior .................................................................................. 12 2.2. Green marketing ....................................................................................... 13 2.3. Eco-labeling ............................................................................................. 14 2.4. Greenwashing ........................................................................................... 15 2.5. Summary .................................................................................................. 17 3. Methodology .................................................................................................. 18 3.1. Choice of method ..................................................................................... 18 3.2. Implementation......................................................................................... 18 3.2.1. Primary data ...................................................................................... 19 3.2.2. Secondary data .................................................................................. 20 3.2.3. Sample group .................................................................................... 20 3.3. Critic of the method used ......................................................................... 21 3.4. Critic of the sources used ......................................................................... 22 3.5. Reliability ................................................................................................. 22 3.6. Validity ..................................................................................................... 23 3.7. Ethics ........................................................................................................ 23 4. Findings ......................................................................................................... 25 4.1. Personal interview .................................................................................... 25 4.1.1. Green knowledge .............................................................................. 25 4.1.2. Eco-labels ......................................................................................... 26 4.1.3. Green products .................................................................................. 27 4.1.4. Trust and Loyalty ............................................................................. 28 4.1.5. Green marketing strategies ............................................................... 29 4.1.6. Greenwashing ................................................................................... 30 4.1.7. Respondents ...................................................................................... 30 4.2. Questionnaire ........................................................................................... 31 4.2.1. Respondents ...................................................................................... 31 4.2.2. Consumption of ethically conscious products .................................. 32 4.2.3. Personal views & beliefs .................................................................. 34 4.2.4. Respondents opinions ....................................................................... 35 5. Analysis .......................................................................................................... 36 5.1. Consumers green knowledge ................................................................... 36 5.2. Companies shaping consumer behavior ................................................... 39 6. Conclusion ..................................................................................................... 42 6.1. Are consumers affected by green marketing, whether or not having green knowledge? .............................................................................................. 42 6 6.2. Do companies who misrepresent themselves intentionally/unintentionally affect consumer behavior, from a consumer perspective? ...................... 43 6.3. Further research ....................................................................................... 43 References ............................................................................................................ 45 Appendix 1: Template for personal interviews ................................................ 48 Appendix 2: Template for Questionnaire ......................................................... 50 7 1. Introduction This chapter will present the background and purpose of the thesis. The background will explain why the chosen topic is considered to be relevant and the purpose will demonstrate the problem areas as well as the delimitation. 1.1. Background Climate change has caused multiple variations in the environment, such as severe flooding, earthquakes and extreme changes in the earth’s temperature. This has lead to several countries and governments taking action and emphasizing the importance of global warming worldwide (Bleda & Valente 2009 ; Krahmann 2013). If we look back in time, in the 70´s one of the issues was chlorofluorocarbons (CFCs) and how harmful this was to the environment. This compound eventually ended up being banned from the market. The 80´s made the population more conscious about eco footprint and to which state the planet would be left for the generations to come (Mansvelt & Robbins 2010). Predictions concerning the future have always been clearly stated and it is suggested that the earth’s population will increase to a staggering number of 9 billion. Furthermore, which will lead to an increase in poverty as well as illness (Meadows et al. 2005). Nowadays both agriculture and fisheries are diminishing and worldwide illnesses are spreading quicker than ever due to an unsustainable behavior (Akenji 2014). Arising concerns regarding environmental issues, has lead companies to rethink and re-consider new strategic paths. For the sake of pleasing growing customer needs, numerous companies are highlighting a preferably sustainable approach (Ankit & Mayur 2013 ; Chen & Chang 2013). When researching sustainability and in particular sustainable consumption, it can be dated back to the early 19th century that the concern and criticism for overconsumption as well as unhealthy living was brought to life. However at that time concerns for environmental issues were not the focus (Akenji 2014). Furthermore due to several factors and the 30:3 syndrome, consumption is an important issue. The 30:3 syndrome can be explained by 30 percent of individuals stating that they have a general concern about sustainable however green products represent only 3 percent of the market share (Hobson 2004). Private households are gaining a greater accountability for unsustainable living. It is imperative with 8 an increase, concerning the market of green marketing, in order to meet these apprehensions (Krahmann 2013 ; Wells et al. 2011). Companies are utilizing
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