Analysis of Product Attributes That Influence Customers Toward A Purchase Intention of Eco-Friendly Household Products
Amanda Prita Kirana1*
1 School of Business and Management, Institut Teknologi Bandung, Bandung, Indonesia
*Corresponding Author: [email protected] Accepted: 15 August 2022 | Published: 1 September 2022
DOI:https://doi.org/10.55057/ajrbm.2022.4.3.3
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Abstract: Household plastic waste is one of the biggest contributors to waste problems in Indonesia and it raises the awareness in the community of the importance of protecting the environment. It is triggering the business sector to innovate eco-friendly household products.
Now, many businesses are competing in the market. However, eco-friendly businesses use the same way to do their business activities that make the product in the market look similar. This phenomenon should be considered by a new business player to have a differentiation to compete in a similar sector. Thus, understanding the product attributes of eco-friendly household products that customers need is important to strengthen a new business. The researcher analyzed conventional and eco-friendly product attributes; price, type of material, product durability, availability of eco-labels, and environmentally friendly production processes. This study was conducted using a quantitative method using online questionnaires distributed to 254 people who are interested in eco-friendly household products within the age range of 20-55 years and who live in Jabodetabek (Jakarta, Bogor, Depok, Tangerang, and Bekasi), Bandung, and Bali. Using SmartPLS program to process the analysis using PLS-SEM and descriptive analysis. This study is expected to get the most significant attributes of eco- friendly household products that can affect customers' purchase intentions.
Keywords: Attributes, Eco-friendly products, Customer purchase intention
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1. Introduction
Household products are tools that support the needs and daily activities at home. The availability itself is always needed so it is common for families to stock extra products.
However, seeing that most household products are made of plastic and non-biodegradable materials, it becomes a dominant type of waste every day. According to graphic data, the composition of waste in 2021 released by Sistem Informasi Pengelolaan Sampah Nasional (SIPSN) 45.6% from 23,702,691.72 tons/year was dominated by household waste with 18.1%
plastic waste (SIPSN, 2021). In this way, this non-biodegradable waste will harm the environment around us.
This phenomenon creates a new awareness in the global community to protect the environment with the slogan “Go Green”. A global online survey (Nielsen, 2018) said 81% of global respondents feel strongly that companies should help improve the environment. This consumer awareness is most visible among Millennials (85%), Gen Z (80%), and older generations such as Gen X and Baby Boomers not far behind with a percentage of 79% (Nielsen, 2018). In Indonesia itself, this phenomenon is triggering the business sector indicating a growing concern
for the environment (Sari, 2021). Including businesses that innovate environmentally friendly household products intending to make people switch to a sustainable lifestyle and also generate profits. This business sector is driven by the growth of the middle to upper class, especially among customers who are aware of the importance of protecting the environment.
All business sectors including eco-friendly products certainly have their positioning.
Positioning is the best way to counter competitive pressure by communicating the unique characteristics of the business based on the needs of target customers. The important message and actions are carefully crafted to build a differentiated brand (Olson, 2020). Besides that, Strategists argue that in order to have outstanding performance, companies must overcome the competition (Ghemawat, 1986). Competitive advantages come from a variety of factors, including cost structure, branding, product offerings, the distribution network, intellectual property, and customer service (Twin, 2021). Eco-friendly businesses implement green marketing to give clear value to the customer about their mission for sustainability. However, eco-friendly businesses use the same way to do their business activities that make the product in the market look similar.
For new business players, to help a product get noticed in a fairly dense market in the midst of many competitors and have a differentiation, it can be helped by a clear product attribute (Dadlana, 2022). However, from the previous study, there is a gap that states that a customer's purchasing intention to buy eco-friendly products is still dominated by egoistic and traditional attributes first, followed by sustainable product attributes (De Groot & Schuitema, 2015; Wang et al., 2022). But, seeing this statement is still more aimed at discussing the literature on sustainable apparel. Therefore to close this gap, inquiry to understanding the significant product attributes from customers’ perspective of eco-friendly household products that can influence the customer’s purchase intention becomes essential for eco-friendly businesses that focus on household products.
2. Literature Review
2. 1 Customer Purchase Intention in The Context of Product Attributes
Purchase intention is the strength of an individual's intention to do the behavior or make the decision to purchase a product according to Amoroso, Roman, and Morco( 2016, p.17). It is also a type of decision-making that studies the reason behind the purchase activity (Shah et al., 2012). Consumers' purchase intention is influenced by the deterministic role of product attributes that they consume (Chakraborty, D et al., 2021).
2.2 Product Attributes
Product attributes are defined as the components that describe product features (both tangible and intangible) that customers are able to use and evaluate (Lovelock & Wright, 2011). From a previous study, in the context of eco-friendly products, product attributes should include a major achievement in decreasing environmental impact; recyclable, biodegradable, ozone- friendly, renewable, and reusable (Morris, Hastak & Mazis 1995). But, despite the fact that research has shown that environmentally friendly materials as sustainable product characteristics may impact consumers' buying decisions, traditional product attributes are determined to be more essential (Viciunaite & Alfines, 2020). The conventional attributes are such as price, quality, and brand (Dubihlela & Ngxukumeshe, 2016).
2.2.1 Price
When it comes to purchasing decisions, price is always an essential and deciding aspect (Zheng et al., 2020). Consumers have a lot of potential to show their willingness to pay a higher price for a sustainable product if they know that it is made with sustainable resources (e.g., organic) (Hustvedt and Bernard 2008).
2.2.2 Type of Material
Materials used in environmentally friendly products are not harmful to the environment, one of them is a biodegradable material that can be decomposed by bacteria, fungi, or other biological creatures (Sigh, Kumar & Borthakur 2019).
2.2.3 Durability
Durability is defined as a material’s capacity to remain serviceable in the surrounding environment for a useful life without sustaining damage or requiring unexpected repair (Coronado, M et al., 2015). The product that has durability quality makes the lifetime of the use itself longer. It can also save resources and minimize waste from its manufacturing process (Iraldo, Facheris & Nucci 2016) so from the consumer side of the product or the provider, they will play a role in a more sustainable movement.
2.2.4 Availability of Eco-Label
Eco-labels, in particular, assist to "convey that the environmental impacts of products are reduced across its whole life cycle," from raw material sourcing through production processes and consumption to disposal (Kumar, V et al., 2017). Consumers' perceptions of eco-label credibility can be derived from their overall knowledge of green items and contentment with previous purchases (Cai, Xie, & Aguilar, 2017).
2.2.5 Environmentally Friendly Production Process
To make an environmentally friendly manufacturing process should be integral with 3 elements (product, processes, and system) and all of them must pay attention to environmental sustainability (Jawahir, Badurdeen & Rouch 2013). Environmentally- friendly production or manufacturing processes protect the world from exploitation, conserve natural resources, and cause few emissions (Fulton and Lee 2013).
2.3 Conceptual Framework
In this paper, the researcher will study the influence of eco-friendly household product attributes on customers’ purchase intention. Factors mentioned in this chapter were proposed by previous studies evaluating factors affecting the customer purchase intention in eco-friendly products (in the context of eco-friendly apparel products) because it has relevant to this study.
The author suggested that factors such as price, type of material, durability, availability of eco- label, and environmentally friendly production process positively influence customer purchase intention on the eco-friendly household product with hypothesis from all variables is has a significant influence on the eco-friendly household product customers’ purchase intention. The conceptual framework is shown in figure 2.1 below:
Figure 2.1 Conceptual Framework
3. Methodology
3.1 Research Design
This research's main purpose is to analyze the attributes of eco-friendly household products that influence customers’ purchase intention. This research began with conducting problem identification to determine the issues in the industry and followed with conducting preliminary strengthen opinions from facts that are felt by many people. The research continued with reviewing previous studies with the theoretical foundation to construct the base of hypothesis formulation that relates to the topic and also contributes to making a conceptual framework presenting the research variables. The next is formulating a questionnaire and collecting data.
This research will conduct using a quantitative research method and analyzed with SmartPLS software. The final step of this research is giving conclusions and business recommendations.
3.2 Research Approach
This research uses a quantitative method to collect the data. Quantitative research entails gathering data in order to quantify information and apply it to statistical analysis in order to support or refute knowledge assertation (Williams 2011).
3.3 Data Collection
In this research, to collect the primary data is using a survey method or using a questionnaire that will be distributed online. A questionnaire is a set of questions asked to people in order to gather statistical information about a specific issue (Roopa & Rani 2012) and the implementation of an online questionnaire can be done at a low cost and short amount of time (Sekaran & Bougie 2016). In the questionnaire, the researcher used a likert scale from the range of 1 to 5. The use of a likert scale of 1 to 5 in social science studies can increase the reliability of the data (Croasmun, J & Ostrom, L 2011) meaning a score of 1 is strongly disagree and 5 strongly agrees.
Price Type of Material
Durability Availability of Eco-
Label Environmentally Friendly Production
Process
Customer Purchase Intention Eco-Friendly Household
Product Attributes H1 H2
H3 H4
H5
3.4 Data Analysis
This is analyzed using PLS-SEM in SmartPLS software. Analyzing using PLS-SEM or Partial Least Square - Structural Equation Modeling. SEM is a methodology to test assumptions about the interactions between interacting variables. This technique is an extension of factor analysis and combines with multiple linear regression (Sinharay, S 2010). Also, PLS-SEM is a simpler and much greater flexible model of SEM, it is able to accept small sample sizes (Hair et al., 2018).
4. Discussion
The result of F-Square in this research is to know the association between latent variables and the impact on the research or effect size. According to Wong (2013), the value of F-square can be classified as small, medium, and large with value order 0.02, 0.15, and greater than 0.35.
Table 4.1 F-Square
Customer Purchase Intention
Price 0.002
Type of Material 0.073
Durability 0.053
Availability of Eco-Label 0.041
Environmentally Friendly Production Process
0.288
Customer Purchase Intention
From table 4.1, the attribute price is lower than 0.002 and it will be ignored because according to Sarstedt et al (2017) because it is considered to have no effect to the dependent variable or customer purchase intention. The type of material, durability, and availability of eco-label is considered as a weak or small effect on customer purchase intention while variable environmentally friendly production process has medium effect size.
In Hypothesis testing, to assess the relationship between variables it can be seen with the result of T value and P value. According to Wong (2013), the relationship between variables is considered significant at a 95% confidence level. With P Value it has to be below 0.05 and T Value is higher than 1.96.
Table 4.2: Hypothesis Testing Hypothesis Structural Path Path
Coefficient
T Values
F Square
P Values
Result
H1 Price → Customer Purchase Intention
0.031 0.495 0.002 0.621 Rejected
H2 Type of Material → Customer Purchase Intention
0.208 3.561 0.073 0.000 Accepted
H3 Durability → 0.184 2.241 0.053 0.025 Accepted
Customer Purchase Intention
H4 Availability of Eco- Label → Customer Purchase Intention
0.159 2.514 0.041 0.012 Accepted
H5 Environmentally Friendly Production Process → Customer Purchase Intention
0.440 5.617 0.288 0.000 Accepted
The result from table 5.4 it can be seen after the researcher use bootstrapping calculation to assess T Value and P Value in order to see whether the value of path coefficient is having significant influence or not for customer purchase intention toward the eco-friendly household product. Among five variables, type of material, durability, availability of eco-label, and environmentally friendly production process is accepted and has significant influence due to the score of P Value is below 0.05 and T Value higher than 1.96. But, there is one variable that has no significance which is a price that has a P Value score greater than 0.05 and T Value below 1.96.
This research attempts to get the most significant attributes of eco-friendly household products that can affect customers' purchase intentions. These findings are constructed with five variables to fill the gap from the previous studies that more analyze sustainable apparel and general eco-friendly product. Thus, this study is more focused on eco-friendly household products. The result of the research hypothesis can be seen in the explanation below:
a. H1: Price has a significant influence on the eco-friendly household product customers’
purchase intention.
Price does not significantly influence the customer purchase intention of eco-friendly household products and considered that has no effect on dependent variables seen from the F Square result. This can be seen from the result of a P Value that is higher than 0.05 which is 0.621 and a T Value below 1.96 which is 0.495. That is why the hypothesis is rejected.
The researcher decided to gain more information by analyzing the questionnaire in price variables. The result is not in line with the previous result that said price is still the most essential and deciding aspect in purchasing a product (Zheng et al., 2020) even though the product is focused on the eco-friendly side, people still choose price as the most influence (Luo, W et al., 2022).
b. H2: Type of material has a significant positive influence on the eco-friendly household product customers’ purchase intention.
Hypothesis 2 in this research shows that type of material has the second most significant positive influence on customer purchase intention of eco-friendly household products. This hypothesis is accepted because the result of P Value is below 0.05 which is 0.000 and T Value greater than 1.96 which is 3.561. Is aligned with the statement from the previous study that the type of materials that have an eco-friendly side like organic and sustainable is influencing purchase intention (Luo, W et al., 2022) and a statement from (Achabou and Dekhili 2013) that said consumers significantly consider recycled-based material when it comes to choosing eco-friendly products.
c. H3: Durability has a significant positive influence on the eco-friendly household product customers’ purchase intention
Hypothesis 3 in this research shows that durability is the third significant attribute that influences customer purchase intention of eco-friendly household products. This hypothesis is accepted because from the result of the P Value, durability has 0.025 which is below 0.05, and also has a positive effect seen from the T Value result that is greater than 1.96 which is 2.241. This is aligned with results in a previous study by (Rausch, Baier &
Wening 2021) that said durability is an influence attribute when it comes to products. It is also seen from the result of the questionnaire that people tend to choose products that last a long time represented by 70.9% or 158 people.
d. H4: Availability of eco-label has a significant positive influence on the eco-friendly household product customers’ purchase intention
Hypothesis 4 in this research is shown that availability of eco-label has the weakest significant influence among other significant variables toward customer purchase intention of eco-friendly household products. The P Value result is below 0.05 which is 0.012. And have a positive effect due to the result of the T Value is higher than 1.96 which is 2.514. It means that the availability of eco-labels makes consumers sure about the green quality (Kumar, V et al., 2017) and feel safe with the quality of the product itself seen from the result of a questionnaire represented by 30% or 67 people.
e. H5. Environmentally friendly production process has a significant positive influence on the eco-friendly household product customers’ purchase intention.
Hypothesis 5 in this research shows that the environmentally friendly production process is the most significant influence on customer purchase intention of eco-friendly household products that can be seen from the F Square have the biggest score among other variables.
This attribute has a P Value score below 0.05 which is 0.000 and a T Value score greater than 1.96 which is 5.617. This is also supported by an environmental analysis statement from the (Nielsen 2017) global online survey, which said 81% of global respondents feel strongly that companies should help improve the environment start with business activities.
It is also aligned with a statement (Rausch, Baier & Wening 2021) that if the product that is made can be proven production is also sustainable, it will add value to the product.
5. Conclusion and Recommendations
5.1 Conclusion
The conclusion of eco-friendly household product attribute that influences customer purchase intention is tested with 5 variables. Four of the variables; environmental production process, type of material, durability, and availability of eco-labels significantly influence to the customer purchase intention. The variables are valid among research population that domiciled in Jabodetabek (Jakarta, Bogor, Depok, Tangerang, Bekasi) and Bandung. The respondents know specifically what types of eco-friendly household products that sold in the business by seeing in social media and e-commerce. One of the variables; price is not significantly influenced customer purchase intention. All variables that have significant influence is aligned with previous research. This shows that when someone wants to purchase eco-friendly products, they really look at whether the impact and the manufacturing process also support the environmentally friendly movement (Rausch, Baier & Wening 2021).
5.2 Limitation and Future Research Recommendations
This current research has its limitations. First, this research is only focusing on people who know specific existing eco-friendly businesses. Many Indonesians are aware of the importance of environmentally friendly products, but the implementation to find out more about product diversity is still lacking. However, there is a growing sustainable lifestyle in Indonesia according to Nielsen (2018), and also in the business sector (Sari 2021). So as the growth of eco-friendly lifestyle is keep on increasing, there is a recommendation for future research to add more types of environmentally friendly businesses to be analyzed so it can broaden the respondent’s criteria.
Second, the comparison of variable aspects of traditional attributes with environmentally friendly attributes is not comparable. Traditional attributes only discuss price, while the eco- friendly attribute dominates. For future research, to find out more about whether traditional attributes can influence customer purchase intention, you can add more variables. According to Dubihlela, J & Ngxukumeshe, T (2016) The conventional attributes are such as price, quality, and brand. So it can be considered for future research to add more variables to be compared with eco-friendly attributes.
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