Analyzing Factors Affecting Customer Purchasing Behaviour Toward Waste Management Service in Indonesia
Nella Mellinia Budiman1*, Annisa Rahmani Qastharin1
1 School of Business and Management, Bandung Institute of Technology
*Corresponding Author: [email protected] Accepted: 15 November 2022 | Published: 1 December 2022
DOI:https://doi.org/10.55057/aje.2022.3.4.2
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Abstract: ‘Green attitude-behavior gap’ is often found in the sustainable industry nowadays;
where the attitude toward sustainable action is high but not following with sustainable purchasing action. This research will help Satu Bumi as a startup that is running on a sustainable industry to identify the elements and factors that are determinants on sustainable purchase behaviors on waste management services among Indonesia consumers and craft the most suitable recommendation for Satu Bumi as a waste management business towards the actual determinant factors on Consumers Waste Management purchase behavior. Using multiple linear regression, this study involved 200 Indonesians who had already used waste management, right now using waste management services, and in the future have a desire to use waste management services as samples. From in-depth research, it was found that five determinant factors that influence sustainable purchasing are: support for environmental organizations, following with attitude towards sustainability purchasing, knowledge of sustainability concerns, concern for the environment, and subjective norms. But the other side, perceived marketplace influence is one variable that is rejected. The findings of this study are also accompanied by recommendations as a strategy to avoid the implications of the ‘Green attitude-behaviour gap’-which has been overgrowing these recommendations are projected to help Satu Bumi as a waste management service that can able to grab the Indonesian market and become a profitable business.
Keywords: Sustainable purchasing behaviour; Green-Attitude–behaviour-gap; Supportive behaviour for environmental organizations; Attitude towards Sustainability Issue.
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1. Introduction
1.1 Background
Increase of Green Consumption
Over course of the industrial era, the number of goods produced and their extraction have continuously increased in response to an ever-growing consumption culture (Lopez, 1994 cite in Zaman, 2015). Consumption levels of goods and services have risen dramatically and resulted in a significant decrease in natural resources and degradation of the environment (Chen and Chai, 2010 cited in Joshi & Rahman, 2015). Consequently, the waste produced today comes from mixed sources, causes environmental damage, and is challenging to manage in a sustainable manner. However, it has increased consumer awareness of environmental issues, involvement in environmentally friendly practices, and green consumption. According to Joshi
& Rahman (2015), green consumption refers to people concerned about the environmental results of their purchases, uses, & disposals of products and services.
Increasing green consumption can be demonstrated by the increase in people's purchasing ability for environmentally friendly goods. In the past five years, 85% of people globally indicated that they had changed their purchase behavior towards being more sustainable.
Moreover, PwC Survey June 2021 found that Asia Pacific consumers are more eco-conscious than global consumers; by the survey, 86% of Indonesian respondents had become more environmentally friendly. Furthermore, according to the Indonesian Consumer Survey conducted by Statika in September 2019, about 82% of Indonesian consumers assert that nature and the environment are essential daily. The rising number of ‘green consumption’ emphasizes that environmental awareness and involvement significantly influence customers.
Zero-Waste Lifestyle and Waste Management
Increasing consumer concern regarding environmentally friendly consumption and wasteful product offerings has led to zero-waste initiatives (Kleesattel et al., n.d.). The zero-waste lifestyle grows in the midst of worsening conditions for managing waste. “Zero-Waste”
involves redesigning the lifecycle of resources so that all products can be recycled (Bartl, 2011).Zero-waste systems involve a circular material flow, which means there are no materials wasted or underused; end-of-life products are treated as resources and are used as inputs in the process (Song et al., 2015). This implicates the increasing “zero-waste” lifestyle leads to reconsidering better waste management.
Waste Management Business Landscape in Indonesia
In Indonesia, waste management has become a chronic problem that never ends. Based on data from Kementrian Lingkungan dan Kehutanan Indonesia (KLHK), Every year Indonesia produce 65,8 million tons per year and as much as 24% of waste in Indonesia is still not managed. However, this challenge is seen as a huge market opportunity. This is evidenced by Indonesia which sees a trend of increasing waste management capacity. According to KLHK, Indonesia was expected improve its waste management by 49.18% by 2020. from the previous year which was 34.60%. The increasing market is also accompanied by the increasing number of business actors that provide environmentally friendly products and services (Kanchanapibul, et al. 2014 cite in Joshi & Rahman, 2015). The emergence of various business people who are involved in waste management business shows that there are signs of economic opportunities that are captured by business players.
1.2 Problem Statement
While the rising of waste management business, which indicates that there is increasing purchasing ability of Indonesian people for environmentally friendly products, consumers' positive preferences do not correspond to their actual purchase behaviors according to several studies (Joshi & Rahman, 2015). Hughner et al., (2007) discovered by 67% consumers expressed favorable attitude toward purchasing organic products, but only 4% of consumers that translate to purchasing activity. Similarly, Defra (2006) discovered more than 30% of UK consumers expressed concern on the environment and yet only a small percentage of those who expressed concern made a green purchase. In contrast to consumer perceptions, there appears to be a chasm among consumers' thoughts and practices (Joshi & Rahman, 2015). A gap exists among buyers' favorable attitudes toward green products and actual purchases of products. This was called the green attitude-behavior-gap.
Satu Bumi as a startup with a new product in the green industry is seeking the right strategy to grow in the Indonesian market. As an early startup in waste management industry, discovering the determinant variable in sustainable purchasing is earnestly important amidst the threat of a 'green attitude-behaviour gap' that exists nowadays -this implication of 'green attitude-
behaviour gap' could leads to failure of business due to the inability of business to deliver optimal services to customers, which will eventually result in bankruptcy because it cannot obtain optimal customers.This study is expected to have an influential effect on the development Satu Bumi's strategy on Indonesian waste management market in the future. Thus, Satu Bumi could execute accurate strategy and avoid the 'green attitude-behaviour gap' and ultimately, Satu Bumi may be able to penetrate the market and provide the right sales treatment to target customers, which will ultimately result in a profitable enterprise.
1.3 Research Question
1) How determinant are the actual determinant variables of Indonesians Buyers on Waste Management purchase behavior?
2) What could be the most suitable recommendation for Satu Bumi as a waste management business towards the actual determinant factors on Consumers Waste Management purchasing behaviour?
1.4 Research Objective
1) Analyze the actual determinants factors of Indonesians Consumers on Waste Management purchasing behaviour.
2) Craft the most suitable recommendation for Satu Bumi as a waste management business towards the actual determinant factors on Consumers Waste Management purchase behaviour.
2. Literature Review
2.1 Sustainable Purchase Behaviours
The Sustainable Purchase Behaviour report describes the effectiveness of consumers acting in accordance with their convictions on green goods buying. These users are the ones who purchase avoid using non-sustainable goods/service, who buy goods/service from natural source, who purchase goods/service with biodegradable material, purchasing goods/service that support environment, as well as not buying goods from environmentally harmful brands (Minton and Rose, 1997 cite in Akehurst et al., 2012).
2.2 Supportive Behaviours towards Environmental Organisations
An environmental organization's supportive behavior refers to the voluntary assistance given to environmental organizations, and the donation of funds to them, as well as participation in their activities. In this sense, consumer behavior which economically, ethically, or socially supports environmental organizations may be considered supportive behavior. According to (Lee, 2014), supporting the environment contributes to sustainable consumption behavior among consumers. A study on participation in society suggests involvement in a activity could influence engagement in another (Latta, 2007). According to self-perception theory, consumer behavior can be predicted by interpersonal observation and determined by their own behaviour in terms of attitudes, emotions, and various behavioural variables. Thus, consumers might be affected by their past behavior in the future. An attempt is made to understand how environmental organizations' supportive behavior may contribute to sustainable purchasing decisions. Therefore, this could serve as the hypothesis:
H1: Supportive behavior toward environmental organizations is positively correlated with consumer behavior with regards to sustainable purchases.
2.3 Attitude towards Sustainable Purchasing
Individuals' behaviours are driven by their attitude, which is an optimistic or negative evaluation of a situation (Ajzen, 1987). The concept of attitude has remained a pertinent topic in environmental studies due the tremendous cognitive potential that can prompt action (Zafar et al., 2021). The concept of sustainable buying attitude is defined by (Lee, 2014) as "the perception of consumer behaviors, including green and fair purchasing preferences''. Joshi &
Rahman (2019) construct sustainability purchasing attitudes as cognitive assessments of sustainable shopping. In order to better understand how attitudes and behaviors are related to sustainable purchasing, further research is needed. As a consequence, the hypothesis can be formulated as follows:
H2: Sustainable buying behavior is influenced by the attitude of consumers toward sustainable purchasing.
2.4 Perceived Knowledge about Sustainability Issues
Consumer's understanding of sustainability matters is influenced by their beliefs and understandings of environmental issues & social issues, and how the issues are addressed (Wang et al., 2014). A consumer's perception of knowledge is pivotal in determining his or her purchasing decisions regarding sustainable products (Smith & Paladino, 2010). Numerous researches establish that more ecologically knowledge consumers show more sustainable purchasing patterns. It has also been found in a few studies that a consumer's understanding on social issues significantly impacts their purchase decisions. Thus, the hypothesis can be formulated as follows:
H3: Consumers are likely to purchase sustainably when knowledge about sustainability issues is perceived.
2.5 Perceived Marketplace Influence (PMI)
PMI refers to "individuals perceive that their choice towards sustainable behavior impacts other consumers and organizations by varying degrees, which leads them to act sustainably" (Leary et al., 2014). PMI affects individual behavior through perceived effects of other actions.
According to Leary et al., (2014), sustainable consumer purchasing is positively correlated with PMI. A similar relationship was tested in this study. Therefore, this study suggest:
H4: Consumers' sustainable purchase behavior is positively influenced by perceived marketplace influence.
2.6 Environmental Concern
An individual's environmental concern reflects his or her concerns, attachment, and preference related to the environment (Yeung, 2004). With knowledge of the impacts of deteriorating the environment on people, animals, and plants, the individual may realise the importance of preserving the natural environment (Lee, 2008). Users perceive a sense of being involved in environmental conservation and belief by exclusively contributing in green initiatives (Lee, 2008). This motivates them to make real efforts to conserve nature. They tend to be concerned on the sustainability of our planet and thereby conserve the environment (Kumar & Ghodeswar, 2015) -this lead to behave in an pro-environmentally manner (Kumar & Ghodeswar, 2015) as conduct to purchasing sustainable products. Hence, hypothesise:
H5: Environmental Concern positively influences consumers' sustainable purchase behavior.
2.7 Subjective Norms
According to Ajzen (1991), subjective norms is the forces perceived as influencing an individual to act in a particular way. Subjective norms also correspond to an individual's psychological interpretation on what others might think of him or her if he or she did
something. According to Jager (2000), subjective norms influence the perceived fit of behaviour under consideration and generate purchase intentions (Robinson & Smith, 2002).
The following hypotheses can be drawn :
H6: Consumers' sustainable purchase behavior will be influenced by personal norms.
2.8 Conceptual Framework (CF)
The researchers developed a framework which integrated social cognitive theory (SCT) in order to explain how previous environmental behaviors, sociocultural environments, &
individual variables; co-ordinate to influence future sustainable behaviors. In light of the framework, Phipps et al., (2013) assert the actions that are into sustainability can have spillover effects on other areas, and that current consumption behavior that is related to sustainability can increase sustainability in the future. Therefore, the model has been enhanced and renew with dimension of behavioural variables in order to forecast consumer behavior related to sustainability. It is intended to contribute to the current research by analyzing sustainable consumer purchasing patterns. Then, CF drawn:
Figure 1: Conceptual Framework
3. Methodology
Aim of analysis intends to collect & analyze information from one person from a population to
obtain information that can reflect consumer behavior regarding waste management.
Non-probability sampling selects the respondent based on subjective judgment (Malhotra et al., 2017). This study urgently needed respondents with characteristic Millennials (range age 24-39) and Gen X (range age 40-56) who live in Jabodetabek or Bandung city. They must occupy their house to assume ownership to manage their household waste. The distinct population was selected according to Satu Bumi's target market. Specific categories of respondents were necessary for producing credible research results concerning their involvement in waste management services, riding to factors that influence sustainable purchasing behavior by consumers. The survey was conducted in Indonesian and conducted online, with sample size 200. In addition, the Multi Linear Regression method tests how the independent variable correlates with the conditional variable.
4. Data Analysis
4.1 Multiple Linear Regression
In multiple regression analysis, T-test determines if linear relationships exist among a response variable and different predictor variables using statistical hypothesis testing. Other than that, to determine the significance of the independent variable to the dependent is using Significance Beta. Variable is assumed have linear relationship or accepted when the significant value bellow 0.05. From table 2 can see the summarize of the reult from 6 independent variables, 5 variables have linear relationship and 1 variable have not linear relationship. Additionally, the T-Sig test shows a beta score (B) that indicates that the greater the beta score, the stronger the effect on customer purchase intentions. From table 2, the ranking of independent variables is shown based on the most significant influence on customer purchase behaviour.
Table 2: T-Test Result T-Test Result Variabel Unstandardized
Beta
Significant Level Description Number of Influence
Environmental concern 0.142 0.007 Accepted 3
Perceived knowledge about sustainability issues
0.134 0.02 Accepted 4
Attitude towards sustainable purchasing
0.154 0.22 Accepted 2
Perceived marketplace influence 0.02 0.74 Rejected 6
Supportive behaviours towards environmental organizations
0.189 0.026 Accepted 1
Subjective norms 0.123 0.043 Accepted 5
4.1 Data Result
Supportive behaviours for environmental organisations are positively influence consumer sustainable purchase behaviour.
Based on all variables considered, supportive behaviors for environmental organizations is the most predictive variable. In agreement with previous studies (Joshi & Rahman, 2019) and (Lee, 2014), this finding indicates past sustainable behavior is the crucial factors in predicting future sustainable consumption patterns. According to research, person interpret socially desirable acts as a reflection of themselves, and consequently act according to their past behavior in future behaviors. People decide whether or not to do something based on their previous behaviour. These findings contradict prior research which focused solely on sustainable behavior as dependent factors & supports the self-perception theory, stating people can conclude what they feel from their own behavior.
The indicators that were asked for the respondents in their supportive behaviour on environmental organisations impacted on showed customer sustainable purchasing behaviour in the future. Their past behaviour creates a personal perspective for the individual, familiarizing & engaging them with the issue, increasing their sense of responsibility and well-
being, and may build a process where they feel more connected to the change process. As a result this increasing consumer involvement and in the end will affect to their purchasing behaviour.
Consumers' attitudes towards sustainability affect their sustainable purchasing behavior.
According to the hypothesis test result, the second influental variables towards sustainable purchasing behaviour was customer attitude towards sustainable purchasing. This result is also align with previous research that consumer’s attitude on sustainable purchasing indicate the consumers’s purchasing behaviour (Kozar & Hiller Connell, 2013) and (Joshi & Rahman, 2017). Purchasing green products is facilitated by attitudes favorable to environmental, fair trade, and local production (Tanner & Wölfing Kast, 2003). This means that sustainable purchases are valued by buyers who have consideration on their effect on environment and become one of impactful variable to analyze how the purchasing behaviour.
Consumption behavior will be positively impacted by a consumers' perceived knowledge of sustainability issues.
Based on hypothesis test result, Perceived knowledge about sustainability issues have an impact on sustainable purchasing behaviour but in lesser impact. Previous research has indicated that sustainability practices can be indirectly related to environmental knowledge (Bang et al., 2000). According to this result, merely understanding social issues and environmentally friendly practices may not be enough to motivate buyer to make more environmentally friendly purchases. This means although the variable have the positive relationship towards sustainability purchasing behavior but the solution to translate user into purchasing action is slightly unprioritized.
Sustainable purchase behavior is unaffected by marketplace influence.
Different from previous studies, which found that individual businesses can influence market behavior (Joshi & Rahman, 2017) and PMI can serve as an essential indicator of sustainable consumption patterns (Vermeir & Verbeke, 2006) -on this research not found out the confidence that consumers individual effort can influence the behavior of other market participants. This could analyze that the perceived marketplace influence variables on Indonesia consumers haven’t ready yet compared from other prior research in other case subject that already found the positive correlation.
Consumption behavior is influenced positively by environmental concerns.
The concerns regarding the environment on this research show the influence on consumer purchase behaviors. This result contradictive with main reference literature that found out Enviromental Concern is not significantly influence the purchasing behaviour (Joshi &
Rahman, 2017). By this research the environmental concern have the third influental factors align with the past studies that the emotional involvement of consumers with environmental issues was positively associated with their willingness to provide financial support for renewable energy sources (Bang et al., 2000). This means that the enviromental concern among Indonesians concern still the factors that are impactful towards the purchasing behaviour -this could indicated that the influent factors for Indonesian consumers for sustainable purchasing behaviour still gain from their internal self and small scope.
A consumer's sustainable purchase behavior will be positively influenced by their subjective norms.
According this research, subjective norms are one of the influential predictor. This conclusion can be justified by customer socialization theory, according to the theory -consumer behavior
is significantly influenced by social norms (John, 1999). Additionally, in this current time sustainable purchase behavior is associated with the values of society. More significant impact of subjective norms could indicate a "group effect" on consumers' sustainable purchasing behavior. Although on the past research the subjective norms is placed as the second most influential variables (Joshi & Rahman, 2017), but in this research subjective norms is placed in fifth place -this might be caused by the applied concept of sustainable in Indonesia is still relatively new, so when this concept implemented on subjective norms way by using perceived social influence on the corresponding behaviour is not affecting to the purchasing behavior due the unreadiness of the sustainable concept in Indonesia.
5. Conclusion
Considering Indonesia is a large market, sustainable goods have great potential. While engaging Indonesian consumers, green and sustainable marketers face several challenges. As part to examines the influence variables on sustainable purchase behaviour, this study is conducted in order essentially answer following study question:
RQ1: What are the actual determinant factors of Indonesians Consumers on Waste Management purchase behaviour?
As the result from multiple linear regression test, the determinant factors are: support for environmental organizations, following with attitude towards sustainability purchasing, concern about sustainability, perceived knowledge of sustainability, and perceived beliefs since all of their significance is less than 0.050. Previous studies have found similar results (Lee, 2014) and (Joshi & Rahman, 2017).
RQ2: What could be the most suitable recommendation for Satu Bumi as a waste management business towards the actual determinant factors on Consumers Waste Management purchasing behaviour?
As resulted from the study above to analyzed the factor-factors that determinant of the sustainable purchasing behaviour, the result shows that major of the significant factors come from the variable of : supporting behaviour on environmental organisations, following with attitude towards sustainability purchasing, environment awareness, perception of sustainability issues, and personal preferences. This finding means that if Satu Bumi wants to grab Indonesia market on sustainable purchasing service, they need to increase the brand aspect that represent into the variable that influence to the sustainable purchasing behaviour. As a result, in order to encourage sustainable purchasing behaviour, Satu Bumi must design a more effective business strategy that represent and tap in the determinant variable on sustainable purchasing behavior.
Table 3: Table Recommendation on Action Plan
Variable Recommendation
Supporting behaviour on environmental organization
● Tap in into the enviromental community.
● Building brand community in different platform (such as forum, social media, and affiliate)
● Tap in into cross community in different business &
industry.
Attitude towards sustainability issue
● Increasing the strength brand belief by building good brand image & brand reputation.
● Drive the accessibility of the product / service by availability on different marketplace platform.
● Giving customers the opportunity to experience the benefits of Satu Bumi; such as Try on Voucher & Discount.
Enviroment concern ● Understanding Indonesians market and target customer characteristic to build the strong communication medium to enhance the enviromental massage.
● Creating media campaign with the right tone & manner to build up environment concern & sustainability around the Indonesians market that could scale up from the target market until the persona outside the target market.
● Use endorsement & testimonial method to promote the environment concern.
Perceived knowledge on sustainability issue
● Enhance online and offline advertising about the environmental issue and enviromental value.
● Updated on how the brand is impactful for the environment.
● Creating offline to used both for outreach and networking purposes. It will allow Satu Bumi to engage both on customers and potential customers that haven’t have the environmental knowledge.
Subjective norms ● Creating brand ambassador as the influential medium to the society.
● Involve potential users in the marketing campaign to create organic crowd that could influence their society.
6. Recommendation
As a waste management business, Satu Bumi, and other sustainable industry businesses should incorporate the Sustainable Purchasing Behaviour variable into their marketing strategy in order to capture the Indonesian market, since Indonesia is one of the growing countries in the sustainable market. From this study, to increase sustainable purchasing behaviour as the significant variable that influence sustainable purchasing behaviour, business owners in waste management industry can improve their involvement on enviroment organization with many
activation of marketing strategy that tap on community. Satu Bumi also should increase the customer attitude on sustainability issue by driving their awareness & consideration on sustainability issue to conversion or attitude; the marketing activation on ease of accessibility, price & value added could be implement in this variable. Moreover, the communication strategy that can reach various levels of society is required by Satu Bumi in order to increase people's concern about environmental issues more broadly. In order to do this, Satu Bumi could not only reach Satu Bumi’s target consumers but also reach various levels of society at all levels. Satu Bumi also should enhancing knowledge on sustainability issue to increase the purchasing behaviour on sustainability by activate marketing activation taht could improving the customer awareness to consideration -by adding the sustainability value & benefit after the customer have knowing the issue and this could be implement by offline event & value adding to customer. The last Satu Bumi could increasing the subjective norms to enhaving the sustainable purchase behaviour by using influential medium that could implement the sustainability on society and involving the potensial people in brand campaign to create organic crowd that could influence their society.
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