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Abstract
This research examines the influence of sustainability claims on price perception and purchase intentions of consumers. The literature states that sustainability claims make consumers more skeptical towards the product. The influence of credible information about the claim is therefore tested in this research as well. The main findings are that the presence of a sustainability claim significantly influences the price perception.
Consumers perceive a higher price when sustainability is claimed. Especially the older consumers with a higher income have the highest price perception for both sustainable as not sustainable products in this research. The results show that the purchase intention of participants who are confronted with a sustainability claim were higher than the purchase intention of the participants in the control conditions. Credibility positively influenced the relationship between the sustainability claim and the purchase intentions, but the moderating effect is not significant.
KEY WORDS: Sustainability, visibility, credibility, purchase intention, price perception,
consumer characteristics
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Preface
By handing in the final version of my master thesis, the period of studying at the HanzeHogeschool and Rijksuniversiteit Groningen will be completed. The Master Degree in marketing crowns the six years of studying in Groningen and the persistence at the secondary school. I can honestly say that this master thesis is the report I am most proud of so far. Despite the slow start of writing this thesis, I reached my goal of finishing the master program within one year.
First of all, I would like to thank my supervisor Marjolein Achterkamp for her good support during the writing of this master thesis. Her feedback on the content of this thesis as well as the support for the process of writing such a paper on my own, has really helped me. Our chit chat about sustainability helped me to approach this subject very practical. I would like to thank my second supervisor Eline de Vries as well. She gave me very useful feedback on the elaboration of the results. Furthermore, she made it possible to work on this thesis during the holidays which enabled me to graduate within one year.
Secondly, I would like to thank Thomas Kos for his contribution to the experiment. He edited all the pictures and publications that are used in the experiment and made it possible to randomly assign participants who joined the experiment via Facebook. This contributed to the professionalism of this research.
Finally, I would like to thank Niels van Veen and my parents Ruud Slot and Aliene Haar for supporting me during my studies. Their encouragement and love made the few hard times during my study much easier.
I enjoyed writing this thesis and hopefully reading this thesis will be a pleasure as well.
Eva Slot
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Table of content
Abstract ... 2
Preface... 3
1. Introduction ... 6
1.1. Visibility of sustainability ... 7
1.2. Credibility of sustainability claims ... 7
1.3. Purchase intention ... 8
1.4. Price perception ... 9
1.5. Problem statement ... 9
1.6. Research question ... 10
1.7. Reading guide ... 10
2. Literature review ... 11
2.1. Visibility of sustainability related to purchase intentions ... 11
2.2. Credibility of sustainability claims ... 13
2.3. Price perception of sustainable products ... 16
2.4. Consumer characteristics... 17
2.5. Reason for additional research ... 19
3. Literature Framework ... 20
4. Methodology ... 21
4.1. Participants ... 22
4.2. Experimental design ... 22
4.2.1. Visibility of sustainability ... 22
4.2.2. Credibility of sustainability... 25
4.2.3. Price perception ... 25
4.2.4. Purchase intention ... 26
4.2.5. Consumer characteristics ... 26
4.3. Data analysis ... 27
5. Results ... 29
5.1. Descriptive results ... 29
5.2. Main results ... 30
5.2.1. Influence of visibility ... 30
5.2.2. Influence of credibility ... 31
5.2.3. Influence of income ... 35
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5.2.4. Influence of age... 37
5.2.5. Influence of environmental concerns ... 38
6. Discussion ... 40
7. Conclusion ... 42
8. Limitations ... 43
7. Recommendations for further research ... 44
References ... 45
Appendix 1: Questionnaire ... 49
Appendix 2: Publications ... 55
Appendix 3: output pre-test statements... 59
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1. Introduction
“Sustainability claims are attached to almost every product nowadays. It seems to be astonishing that the earth is still warming. Perhaps are the green labels unnecessary, because the Dutch marketing consultancy VODW stated that issues like environment, animal welfare or justice are not decisive for the purchase decision in the store. At least four till ten percent of the consumers purchases products or services because of its sustainability. It can be even risky to communicate about sustainability initiatives, because the consumers judge the sustainable products and services more critical.”
This quote comes from a Dutch acknowledged Magazine about Marketing
1, which introduces the subject of my Master Thesis, the influence of sustainability claims.
Sustainability gained a lot of attention from companies’ perspective. Well-known companies like Procter & Gamble, IKEA, the Bodyshop, Philips, Shell etcetera communicate about their sustainability extensively in their annual reports, websites and advertisements. Leonidou, et al. (2011) stated that three issues are responsible for the phenomenal increase worldwide of environmentally friendly approaches in sourcing, operating and marketing activities. These issues are: the intensifying environmental regulations by governments, growing pressures on organizations by stakeholder groups to preserve the environment and the rising environmental concerns of consumers.
Companies that operate in a sustainable way want to communicate their sustainability extensively to show that they go along with the sustainability trend, but the enthusiasm of consumer for sustainable products is very limited. For example, the global market for environmentally friendly apparel is relatively small, namely one percent of total apparel market (Lipson 2008). Despite the attention sustainability is receiving, actual sales of sustainable products still represent only a small fraction of overall
1 “Het tijdschrift voor de Marketing”, number 5, may 2012, article “scharrelmarketing in de modder”.
2 Source: http://www.foliaweb.nl/studenten/hva-rijdt-zuinigheidsrecord-bij-shell-eco-marathon, assessed
7 consumer goods sales. Although 40 percent of consumers report that they are willing to buy “green products,” only 4 percent actually do so (Luchs, et al., 2010).
1.1. Visibility of sustainability
There is a growing interest in environmental issues (Verhoef, 2005), so a growing number of companies claims sustainability of their products. The United Nations Conference on Trade and Development defined sustainability claims as follows on their website: Sustainability claims are distinctive marks, marketing labels and brands, developed by public and private sector institutions and placed on products and services attesting that their products and supply chains incorporate the pillars of sustainability (economic, social and environmental) into their agricultural production, processing, manufacturing and export processes and services. From this definition the following definition has been derived for this research: A sustainability claim is a distinctive mark or marketing label associated with the sustainability of the product or service. This definition is not that concrete, because in this research the explicitness of the sustainability claim is not taken into account.
The influence of sustainability claims will be investigated by the visibility of the sustainability claim. The visibility of the sustainability claim refers to the presence or absence of a sustainability claim on package or any other type of communication. So visible conditions in this research are packages or advertisements with the presence of a sustainability claim. Not visible conditions do not contain any sustainability claim.
1.2. Credibility of sustainability claims
The literature, which will be discussed later, shows that besides the visibility of a sustainability claim, the credibility of this claim is important for consumers.
Bhattacharya and Sen (2004) stated that communication about sustainability is a slippery
phenomenon. While customers like to hear the facts about sustainability, attempts to sell
sustainability may backfire.
8 The following example will explain when a sustainability claim becomes questionable. During a conference about sustainable mobility, a manager of Shell proudly told that Shell sponsors the Eco-Marothon; an event for students with the aim to built the most energy efficient car. A Swiss team of students owns the world record of 2320 kilometer per liter
2. It can be assumed that Shell sponsors this event to improve their suitability image, because the company has been removed from the well-known Dow Jones Sustainability Index because of its oil pollution in Nigeria. The sponsoring of a large sustainability event on the one hand and the pollution on the other hand, makes the credibility of their sustainable image questionable.
Since customers are more sensitive to irresponsible than to responsible corporate behavior (Bhattacharya and Sen, 2004), it is important for companies to take the credibility of the claim into account before communicating the sustainability of the product extensively to consumers. The credibility of a sustainability claim, which will be described in the literature review, influences the acceptance of the claim by consumers.
Therefore the variable credibility is added to this research.
1.3. Purchase intention
The ethicality of a firm’s behavior is an important consideration during the purchase decision (Creyer, 1997). It is expected that the visibility of the sustainability will positively influence the purchase intention of consumers. The definition of purchase intention has been copied from the online business dictionary which defined purchase intention as follows: Purchase intention is the plan to purchase a particular product or service in the future.
2 Source: http://www.foliaweb.nl/studenten/hva-rijdt-zuinigheidsrecord-bij-shell-eco-marathon, assessed on august the 10th .
9 1.4. Price perception
Since the cost prices of ecological friendly materials are often higher, the selling price of sustainable products is on average higher than the prices of non-sustainable products (Luchs et al., 2010). It is expected that these higher selling prices lead to a higher price perception of consumers when it comes to sustainable products. The literature review will give an explanation for this assumption.
Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world (Munnukka, 2008). From this definition the following definition of price perception has been set up: Price perception is the process by which consumers estimate the price of the product or service to select, organize and interpret information about the product.
1.5. Problem statement
The market of sustainable products is developing in two ways; the development from
companies’ side is not equal to the development from consumers’ side. From the
companies’ perspective the sustainability trend gained a lot of attention. More green
products are added to the assortments, green logo’s are added to packages, sustainability
is communicated through advertisements etc. Besides the development of sustainable
products from companies’ perspective, the interest of consumers for sustainable products
remained small. The literature, which will be described later, shows that consumers are
not willing to pay a premium price for sustainable products and services while these
products are mainly higher priced. The discrepancy between the interest of companies
and the interest of consumers for sustainability, was the reason for studying the influence
of sustainability claims on purchase intention and price perception of consumers. The
influence of the credibility of the claim and consumer characteristics (age, income and
environmental concerns) will be taken into account as well, because it is expected that
these variables will influence the relationship between visibility of a sustainability claim
and purchase intentions of consumers. Hopefully the outcomes of this research will
provide insight whether sustainability claims have an effect on purchase intention and
price perception.
10 1.6. Research question
From the problem statement which has been described before, the following research question has been formulated:
“What is the influence of the visibility of sustainability claims on price perception and purchase intentions of consumers? And to what extent are the credibility of this claim and consumer characteristics influencing the relationship?”
1.7. Reading guide
The literature review will give an overview of the relevant literature about sustainability
and credibility related to purchase intentions and price perception. After the literature you
will find a schematic overview of the research; the conceptual model, with the
corresponding hypotheses. These hypotheses are tested by a self-established quantitative
research among 167 respondents. The methodology gives an overview of the
experimental design and the results show the outcomes of the experiment. This report
will end with a discussion, conclusion and the limitations of the research.
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2. Literature review
Sustainability has become a popular goal for companies to gain competitive advantage and has a wide range of interpretations. A company can operate sustainably in three different dimensions; ecological, social and economical (Dyllickand and Hockerts, 2002).
These dimensions of sustainability correspond with the Triple Bottom Line (TBL) by Elkington (2004), also known as “people, planet, profit”. This research will mainly focus on ecological sustainability, since taken all the three dimensions into account will be too extensive.
Dyllickand and Hockerts (2002) defined ecological sustainable companies as companies that only use natural resources that are consumed at a rate below the natural reproduction, or at a rate below the development of substitutes. These companies do not engage in activity that degrades eco-system services. In this research ecological sustainable companies or brands are defined as: Companies which communicate that their products/services are produced in a way that does not harm the environment.
As mentioned in the introduction, the visibility and credibility of sustainability claims are leading terms in this research. It is expected that these variables will influence the purchase intention and price perception of consumers. To make the relationships between the variables clear, they will be discussed one by one in this literature review. At the end of the explanation of the variable, the corresponding hypothesis can be found.
The literature review will end with the conceptual model, which gives an schematic overview of the relationship between the variables.
2.1. Visibility of sustainability related to purchase intentions
Leonidou et. al (2011) divided green advertisements into three categories: those that
directly address the relationship between a product/service and the natural environment,
those that promote an environmentally responsible lifestyle with or without highlighting a
product/service and those that present an image of corporate environmental responsibility
(Banerjee, 2008). The literature about communication of sustainability distinguishes
12 many types of sustainability communication based on its explicitness. The literature does not distinguish the effect of the presence or absence of a sustainability claim, as we do in this research. However, the literature about the explicitness of the sustainability claim can be useful for reasoning the influence of the presence of a sustainability claim on the purchase intention of consumers.
Yan et al. (2012) state that promotional messages lack explicit meaning. They often do not provide consumers with information about the specific materials and thereby leaving consumers uncertain or confused about the validity of such marketing claims.
The lacking explicitly of the sustainability claim can create confusion and/or raise concerns about green washing in the minds of consumers that may inhibit purchase decisions. The lack of explicit information in promotional messages forces consumers to create their own eco-awareness and knowledge about product and brand options, a task that may be too complex for many consumers (Moisander, 2007).
Results from Yan et al. (2012) revealed that respondents formed positive attitudes toward the brand when the advertising message contained explicit information about environmentally friendly products. Furthermore, these researchers found that the attitude toward brand and advertisement, is a strong predictor of intention to purchase an environmentally friendly brand.
From the literature about the explicitness of a sustainability claim it can be assumed that the presence of a sustainability claim will lead to positive purchase intentions. Therefore the following hypothesis has been set up:
H1: There is a positive relationship between the visibility of the sustainability claim and
the purchase intentions of consumers
13 2.2. Credibility of sustainability claims
Recent evidence has shown that green advertising has grown exponentially in the last two decades (Leonidou et al, 2010).Despite the benefits offered, green advertising activity has run into major problems, because consumers become increasingly skeptical about its credibility, validity, and usefulness of the sustainability claims (Pfanner, 2008). Some of the reasons causing this skepticism are related to the growing number of companies promoting their environmental credentials and the increasing purchaser complaints to various organizations (e.g. European Advertising Standards Alliance, the US Federal Trade Commission) about misleading claims (Knight, 2008).
Bhattacharya and Sen (2004) mentioned in their research that communication about sustainability is a slippery phenomenon. While customers like to hear the facts about sustainability, attempts to sell sustainability may backfire. Another important fact about communicating sustainability is that customers are more sensitive to negative information than to positive information. So companies should communicate about sustainability very carefully and should be aware of the negative results of being perceived as unsustainable. Customers are more sensitive to “irresponsible” than to
“responsible” corporate behavior. As in many cases, “doing bad” hurts more than “doing good” helps. Also Folkes and Kamins (1999) found that information about a firm that has acted in an unethical way should provide stronger evidence of the firm's characteristics than does information that a firm has acted in an ethical way. For example, a firm that behaves unethically by employing child labor provides stronger evidence that the firm is an unethical firm compared to the evidence provided about the nature of a firm that behaves ethically by avoiding child labor.
Newell et al. (1998) researched the influence of misleading environmental claims
on consumers perceptions of advertisements. They found that higher levels of perceived
deception were associated with lower levels of perceived corporate credibility, less
favorable attitudes toward the advertisement, less favorable attitude toward the advertised
brand, and decreased purchase intention toward the product in the advertisement. In
14 addition, this study found that perception of deception is was enough to create negative feeling toward the ad, whether the ad was objectively misleading or not.
Regarding the literature about sustainability claims it can be assumed that environmental-related blunders of so-called environmentally responsible companies will lead to lower sales and to reputational damage. Additionally, for this research two blunders of apparently environmental responsible companies are scrutinized; Nuon (Dutch energy supplier) and Albert Heijn (Dutch supermarket). At first Nuon, the company that came up with a television commercial in which the consumer was pointed to the wastage of energy (“Nobody benefits from enlightened offices at night”). After a few months, the same energy supplier got in trouble with Greenpeace, because Nuon was supporting the founding of a coal plant. Greenpeace asked consumers to break down their contract at Nuon. Mark Hooftman (advisor Regulatory Affairs / Stakeholder Engagement at Nuon) has been contacted for this research to find out the consequences for Nuon. He told that nearly none of their customers switched to another supplier or responded otherwise to the inconsistent elaboration of the environmental policy, contradictory to the literature that has been described before.
Another example of a company that experienced the consequences of a sustainability claim, is the Dutch supermarket Albert Heijn. This supermarket respond to the “green trend” with an additional sustainable product line called “puur en eerlijk”, which means “pure and fair”. One of the products that belongs to this pure and fair product line is the ecological toilet paper. This toilet paper became main subject in a Dutch television program “Keuringsdienst van Waarde” that extensively inspects the reliability of claims of companies and the government. This program discovered that the toilet paper was not 100% ecological friendly, since the paper was bleached. Another crucial outcome of this program was the contradictory price-setting strategy. The ecological toilet paper is high priced while the production of this toilet paper is cheaper;
the product is 100% recycled. A lot of blogs wrote about this broadcast negatively. The
customer service of Albert Heijn has been contacted for this research to ask whether the
price of that specific ecological toilet paper has changed since it was introduced in the
15 market. This was not the case, the price of ecological toilet paper has been € 2,29 from the introduction. So the supermarket did not respond to the negative publicity in the television program. From the fact that the supermarket did not respond it can be assumed that the sales have not decreased dramatically after the negative publicity. So also in this case, the customers did not react heavily on the inconsistent elaboration of the environmental policy.
It is too limited to conclude that negative publicity does not influence the purchase intentions of consumers, only based on the previous two examples. The literature shows that incredibility of the sustainability claim negatively influences the attitudes and purchase intentions of consumers. It is clear the there is some contradiction between the literature and practical examples, so this practical example of “pure and fair”
will be tested in this research (will be described in the methodology part).
Since the academic literature review is leading for the conceptual model of this research, the following hypothesis has been set up:
H2: Credibility of the sustainability claim positively influences the relationship between
the visibility of the sustainability claim and the purchase intention of consumers.
16 2.3. Price perception of sustainable products
Since the cost prices of ecological friendly materials are often higher, the selling price of sustainable products is on average higher than the selling price of non-sustainable products (Luchs et al., 2010). The sustainability costs could increase costs to consumers and thus lead to lower sales (Mohr and Webb, 2005). Also Choi and Ng (2011) stated that the drawback of sustainability initiatives is the impact on price and sales. The average unit margin of organic products exceeds the margin of conventional products by 4,2 cents. These higher margins for organic products contributes to the growing interest for corporate social responsibility initiatives from companies’ perspectives (Bezawada and Pauwels,2010). So in the end the consumer have to pay a premium price for the sustainable aspect of the product.
Van Doorn and Verhoef (2011) studied the willingness to pay for sustainable products in the food market and stated that, although the interest for CSR increases, the market shares of organic food remain small. These low market shares can be explained by the fact that organic food is more expensive than regular food and customers are unwilling to pay a price premium for such products. Company’s CSR efforts are most likely to result in consumers’ willingness to pay a higher price when the additional money, or at least part of it, is clearly earmarked for CSR-specific activities.
(Bhattacharya and Sen, 2004).
The British newspaper The Guardian published a study about consumers’ attitudes and perceptions on sustainability (March 2010). This study stated that 73% of the respondents (922 respondents) are deterred from purchase green products and services because of the price. The guardian described that 58% of the respondents of their research about drivers for sustainability, indicates that their customers are not willing to pay a premium price for sustainable products and services.
Although many consumers may have a positive attitude toward the purchase of
sustainable products, their actual purchase intentions and behavior are not in line with
this attitude, especially if there are higher costs associated with purchasing these
sustainable products (Yan et al., 2012)
17 So different studies concluded that consumers are not (yet) willing to pay a premium price for sustainable products, while sustainable products are mainly higher priced. It can be assumed that consumer will compare the prices of sustainable products and the not sustainable products, since they are not willing to pay a premium price for the sustainability. Therefore the following hypothesis has been set up:
H2: There is a negative relationship between the visibility of the sustainability claim and the price perception of consumers.
2.4. Consumer characteristics
Socio-demographics are often important determinants of consumer behavior. Education level, income level, household size, age and gender are the most frequently studied socio- demographics (Grunert and Juhl, 1995). Schifferstein and Oude Ophuis (1998) predicted that consumers with a higher level of education are more willing to consume sustainable products than consumers with a lower level of education. The education level has a direct relationship with the household income of consumers. This results in a positive correlation between the level of household income and consumer’s sustainable consumption patterns (Hines et al., 1987). Since households with higher incomes are more likely to be able to afford the more expensive sustainable products, it can be reasoned that there is a positive relationship between income and purchase intentions for sustainable products
.Moon et al. (2002) also argued that household income is expected to have a positive effect on the WTP, because a higher income allows respondents to allocate more money to support environmentally responsible practices.
For the effect of income on the purchase intention of sustainable products and services, the following hypothesis has been set up:
H4a: Household income positively influences the relationship between the visibility of the
sustainability claim and the purchase intention of consumers.
18 Furthermore, research suggests that age influences the purchase intentions of sustainable products. Yan et al. (2012) referred to a research of Alloy media &
marketing, 2006 2007, that suggests that college students were responsive to socially and environmentally focused marketing campaigns and that they show preferences for brands that are environmentally conscious. On the other hand stated some researchers (Dunlap and Van Liere, 1978; Scott and Willits, 1994) that older people show higher levels of actual sustainable behavior.
It can be reasoned that older people are more likely to purchase the more expensive sustainable alternatives. Therefore the following hypothesis about the influence of age on the purchase intention of sustainable products has been set up:
H4b: Age positively influences the relationship between the visibility of the sustainability claim and the purchase intention of consumers.
Findings from multiple studies suggest that consumers’ concerns about the environment may influence decisions related to consumption of sustainable products.
Ottman (1998) divided the consumers with environmental concerns into two groups; the 10 till 15 percent of the population who are either fully committed to a green lifestyle (‘true’ or ‘deep’ greens) and those who may not be fully committed, but are willing to pay more for environmentally friendly goods and services (greenbacks).
Choi and Ng (2011) found that poor commitment to sustainability leads to a significantly negative company evaluation and significantly negative purchase intention.
They concluded that consumers evaluate a company more favorably if the company
shares the consumers’ causes in general. For example, consumers with sensitivity to
environmental sustainability will evaluate a company more favorably if it also
demonstrates a commitment to environmental sustainability. Also Grunert and Juhl
(1995) stated that environmental concerns influence the extent to which a consumer is
willing to pay a premium price for organic food.
19 Therefore the following hypothesis about the influence of environmental concerns on the relationship between visibility and purchase intentions of sustainable products has been set up:
H4c: Environmental concerns of the consumer positively influences the relationship between the visibility of the sustainability claim and the purchase intention of consumers.
2.5. Reason for additional research
The literature shows that there is an inconsistency in how companies deal with the environmental issue and how consumers handle it. Companies are more and more focusing on sustainability. They come up with green products lines, green slogans and logo’s and as mentioned before, the number of green advertisements still increases. On the other hand the literature shows that customers are not willing to pay a premium price for these sustainable products and the market share of green products remain small. Only a small part of the customers is fully committed to a green lifestyle and therefore willing to pay a premium price. The literature does not give insight whether the visibility of sustainability negatively influences the price perception of customers, which deters consumers from purchase green products on beforehand.
Additionally, in the literature review of this report the credibility of green communication is already discussed, but the influence of credibility on the purchase intentions of consumers is underexposed. The examples of Nuon and Albert Heijn have shown that negative publicity does not necessarily lead to changing the strategy. It is too limited to derive the conclusion from only two examples that negative publicity is not damaging the sales of sustainable products.
Furthermore, the influence of consumer characteristics has been discussed in the
literature. But since the visibility of sustainability claims plays a major role in the
research, it will be investigated whether the consumers characteristics have a moderating
effect.
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3. Literature Framework
The framework below gives a schematic overview of the variables and the hypotheses that have been derived from the literature.
-
+ +
Figure 1: Conceptual model
Visibility of sustainability
(independent variable)
Price perception
(dependent variable)
Purchase intention
(dependent variable)
Credibility of sustainability claim
(moderator)
Consumer characteristics
(moderator)
H1 H2
H3
H4
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4. Methodology
The purpose of this research is to examine whether sustainability claims influence price perception and purchase intentions of (potential) consumers and to what extent credibility and consumer characteristics are moderating the relationship between the sustainability claim and purchase behavior. In order to do so, the six hypotheses are tested by six different online questionnaires (see appendix 1 for the questionnaire that is used for condition 1). A 2 (visibility: sustainable vs. non-sustainable) x 3 (credibility: positive vs.
negative vs. control) experiment is used to test the hypotheses. This means that the experiment contains of six different conditions that will be tested. The six conditions differ from each other by the visibility of the sustainability claim (independent variable) and the credibility of the claim (moderator). The table below shows the six possible conditions a participant can be assigned to.
Condition 1
High visibility – low credibility
Condition 2
High visibility – High credibility Condition3
Low visibility – Low credibility
Condition 4
Low visibility – High credibility Condition 5
High visibility – neutral credibility
Condition 6
Low visibility – neutral credibility Table 1: six conditions that are be used for the experiment
22 4.1. Participants
For every condition at least twenty-five participants were needed, so at least hundred fifty participants in total had to join this experiment. Finally, 167 participants joined the experiment. The participants were primarily approached by email or Facebook.
Experience from my Bachelor Thesis has shown that Facebook generates a lot of participants among the younger population (twenty till thirty years old). The older population, mainly colleagues or acquaintances of my family, were assigned directly by email (appendix 1). My colleagues and family were asked to join the experiment and to forward the email to create a so-called “snowball-effect” (Byrnes,2011) among the older population.
The survey software Qualtrics came up with six unique hyperlinks, so for every condition another hyperlink was used. To randomly assign the participant to one of the six conditions, all the six hyperlinks are shown in the email. Participant were asked to choose one of the hyperlinks. As soon as the target of twenty-five respondents per survey was reached, the survey was deactivated. The participants were asked to choose the next hyperlink when the chosen hyperlink did not worked anymore. To assign the participants from Facebook randomly, the hyperlink www.thomaskos.com/eva (made by Dreamwaver) was used to ensure that the participants were equally distributed among the six questionnaires.
4.2. Experimental design
As mentioned before, a 2 (high en low visibility) x 3 (high, low and neutral credibility) experiment has been used to test the hypotheses. The price perception and purchase intention functioned as the dependent variables in this research. The manipulations and questions of the independent as well as the dependent variables will be described one by one in the next section.
4.2.1. Visibility of sustainability
The product that is used in all of the conditions is coffee and the service that is used in all
of the conditions is energy supply. This product and service are chosen because they are
23 purchased by almost every consumer, but their expression of sustainability differs. The sustainability of the coffee is more expressed by the package; green color, trading logo etc., while the sustainability of the energy is more expressed by written text.
The pictures below show which parts of the package and the advertisement expresses sustainability.
Figure 2: Visibility of sustainability, used for high visibility conditions
The package and advertisements above are used in the high visible conditions (condition 1,2 and 5). The red circles show at which point of the package and advertisement the company tries to communicate its sustainability. The green Albert Heijn logo, the word
“fair trade” and the sustainability claver should communicate the sustainability of this
coffee. For the energy advertisements, the words green energy, “discover how we make
the Netherlands even more sustainable at eneco.nl” and “together we go for
sustainability”, claim the sustainability of the energy supplier Eneco.
24 The package and advertisements are modified for the low visible conditions. The package and advertisement remained more or less the same, only the sustainability claim changed into a more general claim. Figure 3 shows these modified package and advisement.
Figure 3: No visibility of sustainability, used for the low visibility conditions
The green logo’s and the word “fair trade” has been removed from the coffee package.
The claim of the energy advertisements has been changed into “all our customers have
contract with freedom” and “discover the easiness at eneco.nl”, to emphasize the
flexibility of the company instead of their sustainability.
25 4.2.2. Credibility of sustainability
The credibility of the sustainability claim has been manipulated by positive and negative publicity about the product or service. The participants were confronted with two well- known news sources; nu.nl and trouw.nl. The sources nu.nl and trouw.nl are both used in four of the six conditions. The text is modified into positive information for the high credibility conditions (condition two and four) and into negative information for the low credibility conditions (condition one and three). To hold the stimuli constant, include what is recommended by Harris et al. (2009), the layout of the publication remain the same, only the text was modified into positive or negative information about the company’s sustainability policy.
The text of the positive publication as well as the negative publication is self- invented and unfounded. The texts of the publications are short because it is expected that the participant won’t read all the text and large texts lengthen the duration of the experiment. The headings for the positive publication were “Albert Heijn only pure and fair” and “Eneco switches to green energy”. The headings has been changed into “Albert Heijn not pure and not fair” and “Eneco fails with green energy”. The entire text of the manipulated publications can be found in appendix 2.
The respondents who are assigned to condition five and six, which function as control groups, are not confronted with any news message. These respondents saw only the product and service. The outcome of these two conditions function as a reference for outcome of the other four conditions.
4.2.3. Price perception
Verhoef and van Doorn (2011) stated that the presence or absence of an organic claim should influence a consumer's evaluation of a product, and such product evaluations may determine how much he or she is willing to pay for the product. The same reasoning goes for this research. To what extent influences the evaluation of a sustainable product the price perception of a consumer? To discover this price perception of consumers one open-ended question is used: “What do you think is the price of this product?”
The survey program Qualtrics gave an empty text box, so every answer was possible.
26 4.2.4. Purchase intention
Purchase intention is one of the two dependent variables in this research. The measuring method of purchase intentions can be criticized in line with the reasoning of Wertenbroch and Skiera (2002) who stated that asking the willingness to pay does not oblige participants to purchase the product. The same goes for purchase intentions, a question about the likeliness of purchase behavior does not oblige participant to purchase the product. An in store experiment where participants should pay for the products, would have been more satisfactory to see whether the purchase intention is equal to the actual purchase behavior. Due to the extent of this research, it is not feasible to measure the purchase behavior of sustainable products in this way. Therefore the 7-point Likert scale is used to measure the purchase intentions. The participants were asked the question:
“how likely is it that you will purchase this product?”. They could choose one of the seven possible answers that are ranged from “absolutely not likely” till “very likely”.
4.2.5. Consumer characteristics
It is hypothesized in this research that consumer characteristics are moderating the relationship between the visibility of sustainability and the purchase intention of consumers. The three types of consumer characteristic that are identified in the literature are: household income, age and environmental concerns of the consumer.
1. Income
All the participants were asked about their household income per month. They could choose one of the ten options. Less than €1000 and more than €5000 were the extremes, the incomes between the extremes were ranged from € 1000 till €1500, €1500 till €2000, and so on and so forth.
2. Age
The age of the participant was also asked in the questionnaire. Participants could choose
one answer of the dropdown list that was shown. The ages were ranged from 16 till 75,
since it is expected that younger or older people than the given ages will not participate in
this experiment.
27 3. Environmental concerns
The environmental concerns of the participants were measured by seven statements about the environment. The statements come from Dunlap et al. (2000) who came up with their revised New Environmental Paradigm (NEP). They formulated fifteen statements about the relationship between humans and the environment and asked participants to indicate to what extent they agree or disagree with the statement (five point scale). Agreement with the eight odd-numbered items and the disagreement with the seven even-numbered items indicate pro-NEP responses.
In this research the number of statements has been reduced till seven statements to keep the questionnaire as small as possible. To figure out which of the fifteen statements should be used, all the fifteen statements have been pretested by sixteen persons. The persons agreed or disagreed with the positive and negative statements about the environment on a five point scale. The outcomes of the negative statements were reversed to be able to compare these statements with the positive statements. So the outcome of disagreement with a negative statement could have been 1. This number has been reversed into 5, the opposite outcome. A reliability test, which was executed by SPSS, showed that the Cronbach’s alpha was at the highest level when seven of the fifteen statements were chosen. Based on a Cronbach’s Alpha of 0.784, it can be stated that there is a high internal consistency between the seven statements (see appendix 3 for SPSS output).
4.3. Data analysis
The questionnaires that are used for the experiment are executed by the survey software
Qualtrics. All the data from Qualtrics are included in one SPSS file to be able to compare
the means. The data of every conditions has been labeled, based on their visibility and
credibility. So all the data of visible conditions are labeled by 1 and not visible condition
by -1 in the visibility column. The same goes for the credibility, which has been
categorized into three different codes; 1 for high credibility, -1 for low credibility and 0
for neutral credibility; the control condition.
28 To test the hypotheses about the direct effect the visibility of the sustainability claim (independent variable) on the price perception and purchase intention (dependent variables), an independent sample t-test is used. This test able is able to check whether there are significant differences between the means of the two groups (high visibility vs.
low visibility) with continuous data (Field, 2009).
The moderators income, age and environmental concerns, are tested by a two-way analysis of variance. This analysis offers the possibility to test, besides the multiple number of groups, the multiple (related) independent variables
3. SPSS uses the univariate GLM to test all the moderating hypotheses. The test shows the direct effect of the independent variables on the dependent variables, as well as on the interaction between them.
3 SPSShandboek.nl, http://www.spsshandboek.nl/two-way_anova.html, accessed on 17 july.
29
5. Results
5.1. Descriptive results
167 respondents participated in the experiment. Out of these participant, 72 persons (42,1%) were male and 95 persons (55,6) were female. Their mean age was about 34 years (SD= 12,76). The most common ages were 25 till 27 (33,7% of all the respondents). This age distribution is probably caused by the fact that the invitation to join the experiment is send to friends and fellow students who are about the same age.
This also results in a high mean of the education level. 40,2% of the participants has a bachelor degree and 23,7% has a master degree. Their household income is relatively low; half of the participants has a household net income below €2500 per month. This low average income is related to the fact that a large part of the participants were students. Only11,8% of the participants has a net income above €5000 per month.
The table below shows how the consumer characteristics are distributed among the six different conditions.
Condition Age Income Green Score
Mean Std.
dev.
Mean Std.
dev.
Mean Std.
dev.
1: Vis ↑ Cred ↓ 38,4 15,32 € 2510 1508 20,43 4,2 2: Vis ↑ Cred ↑ 36,2 13,06 € 2500 1310 19,06 3,9 3: Vis ↓ Cred ↓ 35,2 13,5 € 2620 1512 19,05 4,62 4: Vis ↓ Cred ↑ 33,4 10,56 € 2795 1500 19,63 3,67 5: Vis ↑ Cred − 27,1 5,4 € 1885 1266 20,43 4,2 6: Vis ↓ Cred − 36,5 14,17 € 2465 1250 20,35 3,35
Table 2: Means of the consumer characteristics.
Vis = visibility and Cred = credibility
30 Table 2 shows that the different participants are equally distributed among the six conditions. They means are relatively close for almost all the conditions. Only condition five consists of younger participants with a lower income than the participants in other conditions.
Gender is not added to this table, since the ratio between men and women was approximately equal among all the conditions. The education level is not added because the output from the question about education level is ordinal data instead of interval data.
The mean levels of all the conditions are between 5 and 6, which means HAVO/VWO on the ordinal scale. These mean levels are not a good representation of the education level.
The Green Score will be explained later on in this chapter.
5.2. Main results
5.2.1. Influence of visibility
To test the influence of the visibility of the sustainability claim of price perception and purchase intention, an independent sample t-test is executed by SPSS. The test has been run two times, one time for the coffee and one time for the energy data.
Purchase intention
The first hypothesis state that there is a positive relationship between the visibility of the sustainability claim and the purchase intentions of consumers. The results from the independent sample t-test show that the mean of the visible conditions (M=2,21, SD=1,81) is higher than the mean of not visible conditions (M= 2,09, SD=1,63). So participants are more willing to purchase the sustainable product than the not sustainable product. These outcomes are in line with the hypothesis that stated that visibility of sustainability is positively related to purchase intentions, but the differences are not significant, t (165), p > .05.
The results of the independent sample t-test for the purchase intention of energy
show that the mean of the visible conditions (M=2,36, SD=1,38) is also higher than the
31 mean of the not visible conditions (M=2,20, SD=1,39), but the difference between the conditions is not significant, t (144) = -.702, p > .05.
Price perception
The results for the coffee show that there is a significant difference between price perception of the visible and not visible conditions, t (165) = - 5.11, P < .05, so hypothesis 3 can be accepted. The output from SPSS shows that the mean of price perception in the visible conditions (M=4,63, SD= 1,32) is higher than the mean in the not visible conditions (M=3,62, SD= 1,23). So participants who have been confronted with the green coffee package assume a higher price for the coffee than participants who have been confronted with the regular coffee package.
The results of the price perception of energy are not significant, t (164) = - 0.171, P > .05. The mean of visible conditions (M=120,63, SD=40,73) is slightly higher than the mean of the not visible condition (M=119,63, SD=48,3).
5.2.2. Influence of credibility
The influence of credibility has been tested for the relationship between the independent variable (visibility) and both dependent variables (price perception and purchase intention).
The moderating effect of credibility on the relationship between visibility and price perception has not been hypothesized, because this relationship is not expected from the literature. Since the data is available, the variables will be combined to see if there are any effects. First you will find the direct effect of credibility on price perception and purchase intention, thereafter you will find the moderating effect of credibility.
Direct effect of credibility
The direct effect of credibility on price perception is measured by an one-way
ANOVA, because the credibility variable consist of more than two conditions (high, low
and control). The output of this analysis of variance shows that there is no significant
effect of credibility on price perception for the coffee example, F (2,164) = 1,88, p >.05.
32 There is also no significant effect of credibility on the price perception for the energy example, F (2,163) = 1,61, p > .05.
The table below gives an overview of the means. The means indicate that not credible information increases the price perception for both the coffee and the energy, compared to the control condition. High credibility decreases the price perception of the coffee, but increases the price perception of the energy.
Coffee Energy
Credibility Mean St. dev Mean St. dev
High 3,93 1,13 127,33 52,98
Low 4,42 1,63 121,21 43,50
Control 4,09 1,27 112,20 33,59
Table 3: Price perception among the different credibility conditions
The same one-way ANOVA has been run for the purchase intentions. The purchase intention is used as the dependent variable and the credibility as the factor. The table below shows an overview of the means of the purchase intentions in high, low and control credibility conditions.
Coffee Energy
Credibility Mean St. dev Mean St. dev
High 2,38 1,8 2,4 1,38
Low 1,9 1,63 2,04 1,26
Control 2,2 1,75 2,39 1,48
Table 4: purchase intentions among the different credibility conditions
The outcomes show that the purchase intentions are higher for credible conditions and
lower for not credible conditions, compared to the control condition. The mean of the low
credible condition is 0,3 lower than the control condition, while the mean of the high
33 credible condition is only 0,18 higher than the control condition. These relative differences are equal for the energy example. This outcome is in line with the literature, which stated that negative information are more influential than positive information. The outcome from a one-way ANOVA shows that the effect of credibility does not lead to a significant difference between the conditions for the coffee, F (2,164) = 1,15, p > .05 and not for the energy, F (2,143) = 1,01, p > .05.
Moderating effect of credibility
One of the hypotheses in this research is that credibility has a moderating effect on the relationship between visibility and purchase intention. These hypotheses are tested by running an analysis of univariance in SPSS. Table 5 below shows the results for the purchase intentions.
Coffee Energy
Visibility Credibility Mean St. dev. Mean St. dev.
Not visible High 2,07 1,65 2,2 1,26
Low 2,00 1,68 1,8 1,15
Control 2,21 1,62 2,54 1,64
Visible High 2,7 1,92 2,59 1,47
Low 1,82 1,61 2,24 1,33
Control 2,2 1,88 2,24 1,33
Table 5: Purchase intentions ordered by credibility as well as visibility.
This overview shows that in visible conditions the mean of the purchase intentions for coffee in high credible condition (M=2,7) is higher than the mean of the purchase intention in the control condition (M=2,2), while the mean of the purchase intention in low credible condition (M=1,82) is lower than the outcomes of the control condition.
This outcome is in line with the hypothesis that stated that credibility of the sustainability
claim positively influences the relationship between the extent to which sustainability is
expressed and the purchase intention of (potential) consumers. The univariate analysis of
34 variance shows that there is no significant interaction effect of credibility on the relationship between visibility and purchase intentions for coffee, F (2,161) = < 1, NS.
The energy example shows the same result for the visible condition as the coffee example; higher mean of high credibility condition (M=2,59) than the mean of the control condition (M=2,24). There is no significant moderating effect of credibility, F (2,140) = 1,1, NS.
The table below shows the descriptive results of the price perception of coffee as well as energy, since this data is already available.
Coffee Energy
Visibility Credibility Mean St. dev. Mean St. dev.
Not visible High 3,38 ,088 122,11 60,41
Low 4,12 1,51 116 45,5
Control 3,39 1,15 120,63 36,04
Visible High 4,57 1,70 127,33 52,98
Low 4,65 1,08 125,15 42,2
Control 4,65 1,08 105,47 30,45
Table 6: Price perception ordered by credibility as well as visibility.
The mean of the coffee in low credibility condition is lower or equal to the control
condition, but the interaction effect of credibility is neither significant for the coffee, F
(2,161) = 1,38, p >.05, nor the energy, F (2,160) = 1,45, p > .05.
35 5.2.3. Influence of income
The output of the income question consists of ordinal data. The participant could choose one of the ten given income ranges, so the output differed from 1 (lowest income category) till 10 (highest income category). Based on the cumulative percentages in the frequency table, the income categories have been reduced from ten till three categories;
low income (till €1500 per month, 25,4% of the cumulative percentages), medium income (from €1500 till €3000 per month, 63,2% of the cumulative percentage) and high income (from €3000 per month, till 100% of the cumulative percentages). These categories are used for the Analysis of Univariance which has been executed by SPSS.
Purchase intention
The means of the purchase intention in the table below show that the low income category has highest purchase intention in nearly all the conditions, except the not visible condition for coffee. These results are inconsistent with the literature which states that income is strongly correlated to the purchase intention of sustainable products.
Coffee Energy
Visibility Income category
Mean St. dev. Mean St. dev.
Not visible Low income 2,00 1,16 2,50 1,38
Medium income 2,31 1,82 1,84 1,38
High income 1,94 1,64 2,37 1,39
Visible Low income 2,54 1,91 2,40 1,43
Medium income 1,94 1,81 2,35 1,38
High income 2,25 1,76 2,35 1,39
Table 7: Purchase intentions per income category
The output of the analysis of univariance show that there is no significant moderating
effect of income on the relationship between visibility and the purchase intention, F < 1,
for both the coffee and the energy example.
36 Price perception
The moderating effect of income on the relationship between visibility and price perception has been tested by an analysis of univariance. The results show that for the coffee there is a significant influence of income on the relationship between visibility and price perception, F (2,161) = 3,41, p < .05. For the not visible conditions, the high income category has the highest price perception (M=3,79). While for the visible conditions the low income category has the highest price perception (M=4,96). The table below shows an overview of the means.
For the energy case, income has no significant moderating effect on price perception, since F < 1. For both the not visible as the visible conditions, the high income category has the highest price perception.
Coffee Energy
Visibility Income category
Mean St. dev. Mean St. dev.
Not visible Low income 2,98 1,11 113,46 32,62
Medium income 3,73 1,41 114 32,42
High income 3,79 1,03 126,43 62,03
Visible Low income 4,96 1,43 110,75 38,68
Medium income 4,38 1,45 124,03 43,31 High income 4,66 1,05 124,94 39,35
Table 8: overview of the means of the price perception per income category
37 5.2.4. Influence of age
The participants have been split up in two groups; below 35 years and above 35 years, to test the influence of age on the relationship between visibility and purchase intention. The decision to make two groups is based on the frequency table from SPSS which shows that the median is at the age of 27 years and the modus is at the age of 26 years. A categorization of three of more groups would have led to a very unequal number of participants per group.
Purchase intention
Table 9 below gives an overview of the means. The purchase intentions are higher for the younger participants in almost every condition. Only in the not visible condition the purchase intention for both age categories remained the same. This is the opposite of the expectation that older consumers are more willing to purchase sustainable products.
Coffee Energy
Visibility Age category Mean St. dev. Mean St. dev.
Not visible Below 35 years 2,09 1,58 2,26 1,42
Above 35 years 2,09 1,78 2,09 1,35
Visible Below 35 years 2,24 1,88 2,44 1,41
Above 35 years 2,14 1,69 2,17 1,30
Table 9: overview of the means of the purchase intention per age category
The results from the analysis of univariance show that there is no significant effect of age
on relationship between visibility and purchase intentions, since F = <1, NS, for both the
coffee and the energy.
38 Price perception
The results from the analysis of univariance show that there is no significant moderating effect of age on the relationship between visibility and price perception, F < 1, NS, for both the coffee and the energy. Although the effect is not significant, the descriptive results below show that the older category (above 35 years) has a higher price perception of the coffee as well as the energy.
Coffee Energy
Visibility Age category Mean St. dev. Mean St. dev.
Not visible Below 35 years 3,58 1,35 109 44,22 Above 35 years 3,70 0,88 144,13 49,31 Visible Below 35 years 4,51 1,38 113,47 37,78 Above 35 years 4,91 1,14 137,07 42,95
Table 10: Overview of the means of the price perception
