The results show that Green promotion, Green product andCorporate social responsibility CSR have a positive impact on consumers’ purchasedecision for green FMCG products.. LIST OF TABLES
INTRODUCTION
Reasons for choosing the topic
Vietnam's Fast-Moving Consumer Goods (FMCG) sector has experienced a significant revival, reflecting a positive trend in the economy NIQ data reveals that the FMCG industry achieved a growth rate of 9.6% in 2022, exceeding levels seen before the COVID-19 pandemic.
The sector has experienced a remarkable resurgence, reaching levels not seen since 2019 and increasing by 17.5% compared to 2021 This growth is driven by heightened demand for essential health, hygiene, and everyday products, demonstrating the industry's ability to adapt to evolving consumer preferences.
Vietnam's fast-moving consumer goods (FMCG) sector is thriving, supported by a population of nearly 100 million and a growing middle class, demonstrating resilience and recovery from the COVID-19 crisis (Statista Research Department, 2023) As a result of the pandemic, consumers are increasingly favoring greener consumption habits, prioritizing health and renewable energy This shift towards sustainable practices is integral to Vietnam's Green Growth Strategy, which extends from 2011 to 2020 and aims to continue through 2050.
Green consumption is an emerging trend driven by increasing global environmental concerns, prompting the implementation of policies that encourage businesses to adopt eco-friendly practices While companies have made strides in improving their production processes, influencing consumer behavior towards sustainable products remains a challenge Green marketing is essential in bridging the gap between consumer intentions and actions, as evidenced by a survey revealing that over 47% of consumers prioritize environmentally friendly products (PwC Consumer Habits Survey, December 2021).
A 2017 Nielsen Vietnam survey revealed a significant shift in consumer behavior, with 86% of Vietnamese respondents willing to pay a premium for products that contribute positively to society and the environment, highlighting their growing preference for "green" and "clean" products.
In this context, manufacturers must promote global green consumption not only through labeled "green" products but also via effective green marketing strategies genuinely attracting customers.
The 21st-century green revolution emphasizes the importance of sustainable practices for healthier living A 2022 Deloitte survey revealed that 39% of consumers consider sustainability when shopping, with 36% willing to pay more for eco-friendly products Understanding consumer attitudes towards these products is crucial for developing effective Green Marketing strategies Companies are responding by innovating green alternatives and recognizing their role in achieving sustainable development goals The growing "Going Green" movement reflects strong consumer support for environmentally friendly products and brands.
Corporate Social Responsibility (CSR) highlights the complex role of corporate behavior in addressing social and environmental issues beyond mere profit generation (Hediger, 2010) Companies must adapt to varying operational standards and market challenges in diverse environments, responding to evolving customer expectations According to Freeman (2010), responsible business practices require alignment with the ethical, legal, and social concerns of stakeholders.
Consumers have significant influence through their purchasing decisions, either supporting socially responsible companies or boycotting those with harmful environmental practices This has led to the development of concepts like "green customer satisfaction" and "green customer loyalty," which help analyze consumer behavior towards eco-friendly products Green customer loyalty signifies a commitment to environmentally conscious brands, while green customer satisfaction focuses on meeting consumer needs related to sustainability Research shows a positive correlation between customer satisfaction and loyalty, indicating that satisfied customers are more inclined to repurchase green products and services.
This paper explores the intersection of Green Marketing strategies and Corporate Social Responsibility (CSR) initiatives within Vietnam's Fast-Moving Consumer Goods (FMCG) sector It aims to analyze existing literature and present empirical research on the impact of CSR and Green Marketing on value creation in sustainable enterprises The study focuses on the interplay between Green Marketing, CSR, Purchase Decisions, Customer Loyalty, and Customer Satisfaction in Vietnam's FMCG industry By understanding these relationships, the research seeks to offer valuable insights for businesses to effectively utilize Green Marketing and CSR to enhance Purchase Decisions, Customer Loyalty, and Satisfaction in a competitive market.
Research objectives
This research investigates the impact of Green Marketing—encompassing Green promotion and Green products—and Corporate Social Responsibility (CSR) on purchase decisions, customer satisfaction, and customer loyalty within the FMCG industry The findings aim to provide actionable recommendations for FMCG companies to enhance their engagement in these sustainable practices.
Based on the overall objective, these are five specific ones for the study:
The first objective is to analyze, evaluate, and test the influence of Green promotion on the purchase decision for FMCG products of Vietnamese people.
The second objective is to analyze, evaluate, and test the influence of Green product on the purchase decision for FMCG products of Vietnamese people.
The third objective is to analyze, evaluate, and lest the influence of Corporate social responsibility on purchase decision for FMCG products of Vietnamese people.
The fourth objective is to analyze, evaluate, and test the influence of purchase decision on customer satisfaction of Vietnamese people after purchasing FMCG products.
This study aims to analyze and evaluate the impact of customer satisfaction on the loyalty of Vietnamese consumers towards fast-moving consumer goods (FMCG) It also examines various demographic factors, including age, gender, occupation, and monthly income, to understand their influence on this relationship.
Research questions
How does Green promotion influence purchase decision for FMCG products of
How docs Green product influence purchase decision for FMCG products of Vietnamese people?
How does Corporate social responsibility influence purchase decision for FMCG products of Vietnamese people?
How does purchase decision influence customer satisfaction of Vietnamese people after purchasing FMCG products?
How does customer satisfaction influence customer loyalty of Vietnamese people for FMCG products?
Research subjects
The research subjects of this study are Vietnamese people, who experience consuming FMCG products.
Research scope
Time: The inquiry, survey and data collection will be carried out for the whole January 2024.
Subjects of the survey: Vietnamese people, who experience purchasing FMCG products.
Research methods
The information regarding group responses gathered by citizens using survey questionnaires serves as the primary source of data.
Preliminary research and formal research is conducted for this study.
The research team developed a qualitative study utilizing scales derived from previous research, complemented by an initial quantitative questionnaire They employed a direct sampling method to carry out preliminary quantitative research.
An initial assessment involving 50 consumers, mainly from the University of Economics Ho Chi Minh City (UEH), aims to evaluate the reliability of measurement scales and the significance of observed variables This study focuses on filtering these variables to ensure they are appropriately tailored to the context of the fast-moving consumer goods (FMCG) industry in Vietnam.
The research team conducted a quantitative analysis using survey data collected from 345 Vietnamese participants, ultimately refining the dataset to 315 standard samples for official results.
The research team utilized a 5-level Likert scale to measure observed variables, encoding the raw survey data with Excel 365 Descriptive statistical analysis was conducted using SPSS 20.0, followed by further analysis with SmartPLS 4 software This included assessments of internal consistency reliability through Cronbach's Alpha, composite reliability, average variance extracted (AVE), and the discriminant validity using the Heterotrait-Monotrait (HTMT) ratio The model fit was evaluated using coefficients such as VIF, R², and f² Finally, the study employed the PLS-SEM analysis technique to test its hypotheses.
Research significance
For educational organizations, research groups, and students overall, this study adds both theoretical and practical value.
This study enhances the theoretical understanding of the FMCG industry by re-evaluating previous research on three key factors: Green promotion, Green products, and Corporate Social Responsibility It examines their impact on Purchase Decision, Customer Satisfaction, and Customer Loyalty The findings contribute to understanding how these variables influence consumer behavior and purchasing tendencies in the FMCG sector Future research can leverage the study's scale to explore the likelihood of purchases using different methodologies.
In terms of practical significance, the study aims to:
This study serves as a valuable resource for research organizations, policymakers, and academic institutions to formulate strategies that enhance positive aspects while mitigating negative ones, ultimately encouraging responsible consumption of Fast Moving Consumer Goods (FMCG) in Vietnam By fostering a positive perception among economics students, the study aids citizens in identifying issues and developing plans for responsible FMCG consumption In the context of the rapidly advancing 4.0 technology era, citizens have significant opportunities to engage in recycling and reusing initiatives, which help reduce waste, curb excessive production, and offer financial incentives for sustainable practices, thereby contributing to a more stable business environment.
The study paper aims to transform the understanding of the 17 UNESCO criteria for sustainable development among Vietnamese universities, research organizations, and citizens, promoting responsible consumption and production This initiative is expected to significantly contribute to the nation’s growth and enhance its international integration.
Structure of this study
The study consists of 5 chapters, the structure is as follows:
This chapter presents the reasons why the research team chose the topic, research objectives, research questions, research subjects, research scope and methods used to conduct the research.
This chapter provides a comprehensive overview of the Fast Moving Consumer Goods (FMCG) industry, highlighting key concepts such as Green Marketing, Corporate Social Responsibility, Customer Satisfaction, and Customer Loyalty It also explores relevant theoretical frameworks that inform the study, ultimately leading to the formulation of the study model's hypotheses.
In this chapter, the authors describe the design of the study, the scale used by the research team and how to take survey samples.
The chapter evaluates the analysis results and evaluates the scale and whether the proposed hypotheses are supported or not.
The research findings suggest significant implications for universities and organizations within the FMCG industry, leading to practical recommendations for improvement Additionally, the chapter highlights the limitations of the current study, paving the way for future research directions to address these challenges effectively.
LITERATURE REVIEW
Introduction
Chapter 2 aims to establish the theoretical framework of the research paper by developing hypotheses related to the connections among key concepts within the research model This chapter is divided into three main sections: an overview of the Fast Moving Consumer Goods (FMCG) industry, green marketing, corporate social responsibility, customer satisfaction, and customer loyalty; a literature review; and the formulation of research hypotheses along with the proposed research model.
Overview of fast Moving Consumer Goods (FMCG) Industry
The Fast Moving Consumer Goods (FMCG) industry, also known as Consumer Packaged Goods (CPG), encompasses the production and distribution of affordable everyday products with a short shelf life This sector is characterized by the rapid sale of goods in large quantities and is divided into three main categories: food, beverages, and household items Consumer decisions in the FMCG market are heavily influenced by various factors, including promotions, packaging, and advertising.
The FMCG sector is characterized by its international nature, with multinational corporations operating across borders while also navigating local and regional variations in customer preferences and purchasing power Vietnam's FMCG market has seen significant growth in recent years, fueled by rising disposable incomes, urbanization, and evolving consumer lifestyles Both local and international companies, such as Unilever, P&G, Coca-Cola, and Nestle, compete in this dynamic market Since Vietnam's entry into the World Trade Organization in 2007, numerous domestic brands like Nutifood, Vinamilk, Kinh Do, THP, and Masanfood have emerged as key players, supported by the country's developing stock markets Additionally, a growing awareness of environmental issues has prompted some FMCG companies in Vietnam to prioritize sustainability and corporate social responsibility.
Definition of research concepts
Environmental issues like global climate change and pollution are closely linked to the agricultural and manufacturing sectors, adversely affecting human health As environmental awareness grows, green marketing has emerged as a vital strategy to align with consumer preferences for eco-friendly products Green marketing encompasses activities such as modifying products to use natural ingredients, altering production processes, enhancing packaging, reducing emissions, and promoting sustainable distribution and usage methods Key elements of green marketing include green products, competitive pricing, sustainable distribution channels, and eco-conscious promotional strategies.
Green promotion is essential for shaping consumer attitudes toward sustainability by marketing eco-friendly products It utilizes eco-conscious advertising methods to influence behavior and emphasizes effective communication and collaboration with environmental organizations to promote sustainable relationships By highlighting the benefits of environmentally friendly choices for individuals and the planet, green promotion guides consumer decisions It involves configuring promotional tools with a focus on people, planet, and profits Green advertisements align with consumers' environmental concerns, aiming to positively influence purchase behavior by showcasing the advantages of eco-conscious choices Additionally, engaging in green promotion enhances the accuracy of monitoring companies' environmental claims, thereby raising awareness of a company's eco-friendly image and products.
A green product is characterized by its recyclability, non-toxicity, use of organic materials, and beneficial impact on individuals Consumers increasingly favor environmentally friendly products from reputable brands (Suki, 2013) The notion of green products ties into sustainable manufacturing and supply chain management, emphasizing standards, technologies, and practices that are friendly to the environment, the planet, and people (Palevich, 2012).
Consumers are increasingly choosing green products to promote environmental improvement and combat climate change (2011) These products significantly influence buying decisions, as they help reduce negative impacts on society and the environment (Pcattic & Charter, 2003; Siddique & Hossain, 2018) Vietnam is adopting a green growth strategy, mirroring global trends (Nguyen, 2012) In response to rising environmental pollution and concerns over food safety, green products have become the preferred choice among Vietnamese consumers (Phan, 2017).
Corporate social responsibility (CSR) has become increasingly significant in both academic literature and the business sector, as companies recognize their societal roles beyond profit-making Compliance with legal requirements is essential for fair business operations, as mandated by federal, state, and local regulations Various studies, including Mohr's classification, categorize CSR into multi-dimensional definitions that outline corporate responsibilities and social marketing perspectives that assess CSR's societal impacts Today, CSR is primarily viewed as a strategic issue, highlighting the need for scholars to examine the substantial time and resources organizations invest in its strategic implementation.
Corporate Social Responsibility (CSR) is defined from various perspectives, emphasizing its role in promoting social well-being alongside corporate interests Davis and Blomstrom view CSR as a corporation's efforts to enhance social welfare, while Kotler highlights the importance of conducting business in a manner that improves societal conditions McWilliams and Siegel expand on this by stating that CSR involves a firm's obligation to support societal goals beyond mere compliance and self-interest Mohr and Webb focus on a company's commitment to mitigating negative impacts while maximizing positive contributions to society Lastly, Matten and Moon describe CSR as the policies and actions undertaken by companies to fulfill their responsibility towards advancing social objectives.
The purchase decision, as noted by Prasetyaningsih & Astini (2016), follows the intention to buy but does not equate to the actual purchase itself; it is a key aspect of consumer behavior With growing environmental concerns, consumers are increasingly adopting eco-friendly lifestyles and recognizing the significance of their purchasing choices on the environment This shift is notably impacting the fast-moving consumer goods (FMCG) sector, which includes essential products with short life cycles and represents a significant market, particularly in emerging economies like Vietnam The trend indicates a rising consumer enthusiasm for supporting environmentally responsible companies (Laroche, Bergeron, and Barbaro-Forleo).
2001), performing the purchasing activities (Mishra and Sharma, 2010), putting into practice a sustainable consumption pattern (Young cl al., 2010), and willingness to spend more money to acquire green products (Hasan and All, 2015).
Customer satisfaction is defined as the emotional response and evaluation a customer experiences after a purchase, reflecting their happiness with a product or service (Ningsih and Segoro, 2014) It serves as a crucial indicator for businesses, emphasizing the importance of meeting consumer expectations (Hansemark and Albinsson, 2004) Zeithaml (2002) describes customer satisfaction as the overall assessment of a consumer's buying experience with a specific good or service Additionally, Udo et al (2010) highlight that customer satisfaction signifies the likelihood of a service making the consumer feel positive.
Customer loyalty refers to the consistent preference for specific products and services over time Retaining existing customers is generally more cost-effective than acquiring new ones, and loyal customers often share their positive experiences, acting as unpaid advocates for the business.
Customer loyalty is vital for business success, leading to benefits such as increased profits, market share, and a positive brand image (Watson et al., 2015) A strong commitment from customers to an organization's products or services fosters resilience In the context of environmental sustainability, ongoing purchases of green products are crucial Green loyalty, as defined by Chen (2010), refers to repurchase behavior driven by a strong environmental attitude and commitment to sustainability Additionally, Marakanon and Panjakajornsak (2013) identified four dimensions of customer loyalty: repurchase intention, complaint behavior, price insensitivity, and word-of-mouth.
Foundational theories
2.4.1 Theory of Planned Behavior (TPB)
The Theory of Planned Behavior (TPB) is a crucial social cognitive framework that explains differences in intentional behaviors, as established by Ajzen in 1991 Its effectiveness has been validated, particularly in understanding pro-environmental behaviors, as evidenced by the research of Yazdanpanah and Forouzani.
The Theory of Planned Behavior (TPB) suggests that an individual's intention to perform a behavior is influenced by their attitudes, subjective norms, and perceived behavioral control This theory posits that perceived behavioral control, along with behavioral intention, can predict the likelihood of achieving the desired behavior (Ajzen, 1991) Various theories have emerged over time to explain consumer behavior, drawing from social sciences like psychology, sociology, and economics, as well as focusing on marketing variables such as advertising, product differentiation, packaging, promotions, and retail availability (Kalafatis et al., 1999).
The Theory of Planned Behavior (TPB) suggests that stronger intentions to act are linked to a higher likelihood of executing those actions Ajzen (1991) identified three key motivational factors within TPB’s cognitive framework as the most dependable predictors of behavioral intention in business settings As a result, the research team chose to explore how customers' attitudes toward Green Marketing and Corporate Social Responsibility (CSR), along with societal norms and perceived control, impact their purchasing decisions.
Figure 1.1: Theory of Planned Behavior Model
2.4.2 Theory of Carroll’s Pyramid of CSR
Carroll's CSR pyramid, introduced in 1991, remains a significant and enduring framework in corporate social responsibility (CSR) literature and business education, as highlighted by numerous studies (Calabretta et al., 2011; De Bakker et al., 2005; Ma, 2009) The framework has seen a dramatic rise in citations, increasing from 5,200 in 2016 to over 16,000 in 2021, underscoring its theoretical importance and practical application (Jain et al., 2017; Masoud, 2017; Schwartz & Carroll, 2003; Spcncc, 2016; Swanson, 1995; Wood, 1991) It is widely recognized as a valuable analytical tool for defining and categorizing corporate responsibilities (Kusyk et al., 2021).
In 1979, Carroll introduced a framework for Corporate Social Responsibility (CSR) comprising four dimensions, which he later organized into a normative pyramid in 1991 This pyramid prioritizes responsibilities, beginning with economic obligations, followed by legal, ethical, and philanthropic responsibilities, each reflecting a decreasing level of importance (4:3:2:1) This model highlights how decision-makers within organizations prioritize these responsibilities and underscores the concept of business accountability.
A comprehensive review (Kusyk et al., 2021) indicates that the CSR pyramid's hierarchy is contingent on environmental, organizational, and individual influences, resulting in varied hierarchies over time.
Synthesis of related studies
2.5.1 Research of Maftuchach et al (2020)
This study aimed to evaluate the impact of price and promotion on purchasing decisions and consumer satisfaction regarding Tclkomscl prepaid cards It focused on four key variables: price, promotion, purchase decisions, and customer satisfaction A purposive literature survey was conducted with 100 respondents providing data The sample size was determined using the Structural Equation Modeling (SEM) approach as outlined by Hair et al (2011), and data analysis was performed using SmartPLS version 3.2.3.
Figure 2.1: Research model of Maftuchach et al (2020)
The research findings indicate that a company's experience with pricing structures and customer service strategies significantly impacts implementation, adoption rates, and scalability, highlighting the broader effects of pricing strategies on consumer behavior and business outcomes In contrast, the influence of promotions on consumer satisfaction is minimal (P = -0.036, p < 0.708) compared to the substantial effect of pricing (P = 0.292, p < 0.006) Hypothesis testing further confirms that pricing has a positive and significant impact on consumer satisfaction, while promotions exhibit negative and insignificant effects.
2.5.2 Research of Yusiana et al (2019)
This study explores the influence of green products and corporate social responsibility (CSR) on customer purchasing behaviors Analyzing data from 100 respondents through a descriptive research approach and structural equation modeling (SEM), the research focuses on environmentally friendly products and the socially responsible initiatives of companies By utilizing SEM, the study provides an in-depth analysis of the intricate relationships between these factors, aiming to illuminate the dynamics that affect consumer choices regarding sustainable products and corporate practices that prioritize social responsibility.
The research indicates that green products (p = -0.136, p > 0.05) and corporate social responsibility (p = 0.610, p > 0.05) have minimal impact on consumer purchase decisions, largely due to a lack of awareness regarding the benefits of green products However, while there is no direct relationship between these factors and purchasing choices, the presence of environmental benefits and information can influence consumers to buy sustainable items, highlighting the importance of awareness in promoting eco-friendly purchases (P = 0.861, p < 0.05).
Figure 2.2: Research model of Yusiana et al (2019)
2.5.3 Research of Mawarni et al (2023)
The research highlights the importance of understanding how Corporate Social Responsibility, Social Media Marketing, Sales Promotion, and Perceived Value collectively influence Consumer Purchase Decisions within the Tokopedia marketplace With technological advancements and the internet reshaping consumer behavior, a significant number of Indonesian shoppers are now opting for online purchases through marketplaces Consequently, competition among these platforms is escalating as they vie for leadership in Indonesia's digital economy.
This study analyzed 178 samples using IBM SPSS Statistics 24, revealing that social media marketing and perceived value significantly influence purchasing decisions In contrast, corporate social responsibility and sales promotion were found to have no meaningful impact on these decisions, as indicated by a significance value of 0.374, which exceeds the 0.05 threshold Therefore, it can be concluded that corporate social responsibility has a minimal effect on purchasing choices.
Figure 2.3: Research model of Mawarni et al (2023)
2.5.4 Research of Astuti et al (2021)
The study explores the impact of the green marketing mix on purchasing decisions, aiming to establish a theoretical model that highlights this relationship It identifies purchasing decision as the endogenous latent variable, while green product, green price, green place, and green promotion serve as the exogenous latent variables within the green marketing mix The conceptual framework was empirically validated through the Partial Least Square (PLS) method, based on a survey conducted with 42 mozzarella cheese consumers produced by cv.
Figure 2.4: Research Model of Astuti et al (2021)
Research findings reveal that green promotion, green pricing, and green products significantly influence consumer purchasing decisions, particularly among snack manufacturers Notably, the green product aspect of the marketing mix had the most substantial impact on the choice to buy Brady mozzarella cheese, with a path coefficient of p = 0.567 (p < 0.05) Consumers opted for Brady mozzarella due to its high-quality standards and the use of toxic-free ingredients Additionally, green promotion played a crucial role in influencing purchase decisions, with a coefficient of p = 0.297 (p < 0.05) To enhance consumer appeal, CV BRADY should increase its green promotional efforts, particularly in supporting local farmers, as this commitment significantly affects consumer attitudes and purchasing behavior.
2.5.5 Research of Mohd Suki et al (2017)
This study investigates the interconnections among product quality, corporate image, store image, and pricing in relation to customer satisfaction and loyalty towards green products in Malaysia Using AMOS 21.0 and structural equation modeling, the research analyzed data from 200 university students committed to a green lifestyle, characterized by the use of recyclable materials, purchasing retail goods, and opting for ozone-free products.
Empirical research indicates that product quality (p = 0.552, p < 0.05) significantly influences customer satisfaction with green products, followed by corporate image (p = 0.461, p < 0.05), store image (p = 0.227, p < 0.05), and product price (p = 0.136, p < 0.05) Additionally, customer loyalty has a notable effect on satisfaction when using green products (P = 0.578, t-value = 3.074, p < 0.05), with product quality being a key driver of loyalty Consumers prioritize the green store's ability to provide a diverse range of affordable, high-quality items For sustainable business practices, marketers should promote the identification of green products and address consumer challenges in distinguishing between green and non-green options The findings offer valuable insights for developing effective marketing strategies and enhancing understanding of consumer behavior regarding green products in Malaysian markets.
Figure 2.5: Research Model of Mohd Suki et al (2017)
2.5.6 Research of Kinasih et al (2023)
This research investigates how brand image mediates the effects of green marketing and corporate social responsibility on purchase decisions among Avoskin skincare customers in Denpasar City Utilizing purposive sampling, the study comprises a sample of 180 respondents Data analysis is conducted using Structural Equation Modeling (SEM) based on Partial Least Squares (PLS) methodology.
The study reveals that corporate social responsibility (CSR) significantly influences consumer purchase decisions regarding Avoskin skincare products (p= 0.262, p< 0.05) Consumers are more inclined to choose Avoskin when they recognize the company's commitment to CSR, while a lack of CSR initiatives may deter them Avoskin's CSR efforts, which include charity projects aimed at addressing community needs, play a crucial role in shaping customer preferences Notably, the company utilizes social media campaigns that encourage users to engage by transforming comments on posts into food packages for those in need, highlighting its dedication to socially responsible business practices.
Figure 2.6: Research Model of Kinasih et al (2023)
2.5.7 Research of Chang and Fong (2010)
This research introduces the concepts of green customer satisfaction and green customer loyalty, proposing a framework to explore the connections between green product quality, green corporate image, and these two dimensions of customer engagement Utilizing a questionnaire survey targeting consumers who have purchased eco-friendly products, the study employed Structural Equation Modeling (SEM) with AMOS to validate its framework and hypotheses, yielding empirical insights into the relationships among these variables.
Figure 2.7: Research model of Chang et al (2010)
This research fills a significant gap in understanding customer satisfaction and loyalty related to environmental issues, revealing a strong positive correlation between satisfaction with green practices and customer loyalty (P = 0.560, p < 0.05) To meet the demands of major international markets, companies must produce high-quality products that align with societal and environmental values to maintain global competitiveness As a result, there is a growing focus on green concepts such as green management, green marketing, and the development of green products.
2.5.8 Research of Hsu et al (2021)
In today's world, it is essential for economic growth to align with ecological sustainability and social responsibility Consequently, more companies are prioritizing the development of eco-friendly products, leading to the rise of concepts like green product design and innovation This study explores the determinants of customer satisfaction and loyalty towards green products, focusing on Gogoro as a case study Data was collected from 208 respondents, and statistical analysis was performed using SPSS and PLS-SEM.
Figure 2.8: Research model of Hsu et al (2021)
Hypotheses and research models
Green Promotion (GP) in the fast-moving consumer goods (FMCG) sector enhances consumer preferences for sustainable options, yet the standardization of advertising tools continues to pose challenges (Albayrak et al., 2013) According to Bekhet et al (2012), this trend underscores the importance of effective communication in promoting eco-friendly products.
Green marketing (GP) plays a vital role in encouraging consumers to choose eco-friendly products by establishing a strong brand identity Frequent exposure to GP significantly impacts consumer decisions when selecting brands or products (Yoo et al., 2000) According to Hasan et al (2015), GP effectively demonstrates a company's commitment to environmental issues while promoting its offerings By highlighting the benefits of eco-friendly choices for both individuals and the planet, GP aims to guide consumers towards more sustainable options (Rahbar and Wahid, 2011).
In the quest for sustainability, many FMCG companies utilize green promotion (GP) to highlight their products and values However, contrary to Annalisa Faradina's (2016) findings, Maftuchach's study (2020) indicates a negative and insignificant effect of promotion on consumer satisfaction regarding Telkomsel prepaid cards This is supported by Bekhet et al (2012) and Chan (2004), who contend that green promotion may not effectively sway consumer purchasing decisions due to doubts about environmental claims Nevertheless, Astuti et al (2021) found that GP does significantly influence purchase decisions (P = 0.297, p < 0.05) Therefore, this study aims to thoroughly examine the true impact of GP on consumer purchasing behavior in the FMCG sector, leading to the formulation of a specific hypothesis.
Hi: Green Promotion (GP) has a significant influence on purchase decisions in the FMCG industry (+)
A green product is defined as one made from non-toxic ingredients and environmentally friendly practices, certified by recognized organizations (Kumar and Ghodeswar, 2015) In the fast-moving consumer goods (FMCG) sector, both product and packaging significantly influence purchasing decisions (Venekar and Wadhwa, 2011) However, consumers often hesitate to buy green products due to concerns about their performance (Majid et al., 2016) Research by Yusiana et al (2019) indicates no significant correlation between green products and purchase decisions (P = -0.136, p > 0.05), while Astuti et al (2021) found a significant correlation (P = 0.567, p < 0.05) Despite conflicting findings, the market for eco-friendly products is expanding as consumer demand rises (Wahid and Rahbor, 2011).
H2: Green product has a significant influence on purchasing decision in the FMCG industry (+)
Corporate social responsibility (CSR) is defined by Kilcullen and Kooistra (1999) as the moral obligation of corporations that extends beyond mere legal compliance Kotler and Lee (2005) further describe CSR as an organization's dedication to enhancing societal welfare through voluntary business practices and resource contributions Additionally, the CSR initiatives of a company can significantly influence consumer purchasing decisions regarding its products or services (Rodrigues & Borges).
Research indicates that consumers are willing to pay higher prices for companies that prioritize Corporate Social Responsibility (CSR), as it enhances their sense of safety and trust (Parung, 2019) This social responsibility influences customers' choices when selecting products or services (Hassan et al., cited in Hanaysha, 2018) However, a study by Yusiana et al (2019) found no significant correlation between CSR and purchasing decisions, primarily due to a lack of consumer awareness regarding the importance of green products Despite this, adherence to regulations and proactive CSR efforts positively influence consumer perceptions and purchasing decisions (Lee & Lee, 2015) Additionally, Majid et al (2023) demonstrated a positive relationship between corporate social responsibility and purchasing intention (p = 0.134, p < 0.05), leading to the formulation of the following hypothesis.
H3: Corporate social responsibility has a significant influence on purchasing decision in the FMCG industry (+)
Research indicates that consumers' green purchase behavior is influenced by various factors, including a sense of environmental obligation, prior experiences with eco-friendly products, corporate environmental initiatives, and lifestyle awareness (D'Souza et al., 2006) As environmental concerns grow, consumers are increasingly adopting more sustainable lifestyles and recognizing the environmental impact of their purchasing decisions This shift significantly affects the fast-moving consumer goods (FMCG) industry, particularly in emerging markets like Vietnam, where the demand for sustainable products is rising Green purchasing not only aligns with consumer preferences for eco-friendly products but also enhances customer satisfaction, as noted by Suhaily and Darmoyo (2019), who highlighted the strong link between purchase decisions and customer satisfaction.
= 1.57, t-values = 7.3 8) Following up, in 2020, Maftuchach et al also indicated the same result, when the study showed that purchase decision has a positive impact on customer satisfaction (p = 0.465, p < 0.05).
H4: Purchase decision has a significant influence on customer satisfaction in the FMCG industry (+)
Consumer satisfaction is defined as the alignment of a customer's consumption with their environmental goals and desires, resulting in a pleasurable experience Customer loyalty emerges when consumers wish to maintain relationships with brands that prioritize green initiatives, leading to repeat purchases and positive word-of-mouth (Chang and Fong, 2010; Hsu et al., 2021) However, in the FMCG sector, customer satisfaction does not always guarantee loyalty, which can result in lost customers and market share (Namini, N s., 2016) Research indicates a strong link between customer satisfaction and loyalty, particularly in green product consumption, where satisfied customers are more inclined to repurchase and pay premium prices for eco-friendly options (Suhaily et al., 2019; Mohd Suki et al., 2017) Ultimately, the purchase of green products reflects individual values, enhancing customer satisfaction, retention, and reducing price sensitivity (Hur et al., 2013) Chang and Fong’s study confirms that customer satisfaction significantly influences loyalty (p = 0.560, p < 0.05), leading to the formation of the following hypothesis.
H5: Customer satisfaction has a significant influence on customer loyalty in the FMCG Industry (+)
Through studying the theoretical bases and referring to relevant research models, the group proposed the following research model:
Figure 2.16: Proposed research model Summary of the hypothesis:
Hl: Green Promotion (GP) has a significant influence on purchase decisions in the FMCG industry (+)
H2: Green product has a significant influence on purchasing decision in the FMCG industry (+)
H3: Corporate social responsibility has a significant influence on purchasing decision in the FMCG industry (+)
H4: Purchase decision has a significant influence on customer satisfaction in the FMCG industry (+)
H5: Customer satisfaction has a significant influence on customer loyalty in the FMCG Industry (+)
RESEARCH METHODOLOGY
Introduction
In Chapter 2, the research team presented pertinent studies and established the foundational theory They formulated research models and hypotheses derived from these studies, which have significantly informed the methodological framework developed in Chapter 3.
This chapter aims to outline the research methods employed in developing the research model, including the scales for the research concepts, the research process, and the sampling method, while also testing the proposed research model.
The main content of Chapter 3 includes:
(1) Research design: Quantitative research process and methods
(2) Relevant scales: Building, adjusting and presenting research concept measurement scales
(3) Sample and method of sampling survey
Research Ethics
Throughout our research process, we upheld ethical principles to maintain honesty, transparency, and respect We made certain that all survey participants were fully informed about the research's purpose and provided their consent prior to data collection.
We prioritized the privacy rights of survey participants by securing their personal information and anonymizing all data collected for research purposes, ensuring that only publicly available information was used with consent Our data analysis adhered to principles of honesty and transparency, presenting results accurately without distortion, omission, or manipulation to enhance their significance.
Our team also followed regulations regarding citation and use of materials Works and sources were accurately and fully cited, ensuring fairness and honesty in the use of others' works.
Our research was rigorously reviewed by independent experts, ensuring its accuracy and reliability This evaluation process helped identify and rectify any potential errors or deficiencies Throughout the study, our team prioritized research ethics, emphasizing honesty, transparency, and respect at every stage of the research process.
The research is conducted in two main stages: preliminary quantitative research and official quantitative research, as illustrated in Figure 3.
To define the study's problem and objectives, the author reviewed existing research on factors influencing consumer decisions to purchase green products in the FMCG sector Based on insights from previous studies, a theoretical framework was established, and a research model along with a draft measurement scale was developed Subsequently, qualitative research was conducted through a group discussion with 10 informed consumers of fast-moving consumer goods to gather their perspectives on the survey content.
The research team initially conducted quantitative tests with 50 consumers to validate the reliability of the scale before proceeding with formal quantitative research involving 315 participants Utilizing SPSS 20 for sample description and SmartPLS 4 for analyzing measurement and structural models, the analysis involved assessing scale reliability through Cronbach's alpha, composite reliability (CR), and average variance extracted (AVE), as well as testing for convergence and discriminability The structural model was then evaluated using the partial least squares structural modeling (PLS-SEM) method The findings led to a discussion of theoretical, methodological, and practical contributions, while also addressing the study's limitations and suggesting directions for future research.
Scales
We utilized an online questionnaire to collect data for our research, ensuring that participation was entirely voluntary The survey featured structured close-ended questions organized into three sections: the first section explained Green marketing concepts related to Green Products and Green Promotion, the second section included the measurement scales for the study, and the final section gathered demographic information from respondents, such as gender and age.
The levels of each scale is the same, depending on the scale of the reference
The article references various scales utilized in research, including customer satisfaction by Mohd Suki (2013), customer loyalty by Chang and Fong (2010), and corporate social responsibility by Mawarni and Muzammil (2023) Additionally, it discusses the scale of green products by Mohd Suki (2017) and green promotion by Govender et al (2016) Each scale operates on a 1 to 5 rating system, where 1 indicates "strongly disagree" and 5 signifies "strongly agree."
The survey scales were translated into Vietnamese to accommodate participants in Vietnam, resulting in the collection of three hundred responses by the end of the data gathering period.
The current study investigated the relationships between four independent variables—Green Promoting, Green Product, Corporate Social Responsibility, and Purchase Decision—and two key dependent variables: Customer Satisfaction and Purchase Decision Measurements for these variables were adapted from previous research with minor modifications to align with the context of the Fast-Moving Consumer Goods (FMCG) industry and the specific cultural setting of Vietnamese consumers.
The Green Promotion scale, developed from the research of Govender, J P., and Govender, T L (2016), utilizes four observed variables, labeled GP1 to GP4, to assess the impact of green promotion on consumer purchase decisions.
Table 3.1: Green Promotion Scale (GP)
Coding Adapted Scale of Green Promotion (GP)
GPl Promotions for green FMCG products are effective in creating awareness of problems facing the environment
GP2 Promotions for green FMCG products motivate me to support the environment through purchasing green products
GP3 I often read product labeling/packaging before making a purchase
GP4 Information on product packaging helps me make an informed decision about what I am consuming
The Green product scale, developed from Mohd Suki's 2017 research, utilizes four observed variables, denoted as GPR1 to GPR4, to assess the impact of green products on consumer purchase decisions.
Table 3.2: Green Product Scale (GPR)
Coding Adapted Scale of Green Product (GPR)
GPRl I will frequently buy the green FMCG products of the company meet or exceed the requirement of environmental regulations.
GPR2 1 will buy the green FMCG products of the company that consumes the least amount of resources and energy.
GPR3 1 buy the green FMCG products of this company that are easy to recycle, disassemble, decompose and reuse.
GPR4 I buy the green FMCG products of this company result in minimum environment damage
The Corporate Social Responsibility (CSR) scale, developed from the foundational work of Mawarni, I., & Muzammil, O M (2023), incorporates four observed variables The research team opted to utilize these four variables, designated as CSR1 to CSR4, for their survey.
Table 3.3: Corporate Social Responsibility Scale (CSR)
Coding Adapted Scale of Corporate Social Responsibility' (CSR)
CSRl I would pay more to buy green FMCG products from a company having activities that make a positive contribution to society.
CSR2 I would pay more to buy green FMCG products from a company that indicates a form of concern for environmental protection.
CSR3 1 would pay more to buy green FMCG products from a company whose
CSR activities benefit the community.
CSR4 I would pay more to buy green FMCG products from a company that was able to foster a positive outlook and my interest in their products.
The purchase decision scale is based on the study of Suki and Norazah Mohd
(2013) with three indicators The research team decided to use three observed variables and symbols from PD1 to PD3 for the purchase decision variable to survey.
Table 3.4: Purchase Decision Scale (PD)
Coding Adapted Scale of Purchase Decision (PD)
PDl I choose to buy green FMCG products that are environmentally friendly.
I buy green FMCG products even if they are more expensive than the non-green ones.
PD3 I prefer green FMCG products than non-green products.
The customer satisfaction scale, derived from Mohd Suki's 2017 study, originally included four observed variables However, the research team expanded this to five observed variables, labeled from Sail to Sat4, to effectively assess the impact of green marketing and corporate social responsibility (CSR) on customer satisfaction, with purchase decisions serving as a mediating factor.
Table 3.5: Customer Satisfaction Scale (Sat)
Coding Adapted Scale of Customer Satisfaction (Sat)
Satl 1 am satisfied with my decision to purchase the green FMCG products Sat2 1 am glad to purchase the FMCG green products
Sat3 I believe that I do the right thing in purchasing these green FMCG products.
Sat4 I feel that I contribute to the environmental protection and sustainable development
The customer loyalty scale, developed from the research of Chang and Fong (2010), utilizes three observed variables, denoted as Loyl to Loy3, to assess the impact of customer satisfaction on loyalty.
Table 3.6: Customer Loyalty’ Scale (Loy)
Coding Adapted Scale of Customer Loyalty (Loy)
Loyl I will continue to do shopping with this company
Loy2 1 am willing to recommend my family and friends to do shopping with this company
I can accept the higher price of the green FMCG products, even though the price of other general products (not green products) are cheaper than that of green FMCG products.
Preliminary quantitative research
A preliminary quantitative study was conducted to assess the reliability, convergence, and distinctiveness of the measurement scales developed by the research team Following this, we created a survey using Google Forms for the initial investigation Utilizing a convenient sampling method, we shared the survey link with consumers in Ho Chi Minh City, primarily targeting individuals in the Fast Moving Consumer Goods (FMCG) sector A total of 315 participants provided valuable feedback, which will be used for preliminary analysis.
Most of the concepts in the study met the requirement for Outer loading when the observed variables of these concepts all had values greater than 0.7 (Hair et al.,
In the analysis, all latent variables, except for Loy3, met the reliability standards, with Cronbach's Alpha coefficients ranging from 0.6 to 0.7, though not reaching the ideal level of 0.7 (Hair et al., 2017) The Composite Reliability (CR) for each latent variable exceeded 0.7, confirming their reliability and internal consistency Additionally, the Average Variance Extracted (AVE) coefficients ranged from 0.554 to 0.774, surpassing the 0.5 threshold for convergent validity The HTMT index values were all below 1, indicating strong discriminant validity (Garson et al., 2016).
Preliminary research involving 315 respondents shows that the measurement of concepts in the study demonstrates high reliability, convergent validity, and discriminant validity Consequently, all observed variables are deemed appropriate for formal quantitative research.
Formal quantitative research
Formal quantitative research tries to evaluate the measurement model while examining the structural model.
Justifying the sample size in an empirical study is essential, as an insufficient sample may hinder the detection of significant effects, while an excessively large sample could lead to unnecessary expenditure of time and resources.
One widely used method for estimating sample size in PLS-SEM is the 5-times rule, which suggests that the sample size should be a minimum of five times the number of observed variables in the study model (Noordzij et al., 2011; Hair et al., 2010).
As a result, the proposed research model has 22 observed variables, implying that a minimum sample size of 110 observations is required.
To ensure reliable statistical results in challenging data collection scenarios, a minimum sample size is essential for effective value assessment However, a sample size of 110 is insufficient for meaningful research outcomes given the complexity of observed variables Consequently, the author recommends a sample size of 315 observations to account for potential non-responses, incomplete data, or unsatisfactory responses.
This research focuses on survey participants with purchasing experience in fast-moving consumer goods (FMCG) within Vietnam The author utilizes convenience sampling, emphasizing the selection of easily accessible and straightforward elements.
The author conducted research using a tailored survey created with Google Forms, which is divided into four sections The first section collects personal information from respondents, including gender, age, occupation, and income level The second section contains filtering questions to identify the appropriate survey subjects The third section focuses on key questions designed to assess the level of agreement with various statements related to the study's objectives.
This study explores six key variables: green promotion, green products, corporate social responsibility, purchase decisions, customer satisfaction, and customer loyalty These elements are crucial in understanding consumer behavior and preferences in the context of sustainable practices We appreciate your valuable time and participation in this survey, which contributes to our research.
After designing the survey, the author utilized Google Forms to create an online link, which was then shared with respondents via social media platforms such as Zalo, Facebook, and Messenger Initially, the survey was distributed among family, friends, and colleagues, who helped expand its reach by forwarding it to others Subsequently, the author targeted student groups, including those involved in "Study," to further distribute the articles and questionnaires.
Group UEH" on the Facebook platform and the learning forum.
Prior to data entry, processing, and analysis, received questionnaires undergo a thorough review to identify and eliminate any incorrect or contradictory responses The validated data is then entered into Microsoft Excel, where it is meticulously checked and screened again to ensure accuracy before proceeding with data analysis.
In this study, SPSS 20 was utilized for descriptive statistical analysis to examine the research sample's characteristics, including gender, age, marital status, education, workplace, seniority, and income percentages For assessing the reliability, convergent validity, and discriminant validity of both the measurement and structural models, SmartPLS 4 was employed Partial least squares structural modeling (PLS-SEM) was chosen for structural model analysis due to its effectiveness in handling non-normally distributed data, small sample sizes, and complex models (Hair et al., 2019) Moreover, PLS-SEM demonstrates minimal bias when estimating crowdsourced data in synthetic models (Hair et al., 2016).
❖ Assessment of indicator reliability (Outer loading)
The initial phase of evaluating the measuring model involves assessing indicator reliability via outer loading, with a threshold set at 0.7 as recommended by Hair et al (2017) An indicator is deemed reliable when its outer loading exceeds 0.7, signifying that the latent variable accounts for over 50% of the indicator's variance Therefore, the reliability of the indicators can be considered acceptable.
Cronbach’s Alpha and Composite Reliability are essential metrics for assessing the reliability of research scales, as highlighted by Hair et al (2017) These measures indicate the correlation among indicators within the same factor Both Cronbach's Alpha and Composite Reliability generally yield comparable results, with values ranging from 0.6 to 0.7 considered acceptable in exploratory research, although values exceeding 0.7 are deemed optimal for robust reliability.
Convergent validity mentions the high degree of correlation between indicators
To assess convergent validity in SmartPLS, we utilized the average variance extracted (AVE) As noted by Hock & Ringle (2010), a scale achieves convergent validity when the AVE exceeds 0.5 This threshold signifies that the average latent variable accounts for at least 50% of the variance in the indicator.
Discriminant validity is essential for demonstrating the distinctiveness of a construct in relation to others within a model, characterized by low correlation or significant differences between constructs (Hair et al., 2017) Garson (2016) notes that a HTMT index below 1 confirms discriminant validity between two latent variables While the traditional Fornell-Larcker criterion (1981) is also used for assessment, the HTMT index is often favored for its stricter evaluation of discriminant validity.
After evaluating the measurement model, the next crucial step is to assess the structural model to analyze the relationships between research concepts In conducting this evaluation using SMART PLS, three key aspects are considered: (1) the assessment of multicollinearity, (2) the measurement of the coefficient R², and (3) the assessment of hypotheses.
Multicollinearity arises when latent variables in a structural model are fully correlated, leading to less reliable statistical inferences (Hair et al., 2019) This statistical phenomenon occurs when multiple independent variables are correlated within a model To assess multicollinearity, we utilized the PLS Algorithm and the Variance Inflation Factor (VIF) index A higher VIF indicates a greater degree of collinearity among the latent variables As noted by Hair et al (2019), a VIF value exceeding 5 suggests a high likelihood of multicollinearity, while values between 3 and 5 indicate a moderate probability of this issue.
VIF value < 3 can be free of multicollinearity.