Critical factors affect consumers purchase intention towards greeen products in ho chi minh city

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TRAN HUY BAO CRITICAL FACTORS AFFECT CONSUMERS’ PURCHASE INTENTION TOWARDS GREEN PRODUCTS IN HO CHI MINH C

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

TRAN HUY BAO

CRITICAL FACTORS AFFECT CONSUMERS’ PURCHASE

INTENTION TOWARDS GREEN PRODUCTS

IN HO CHI MINH CITY

ID: 22120003

MASTER OF BUSINESS (HONOURS) SUPERVISOR: Dr Vo Xuan Vinh

ACKNOWLEDGEMENTS

I would like to express my greatly appreciation in thanking people who helped me to complete this thesis Firstly, I am very grateful to my advisor, Dr Vo Xuan Vinh, for his valuable advices I especially appreciate his continual support in responding, reminding, and assisting in all aspects of this endeavor

On the other hand, I would like to thank my colleagues, friends and classmates for their valuable encouragement during months that I was working on this thesis Special thanks for people who spent their precious time with me in both pilot and main surveys

Finally, I would like to express my heartfelt thanks to my family for their support, their encouragement, and their faith during the time I accomplish my thesis

value and green advertisement which are considered in order to test influence on consumers’

purchase intention This research aims to find out which and how factors of green product affect purchase intention and from that, give recommendations

By applying both qualitative and quantitative method, the data is collected through in-depth surveys Then, the collected data is analyzed by SPSS software According to reliable results, this paper proposes recommendations for corporations which want to develop green product line

Keywords – Purchase intention, eco-label, green packaging, green corporate perception, green product value, green advertisement

TABLE OF CONTENTS

LIST OF FIGURES 6

LIST OF TABLES 7

CHAPTER 1: INTRODUCTION 8

1.1Research Background 8

1.2Research gap 9

1.3Research Objectives 10

1.4Research scope 10

1.5Research structure of thesis 11

CHAPTER 2: LITERATURE REVIEW 12

2.1 Green product 12

2.2 Purchase intention 13

2.3 Eco - label 15

2.4 Green packaging 16

2.5 Green corporate perception 17

2.6 Green product value 17

2.7 Green Advertisement 18

2.8 Conceptual model 19

CHAPTER 3: RESEARCH METHODOLOGY 20

3.1 Research approach 20

3.2 Sampling 20

3.3 Data collection methods 21

3.4 Measurement scales 22

3.4 Data analysis methods 24

CHAPTER 4: DATA ANALYSIS AND RESULTS 26

4.1 Respondents’ demographics 26

4.2 Reliability Analysis 28

4.3 Exploratory Factor Analysis (EFA) 31

4.3.1 EFA for independent variables 31

4.3.2 EFA for the dependent variable 33

4.4 Correlation Testing 34

4.5 Multiple Regression Analysis 35

CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATIONS 40

5.1 Main findings 40

5.2 Managerial implications 43

5.3 Limitations and future research 44

REFERENCES 46

APPENDIX A 52

APPENDIX B 58

APPENDIX C 63

APPENDIX D 65

LIST OF FIGURES

Figure 2.1: A Research Model……… … 19

LIST OF TABLES

Table 2.1: Objectives for a green product……… 13

Table 4.1: Respondents' characteristic……… 27

Table 4.2a: Reliability Statisticsa……… 29

Table 4.2b: Reliability Statisticsb………30

Table 4.3: KMO and Bartlett's Test of Independent Variables……… 31

Table 4.4: Rotated Component Matrix for Independent Variable……… 32

Table 4.5: Table KMO and Bartlett's Test……… 33

Table 4.6: Rotated Component Matrix for The Dependent Variable……….33

Table 4.7: Correlations……… 34

Table 4.8: Model Summary……… 35

Table 4.9: ANOVA………36

Table 4.10: Coefficients……….36

Table 4.11: Summary of hypotheses testing result………39

Table 5.1: Research questions, related hypotheses and results……… 40

CHAPTER 1: INTRODUCTION 1.1 Research Background

Nowadays, modern industry develops with gigantic growth rate Along with both population and economic growth, the world is facing environmental degradation including Vietnam The Doi Moi policy which was started by government in 1986 has brought high economic growth rate but it also causes harm in environment Evidently, ten years later, Quy

Vo (as cited in Mai & Nguyen, 2003), who is president of the Center for Natural Resources and Environmental Studies at the National University in Hanoi, stated that “Vietnam is being confronted with a number of serious Environmental problems, including deforestation, degradation of land resources, shortages of fresh water, over-exploitation of biological resources, threats to ecosystems, and increasing pollution”

Because modern industry brings many problems; hence, it is responsible to find out solution Government appeals incessantly to everyone for environmental protection which contributes to increase people’s awareness “The mass media in Vietnam have recently begun

to distribute a large quantity of news related to various environmental problems” (Pham & Rambo, 2003) For this reason, people might be aware of the associations between major environmental issues, such as water and air pollution, land degradation and chemical contamination, and everyday consumption items, such as clothing, food, housing and transport (Adams, 1990; McKusick, 1990) Simultaneously, people increasingly recognize environmental problems which increase by manufacturing activities in the world (Chen, 2011) Therefore, people take consumptions not only for needs but also green, cleanliness and environmental friendliness of products, guarantee for future life of their progeny “More and more consumers have started to assess the environmental impact of product/service choices and to change their behavior in purchasing, consuming and dispensing of the product” (Ting, 1991) For instance, over 70 percent of Americans reported that they contributed to protect environment, and 49 percent said that they would avoid buying harmful environmental products (Hueber, 1991) Especially, in Vietnam, people have recently begun to pay attention

to environmental issues A research refers that “Respondents’ concerns about the environment are based primarily on their own personal experiences and observations In other words, they

are concerned about environmental problems that they can directly sense (e g., smell, see, hear) or that directly affect their health and lives.” (Pham & Rambo, 2003) Indeed, in the case of Vedan, consumers immediately ostracized Vedan when that company eliminated harmful toxic for health of people living near Thi Vai River (Ngo, 2011)

To put forward an effective solution, marketing researchers appreciate consumers’ growing environmental consciousness and begin to recognize the value of green products Based on the findings of the previous articles, the researcher comes to the point that people become more concerned about the environment as well as green products Actually, people are becoming more knowledgeable about nature and ecology and the positive impact of the green products on nature There are so many articles, comments, evaluations, definitions or issues that concern green products topic Conceivably, “More and more companies are involved in turning the region’s growing environmental awareness into an expanded business opportunity rather than an obstacle.” (Barrett, 1990) Consequently, in early 1980s, green marketing began in Europe and became more and more popular in other continents (Preece, Pheng, Padfield & Padfield, 2011) For the time being, green products are brought into the world such as recycled paper, environmentally-friendly packaged products, energy-efficient light bulbs, electric steam irons, cleaning goods as well as organic foods

1.2 Research gap

Around the world, green marketing developed with many practical activities and was also a field research in many companies Foreign countries like Europe and North America conducted many researches about green marketing, especially consumers’ green purchase behavior, in order to support for marketers (Afzaal, Ali, Israr & Waseem, 2011) Furthermore, previous researches conducted to identify young consumer intention buying green products

in Hong Kong (Lee, 2010) or investigated green products through green energy, consumption, constructional materials in Sweden (Haraldsson, 2001; Rex & Baumann, 2007; Emilsson, 2008) However, this is still rather new form of marketing and has not yet been researched much in the context of Vietnam The consumer purchase intention on green products are also not involved in Vietnam Hence, companies are discreet in manufacturing “Green” for their products accordingly because of special process which guarantees low pollution, resource

saving and safety for health If any company takes the lead in the application of this kind of marketing, it will attain competitive advantages as well as positive evaluation from consumers “Not only does environmental responsiveness help organizations to remain competitive and increase market share but also there is some evidence showing increases in customer loyalty” (D’ Souza et al., 2006)

In general, green products are not only unfamiliar to consumers in Vietnam but also rare researched in the awareness of consumer purchase intention Therefore, there is an urgent quest to investigate the critical factors affect green purchase intentions of consumers in order

to fill in the research gap in developing green marketing

1.3 Research Objectives

By improving environment in Vietnam and achieving the success in green products, this research is to support for corporations which find out the relationship between specific factors and consumers’ purchase intention of green products in Ho Chi Minh City In order

to evaluate problems above, this study aims to answer for these following research questions (RQ) below:

RQ1: Is there a positive relation between eco-label and consumers’ purchase

intention in Ho Chi Minh City?

RQ2: Is there a positive relation between green packaging and consumers’

purchase intention in Ho Chi Minh City?

RQ3: Is there a positive relation between green corporate perception and

consumers’ purchase intention in Ho Chi Minh City?

RQ4: Is there a positive relation between green product value and consumers’

purchase intention in Ho Chi Minh City?

RQ5: Is there a positive relation between green advertisement and consumers’

purchase intention in Ho Chi Minh City?

can not be studied in all cities of Vietnam Therefore, the study framework is carried out in

Ho Chi Minh City where is considered as the most important economic center of Vietnam Additionally, this research only concentrates on consumers who are over 18 years old have greater or equal middle income level

1.5 Research structure of thesis

The research structure is organized as follows:

- Chapter 1 presents the research background, research gap, research objectives, and research scope

- Chapter 2 introduces the conceptual model and its hypotheses as well as its literature review

- Chapter 3 illustrates the research methodology conducted in this paper

- Chapter 4 presents research results which are based on data collected

- Chapter 5 summarizes the research results, provide the findings and recommendations

CHAPTER 2: LITERATURE REVIEW

This chapter mainly introduces theories which are proposed by many scholars in academic field, and theoretical model in order to create foundation for this research Firstly, the general introduction is about green products and definition of dependent and independent variables are discussed in this section On the other hand, the related theories of each factor, including eco-label, green packaging, green corporate perception, green product value and

green advertisement affect green consumers’ purchase intention are discussed respectively

Finally, this chapter proposes theoretical model which its constructs and hypotheses are discussed

2.1 Green product

Firstly, it is necessary that finding out the products which nearly involve environment called environment sensitive commodities (Wuttke, Skrylnikov, Kutonova & Yevseyev, 2011) These products eliminate the cause of environmental pollution, the cause of national resource degradation or the cause of human health, etc… In order to manufacture the products which should be friendly with environment becomes essential, called “green products” A product, satisfies some criteria, should be called “green” According to Department of Natural Resources and Environment of Thanh Hoa Province (2009), it stated that:

A product is created from environmental friendly materials It means the product includes recycled commodities, instead of new and raw materials that called a green product

A product brings safe and healthy environment for human beings instead of traditional toxic products For instance, the materials replace the preservation of woods like creosote, as considered the compound causing cancers

A product decreases the effect of environment when using (small toxic, small cost of service, using recycled energy) Lots of Europeans reuse glass milk bottles, decreasing the proportion of using plastic milk bottles Hence, the glass milk bottles can be recycled easily for long usage

A product creates the friendly relationship of environment and safety for human health

In details, green products associate closely to human life in housing, eliminate the

spread of pollution throughout ventilation and air filter of eco- air conditioning Tan and Lau (2010) defined terminology of green product as product which associates with corporate strategy in recycling or with recycled content, reducing packaging, using less toxic materials to diminish bad green product is characterized by features such as “original grown, recycle/ reusable, contain natural ingredients, contain recycled content, do not pollute environment, contain approved chemical and not test on animals” (Panvan, 2010) Moreover, Shamdasami et al (1993) stated that green products as the product that will not pollute the earth or deplore natural resources, and can be recycled or conserved In general, Roy, Wield, Gardiner and Potter (1996) depicted green product through its objectives showed in Table 2.1

Table 2.1 : Objectives for a green product

 Capable of lessening global environmental problems

e.g eliminate CFCs (chlorofluorocarbons); reduce CO2 (carbon dioxide) emissions

 Energy efficient

 Easily repairable

 Designed to last , or to be reused, reconditioned or recycled

 Generates minimum pollution and waste

 Can be disposed of safety

 Minimal use of materials, including packaging

 Manufactured, if possible, locally and from locally obtainable materials to reduce transport requirements

 Environmental information on product available to purchaser

 Not harmful to human health

 Satisfies a genuine human need

2.2 Purchase intention

According to Whitlark, Geurts and Swenson (1993), purchase intention is a purchase probability associated with an intention category at the percentage of individuals that will actually buy product They are indications of how hard people are willing to try, or how much

of an effort they are planning to exert in order to execute the behavior; in short, the stronger the intention to engage in certain behavior, the more likely an actual behavior would be performed (Ajzen, 1991) Nik, Jusoff and Kassim (2009) referred green purchase intention as the probability and willingness of a person to give preference to products having eco-friendly features over other conventional products in their purchase considerations Similarly, Chen

and Chang (2012) defined green purchase intention as the likelihood that a consumer would buy a particular product resulting from his or her environmental needs Constructs like considering something purchasing a brand and anticipating to purchase a brand aids to scope the intentions of purchasing (Porter, 1974) Porter (1974) also elaborated customers’ intention

to purchase a focused brand is not merely by his same brand attitude, but also by his attitudes leading to other brands in choice of set considered Porter (1974) explained that customers buying behavior also depend on the level of existing competition in the industry Schoen (2004) explained a type of loyal customer, whose purchase intention is insensitive to pricing and the show their loyalty by suggesting positive recommendations to firm and even investing money in the brand which show their extreme trust in the brand

Besides, Chan (2001) defined green purchase as a specific kind of eco-friendly behaviour that consumers perform to express their concern to environment Purchase intention is a critical factor to predict consumer behaviour (Fishbein & Ajzen, 1975) Consumers’ intention has been used as a proxy for actual behaviour (Follows & Jobber, 1999) Kotler and Armstrong (2001) argued that, in the evaluation stage, the consumer ranks brands and forms as part of the considerations in the purchase intention process Purchase intention are completely under the consumer's volitional control (Dodd, 2010) There were also other scholars who have conducted similar studies on purchase intention Anand, Holbrook, and Stephens (1988) and Laroche, Toffoli, Kim and Muller (1996) testified the advertising endorser's exposure rate can change consumer's preference and attitude and promote purchase intention Wang (2006) used brand image as independent variable, product category as moderator, and purchase intention as dependent variable and found that the higher the brand image is, the higher the purchase intention Moreover, Kamins and Marks (1991) and Laroche

et al., (1996) found that consumer's brand attitude and purchase intention will be higher when

a product has high preference image and familiarity In the context of purchase intention for the green product, Iman and Zainuddin (2011) concluded that the perceived government legislation did not have an influence neither on environmental attitude nor purchase intention

Ng and Paladino (2009) conducted an empirical investigation amongst young consumers within the Australian context on the purchase intention on green mobile phones The study

indicated that peers and environmental knowledge appeared to be significant factors in encouraging green purchase In any circumstances, consumer’s purchase intention is kind of the intention which consumer has interesting thought and then makes a decision to buy; first impression always takes shape in consumers’ mind that becomes an intention In fact, intention is the best predictor of behavior (Ajzen, 1991)

2.3 Eco - label

Label is considered as an important tool to communicate with consumers about information, characteristics, functions and assertion of safety of product According to D’Souza, Taghian, Lamb and Peretiatkos (2006), environmental labelling on products is an effective way of communicating to the customer the specific benefits and characteristic of the product and the claim of safety; thus, label is measured by accuracy and easiness to read Sammer and Wustenhagen (2006) advocate eco-label as an important marketing tool to overcome market failure due to information asymmetries between buyers and sellers of environmental friendly products Marketers communicate green of brand to consumer through information claims on label; for example, “eco ‐ friendly”, “environmentally safe”,

“recyclable”, “biodegradable” and “ozone‐friendly” (Morris et al., 1995) Likewise, Elham and Nabsiah (2011) developed a conceptualized model that investigated the effects of eco-label, eco-brand, and environmental advertising on consumers’ purchasing behaviour in Penang, Malaysia They suggested that these three marketing tools are useful in enhancing consumers’ knowledge about environmental friendly products and their ability to distinguish between green products and conventional products Eco-label is a mean of information tool that usually utilized logo to convey information to consumers on the environment implications

of buying such product (Tang et al., 2004) Sonderskov and Daugbjerg (2011) described label as a product claim to furnish consumers with credible and easily accessible information

eco-on the envireco-onmental attributes of a product Moreover, some previous researches showed that eco labels have an effect on consumer perception and behavior in the positive way as well as help companies expand market share (Kuhn, 1999; Rashid, 2009) Philips products that have a Green logo offer consumers and society an environmental improvement of energy efficiency, recycling, disposal and lifetime reliability Based on this discussion, the following

hypothesis (H1) is proposed

H1: Eco-label positively affects purchase intention towards green products

2.4 Green packaging

Van Dam and Van Trijp (1994), in their attemp to unveil consumers’ perceptions and

preference for beverage containers in the Netherlands, define green packaging as to the extend consumers recognize environmental aspects in their overall preference formation Packaging

is communication tool between businesses and consumers and it is capable of attracting consumers’ attention Consumers’ overall perception of packaging is a sum of individual perspective of packaging shape, size, colour, materials, and labelled information According

to Gaafar and Ra’id (as cited in Panwar, 2004), packaging is to contain, protect and present the information through sequence of producing, handling and transporting good to the point

of arrival with state of good as the moment of production In the other point of view, Joonas and Liisa (2008) stated that packaging research had focused on communicative characteristics

of the package such as labeling, functionality, colour, size (Roper & Parker, 2006; Silayoi & Speece, 2007) On the other hand, in the field of environment, Lamb et al defined the terminology of packaging associated with four functions In that, three functions is relatively similar to non-green products are contain and protect products, promote products, and facilitate the storage, use and convenience of products and the fourth role of packaging is important with function of recycling and reducing environmental damage In a more recent study, Juwaheer, Pudaruth and Noyaux (2012) analyzed the impact of green marketing strategies on consumer purchasing patterns in Mauritius, and developed a conceptualized model that consisted of five predictor variables One of the predictor variables is consumers’ perceptions towards green packaging, and eco-labelling is conceptualized as a two-dimensional variable with three measurement items for green packaging and two measurement items for eco-labelling Additionally, Rosa and Devashish (2010) researched, interviewed and stated that initiatives for packaging include use materials which are natural, biodegradable or recycled The following hypothesis (H2) is proposed

H2: Green packaging positively affects purchase intention towards green products

2.5 Green corporate perception

Okada and Mais (2010) describe that green companies are contrasted with non-green companies in the extend to which they take proactive measures in environmental sustainability and position themselves based on environmental philosophy Furthermore, Aysel (2012) stated that strategies targeting not only making a profit for the day but also for long-term profitability and environmentally friendly sustainability have started to become agendas of the companies Corporate ethical code of the 21st century is being green Companies should be aware of their responsibilities towards the environment and the society

in the same way as towards clients, shareholders and employees Climate change, environmental issues and social problems will challenge the leaders of future generation for taking efficient and comprehensive decisions (Aysel, 2012) The basic concern for most businesses is more an attempt to manage their firm’s resources towards environmental impacts effectively and efficiently, rather than the restructuring of the business and their market offerings around environmental safety issues (D’Souza et al., 2006) Corporate perception, which is evaluated through socially responsibilities and environmental concerns

of organizations by customers, influences on consumers’ purchase intention Corporate perception about environmental protection has accepted into organizational strategy with managing their resource effectively, rather than restructuring business Besides, the challenge

of firms is to balance environmental concerns with profit and competition in the market (D’Souza et al., 2006) Based on these considerations, the hypothesis (H3) follows

H3: Green corporate perception positively affects purchase intention towards green products

2.6 Green product value

A study by Bhaskaran et al (2006) indicated that customers do not perceive those products produced under environmental sustainable standards as offering any distinct benefits

to them and customers distrust the claims made by these organizations This is the way consumer perceives about safe of product in aspect of quality and price (D’Souza et al., 2006) Characteristics of traditional product such as brand name, price and quality are still the most concern of consumer when purchase product Green products are perceived as lower quality and higher price by most consumers In addition, these products are more costly to

manufacture than conventional products, and thus, they are simply more expensive for consumers to purchase (Royne et al., 2011; Sonderskov and Daugbjerg, 2011) Hence, Chen and Chang (2012) suggested that companies should develop products with both green features and high-value attributes to attract consumers They further argued that increasing consumer perceived value about green products may make customer no more doubtful about green products and enhance consumers’ purchase intention Therefore, green products also have to create competitive advantage about not only environmental aspects, but also other important product characteristics like price, quality, convenience and durability (Diamantopoulos et al., 2003) The green product value indicates the hypothesis (H4)

H4: Green product value positively affects purchase intention towards green products

2.7 Green Advertisement

Most consumers can not be sure to identify whether a product is really green or not Labels can not communicate all content of product to make consumer trust Therefore, advertisement is a tool to help marketers spread out green message of product to consumers more easily and efficiently Elham and Nabsiah Abdul (as cited in Chase & Smith, 1992) stated that environmental messages in advertisements and product labeling was found to

“sometimes” influence the purchasing decisions of 70 percent of the respondent In addition, consumers are more positive with green product in the condition that environment message

of product is credible (Habib et al., 2010; Mathur and Mathur, 2000) Whereas Chan (2004) defined green advertisement as claims that the attributes of the advertised product or associated production process contributed to environmental protection or with other positive effects to the environment Corporate environmental advertisement typically contains three elements (Davis, 1994): First, the advertisement presents a general statement of corporate concern for the environment Second, the advertisement describes how the corporation has initiated a number of activities to demonstrate its concern and commitment towards environmental improvement Third, the advertisement provides a description of specific environmentally related activities, in which the corporation is engaged and / or outcomes for which the corporation takes credit Based on the previous researches, consumers’ affective responses are influenced by other ads, consumers’ emotions and the current circumstance

(Gardner, 1985; Aaker et al., 1986) Therefore, how the consumers feel about the ad that they

are exposed will affect their assessments of the brand (Edell & Burke, 1987) The study of

consumers’ attitudes towards green advertising has been very comprehensive Consumers

who are environmental concerned normally have generated positive attitudes towards green

advertising and environmental issues (Carlson et al., 1993) From that, the hypothesis (H5) of

green advertisement is indicated

H5: Green advertisement positively affects purchase intention towards green products

2.8 Conceptual model

The main purpose of this study is to investigate if consumers’ perception on green

corporate, eco-label, green advertisement, green packaging, and green product value

influence their green purchase intention in Ho Chi Minh City

In Ho Chi Minh City, green product has new features which consumers are familiar

with; thus, they could not have enough experience to evaluate a green product Consequently,

the research model with factors affecting directly on purchase intention about green products

CHAPTER 3: RESEARCH METHODOLOGY

This chapter presents research methodology of this study Firstly, it started with research approach, introduced about methods using for this research Secondly,

measurement scales are followed by sampling and data collection methods Thirdly, data collection methods are mentioned in this chapter Finally, this chapter also aimed at data analysis methods and presenting the purpose of using that method

3.1 Research approach

This research mainly applies quantitative method while qualitative method is used to support Quantitative method aims to collect, analyze the data in order to come up with findings Qualitative method helps to build and improve the survey explain more clearly for findings and results which is analyzed by quantitative approach Concerning to the qualitative phase, the Vietnamese version of the survey questionnaire is pre-tested using in-depth interviews during two weeks with five experts to collect their ideas about the accuracy, the clarity, and the understandability of the questionnaire During the interview, the author decides to find out if the chosen measurement scale is suitable for conducting the research in

Ho Chi Minh City All the comments from the interviewees are gathered with the aim to modify the measurement scales

3.2 Sampling

The survey is conducted in Ho Chi Minh City where is the most populous city The target population is green consumers who are belong to many social backgrounds such as office staff, teacher, businessman, doctor, engineer, etc…They have quite clear overview that green products include energy – efficient light bulbs, eco bags, recycled paper, electric steam irons, organic foods and over in the survey Especially, the survey concentrates on office staff

in corporation groups including Petrovietnam, Vinamilk and Bankings The survey is sent to these places by directly hand, email or post In details, this research exploits the quantitative

method (questionnaire survey) to empirically examine the relationship between eco-label,

green packaging, green corporate perception, green product value, green advertisement and the purchase intention

Furthermore, the target respondents of this research are individual consumers who are over 18 years old, with the assumption that this group of consumers has middle income and over, being aware of green products and independent in their own decisions for choosing the right products among many available choices

In terms of sample size, Haire et al (2009) stated that the minimum sample for appropriate use for statistic analysis is equal to or greater than five times of number of variables, but not less than 100

n>=100 and n>=5k (k: number of variables)

The model in this study consists six factors with twenty-six variables, thus, at least the necessary sample size should be: 5*29=145 observations

For Exploratory Factor Analysis, a general rule is that the minimum sample size is to have at least five times as many observation as the number of variables to be analyzed and larger than 100 (Hair et al., 2009) This the minimum sample size by EFA in this research is: n=5*29=145 observations

3.3 Data collection methods

Before collecting data, the pilot study is carried out to test preliminarily the viability

of the questionnaire and to see if there are any needed modifications or improvements The in-depth interviews are conducted in order to modify and revise all observed items of the draft questionnaire to make improvement for the official questionnaire

Convenience sampling is conducted for the sampling process in the study The original English questionnaire is translated into Vietnamese and back translated for validity check purposes Participants are self-completed surveys with most of items measured by 5-point Likert scale The questionnaire is divided into two sections The first section explores demographics information which include living place, gender, age and education of the respondents Such information is used to classify and compare groups of respondents.Furthermore, this section includes a screening question to identify exactly the target respondent

of this survey Screening question is the following question: “Have you ever heard about green products?” The respondents will answer this question before starting doing the survey

If anyone answers “No” meaning that they are not the target respondents of this survey and

they will stop their job The second section explores the determinants affecting to the consumers’ purchase intention towards green products

The questionnaires are delivered to respondents through two ways of handling directly

to respondent or indirectly by email which suggests using online Google Drive to survey.A cover letter is also attached explaining the purpose of the study Moreover, informed consent, explanation of study, procedure of maintaining confidentiality, and detailed instructions on how to complete the questionnaire successfully is included For those questionnaires completed through hard copy format, the data is entered manually For those questionnaires completed through the Google Drive web link, the data is converted into a database in an SPSS format file for analysis

3.4 Measurement scales

This study will examine relation between factors of green products and purchase intention The measurement scale for this research is built and mainly based on measurement scale of Wilson et al (2014) Besides, items are referred from other measurement scales which are suitable for the consumers’ purchase intention towards green products in the context

of Ho Chi Minh City Items are measured by 5-point Likert scale (1= strongly disagree, 2= disagree, 3= neutral, 4= agree, 5= strongly agree)

The green products constructed in this study were multi-dimensional constructs, which comprised of five independent variables; namely, eco-label, green packaging, green corporate perception, green product value and green advertisement In detail, eco-label is assessed by using a 5-item measure: Wilson et al.’s 3-item eco-label scale (2014) and Thanika et al.’s 2-item label scale (2012) Actually, eco-label is conceptualized as a single-dimension variable that consists of five items, ranging from consumers’ recognition of various eco-labels, use of eco-labels, the comprehension of the meaning of eco-label, and trust of the eco-label’s message (Wilson et al., 2014)

EL1 I consider what is printed on eco-labels to be accurate

EL2 The information on eco-labels is usually easy to understand

EL3 Green label is prerequisite criteria to consider a green product

EL4 Green advertisements are always trustworthy

EL5 Sufficient information is provided on eco-labels

Green packaging is measured using the scale developed by Wilson et al (2014) This scale contains five items which each respondent is asked to indicate either agreement or disagreement with each of five items using a 5-point Likert scale

GP1 That the packaging is made from recyclable materials

GP2 That the packaging is biodegradable

GP3 That the packaging is recyclable

GP4 That the packaging is reusable

GP5 That the product has no excessive packaging

Green corporate perception is conceptualized as a single dimension variable based on

a study by D’Souza et al (2006) and Smith and Perks (2010) D’Souza et al (2006) offered measurement scale with 2 items like companies should give priority to reducing pollution even if jobs are at risk, and companies should aim to reduce pollution than increase profit Furthermore, Smith and Perks (2010) indicated a 3-item measure which is greening the business functions by the corporation

GCP3 Companies create byproducts, recycle and re-use to eliminate waste

GCP4 Companies use alternative energy sources in production and manufacturing processes

GCP5 Companies use space - saving warehousing or storage facilities to reduce environmental impact

Based on the study by Wilson et al (2014), the green product value is assessed by using a 5-item measure

GPV1 This product’s environmental performance meets my expectations

GPV2 This product’s environmental functions provide very good value for me

GPV3 I purchase this product because it has more environmental benefits than other products

GPV4 I purchase this product because it has more environmental concerns than other products

GPV5 I purchase this product because it is environmentally friendly

Green advertisement is based on measurement scale of Wilson et al (2014) and Thanika et al (2012) Hence, green advertisement which is conceptualized as an independent variable comprises 5 items

GA1 Green advertisements are attractive

GA2 The contents of green advertisements are of great relevance to my daily life

GA3 Green advertisement should promote environmental friendly products in a

credible manner.

GA4 Environmental advertisements are not exaggerated for Green Products

GA5 Overall, I’m satisfied with the information currently available on the eco-label of the products I

purchase

Purchase intention towards green products is conceptualized as a single-dimension variable, which is in line with Wilson et al (2014) The green purchase intention scale contains 4 items which is shown below:

PI1 I would buy green products that are not harmful to the environment

PI2 I plan to switch to a green version of a product

PI3 I consider switching to other brands for ecological reasons

PI4 I consider buying green products because they contribute to less pollution

3.4 Data analysis methods

Two methods, Cronbach’s reliability and factor analysis, are used to assess and select the final items (5-point questionnaire responses) that will be employed for hypothesis testing First, Cronbach’s reliability coefficient is calculated for the items of each higher level

construct (e.g., purchase intention) A coefficient of 70 is considered the cut-off level of reliability recommended for theory testing research (Nunnally & Bernstein, 1994) Items that

do not significantly contribute to the reliability will be eliminated in the interests of parsimony

Then Exploratory Factor Analysis (EFA) to examine reliability and validity of the scale measurement Factor analysis is applied to determine whether the items in fact aggregated around their proposed factors, and whether the individual items are loaded on their appropriate factors as intended Factor analysis with a Varimax rotation technique is conducted on all measured items Finally, multiple regression is used to identify the correlation and measure the impact level of each independent variable to purchase intention towards green products After all, results of hypotheses testing are also discussed

CHAPTER 4: DATA ANALYSIS AND RESULTS

Chapter 3 presented research methodology to examine scale validation and analyze the collected data In chapter 4, results of study would be shown and analyzed with sample n=170 First, respondents’ demographics were summarized Secondly, results of scale validation were presented In this section, the data of this research was evaluated through two steps Step 1 used Cronbach’s Alpha and Exploratory Factor Analysis (EFA) to examine reliability and validity of the scale measurement In step 2, the researcher employed multiple regressions to test the five hypotheses Finally, results of hypotheses testing were discussed

4.1 Respondents’ demographics

Data was collected by two methods Firstly, data was collected by using online survey The number of collected online survey was 90 which all were valid for analyzing data Secondly, data was collected by distributing survey directly A number of survey was 87 which only validated 80 surveys gain Besides, 7 surveys were eliminated because of not hearing about green products Therefore, 170 samples were coded and used for data analysis

Initial analysis of data indicated that 94.1% of respondents were living in Ho Chi Minh City Otherwise, only 5.9% of respondents belonged to other regions Besides, the gender was not equally between female and male Female was slight dominant with 51.8% of respondents and male was 48.2% of respondents

Most of the respondents in this study were young people from 25 to 39 years old with 67.1% of total sample The next proportion of age group was 20.6% of 18 and 24 years old Meanwhile, the balance was divided by 6.5% respondents for age group between 40 and 54 years old and 5.9% for the age from over 55 years old

Marital status in this study were mainly focus on single respondents with more than 50% There were a close balance between married respondents and married with children respondents when 1.2% of others were unveiled

Education was divided in 4 groups with bachelor’s degree group occupied 64.1%,

master’s degree group occupied 17.6%, high school diploma or less education occupied 9.4%

Moreover, the percentage of respondents in college group was just 8.8%

Most of the respondents were surveyed by office staff with 60% Meanwhile, 11.2%

of students were the second place in career statistic There were a quite balance between the rest occupations from 4.1% to 9.4%

Finally, income per month of most of respondents was rather high 58.8% respondents revealed that their income ranged from 5 to 15 million VND The balance was divided by 15.3% respondents for income ranged from lower 5 million VND and 15.9% respondents for income ranged from 15 to 30 million VND Moreover, there were just about 6.5% people earned more than 30 million VND every month, and the last portion with the lowest percentages 3.5% was the respondents with the income more than 50 million VND per month

The results of the demographics analysis were summarized in table 4.1

Table 4.1 Respondents' characteristic

Demographic profile

Category Frequency Percentage (%)

Bachelor’s degree 109 64.1

The reliability test for each construct in the measurement scale is really principal step

to ensure the reliability of the instrument developed for this research Thus, Cronbach’s Alpha test is conducted to remove unstandardized scale items Reliability test mentions consistency

of a measure According to Craig and James (2003), the range of Cronbach’s Alpha is from 0

to 1.00; in that, values which approach to 1.00 indicate high consistency Therefore, it require that the value of Cronbach’s Alpha should be above or at least equal 0.6 to guarantee the reliability of each item in measurement scale (Nguyen, 2011) Beside Cronbach’s Alpha, the Corrected Item – Total Correlation is also very important for the reason that item is assumed closely correlated to other items in the scale if the correlation of this item with total of the other items in the scale is higher than 0.3 (Nguyen, 2011) This specific item becomes a good part of this total rating rate Otherwise, if the Corrected item – Total correlation of any item

is negative or too low (less than 0.3), measurement scale should be reviewed if there is any wording or conceptual problems (Leech et al., 2005) Then such items are necessarily to be modified or deleted

In this study, the result indicated significantly high internal reliability of for test items scales including eco-label, green corporate perception, green advertisement and purchase

intention with the value of Cronbach’s Alpha were more than 0.8 Meanwhile, green

packaging and green product value had Cronbach’s Alpha with more than 0.7 The following

tables 4.2 indicates the results for reliability analysis

Table 4.2a Reliability Statistics a Observed Variable Scale Mean if Scale Variance Corrected Cronbach's

Table 4.2b Reliability Statistics b Observed Variable Scale Mean if Scale Variance Corrected Cronbach's

GPV2 11.34 4.960 679 .786

4.3 Exploratory Factor Analysis (EFA)

Result of reliability test showed that 27 items reached the standard and there were two items removed which would be GP2 and GPV3 Therefore, the author conducted exploratory factor analysis with 25 qualified items

Exploratory factor analysis (EFA) is to test validity of these measurement scales Besides, the relationships between variables are investigated In addition, the researcher could see how a large set of items group together under a cluster (Leech et al., 2005) In that, varimax rotation is applied to minimize the number of variables that have high loadings on each factor and get final results Firstly, KMO is an important value to evaluate EFA When KMO≥ 0.90: very good; KMO≥ 0.80: good; KMO≥ 0.70: acceptable; KMO≥ 0.60: so-so; KMO≥ 0.50: bad; KMO< 0.50: unacceptable (Kaiser,1974) Secondly, Bartlett’s Test of Sphericity with significant less than 0.05 (sig < 0.05) indicates that the data is considered as appropriate for factor analysis and variables have relationship with each others On the other hand, Eigen values need to be greater than 1 and total variance explained over 50% is acceptable Therefore, if factor loading of item is less than 0.5, that item will be removed or items that present in two or more factors whose difference is less than 0.30 will be eliminated

From that, the result of the factor analysis of dependent variable is implemented and presented in the table 4.3

4.3.1 EFA for independent variables

Table 4.3 KMO and Bartlett's Test of Independent Variables

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .782

Sphericity

As shown in Table 4.3, KMO was 0.782 (greater than 0.7) which proved that factor analysis was acceptable Bartlett’s Test of Sphericity was with significant of 0.000 (less than 0.05); hence, the hypothesis H0, which referred that items had no interrelationship, was rejected It meant that there was inter-correlation among items which were suitable for EFA

Table 4.4: Rotated Component Matrix a for Independent Variables

Based on the varimax rotation results, no items/variables were removed from the measurement scale because of their high loading (greater than 0.5) The total 23 items of five independent variables grouped into these five components defined by high loadings The items in the same construct after rotated also grouped in only one component with strong loadings and did not mix into the remained component This showed that the items of each construct were well conceptualized.

In addition, the cumulative of the five factors accounted for 68.417 percent of variance (appendix table C1) It meant that more than a half of variance could be explained by five factors

4.3.2 EFA for the dependent variable

KMO equaled 0.825 which was good (Kaiser,1974) In other words, there were enough items to measure each construct The Bartlett’s test was also significant (significance value was less than 5%) showing that the variables were well correlated

Table 4.5: Table KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .825