Analysis of Canadian Consumer Spending Patterns towards Green Products

By Ataei, Hossein; Taherkhani, Farnaz | International Journal of Marketing Studies, April 2015 | Go to article overview

Analysis of Canadian Consumer Spending Patterns towards Green Products


Ataei, Hossein, Taherkhani, Farnaz, International Journal of Marketing Studies


Abstract

This paper aims to investigate the consumer behavior towards purchasing environmentally-friendly or "green" products from marketing analysis and consumer price sensitivity standpoints.

The experimental methodology in this paper is based on statistical analysis of the survey questionnaire results and in-depth interviews with Canadian consumers. This paper indicates that a majority of consumers see added-value for environmentally-friendly products. The spending patterns are studied for different product price groups across customers of different age and genders. Moreover, analysis ofthe consumer price-sensitivityresults for green alternatives and different product categories,it demonstrates that the consumers attribute higher importance tothe green products that have more individual monetary benefits (e.g., energy-efficient products) over the oneswith more social and environmental benefits such as biodegradable products. This article also looks into the existing differences between gender and age groups inthis regards.

Adding the "green" dimension to original purchasing decision-making triangle of price - quality - brand, the findings of this paper illustrate on how the consumer behavior and priorities would differ for lower-end household items compared to more expensive products such as appliances and electronics.

Theseresults provide valuable insight to manufacturers, product managers and marketing directorstoefficiently price and innovatively market their greenproducts without negatively impacting the salesor compromising the profits.

Keywords: Canadian customers, green products, spending patterns, sustainability, marketing analysis

1. Introduction

Over the past decade, there has been an increasing focus on environmental awareness from almost every aspect of daily lives including the educational campaigns to national and international policy-makings and to consumables.The grocery stores now devote more "shelf space" to organic groceries and in almost all major cities across North America,supplying of free plastic bags to customers is discontinued.

According to the survey results of the report, A Green Economy for Canada: Consulting with Canadians, consumers approach the term "green" with different perspectives that range from concerns over climate change; interest in a consumer-benefitting leverage mechanisms between the environment and economic gains; future opportunities for innovations in manufacturing eco-friendly products and to an increasing desire for more product diversification and risk minimization. According to the same survey results, approximately 60% of the respondents indicated their expectations for a smooth transition towards a "green economy" through making significant economic and social gains. Canadian consumers suggested development of an advanced national dialogue and a shared vision alongside with the United Nations Global Sustainable Development Report as well as establishment of clear pricing strategies for goods and services followed by more investments in R&D initiatives in green businesses.

The importance of assessing consumer willingness for extra expenditure over environmentally-friendly items is in determining whether consumers will actually change their spending habits as a result of the increased awareness on these products and their publicized benefits in the recent years.

Product Managers and Marketing Directors always look for means to understand the extent of consumers' willingness to pay extra for green products. In the absence of a comprehensive statistical study on consumer spending willingness, companies may make costly product-pricing decisions. Moreover, the product managers might not thoroughly understand whether the incurred extra costs towards environmentally-friendly products are likely to result in a significant return on investment. That said, this paper is aiming to provide insights into this area by statistical analysis and hypothesis testing of the collected data through the distributed survey questionnaires. …

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