Keywords

Social Marketing Campaigns, Environmentalism, Sustainability, Eco-Behavior, Willingness to Buy, Eco-Friendly.

JEL Classification

M3, M0

Introduction

Social marketing has become a business imperative (Vasconcelos, 2011) and a new business norm ((Burchell et al., 2013; Perkins & Berkovitz, 1986), assuring competitive advantage to the practitioners (Kim et al., 2018). Hence, its domain extended from non-commercial to commercial entities (Andreasen, 1994) and resulted in an increased focus on environmental sustainability (Kotler & Armstrong, 2011) along with wide-spread adoption of eco-friendly strategies across business sectors (Chao & Lam, 2011). It is further supported by the favourable eco-behavior of stakeholders (Lotfi et al., 2018). For example, investors are showing interest in green projects, retailers are willing to sell less profitable goods as a part of their contribution to ecology and customers are willing to spend more on eco-friendly products (Esty & Cort 2017). Behavioral change among customers in favour of green products escalated the demand for environmental goods and resulted in the emergence of the green consumerism movement (Mohiuddin et al., 2018). Increasing positive attitude of customers towards eco-friendly goods combined with increasing likelihood of purchase has been encouraging marketers to undertake social marketing activities aimed at influencing green purchase intentions of their customers (Liu et al. 2009; Cherian & Jacob, 2012).

Environmentalism embraced all business sectors through voluntary and mandatory measures. The packaging industry is developing reusable packing material electronic firms started building green product lines, the transportation sector is using eco-friendly biofuels and restaurants started serving organic food. The retail sector, too, has been witnessing the application of eco-friendly front-office activities. For example, retailers started featuring organic products to promote themselves as eco-friendly stores. However, their back-office environmental initiatives such as eco-friendly storage and eco-friendly transportation have been mainly unnoticed due to low awareness levels and poor marketing practices (Cherian & Jacob 2012).

Social marketing campaigns are aimed at influencing people's behaviour in favour of issues related to the well-being of the society (Kotler & Armstrong, 2011). Such programs not only create awareness but also guide people towards a safer living. As social marketing became a business imperative managers are now convinced that all marketing is essentially social marketing. In addition to Governments and social organizations, the private sector is fully engaged in the design and implementation of social marketing campaigns to influence their target customers' behaviour in favour of safer and environmentally friendly products. Though it was recommended around three decades ago that there is a need to build expertise in the field of social marketing and identify key focus areas in social marketing campaigns, it still seems to be unaddressed as the recent literature too calls for identifying key features of an effective social marketing campaign (Donovan & Henley, 2003). As social marketing is basically aimed at altering or influencing people's behaviour in favour of society's well-being, a study of consumer behavior would enable marketers to identify the key areas to focus on in their social marketing campaigns. This paper evaluates the customers' attitude towards eco-friendly goods and retailers' attitude towards eco-friendly practices to identify the focus areas of effective social marketing campaigns.

Literature Review

Literature related to the rationale behind the application of eco-friendly strategies indicates that such methods not only serve as a route to conserve the ecosystem but are also cost-effective in the long run. Addressing environmental issues could help companies build relations with their communities and further provide an additional benefit of risk mitigation; business innovation's ecological dimension helps managers yield additional diversification and value co-creation opportunities. (Donovan & Henley, 2003), in her literature review, highlighted the importance of ecology-based innovations and found that the key factors that drive these attempts are cost savings and competitive advantage. Maniam & Nichols (2010) studied over 100,000 businesses in Germany and found that companies could gain a competitive advantage by passing on their environmental innovation to the end-users. They suggested that such environmental efforts and contributions can be highlighted as a part of social marketing campaigns. Experts such as supported this view in their Harvard Business Review article. They mentioned that effective communication about a firm's sustainability actions should create a favourable mindset among its customers. Retailers should promote the eco-friendly attributes of the goods they are retailing (Dubihlela & Ngxukumeshe, 2016) found that focus on the environmental dimension of the food being served has enhanced the image and increased the re-visit frequency of guests in the hotel industry.

The literature on the factors influencing customers' eco-behavior identifies awareness and concern for the environment as crucial influencing variables, Saifullah et al. (2017), who researched urban residents' eco-behavior in Kuala Lumpur, Malaysia, environmental awareness reduced consumers' wasteful consumption and favourably influenced their purchase of eco-friendly products. Also, studies by Saifullah et al. (2017) identified eco-literacy, environmental knowledge, and awareness as the main factors that influence consumers' green buying intentions and create a favourable attitude towards green products. Similarly, several studies indicated that higher awareness levels and increased environmental concern (Geetha & Jenifer, 2014) are essential factors that influence consumer behavior in favour of green products.

The literature on customers' willingness to buy eco-friendly goods presents a positive outlook (Konuk, 2019). Research in this area indicates that customers of all income groups are willing to buy eco-friendly goods. While (Konuk, 2019) in Ukraine found that people with a high income have shown interest in buying eco-friendly goods, (Al Mamun et al., 2018) found that even low-income households in Malaysia were willing to buy eco-friendly goods. (Laroche et al., 2001) in their study of UK's residents' eco-behavior, found that customers were willing to buy eco-friendly goods from those marketers whom they trusted. Mohiuddin et al. (2018) found that those who have environmental knowledge and awareness were willing to buy green vehicles. Thus, literature from the past two decades, starting from, who prepared a profile of customers willing to buy eco-friendly products, till the recent CGS Survey (2019) conducted on 1000 consumers in the USA, identified that customers are willing to buy eco-friendly products.

The literature on customers' willingness to pay a premium on the purchase of eco-friendly goods indicates that high price tags may not scare consumers (Mohiuddin et al., 2018) due to growing environmental conscience in the society, the millennials, comprised of nearly 25 to 30 percent of the total world population are more likely to pay a premium for eco-friendly purchases than other generations. This trend is not new as almost two decades ago Magnusson et al. (2001) in Sweden and in Denmark Katrin & Hansen (2002) found that people were willing to pay a premium for buying organic products. According to a study by Verma & Madan (2011) young Indian consumers' intention to visit green hotels is increasing though they are relatively expensive. Sarmiento & El Hanandeh (2018), in their study conducted in Gold Coast, Australia, found that nearly 80 percent of the respondents were willing to pay extra in a green restaurant.

However, literature is also available explaining customers' contradictory behavior concerning paying a premium for an eco-friendly good. (Biswas & Roy, 2016) found that willingness decreases with a price increase, and customers expect a more excellent functional value if a high price is charged for eco-friendly goods. It is also supported in the CGS survey (2019), which proved that customers have high expectations if they pay more for eco-friendly goods. Further, available literature indicates that not everyone is willing to pay more (Banna et al., 2016) as customers equate green products with standard products in terms of economic value.

Hence, this calls for more persuasive and focused social marketing campaigns to shape customers' behavior in favour of eco-friendly goods. According to Biswas & Roy (2016) retailers need to focus on shaping their shoppers' perceptions regarding green products. It is clearly emphasized in the marketing theory that the stronger the perceptions, the more the customers' willingness to buy (Verma & Chandra, 2018) recommended that focusing on the in-store promotion of organic foods and eco-friendly packaging can help retailers shape the shoppers' perceptions favourably and increase footfall. Laroche et al. (2001) suggested that retailers should use social marketing communication techniques to re-position themselves as eco-friendly retailers.

Several studies that focused on finding customers' willingness to buy and spend more on eco-friendly products (Laroche et al., 2001) did not refer to the reality that the price of such products could be higher than the price of common goods. This calls for research to determine whether the customers are willing to buy even if the price of an eco-friendly good is higher than that of a normal good. This will enable the researcher to validate the existing literature and update the information. For example, Magnusson et al. (2001) found that premium price is a significant obstacle to customers' decision to buy eco-friendly goods. Hence, there is a need to find out whether such findings are valid even after two decades.

Several studies that proved low awareness level among customers were conducted in Western and developed countries (Filimonau & Gherbin 2017) and Far East countries (Kucher et al., 2019) but not in the Middle East. Further, studies on consumer behaviour emphasize that behaviour may vary from country to country or region to region. Thus, there is a need to conduct this study in the Sultanate of Oman, one of the Middle East countries.

Most of the existing research covered categories such as packaging products (Kucher et al. 2019) health products, restaurants, and hotels. Preliminary research has been conducted concerning grocery, even though this category is essential and needs to be addressed due to reducing sales (Redman, 2020). Also, most grocery retailers are still adopting conventional methods and need to modernize their marketing practices. Thus, this research is needed to recommend modern marketing strategies to grocery retailers. Several studies conducted regarding retailers' attitude towards eco-friendly business practices (Redman, 2020), did not specifically find out whether the retailers have comprehensive knowledge of the eco-friendly concept and whether they are willing to adopt eco-friendly strategies even if they are expensive. These two aspects are covered in this research.

Finally, even after decades of implementation of social marketing strategies, there is no clear understanding of the field of social marketing (Andreasen, 1994), which also calls for more research in this discipline. Truong et al. (2019) specified that there is a need to improve social marketing campaigns by including stakeholders' voices and participation. It calls for research to determine whether the stakeholders have a good knowledge of the eco-friendly concept and whether they are willing to participate in the social marketing campaigns. The study developed the following objectives (i) To identify the customers' and retailers' awareness of eco-friendly concept; (ii) To evaluate the customers' willingness to buy eco-friendly goods even if they are priced higher than normal goods; (iii) To evaluate the retailers' willingness to adopt eco-friendly strategies even if they are expensive.

Research Methodology

This empirical research is based on primary data collected for the purpose of analyzing customers' and retailers' eco-behaviour. Data analysis, done on SPSS 26 version, included multiple response set analysis, which is conducted to identify the awareness levels and Chi-square test of independence, which is conducted to evaluate the association between respondents' demography and their eco-behavior (Kothari, 1990). Post-hoc analysis included calculating Cramer's for understanding the strength of association in a statistically significant relationship (Cohen, 1988) and crosstabs analyses helped in understanding the differences between categories (Argyrous, 1997).

As per the sampling theory, the availability of sampling frames (list of subjects) is a critical requisite for adopting the random sampling technique (Stanton et al., 1982). As it was challenging to collect customers and retailers' lists in the current research, a convenience sampling technique was used. The sample size consisted of 237 customers and 46 retailers. Sample unit in case of customer study comprised of end-users, who were approached at the point-of-sale (Brown & Katz, 2011). Sample unit in case of retailer study consisted of, a) owners of small retail stores located inside residential colonies, b) owners of medium-sized retail stores located on busy streets and in commercial complexes, and c) managers in supermarkets. The study was limited to grocery products, and geographic coverage was limited to Muscat city, the capital of Sultanate of Oman.

Questionnaire Variables

Questionnaires were designed separately for customers and retailers based on several research types in this area (Brown & Katz, 2011; Mohiuddin et al., 2018; Saifullah et al., 2017). Questionnaires were designed so that a comparison can be made between two groups, viz., customers and retailers (Akinsanya & Bach, 2014). Theory of Planned Behavior (Ajzen, 1991) was adopted in this research to determine customers' intention to buy eco-friendly products and the intention of retailers to adopt eco-friendly strategies. Demographic questions were included for studying the association between respondents' demography and their attitude (Fisher et al., 2012) and (Stewart, 1994). Variables in case of customer survey included a) age group, income level, and education level, b) awareness, c) willingness to buy, d) willingness to pay more, e) interest to know about eco-friendly practices, and recommendation to others (Ajzen, 1991) & (Caruana 2020). Variables in case of retailer survey included a) type of retail store and education level of the retailer, b) awareness level, c) intention to use eco-friendly strategies, d) willingness to receive information, and e) recommendation to others (Caruana 2020; Patrick, 2010). Variables were presented in the form of statements, and each of those statements was rated on a 5-point Likert scale ranging from strongly agree (coded as 5) to disagree (coded as 1) strongly. A higher rating indicates a positive and supportive attitude.

Validity and Reliability of the Questionnaire

The validity of the questionnaire for this study was tested using the face validity technique, (Kothari, 1990) and (Patrick, 2010). Cronbach's alpha values of 0.712 in case of customer survey and 0.719 in case of retailer survey are acceptable and ensure the reliability of the instrument used for the study (Godambe, 1982).

Results

Analysis of customers' attitude towards eco-friendly goods and retailers' attitude towards eco-friendly practices.

Data were analyzed using descriptive statistics, multiple response sets, and chi-square analyses, including post-hoc analysis. This section comprises i) demographic analysis of customer data, ii) demographic analysis of retailer data, iii) comparative analysis of awareness of eco-friendly concept among customers and retailers, iv) analysis of customers' attitude, and v) analysis of retailers' attitude.

Demographic Analysis of Customer Data

Characteristics of customer sample presented in Table 1, match with the population characteristics of Sultanate of Oman (NCSI, 2017; Times of Oman, 16 Oct 2019) as evidence of representativeness of the sample (Truong et al. 2019). Out of 237 customers surveyed at the point-of-sale, 73% are males. Male respondent of a couple has filled the questionnaire. 65% of the respondents are in the age group of 20 to 40 years, 60% are in the income level of OMR 750 to OMR 1500 (approximately USD 2000 to USD 4000) per month, and 55% have school level education.

Demographic Analysis of Retailer Data

Demographic analysis of the retailer data presented in Table 2 supports to understand the country's retail market (Saunders et al., 2007; Stewart, 1994). From 46 retailers approached, 23 (50%) represent small convenience stores located inside residential colonies, 11 (24%) being medium-sized retailers, and 12 (26%) are managers in supermarkets. The most prevalent age group in this research is 30 to 49, with many of the respondents (67%) belonging to this range. The same percentage of people, 67%, holds a high school diploma.

Comparative Analysis of Eco-Friendly Concept Awareness among Customers and Retailers

Multiple response set analysis results presented in Table 3 indicated low awareness levels among both customers and retailers. Only 38.4% of the customers surveyed indicated storage and 32.1% indicated transportation too will affect the environment. Similarly, only 54.3% of retailers indicated that storage and transportation too will affect the ecology. Almost all of the respondents in both the categories have identified that manufacturing and packaging material cause hazard to environment.

Analysis of Customers' Attitude

Results presented in Table 4 explain the customers’ attitude towards eco-friendly goods. Interest to receive information related to eco-friendly goods and recommendation of eco-friendly goods to others were rated high with 3.92 and 3.62 respectively on a 5-point scale. Willingness to buy eco-friendly goods was rated relatively lower with an average of 3.38. The lowest rated item in the table was customers’ willingness to buy eco-friendly goods if they are priced higher than the normal goods (3.26 mean values).

Hypothesis Testing

Table 5 presents the statistics related to hypotheses testing. Findings indicated that the respondents' level of education is associated with their willingness to buy eco-friendly products (p-value: 0.008), interest to receive information (p-value: 0.044) and recommend others to buy eco-friendly products (p-value: 0.042). Customers’ willingness to buy eco-friendly goods even if they are priced higher is also associated with the age group of the customers (p-value: 0.024). Statistically significant Cramer's V values in all the four cases indicate a strong association between the behavioral and demographic variables (Cramer's V>0.15). Cross tabulation analyses indicated that respondents with a higher level of education have shown a greater willingness to buy, are more interested in receiving information and recommend others to buy eco-friendly goods.

Analysis of Retailers' Attitude

Results presented in Table 6 explain the retailers’ attitude towards eco-friendly methods. It was found that the retailers are willing to use eco-friendly methods' even if they are expensive' (average value of 4.11 on a 5-point scale). Retailers mentioned that they would recommend others, i.e., friends and fellow retailers, to follow such methods (3.96). Lowest item is the retailers’ interest in receiving information about the same (3.28).

Hypothesis Testing

Table 7 presents the statistics related to hypotheses testing.

As presented in Table 7, a p-value of 0.001 indicates that retailers' willingness to receive information is associated with their category (type of retailer) and statistically significant Cramer's V value (Cramer's V: 0.523) indicates strong association between the demographic and behavioral variables. Managers in large supermarkets expressed greater interest in knowing about eco-friendly methods than the small and medium-sized retailers. Retailers with lower education levels indicated an interest in recommending eco-friendly practices to others (p-value<0.05; Cramer's V>0.29).

Discussion

Comparative Analysis of Eco-Friendly Concept Awareness among Customers and Retailers

For this purpose of identifying the awareness levels of being environmentally responsible, four business functions that might influence the environment. Manufacturing processes, storage, packaging material, and transportation were presented to customers and retailers. The main aim was to identify the targeted groups' awareness levels, i.e., whether customers and retailers are aware that storage and transportation could also impact the environment and should be considered when it comes to the eco-friendly concept. The relevant literature clearly indicates that storage and transportation functions need to be performed from the environmental dimension (Khalili et al., 2011; Walk-Morris, 2020) not only as a mandatory function (Manzini & Vezzoli, 2003) but also for gaining competitive advantage (Manzini & Vezzoli, 2003). The respondents were required to select (by ticking the box) the business aspect(s) that affect(s) environment according to their understanding and knowledge. Findings presented in Table 3 that indicated an inadequate level of awareness among customers support (Manzini & Vezzoli, 2003) study. Awareness levels are found to be higher among retailers than customers and complement the findings of McClure & Ryans (1968) whose investigation revealed that this difference is caused by the retailers' greater understanding and knowledge of market conditions. However, this finding contradicts the 2017-Tulip Retail research, wherein 83% of the shoppers are shown to be more knowledgeable than the retail store assistants (Walk-morris 2020). This comparison leads to the conclusion that customers perception of their knowledge is not proved to be correct. Thus, this research has revealed the correct behaviour of the targeted groups.

Analysis of Customers' Attitude

Customers have shown interest in receiving information related to eco-friendly goods and indicated that they would recommend others as well (Table 4). However, they expressed less willingness to buy eco-friendly goods if priced higher than normal (lowest rated items). This finding differs from the studies conducted in India (Verma & Chandra, 2018; Laroche et al., 2001; Al Mamun et al., 2018) and Europe (Kucher et al., 2019) which concluded that customers are willing to buy eco-friendly products. The main reason for this difference is that these studies might not have indicated that the price of eco-friendly goods could be higher than standard goods. However, not everything is disappointing, as a statistically significant positive correlation was found between willingness to buy in general and willingness to buy even if they are priced higher (correlation coefficient of 0.703). It indicates that most of those willing to buy eco-friendly goods are also willing to pay more for such goods than normal goods. Thus, it can be concluded that customers' interest to know about eco-friendly goods and their willingness to recommend others indicate a positive attitude, whereas their unwillingness to buy eco-friendly goods if priced higher calls for attention and should be focused in the social marketing campaigns aimed at changing their behavior in favour of eco-friendly goods.

The level of education emerged as a key demographic variable associating with their eco-behavior including, willingness to buy eco-friendly products, willingness to receive information, and recommend others to buy eco-friendly goods. These findings complement existing literature that establishes the association between customers' education and their eco-behavior, from the last two decades Fisher et al. (2012); Phan et al. (2014); Tsen et al. (2006) till the recent one Popovic et al. (2019).

That notwithstanding and concerning the existing association between customers' age group and their willingness to pay more, the present findings differ from those made by similar studies. At the same time, this research reveals that the respondents' age group is associated with their willingness to spend more; Popovic et al. (2019) found that there is no association between these two variables. Similarly, this research finds that younger generation customers are less willing to buy eco-friendly goods. In contrast, Popovic et al. (2019); Carrigan & Szmigin (1999); Kim (2017) and Young (2018) found that the youth are more willing to buy. Therefore, this research reveals the real behavior of youth concerning their attitude towards eco-friendly products and calls for further focus on social marketing campaigns to persuade the youth to favour eco-friendly goods.

Analysis of Retailers' Attitude

This research complements several studies that have indicated an increasing favourable eco-behavior demonstrated by retailers (Dubihlela & Ngxukumeshe). Though retailers' willingness to adopt eco-friendly strategies is not new (Umaraw & Verma, 2017) the condition of 'even if they are expensive' is unique to this research and has been missing in similar studies (Table 6). This research indicated that the retailers are willing to use eco-friendly methods 'even if they are expensive' (highest rating). Though retailers did mention that they would offer recommendations to others, i.e., friends and fellow retailers, to follow such methods, they did not express an interest in receiving information about the same (lowest rating). Nonetheless, the higher standard deviation (1.259) indicates the spread of opinions (Saunders et al., 2007), which could mean that few of them are willing to receive information. Thus, it is recommended to extensively use social marketing campaigns to spread information about eco-friendly strategies by retailers. Category or type of the retailer needs to be taken into consideration in this analysis. Not all type of retailers’ behaviour is similar. Managers in the large supermarkets, despite having more information and knowledge about eco-friendly methods, have further shown interest to know more. It is important to create awareness and interest among other category of retailers, small and medium-sized retailers.

Focus Areas in Social Marketing Campaigns

The outcomes of this research imply the use of eco-friendly methods in the retail sector as a part of social marketing initiatives, which are primarily aimed at persuading shoppers to engage in socially beneficial behavior (Goldberg et al., 2018) and change their purchase options in favour of eco-friendly goods (Akinsanya & Bach, 2014). This research recommends retailers to use eco-friendly methods that add societal value. As customers have shown willingness to receive information, retailers should undertake social marketing campaigns to create awareness about their eco-friendly and enhance their corporate credibility (Font & Lynes, 2018). Retailers' social marketing campaigns must increase customer engagement with their eco-friendly activities (Cheah & Phau, 2011) as customers have shown willingness to recommend eco-friendly goods to others. Social marketing campaigns should create awareness of the eco-friendly concept, as both customers and retailers had a narrowed-down view of the same. These two stakeholders should be educated that the eco-friendly concept is limited to the manufacturing process and packaging material and encompasses other business functions such as storage and transportation. Social marketing campaigns aiming to persuade customers to buy eco-friendly products should focus on the cost-benefit perspective. Customers have not expressed a willingness to buy eco-friendly goods if they are priced higher than standard goods. Social marketing campaigns should focus on the youth segment and aim to persuade them in favour of eco-friendly goods, as they were less willing to buy eco-friendly goods than older age-groups.

Social marketing campaigns targeting retailers should educate them about eco-friendly methods as the awareness levels are low, incentivize their learning process as they are less enthusiastic about receiving information, and provide them hands-on support as they are willing to adopt eco-friendly strategies. Further, it is recommended that social marketing campaigns focus on small retailers providing information and training regarding eco-friendly practices as the awareness levels is low among small retailers.

Conclusion

Social marketing campaigns need to be undertaken to change shoppers' behaviour in favour of eco-friendly goods. Understanding consumer behaviour in the retail sector enables managers to identify focus areas in social marketing campaigns. This research brought out the real behaviour rather than the stated behaviour by proving that customers may not buy eco-friendly goods if they are priced higher than normal goods. It indicates the death of premium markets for eco-friendly goods and calls for redesigning social marketing campaigns accordingly. Focus on changing the behaviour of the youth segment in favour of eco-friendly goods would yield desirable benefits. Small retailers should be involved in social marketing campaigns designed by social marketers in the retail sector. Effective social marketing campaigns can help create a competitive advantage if designed and implemented professionally based on a proper understanding of stakeholder behaviour. This study can be extended to other product categories in the retail sector, same study can extend in the Gulf Cooperation Council countries and Middle East and North Africa as well. In the same study can be study with more samples.

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