Contemporary Management Research
Pages 47-60, Vol. 12, No. 1, March 2016
doi:10.7903/cmr.13842
Modelling the Relationship among Green Perceived Value, Green
Trust, Satisfaction, and Repurchase Intention of Green Products
Aris Y. C. Lam
Hong Kong Polytechnic University
E-Mail: sparis@speed-polyu.edu.hk
Mei Mei Lau
Hong Kong Polytechnic University
E-Mail: spmay@speed-polyu.edu.hk
Ronnie Cheung
University of South Australia
E-Mail: ccheung@acm.org
ABSTRACT
This study investigates the relationship among green perceived value, green trust,
satisfaction, and repurchase intention of green products. A research model was
developed to investigate the factors affecting the repurchase intention of green
products. The research results demonstrated that green trust and satisfaction mediate
the relationship between green perceived value and repurchase intention. The research
results also indicated that the drivers of green product repurchase intention are
represented by perceived value, green trust, and satisfaction. Companies should
emphasize resources to improve these aspects in order to enhance green product
repurchase intention among consumers.
Keywords: Green Products, Repurchase Intention
INTRODUCTION
Economic activities have been using up resources from the planet at an alarming
rate. Consumption is more and more clearly seen to be creating harmful effects on the
natural environment (Koller, Floh, & Zauner, 2011). Scientists and environmentalists
have repeatedly warned governments that our planet has been in environmental
turmoil for the past few decades. Some have said that the solution to saving our planet
Contemporary Management Research 48
is to go green in our living. As more people become aware of the problem of global
warming, more consumers become eager to engage in “green consumption”
(Whitmarsh, 2009). Eco-friendly or green products are welcomed by consumers as
they help preserve the natural environment and reduce the pollution and degradation
of our planet. More companies have realized new business opportunities and started to
take advantage of the relatively new trend of green marketing or sustainability
marketing, which is the “effort made by business organizations to design and promote
products that are eco-friendly” (Choudhary & Gokarn, 2013). These companies focus
on the development of green marketing, which is about developing strategies that can
generate profits for companies while being able to sustain, protect, and preserve the
environment (Kotler & Armstrong, 2013).
LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
Green Marketing and Competitive Advantage
In the era of global warming, environmental consideration in consumption has
become widely accepted by consumers, and more consumers are paying attention to
green products (Chen & Chang, 2012). With the heightened awareness of
environmental concerns, consumers are eager to purchase more green products
(Kalafatis, Pollard, East, & Tsogas, 1999), which are perceived to be not as harmful to
the environment (Chen, 2010). Green products are able to command a premium price;
for example, 83% of Brazilians, 93% of Thai, and 53% of Americans are willing to
pay more for the purchase of green products (Makower, 2009). As a result, green
products have become a powerful weapon in building a competitive advantage
because more consumers are willing to pay a higher price for green products (Bhat,
1993).
Green marketing is defined as “the holistic management for identifying,
anticipating and satisfying the requirements of customers and society, in a profitable
and sustainable way” (Peattie, 1998). It is also defined by the American Marketing
Association in three aspects—namely, “the marketing of products that are presumed to
be environmentally safe” (retailing), “the development and marketing of products
designed to minimize negative effects on the physical environment or to improve its
quality” (social marketing), and “the efforts by organizations to produce, promote,
package, and reclaim products in a manner that is sensitive or responsive to ecological
concerns” (environments). Green marketing refers to marketing strategies that
constitute an important part of corporate social responsibility, attract customers who
are concerned about society, stimulate positive views from stakeholders, and facilitate
Contemporary Management Research 49
corporations’ triple-bottom-line accounting, thereby simultaneously contributing to
the three facets of sustainability: economic prosperity, environmental quality, and
social equity (Choudhary & Gokarn, 2013; Stenzel, 2010).
Research has shown that companies could benefit from sustainable green
marketing strategies that enable the development of competitive advantages in both
B2C and B2B environments (Porter & van der Linde, 1995). According to the
resource-based view, competitive advantage is conceptualized as the implementation
of a strategy that is currently not used by competing firms but helps “reduce costs,
exploit market opportunities, and neutralize competitive threats” (Barney, 1991).
Companies that can attain a competitive advantage can improve their economic
performance in ways that cannot be matched by competitors (Newbert, 2008).
Research has demonstrated that companies’ environmental practice could be a
resource and/or capability that reinforce competitive advantages (Hart, 1995). First
movers who are able to adopt superior green marketing strategies can project their
brand image as a sincere environmental activist, which provides the basis for a
competitive advantage, as evidenced by success by pioneers like Wal-Mart (McDaniel
& Rylander, 1993).
Influence of Perceived Value
In order to investigate the positive effect of green perceived value on satisfaction,
green trust, and green repurchase intention, literature relating to perceived value was
investigated. Perceived value stems from the equity theory, which posits that
consumers consider the ratio of their outcome/input to that of the service provider’s
outcome/input (Oliver & DeSarbo, 1998). Consumers’ perceived value is defined as
consumers’ overall assessment of what is received in relation to what is given
(Zeithaml, 1988). “Green perceived value” is defined by Chen and Chang (2012) as “a
consumer’s overall appraisal of the net benefit of a product or service between what is
received and what is given based on the consumer’s environmental desires,
sustainable expectations, and green needs.”
Perceived value is not only an important component for long-term customer
relationships, but also plays an essential role in affecting purchase intentions (Zhuang,
Cumiskey, Xiao, & Alford, 2010) and customer trust (Kim, Zhao, & Yang, 2008).
Trust is about whether someone is willing to be vulnerable based on “positive
expectations of the integrity and capability of another one” (Lin, Weng, & Hsieh,
2003). Perceived value was found to have a positive influence on customer trust and
green purchase intention (Chen & Chang, 2012). Consumer value is considered an
important factor that determines satisfaction (Zeithaml, 1988). Green perceived value
Contemporary Management Research 50
affects loyalty toward green products and impacts consumers’ green trust and
satisfaction; hence, it is believed to influence green perceived trust and green purchase
intentions (Chen, 2010; Chen & Chang, 2012). Therefore, the following hypotheses
are proposed:
H
1
: Green perceived value is positively associated with satisfaction.
H
2
: Green perceived value is positively associated with green trust.
H
3
: Green perceived value is positively associated with green repurchase intention.
Influence of Satisfaction and Green Trust on Green Repurchase Intention
To investigate the determinants of green repurchase intention, green trust and
satisfaction were the major factors considered. Customer satisfaction was introduced
as an influential factor toward repeated purchase, higher receptiveness of other
products, and positive word-of-mouth (Cardozo, 1965). Since then, customer
satisfaction has been regarded as one of the essential factors for predicting consumers’
purchase behavior, as many studies have shown a positive link between customer
satisfaction and repurchase intentions (Zeithaml, Berry, & Parasuraman, 1996).
Satisfaction refers to consumers’ expectation toward a product or service; if the
product or service meets the consumers’ expectation, they will be satisfied, leading to
repurchase intention (Chang & Chou, 2014). If a company is able to provide a quality
product or service that satisfies or even exceeds the customers’ expectation,
consumers will consider repurchasing or recommending the product to others (Kotler,
1999).
Trust is believed to be the intention to accept vulnerability based on positive
expectations of the behaviors or intentions of another. It has been argued that trust is a
willingness to depend on another party based on the expectation resulting from the
party’s ability, reliability, and benevolence (Ganesan, 1994). Trust has also been
found to be an important factor influencing consumers’ choice of green products.
Although consumers purchase green products to maintain a healthy environment,
some criticisms with regard to the way such products are regulated and licensed have
become apparent in the United Kingdom (Harper & Makatouni, 2002). Green trust is
defined as the “consumer’s willingness to depend on a product or a service of a brand
as a result of his belief in its environmental credibility, benevolence and ability”
(Chen, 2013). One key element for green marketing strategy is credibility (Chen &
Chang, 2012). Researchers have shown the importance of consumer trust in
influencing consumers’ purchase intentions (Harris & Goode, 2010); others have
revealed that trust can significantly affect the customers’ repurchase decisions (Gefen
& Straub, 2004). Therefore, the resulting hypotheses are as follows:
Contemporary Management Research 51
H
4
: Green trust is positively associated with green repurchase intention.
H
5
: Satisfaction is positively associated with green repurchase intention.
The overall research framework for this study is depicted in Figure 1.
Figure 1 The Research Framework
RESEARCH METHOD AND DATA ANALYSIS
Data Collection
Green marketing is regarded as a way to achieve greater product differentiation
(Aberdeen Group, 2008). Not only have automobile companies like Toyota and Ford
been aggressively adopting the green strategy in manufacturing their cars, but FMCG
companies like Coca-Cola, Lipton, and SC Johnson are also actively designing green
products to enhance their business sustainability (Mourad & Ahmed, 2012). In this
study, the authors have chosen to consider Bonaqua, the brand of bottled water
produced by Coca -Cola in Hong Kong, in an empirical study. Bonaqua is one of the
top three brands in Hong Kong, together with two other local brands: Watson’s and
Vita. Despite fierce price competition, sales of bottled water continue to grow due to
consumers’ increasing health consciousness (Euromonitor International, 2012).
Bonaqua was the first brand to launch a lightweight bottle in 2010, which reduced the
use of plastic by a significant 34%; the bottle can be twisted and shrunk to save
recycling space. A research study conducted by the University of Hong Kong showed
that people in Hong Kong have a high awareness (94%) of the need for everyone in
society to shoulder responsibility for environmental protection even when it involves
Green Perceived
Value
Satisfaction
Green Trust
Green Repurchase
Intentio
n