graduate school of business & operations management chang jung christian university the effects...

Graduate School of Business & Operations Management Chang Jung Christian University

The effects assessment of firm environmental strategyand customer environmental conscious on greenproduct development

The effects assessment of firm environmental strategyand customer environmental conscious on greenproduct development

Adviser ： Liming Chuang & Chun-Chu Liu Doctoral Student ： Shu-Tsung ChaoDate ： Oct. 27, 2011

Outline

Abstract 1

Introduction 2

Literature Review and Hypotheses Dev. 3

Methodology4

Results 5

Conclusion and Recommendation6

References7


Abstract

Abstract

The purpose of this study is to examine why both parties (industry and consumer market) （ Dyadic

Perspective、雙值觀點） have mutual interests （共同利

益） in protecting the environment, but they still are hesitant to act green. （對綠色行動仍然猶豫不決）

The study used two-stage sampling from consumer market to depict ideal green product characteristics and reliable toy companies. （描繪出理想的綠色環保產品特性）

Abstract (cont.)

Customers : This research shows that the willingness to buy ( 購買意願 )

green toys increases if most people in society buy green toys represents that customers are environmentally conscious( 環保意識 ) and care about protecting the environment or buying green toys is the result of a new economic trend ( 新的經濟趨勢 ) and childhood education.

The willingness to buy green toys increases if customers think that green products implies an enhancement on new product development ( 加強對新產品開發 ) to toy manufacturers.

Abstract (cont.)

Manufacturers : If manufacturers are able to manage the difficulty of

cooperation with all parties in the supply chain ( 供應鏈 ) and difficulties related to production ( 生產之困難度 ) , they are willing to adopt customers’ perceived value on green toys for their new product development strategy.

This research aims to find the effect of consumer perceived value and company eco-innovation ( 生態創新 ) on green product development.


Introduction

Introduction

In recent years, there has been an upsurge ( 上昇趨勢 ) in the reporting of research in the area of eco-innovation, green innovation or sustainable ( 可持續發展 ) development innovation with regards to R&D, production processes, new products and new services (Conway & Steward, 1998; Forster & Green, 2002; Hart, 1997; Pujari, 2006; Pujari, Peattie, & Wright, 2004; D. Pujari, G. Wright, & K. Peattie, 2003).

Academic researches on corporations and environmental concern have increasingly been published since 1990s.

Introduction (cont.)

Most studies concentrate on examining companies’ new strategies in response to regulation of environmental protection (Huang, 2004). ( 檢視公司對環保法規的反應之新策略 )

Fails to clarify what exactly is supposed to be done by companies ( 無法澄清究竟什麼是公司應該做的 ) particularly with regards to new product development (Pujari, 2006) , with a combination of company perceived value and consumer perceived value toward green product development strategy.


The purpose of this study is to understand why is it that even though both parties (industry and consumer) have mutual interests and understanding of environmental protection they still are hesitant to act green.

The study adopts a two-stage sampling process : the first stage investigates the consumer market by

collecting their points of views on consumers’ perceived value on green toy development


the second stage identifies the concept of organizational eco-innovation strategy on green product development, and then compares the results between the both parties

To conclude what are the important factors involved in the strategies for developing green products.

People have started to think about how compensate for the related loss （如何彌補相關損失） . Some have begun to live in a more simple way to consume less and make less waste also known as LOHAS. ( 樂活 )


In the past decade, when companies promote and sell green products, the environmental concerns always draw attention and recognition and expect consumers to adjust their buying intentions and develop new buying behavior. ( 環境的問題總是吸引關注的，並期望消費者增進自己的購買意願和發展新的購買行為 )

This study includes consumer perceived value on green products that is beneficial at the product management level（有利於產品開發管理水準的提昇以開發綠色產品） to develop green products that comply with consumers’ demands for marketing management to plan an efficient green marketing plan. （以符合消費者之需求為動力以規劃進行高效的綠色行銷 )


Literature review and Hypotheses development

Conceptual Model

Customer Perceived Value

Willingness to Buy

Green Product Development

Figure 1. Conceptual Model

Green Design

Green Economy

Green Management

Organization Culture

H8

H1H2

H3 H4

H5 H6

H7

Stage 1 Stage 2

QualitativeQuantitative

Green Economy

Environmental economics plays a key role in identifying options for efficient natural resource management ( 環境經濟在有效的自然資源管理中扮演著關鍵的作用 ) that facilitate sustainable development (Munasinghe,

1993) ( 可促進持續性發展 )

Various stakeholders, such as consumers, governments, and environmental groups are increasingly paying their interests in the environmental performance of products (Johansson & Magnusson, 2006).

Green Economy (cont.)

H1: Green Economy has positive influence on green

product development.

H1: Green Economy has positive influence on green product development.


Willingness to Buy



H1

Green Design

Green Economy

Green Management


Consumer Market Awareness

There is 89% consumers concerning about what they buy would impact the environment and 79% consumers willing to pay additional 5% for Biodegradation or recycle material made packaging (Makower, 2009). ( 生物分解或回收的材料 )

On the other hand, there is few research discussing about toy safety, however, preventing childhood injury ( 預防兒童傷害 ) is very important to parents and primary caregivers ( 主要照顧者 ) and governments.

Consumer Market Awareness (cont.)

H2: Green Economy has positive influence on customer

perceived value.

H2: Green Economy has positive influence on customer perceived value.


Willingness to Buy



H2

Green Design

Green Economy

Green Management



According to Holbrook’s (1999) definition on perceived value, the total value consumers received from products or service includes the value of product, service, personal, image, however, to obtain above value , customers must pay its cost, that includes monetary ( 貨幣 ) , time, energy and mental cost, which so called customers’ cost.

Consumers are fascinated on ( 著迷 ) some specific characteristics of a product. It seems a magic power to make them attached. It aims to build consumer’s loyalty to the products.

Customer Perceived Value (cont.)

H3: A higher degree of customer perceived value

positively influences customer’s purchase intention.

H3: A higher degree of customer perceived value positively influences customer’s purchase intention


Willingness to Buy



H3

Green Design

Green Economy

Green Management


Willingness to Buy

Willingness to buy is a normal effectiveness measurement and often used to anticipate ( 預測 ) a response behavior. Patterson (1997) provides a model of the customer purchase intentions.

Previous studies have provided ample evidence for the positive influence that perceived value has on purchase intention or consumers’ willingness-to-buy (Dodds, Monroe, & Grewal, 1991; Monroe, 1990; Zeithaml, 1998).

Willingness to Buy (cont.)

H4: A higher degree of purchase intention positively

influences green product development strategy.

H4: A higher degree of purchase intention positively influences green product development strategy.


Willingness to Buy



Green Design

Green Economy

Green Management


H4


Market orientation is the business culture that produces outstanding performance through its commitment to creating superior value for customers (Slater & Narver, 2000).

Also, the marketing concept states that organizational success depends upon satisfying customers’ needs better than competitors (Kolter & Armstrong, 1994). ( 組織的成功取決於對滿足客戶的需求之能力優於競爭對手 )

Organization Culture (cont.)

Some researchers have posited that market-oriented values and market-oriented activities are both aspects of the market-oriented culture has been found as one of the key factors of business success (Gainer & Padanyi,

2005) as well as new product innovation and the market focus helps a business develop an understanding of its target market and their needs (Pujari, 2006).

Organization Culture (cont.)

H5: A higher degree of marketing orientation in the organizational culture positively influences green product development strategy.

H6: A higher degree of marketing orientation in the organizational culture positively influences green management.

H5: A higher degree of marketing orientation in the organizational culture positively influences green product development strategy


Willingness to Buy



Green Design

Green Economy

Green Management


H5

H6: A higher degree of marketing orientation in the organizational culture positively influences green management.


Willingness to Buy



Green Design

Green Economy

Green Management


H6

Green Management (Life-Cycle Assessment)

Life-cycle assessment is the measuring greenness tool which provides an objective evaluation from raw material acquisition to final waste treatment ( 原料收購到最終廢棄物處理 ) which so called “Cradle-to-Grave” ( 從搖籃到墳墓 ) perspective to evaluate the overall greenness of a product and to optimize all stages of a product (Bhat, 1996; Jørgen Hanssen, 1998).

Life-cycle assessment aims to set up the goal of maximum performance while minimizing waste of green products, through the measuring assessment, the value represent how will a product performs compared with what the customer wants and is willing to pay (Bhat, 1996).

Green Management (Life-Cycle Assessment) (cont.)

H7: A higher degree of green management positively

influences green design.

H7: A higher degree of green management positively

influences green design.


Willingness to Buy



Green Design

Green Economy

Green Management


H7

Green Design

An effective green design enhances product quality, reduces costs in developing green products and generates cyclic efficiency (Bhat, 1996; Braungart et al., 2007)

Green design also involves two broad segments to set up green strategies: Source Reduction and Waste Management (Bhat, 1996).

Eco-efficiency as a “social action strategy” seeking to “reduce the use of materials in the economy in order to reduce undesirable environmental impacts….and produce a relatively higher degree of economic affluence which is more fairly distributed” (Schutz & Welfens, 2000).

Green Design (cont.)

As Braungart (2007) defining the concept of eco-efficiency is: dematerialization, increase resource productivity, reduced toxicity, increased recyclability (down cycling) and extended product lifespan. ( 非物質化，提高資源生產率，降低毒性，增加可回收率與延長產品的壽命 )

To consider green design on toys, the safety always the prior category in discussion and made strong connection on designing stage.

Green Design (cont.)

H8: A higher degree of green design positively

influences green product development.

H8: A higher degree of green design positively influences green product development.


Willingness to Buy



Green Design

Green Economy

Green Management


H8


Methodology

Conceptual Model


Willingness to Buy



Green Design

Green Economy

Green Management


H8

H1H2

H3 H4

H5 H6

H7

Stage 1 Stage 2

QualitativeQuantitative

Sampling Plan

We obtained data on the degree environment concern between consumers and manufacturers

A two-stage sampling will be used in this study.

At phase one stage, we collect 220 adult customers equally divided into two groups: married and have child/children at age under eight; married or single, few experience on raising child/children.

Sampling Plan (cont.)

At stage two, we visit twenty toy manufacturers who have intention to develop green business.

The questionnaire contains environment concern and the process of Eco-Innovation that includes organizational culture, green management and green design and product development requirement

Sampling Plan (cont.)

This is an important part of the study, it’s the combination of consumers’ perspective and manufacturers’ perspective on green products.

It shows whether toy manufacturers consider consumers’ value into their new product development strategy, and furthermore to define the key successful factors of new product development at Eco-innovation process.

Data Analysis Procedure

Descriptive Statistic Analysis

Factor Analysis and Reliability Test Factor Analysis Item-to-Total Correlation Internal Consistency Analysis (Cronbach’s alpha)

Multiple Regression

In-Depth Interview


Results

Data Collection

This experiment includes two sample groups, one is consumer group another is a few of toy manufacturers.

Consumer Group : 220 above 20 years old respondents that assuming the

targeted consumer group is with economic independence and owns decision power on purchasing decision.

The returning response was 167, after eliminating incomplete information provided, the effected response is 152. The total effective response rate is 69%.

Data Collection (cont.)

Toy Manufacturers : 20 Taiwanese toys makers who are interested of this

subject, the valid and completed response was finished the first part of semi-structured questionnaires and accepted a phone interview.

The response with completed information provided only 6 toys makers . The total effective response rate is 30%.

Empirical results

Table 1. Result of Simple Regression for

Green Economy and Consumer

Perceived Value (four factors)

( Testing for H2 )

Independent Factors“Green Economy”

Dependent Factor—Factor 1 of “Consumer

Perceived value”—(Quality and

Efficiency_PVM1)


Perceived Value”—(Status and

Esteem_PVM2)

Model 1 Model 1

Beta (β) Beta (β)

Green Economy (GEM) .520*** .442***

R2 .271 .196

Adj-R2 .266 .190

F-value 56.374 36.981

P-value 0.000 0.000

D-W 1.851 1.906

VIF Range 1.00 1.00



Perceived value”—( Play and

Aesthetics_PVM3)


Perceived Value”—(Ethics and

Spirituality_PVM4)

Model 1 Model 1

Beta (β) Beta (β)

Green Economy (GEM) .570*** .397***

R2 .325 .158

Adj-R2 .321 .152

F-value 73.34 28.417

P-value 0.000 0.000

D-W 1.949 2.001

VIF Range 1.000 1.000

*p<0.1, **p<0.05, ***p<0.001 ; significantly level at t >1.96

Empirical results

Table 2. Result of Multiple Regression for Consumer Perceived Value and Willing to Buy Green Toys ( Testing for H3 )

Independent Factors“Customer Perceived Value”

Dependent Factor— “Willing to buy green toys”—(WBM)

Model 1 Model 2 Model 3

Beta (β) Beta (β) Beta (β)

Quality and Efficiency_PVM1 - - -

Status and Esteem_PVM2 .696*** .513*** .458***

Play and Aesthetics_PVM3 - - .129*

Ethics and Spirituality_PVM4 - .282*** .266***

R2 .485 .530 .543

Adj-R2 .481 .524 .534

F-value 142.892 85.257 59.346

P-value 0.000 0.000 0.000

D-W 1.905 1.905 1.905

VIF Range 1.000~1.345 1.000~1.345 1.000~1.345


Empirical resultsTable 3. Result of Simple Regression for Willing to Buy Green Toys and Product Development

( Testing for H4 )

Independent Factors“Willing to buy Green Toys”

Dependent Factor—“Product Development on Green Toys”—(PDM)

Model 1

Beta (β)

Willing to buy Green Toys (WBM) .629***

R2 .396

Adj-R2 .392

F-value 99.678

P-value 0.000

D-W 2.169

VIF Range 1.000


Empirical results

Table 4. Result of Simple Regression for Green Economy and Green Product Development ( Testing for H1 )


Dependent Factor—“Product Development on Green Toys”—(PDM)

Model 1

Beta (β)

Green Economy (GEM) .584***

R2 .341

Adj-R2 .337

F-value 78.636

P-value 0.000

D-W 2.055

VIF Range 1.000


Empirical results

In-Depth Interview with Toy Manufacturers : Discusses how toy manufacturers think about green toys

from different perspective, which involves organization culture, green management, green toys design and new product development.

20 Taiwanese toys makers, distributors and traders who are interested of this subject, the valid and completed response was finished the first part of semi-structured questionnaires and accepted a phone interview.

The response with completed information provided only 6 toys makers. The total effective response rate is 30%.


Conclusion and Recommendation

Research Conclusions

This research examines how the green economy trend attracts consumers’ attention toward green toys by satisfying their perceived value from purchasing toys considering both the experience and expectations, buying intention developed forming market demand and then later transformed into the motivation to develop new products on the manufacturers’ end.

This study not only considers the consumer’s point of view but also considers that of the supplier.

Research Conclusions (cont.)

But due to their being so many factors to consider in new product development, all of the factors couldn’t be included in this study. Therefore, this study adopted a broader approach using in-depth interviews with a few toys manufacturers trying to link their perceptions on green toy development with consumers’ real demand in order to determine whether manufacturers actually understand consumers’ expectations and whether they are willing to satisfy them.


Table 5. Hypotheses Summary and Result at Consumers’ End

Hypotheses Result

H1Green economy has positive influence on customer

perceived value on green toys.Support

H2Customer perceived value on green toys has positive

influence on willingness to buy green toys.Support

H3Willingness to buy green toys has positive influence on

green toys new product developmentSupport

H4Green economy has positive influence on green toys new

product developmentSupport


Semi-structured questionnaires and phone interviews with manufacturers followed the result of the regression analysis.

Representative respondents for manufacturers agree that efficiency and quality are important considerations for new product development.

Should consider consumers’ recognition and acceptance of green toys.


Most of the respondents imply that social responsibility is important, but in reality, it is more complicated due to the many factors that must be taken into consideration, such as supply chain management and production process management.


Table 6. Hypotheses Summary and Result at Toy Manufacturers’ End

Hypotheses Result

H5

A higher degree of marketing orientation in the organizational culture positively influences new product development

strategy.

Support, but if the market trend or demand from

customers’ end is not clear, manufacturers will not easily make a move on new product development on green toys.

H6A higher degree of marketing orientation

in the organizational culture positively influences green management.

Support and top management’s support also

take important place.

H7A higher degree of green management

positively influences green design.Support

H8A higher degree of green design positively

influences green product development.Support

Limitation and Future Research

It is rare to find academic research discussing both consumers and manufacturers in one study because the research topic is broad and so many conditions need to be considered.

The aim of this research is to find the effect of consumer perceived value and company eco-innovation on green product development.

In doing so three limitations were found and these limitations need to be made clear and be understood by the reader.

Limitation and Future Research (cont.)

First, the technical background of manufacturers was not discussed. This could be a barrier for toy manufacturers to transform their business model so as to include green toy development, especially in the Taiwan toy industry where most of traditional toy manufacturers are OEM based without R&D teams.

Understanding the manufacturers’ technical background could have a major effect on the responses they give related to their willingness to go green or not.


Second, there is no standardized definition on green toys in the market. During the research few academic or industrial explanation for what green toys really are could be found.

However, different groups may had different explanations and ways of defining green toys. This research is limited to the perspectives of manufacturers and consumers. ( 本研究僅限於製造商和消費者的觀點 )

Future research should consider the perspectives of educationists and environmental groups, etc. This could add to a clearer and more comprehensive definition for green toys.


Finally, acquiring accurate information related to environmental issues from manufacturers is not easily achieved. ( 牽涉到環保法規等因素 )

Improvements of environmental protection from eco-friendly production processes are hard to quantify and measure.

In this research, respondents indicated they are willing to establish criteria to for quality assurance tests ( 建立綠色品質保證之測試標準 ) but also mentioned that it is very difficult to design a systematic appraisal ( 系統評價 ) of environmental protection to record in detail about materials used or employed in the finished products.


Therefore, prefer not to disclose information openly to the public or to customers to avoid being challenged and monitored.

Further research could do more surveys and challenge the findings of this study, testing whether this phenomenon generally exists in other industries.


References

graduate school of business & operations management chang jung christian university the effects...

Documents