Do Ethical Consumers Really Love Green Brand? A Comparison of Chinese and Korean Consumers

Abstract

Purpose - As socially responsible consumption increases, green marketing emerges as a new philosophy in marketing. A number of companies are now putting forth green marketing strategies. But there is no single definition of "green brand" that can be used interchangeably. In this paper, we attempt to explore the meaning for "green brand," especially in Information and Technology products. Research design, data, and methodology - The author developed qualitative and quantitative research design. In particular, the paper approaches this topic from the Asian consumers' perspective and applies ethical concepts to green brand research. For this, Chinese and Korean consumers were used as consumer segmentation variables to investigate their ethical perspectives. Results - Qualitative research showed that there are several attributes and benefits we need to consider for green brand. Quantitative study showed positive correlations of the two variables: the higher the consumer ethics are, the more they prefer green brands. Conclusions - The current study shows that consumers clearly have a certain propensity toward green brand equity. Thus, marketers should consider the consumers' evaluation about green brands. This paper also proposes that ethics have a close relationship with green brand equity, and companies may use ethics in marketing strategy management.

1. Introduction

Since the World Commission on Economic Development (WCED), it has been brought “sustainability” into the field of business strategy (Crittenden et al., 2011). Sustainability has been framed by considering multiple dimensions (e.g., environmental, economic, and social domains). Especially environmental sustainability has been gained lots of attention, particularly with the emergence of world environmental protection movement.

We also find that consumers’ happiness may not be maximized if their standard of living is achieved at the expense of the resource consumption of poorer countries. This is related to consumers’ ethical decision. Over the last couple of decades, the ethical behaviors of companies and consumers have been interest to many researchers (Vitell, 2003; Rawwas et al., 2005; Vitell & Muncy, 2005; Chan et al., 2007). However, most attention has been focused on company’s ethics and social responsibility and only few studies are examining ethical issues in marketplaces from the perspective of consumer ethics. Especially socially responsible consumer behavior needs to be explored.

Socially responsible consumers can be defined as those who purchase products and services which they perceive as having a positive impact on the environment. Especially, environmental concerns and the demand by consumer groups for environmentally friendly products have already led to the emergence of a new marketing philosophy, known as “green marketing”. Green marketing has gained acceptance among several companies as being a sustainable competitive strategy. Therefore, recently increasing attention has been paid to the relationships between consumer behavior, marketing and the green philosophy. However, a review of prior literatures reveals that there is little to be known about the relationship between ethical concepts and green consumer behavior. Moreover, there is no research which aims to determine the relationship between green brands' images and consumers' preferences.

The first objective of this study is to find out the meaning of “green brand” from the perspective of Asian consumers, specifically Korean and Chinese consumers. Secondly, the paper aimed to determine whether there was a relationship between ethical consumer behavior and green brand preference. Consequently, it compares and contrasts the ethical beliefs of Korean and Chinese consumers using the Consumer Ethical Practice scale of Muncy and Vittel questionnaire (Vitell & Muncy, 2005) and to investigate whether there are differences in green brand preferences between these two nations. We show that the degree of ethics can be used as a segmentation variable.

To the best knowledge of the authors, this study represents the first empirical attempt to apply general brand equity theories into green brand consumption related issues using multiple methodologies and cross-cultural investigation.

The structure of the study is as follows. In study 1, qualitative research were performed to find out the meaning of “green brand.” In study 2, the paper compared green brand preference with consumers' degree of ethics. In the exposition of each study the paper includes a literature review, methodology, sample, measurement of construct, and result. The paper concludes with a discussion of the findings and implications of the studies, and some suggestions for possible ways in which this research can be extended in the future.

2. Study1. Qualitative Methodology

2.1. Conceptual Framework

Sustainability is a major concern in business management since its strategies are linked to the future of the environment that sustains all life. Sustainability can be achieved via green or ethical consumption. Many companies realize that they are members of the wider community and therefore must behave in an environmentally reasonable fashion (Mainiieri et al., 1997). This means that firms come to know they must achieve environmental objectives as well as financial ones to survive. More marketers are targeting green markets and also incorporating the environmental concerns into marketing activities. Drawing from the past research and analysis of marketing and strategies of green products, successful green products also are able to appeal to mainstream consumers and command price premiums.

A strong brand has high brand equity. Brand equity is the positive differential effect that knowing a brand name has on customer response to the product or service (Kotler & Armstrong, 2009). Brand equity is fundamentally determined by the brand knowledge created in consumers' minds (Keller, 2009). Two particularly important components of brand knowledge are brand awareness and brand image. Brand awareness is related to the strength of brand node or trace in memory as reflected by the consumer’s ability to recall or recognize the brand among different brands (Keller, 2009). Brand image is defined as a consumer’s perceptions of and preferences for a brand as reflected by the various types of brand associations held in the consumer’s memory. In this study we use Keller’s (2014) brand equity model to conceptualize green brand equity. But in this study, we are focused on finding brand associations related to green brands; we did not select specific manufacturers. So we classified the meaning of “green brand” into product-related and non-product related brand images. Previous studies suggest that enhancing brand image is beneficial for increasing of the brand equity (Biel, 1992; Faircloth et al., 2001). In this article, based on the former literature, we used the research framework described below.

[Figure 1] Conceptual framework based on the Brand Equity Model (Keller, 2014)

Although green marketing has long been recognized as an important concept in new marketing paradigms, there is less agreement on its appropriate definition and its constructs. Also, it has traditionally been classified based on company’s attitude and strategy and they are primarily focused on the technological perspective (Ottman et al., 2006; Dangelico & Pujari, 2010). However, if we want to set policies and strategies for green consumers and build green brand equity, we must investigate the meaning of “green” to consumers. It is also important to approach with an ethical viewpoint (Oyewole, 2001).

2.2. Sample and Procedure

A qualitative methodology was selected for the initial portion of this research and focus group interviews were conducted to obtain perceptions on a defined topic (Krueger, 1994). A total of six focus groups (38 participants overall), with each group including between five and seven participants, were conducted at a discussion room in Seoul. Each discussion lasted approximately 90 minutes and one moderator attended each session.

The data were analyzed by using framework analysis, which is considered useful for analyzing group data. The researchers followed the five stages of framework analysis. This includes familiarization, identifying a thematic framework, indexing, charting, mapping and interpretation (Krueger, 1994).

2.3. Qualitative Findings

Participants showed their familiarity with the “green brand” concept. Then, participants were forced to think about the most familiar IT products and asked to write down a word that is most related to the green brand concept. In general, about 80% of participants associated “green brand” with a pro-environmental concept.

The qualitative interviews reveal primary themes relating to green brand images and they also reveal that an ethical perspective is common in participant responses. We figured out that ethical perspectives are important factors that can be used as segmentation criteria of green brand preference. The themes that are related to green branding can be classified into product-related themes and non-product related themes.

There are three factors related with 'Product related theme'. The first factor is 'Cost benefit'. The perception that green brands are expensive is common across focus group discussions. This is a product-related attribute and participants thought that green brands usually use energy-conserving techniques, and therefore maintenance costs will be reduced. Participants also felt that they have confounding views related to cost/benefit. The following quotes express these two points of view.

“I think [green brands are] a little more expensive. This is because green products are made with environmentally friendly materials. And it sometimes requires application of new high-tech systems for energy efficiency”

“At first I felt that [green products are] expensive, but in the long run I think I can save money, because they save maintenance costs. Because of energy efficiency, I'll have a small electricity cost, and the life expectancy of batteries will be longer than other products.”

The second benefit is 'Operation benefit'. Perrault(2010) claimed that marketers are focused on “green” consumers, but it would be harmful for companies to emphasize “green” too much. This could cause consumers' attitudes to become negative. Most participants agreed that even though green brand products usually seem to have higher prices, they would buy green products if their product performance was equal to that of competing products. But they generally did not believe that green brands usually have more functional benefits. In the view of energy, it can be less wasteful but its efficiency is quite questionable. The following quotes express these benefit concepts.

“Green means good quality. This quality contains the meaning of good performance. But I doubt the performance is excellent. Even though there may be no noticeable difference, companies exaggerate in advertisement.”

“I pay 20% more than ordinary brand prices, but its money for value is just 5% or less I think.".

Final factor is 'Environment related benefit – protection and harmony'. As expected, pro-environmental associations with the green brand concept were found in all focus groups. They feel that green brands typically use recyclable material, and that they are inclined to be earth-friendly. We also found other characteristics that are related to the environment. Koreans often give an importance to harmony with nature which means following the rules of nature, and not controlling it. It also means that “green” comes from nature and is not artificial. Participants thought “green brand” has a meaning of harmony with humans, nature, and culture. “

This is one of the main values of green brands. It is neither efficiency, nor price. Its value is to keep our planet clean.”

“Green brand stands for following the rules of nature, not conquering it.”

For 'Non product related themes', I found out five elements. The first factor is 'Benefits for health'. Participants used the words “organic” and “healthy” to explain “green brand.” The people who were interviewed thought “healthy” was very highly associable. Especially males in their 50s and females in their 40s stressed these words. In addition to, environment-related association is related to exteriority and health benefits are related to interiority of personal consideration. People are concerned about the possible health dangers in using electronic equipment, even though it is very useful and convenient.

“I think green brands are good for health. They will consider our eyes when we are watching, and consider our ears when we are listening. We can have the best performance and we can protect ourselves from overperformance at the same time.”

The second factor is 'Self representative benefit'.

Scholars have demonstrated that self-brand connections exist and that they can lead to favorable brand attitudes (Escalas, 2004; Sprott et al., 2009). Consumers engage themselves with green brands. People vary in their tendency to possess particular self schemas, and this can lead to differential attitudes toward green brands. Some consumers thought they could develop their self schemas about how the brands they use and like are related to the self. They create links between “green brand” and their self concept.

“When I use green brands, it makes me appreciate green people. People will treat me as a good-minded person. And it will represent who I am and what I usually do. Using green brands is one of the methods in presenting myself to other people.”

The third factor is 'Smart behavior as a good citizen'.

Participants felt that by using green products, they were acting as good citizens. It became a responsibility for consumers to consider socially responsible consumption. This is a different meaning when compared with selfrepresentation benefits. People will feel that they are doing well when observing the law and ethical values.

Socially responsible consumption can also be thought of as an intelligent behavior. This related to Hoftede’s classification of culture. According to Hoftede, Korean culture is considered collectivistic—Koreans often want to act as a component of society rather than focusing on individual benefits. Therefore we can say that “green brand” can make consumers smart and socially desirable.

“Green can stand for smart. I would say it looks like clever and desirable.”

“When I saw someone in the market who wanted to buy a TV with “green” logo, I felt that she thought about her family and green felt socially desirable”

The fourth factor is 'Symbolic benefit - Trendy'.

Another emergent theme from our analysis is that the newest trends sometimes become an image for green brands. Comments from the informants on this issue include:

“These days, using green brands is a kind of trend. If I don’t see a logo related to green, I think that brand doesn’t keep up with current trends.”

“Green has become something trendy. It seems like a cool behavior because it is new and charming.”

These quotes illustrate that a brand is out-of-date or behind the times if it does not have a “green” benefit.

The final factor is 'Ethical belief - Dominant image related to Green brand'.

We can infer that the concept of green brand is essentially related to ethics from qualitative studies. When asked to discuss the feelings evoked by the idea of a green brand, most participants expressed that these feelings are very positive and also related to ethical consumption. They felt that one who uses green brands will be more ethical. Discussion reveals that ethics is related to green mainly because when individuals buy green products, it makes them feel as if they are doing something positive and good for society. Koreans are influenced by the Confucian culture. Under Confucian culture, ethics is emphasized as an essential requisite to be a man of noble character.

Sustainability can be achieved by green consumption. Ethical consumption means that consumers have a higher level of global awareness. But as far as we know, there is little research dealing with consumer ethics and green brand equity together, especially from the perspective of Asian consumers.

Despite environmentalists' constant urge to treat human-environment interaction as an ethical issue that should be governed by well-articulated moral principles, studies that frame eco-friendly consumer practices as an ethical issue for empirical investigation remain rare. To help fill this research gap, this study uses ethical concepts to examine how consumers’ basic moral philosophies may influence their preference for green brand images and their satisfaction with green brands.

3. Study 2. Quantitative Methodology

3.1. Conceptual Framework

Consumers are an essential part of the marketing processes and marketers should give an effort to understand their target consumers. Understanding differences and similarities between responses on ethical issues and on green brand issues will help Western firms facilitate and market to their targeted consumers. Ethical consumption means that consumers have a higher level of global awareness, which is beyond environmental issues that related to consumers directly. In this study we selected China and South Korea as sample countries.

Ethics can be defined as “inquiry into the nature and grounds of morality, where the term morality is taken to mean moral judgments, standards, and rules of conduct” (Taylor, 1975). A relatively large part of the literature on ethics in marketing has been focused primarily on the seller side rather than the buyer side. But as consumers are major participants in the business process, researchers have found that neglecting them may result in an inadequate understanding of that process (Swaiden, et al., 2003). For example, Vitell and Muncy (2005) developed a consumer ethics questionnaire that examines the significance of morality in various marketplace practices. They developed a consumer ethics scale that examines consumer ethical beliefs regarding various questionable behaviors.

Brand equity, an intangible brand property, is the hidden value inherent in a well-known brand name (Yasin et al., 2007). Higher brand equity can cause consumers to be willing to pay more for the same level of quality due to the attractiveness of the name attached to the product (Bello & Holbrook, 1995). In this study we followed the results of study 1 and also applied Chen's (2010) recent definition of “brand equity.” He defined “green brand equity” as “a set of brand assets and liabilities about green commitments and environmental concerns linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service.”

Because the relationships among the various components of the ethical decision-making process are likely to vary with consumers’ perceived importance of the ethical issue in question, this study also examines the possible moderating effect of this perceived importance.

To the best knowledge of the authors, only one study has attempted to empirically apply general ethics knowledge to the analysis of green-consumption related issues. Chan et al. (2007) surveyed 250 Chinese consumers, and showed that teleological evaluations exert a much stronger influence on ethical judgment than do de-ontological evaluations. In this research, we tried finding the relationship in the case of using durable products. The hypothesis of this research is as follows.

[H1] The level of consumer ethics and the preference for green brand equity have a positive relationship.

Despite the current importance of the Asian market, no study has compared the differences in ethical beliefs of Asian consumers using the Muncy-Vitell Questionnaire. According to Mooji and Hofstede (2010), China and Korea are both considered to be collectivistic cultures. In collectivistic cultures, appeals focusing on in-group benefits, harmony and family are most effective, whereas in individualistic cultures like the United States, it is more important for appeals to focus on individual benefits and independence.

Hall (1976) has suggested a distinction between high-context and low-context culture. In the high-context culture, information is widely shared through simple messages with deep meaning. Therefore high-context countries including China and Korea, the simple message “green brand” can have a deep meaning. As the green brand becomes a new paradigm, individuals' responses to green-brand related questions should be reevaluated.

The choice of China as the research setting for this study warrants discussion. While China has been enjoying remarkable economic performance since its 1978 proclamation of the open door policy, it has nevertheless been paying a high ecological price for this speedy economic development. However, the country is the world’s largest and second largest producer of ozone-depleting substances and greenhouse gas emissions (Baldinger, 2000).

To explain that culture and nation of origin can be used as criteria to distinguish people’s ethical beliefs, we use differential association theory. Differential association theory (Ferrell & Gresham, 1985) assumes that ethical/unethical behavior is learned in the process of interacting with persons who are a part of intimate personal groups or role sets. Thus, it is expected that association with others who are perceived to be participating in unethical behavior, combined with the opportunity to be involved in such behavior oneself, are major predictors of unethical behavior.

3.2. Sample and Procedure

To empirically test our hypothesis, a total of 247 participants from Korea and 281 participants from China were surveyed for this study. Subjects with varying demographic features were randomly selected and overall, 380 (72%) respondents were male. In both the Korean and the Chinese samples, the highest proportion of the sample was in the 30-39 age group (Korea: 59.1%, China: 64.1%).

In this study, we used automobiles as the main product, because of the recent green marketing strategy of the automobile industry. Also, China's car to car-owner ration is increasing more quickly than that of nearly any other country.

The measurement of the questionnaire items in this study was with the Seven Point Likert scale (1 = strongly disagree, 7 = strongly agree). The questionnaire was composed of three parts. The first part was on consumer-ethics related issues and asked every respondent to read about automobile brands that the researcher suggested in the survey paper. Then every consumer was requested to regard it as the focal brand and fill out the questionnaire. The second part concerned green brand equity and the third part was related to demographic items with respondents. In this study, we used the Muncy-Vitell consumer ethics scale. It examined consumer ethical beliefs regarding various questionable behaviors. It resulted in four-dimensional solutions for consumer ethical beliefs: (1) actively benefiting from illegal activities; (2) Passively benefiting; (3) recycling/ environmental awareness; and (4) doing the right thing/doing good.

Based on the measurements of Chen (2010), our measurement of green brand equity includes four items.

(1) It makes sense to buy this brand instead of other brands because of its environmental commitments, even if they are the same. (2) Even if another brand has the same environmental features as this brand, you would prefer to buy this brand (3) If there is another brand whose environmental features are the same as this brand's, you would still prefer to buy this brand. (4) If the environmental concern of another brand is not different from that of this brand in any way, it seems smarter to purchase this brand.

3.3. Analysis and Results

A total of 247 participants from Korea and 281 participants from China were surveyed for this study. Subjects with varying demographic features were randomly selected. As a screening survey question we asked if respondents were interested in automobiles or the automobile industry. Overall, 380 (72%) respondents were male and 148 (28%) respondents were female. In both the Korean and the Chinese samples, the highest proportion of the sample was in the 30-39 age group (Korea: 59.1%, China: 64.1%).

Confirmatory factor analysis (CFA) was performed using AMOS 4.0 to check convergent validity and discriminant validity (Anderson & Gerbing, 1988). The overall model for the Korean sample showed a satisfactory fit. The overall model for the Chinese sample also showed a satisfactory fit.

The findings proved that there was a good fit between the proposed model and the sample data, and undimensionality of all constructs were satisfactory in both cases of Korea and China (Bagozzi & Yi, 1988). SPSS 18 was used to test reliability. It is commonly agreed that if the Cronbach’s alpha coefficient is bigger than 0.6 in the domain of exploratory research, 0.8 in the field of basic research. undimensionality of all constructs were satisfactory in both cases of Korea and China (Bagozzi & Yi, 1988). SPSS 18 was used to test reliability. It is commonly agreed that if the Cronbach’s alpha coefficient is bigger than 0.6 in the domain of exploratory research, 0.8 in the field of basic research. [Table 1] shows the Cronbach’s alpha coefficient results.

[Tale 1] Reliability test result

SPSS 18 was used to analyze the relationship between consumer ethics and Green brand equity preferences. In [Table 2], the preference for green brand equity in automobiles in both Korea and China increased proportionately with the level of consumer ethics. In China, the mean of the green brand equity preference varied from 4.03 for the low ethical consumer to 4.53 in the high ethical group. In Korea, the mean of the preference of previous products ranged from 4.18 to 4.59. 

[Table 2] Mean difference between Chinese and Korean

The rising slope of the preference for green brand is clearly illustrated in [Table 2]

An independent sample t-test was conducted to assess the relationship between consumer ethics and the preference for green brand equity. The higher the level of consumer ethics, the more they preferred green brands.

[Table 3] Independent Sample t-test

4. General Conclusion

With this research we can find the meaning of "Green brand" from customer's perspective. “Green brand” has become a philosophy in marketing and it is required to use the green image for core brand equity. Also, consumer ethics is an important part of marketing ethics. Thus, marketers should consider both internal ethics and external environmental ethics. Moreover, environmental issues have become highly mainstreams in the world. Therefore green marketing is an inevitable trend for companies. However, there remains some criticism about “green”. Many companies still believe that consumers will welcome anything that is considered to be green. Ottman et al. (2006) called this illusion “green marketing myopia.” To avoid this myopia, marketers must fulfill consumers' needs and interests beyond what is good for the environment.

To make green marketing a sustainable competitive advantage to firms, we need to further explore the concept of green branding. This study investigated the “green” concept from the consumer’s point of view. We classified themes for green branding. For Asian consumers, “green” have different meanings because of cultural differences such as collectivism, Confucianism, attitude toward nature, and so on. Participants especially considered that ethical beliefs have a relationship with “green”. “Green” has always existed, but these days it has become a responsibility that contributes to the formation of one’s personality.

Importantly, this research sought to explore the concept of green branding. We investigated the concept “green” from the consumer’s point of view. We classified the green brand image through product-related association and non-product related association. Participants certainly knew the green brand concept and they are more likely to pay attention to the marketing strategies for green brands.

We also tried to determine the relationship between ethics and green brand equity. We suggest that ethics can be used as a segmentation variable. This research was conducted to investigate consumers’ responses toward green brand equity, using data from Korean and Chinese consumers. After clustering the subjects into groups based on the level of consumer ethics, we further tested the relationship between consumer ethics and “green” preference.

However, owing to its exploratory environment, this study surveyed just major cities in China and Korea. Considering China’s vast territories, diverse ethnicities, and extreme ecological differences between regions, we were unable to capture and cover differences between regions. Researchers who are interested in this topic should consider differences between regions and differences between cultures within these countries.

We hope that the research results are helpful to managers, researchers, practitioners, and governments, and provide a useful contribution to relevant studies and global marketing managers.

This research was supported by a 2015 Research Grant from Sangmyung University.