Linking of Egoistic, Altruistic, and Biospheric Values to Green Loyalty: The Role of Green Functional Benefit, Green Monetary Cost and Green Satisfaction

Abstract

The study aims to analyze the influence of egoistic, altruistic and biospheric value on green functional benefit, green monetary cost, green satisfaction and green loyalty. The study analyzes the effect of green functional benefit and green monetary cost on green satisfaction and green loyalty, as well as green satisfaction on green loyalty. The study employs quantitative methods with customers who have green brand purchase experience in Indonesia. Non-probability sampling was conducted using purposive sampling method based on predetermined criteria, which are customers who have already purchase and use green brand products. A total of 402 samples were analyzed using Structural Equation Modelling. The result shows that the data support hypotheses on egoistic and biospheric value, hypotheses on green functional benefit effect to green satisfaction and green loyalty, as well as green monetary cost effect to green loyalty. The other hypotheses are not supported by data. As a conclusion, it is egoistic and biospheric value that has positive effect on green loyalty, while green functional benefit and green monetary cost act as mediation between the value orientation and green loyalty. As managerial implication, green brand marketing strategy should incorporate egoistic and biospheric values in messages in advertising and promotion.

1. Introduction

The trend of consumers awareness in consuming environmental friendly products/services is a reality that must be faced (Kotler, 2011). This is shown in the research by National Geographic and Globe Scan that was published in Greendex Highlight Report (2014). The study that evaluate the sustainability of international consumerism through survey in 18 countries shows that consumers pay attention to environmental issues and affect the daily pattern of consumption. As much as 65% of the consumers surveyed see themselves as green or as a person who minimize waste, trying to safe energy, choose environmental friendly product, and reject brand/product that destruct nature.

Unfortunately, despite of this increasing awareness, enthusiasm of the growth of greenness is still far from expectation (Yadav, 2016). This is due to different phenomenon that happening in the other side i.e. the consumers that are expected to become the determinant in the global green growth, comes up not really conduct environment friendly attitude (Goh & Balaji, 2016). This condition is in line with the conclusion of previous research, that behind the growing awareness to the environment, consumers are not buying regularly as expected (Chekima, Wafa ,Igau, Chekima, & Sondoh Jr., 2016). Consumers who show awareness and positive attitude towards environment is not always indicate regular buying attitude (loyalty) or even they don’t show that kind of commitment at all (Tan, Johnstone, & Yang, 2016).

Awareness of various environmental issues and various environmental problems has touched human value orientations and has created a new paradigm for the universe (Werff, Steg, & Keizer, 2013). This makes them review their consumption behavior decisions, become more environmentally conscious (Nguyen, Lobo, & Greenland, 2016). Value orientation is an important parameter that can strengthen or weaken behavior (Lee, Kim, Kim, & Choi, 2014). There are three important value orientations in a person that consists of egoistic, altruistic, and biosphere (De Groot & Steg, 2008).

In other research, Hartmann and Ibanez (2012) outline that functional benefit and emotional benefit also can be antecedent in the development of green loyalty. However, the gap between attitude and behavior that occurs indicate the need of mediating variable to elevate its implication to behavior (Lin, Lobo, & Leckie, 2017). Several research then try to use satisfaction, trust, brand-self connection or relationship quality as mediating variable (Papista & Krystalis, 2013). Aside of benefit as push factor in green consumption behavior there are other important factor i.e.barrier of consumption in green behavior (Goh & Balaji, 2016) and price sensitivity towards green brand (Casidy & Wymer, 2016) which are part of green sacrifice. Sacrifice or perceived cost in green brand is believed by previous research as potential to hamper the buying (Fleith, Ribeiro, & Cortimiglia, 2016).

This study tries to find out how the egoistic, altruistic and biosphere value as antecedent will affect consumers green behavior, using functional benefit and monetary cost as mediation factors. To add to the construct this study will also insert satisfaction as mediation into the variable.

2. Review of Literature

2.1. Green Loyalty

Loyalty refers to repeated buying behavior or repeated use of a product or brand in the long run (Kumar & Shah, 2004). Although loyalty is a form of behavior that is similar to attitudinal, but it refers to cognitive, affective, and conative as its constituent elements (Homer & Kahle, 1988), therefore forming loyalty is one of the most important marketing goals. In the midst of increasing competition in the business world, the formation and sustainability of loyalty is a necessity (Han et al., 2018). Loyalty is believed to be formed as a result of repeated purchases, willingness to pay, and positively recommend the brand (Aysel, Unal, Candan, & Yolfirim, 2012).

Therefore, a brand will try to shape consumer loyalty towards its brand, in addition to having a positive impact on sales, increasing profits, and establishing consumer loyalty(Aksoy et al., 2015). Thus, the conclusion is that consumer loyalty is the financial benefit for the company through the formation of long-term value relationships (Keller & Kotler, 2013). When a brand succeeds in creating loyalty, consumers who show intention and commitment will be loyal to the brand (Han et al., 2018).

In the green brand context, loyalty can be interpreted as the understanding of green loyalty in general is in line with brand loyalty, where green brand loyalty can be defined as a dimension of behavior and attitudes towards a brand (Kwon, Englis, & Mann, 2016). Green loyalty can be interpreted based on Chen (2016), as the degree of repurchase intention driven by environmental motivation and sustainable commitment. Green consumers are considered loyal if they repeat their daily purchases and maintain their tendency towards the green brand.

The behavioral dimension of green loyalty is the actual consumer behavior in the purchase or repetitive purchase of a green brand even though there are other alternatives and also convey positive word-of-mouth about the brand (Kwon, Englis, & Mann, 2016). This is shown by consumers through positive consumer associations on green brand attributes and psychological commitment built through satisfaction(Inoue, Funk, & McDonald, 2017).

2.2. Value Orientations

The concept of VBN by Stern, Dietz, Guagnano, and Kalof (1999) builds relationships between values, beliefs, and norms in a chain forming behavior whereas Goal Framing motivates someone for three purposes, namely pleasure, saving money, or because they think about protecting the environment (Steg, Bolderdijk, Keizer, & Perlaviciute, 2014). Value orientation consists of three different objectives so that collisions often occur and have the potential to strengthen or inhibit green behavior (De Groot & Steg, 2008). Despite different levels of sensitivity to the environment, each value orientations relates to environmentally friendly behavior (Choi et al., 2015). Research conducted by Werff, Steg and Keizer (2013) found that not only egoistic, altruistic but also biospheric influences one's intention behavior on environmentally friendly energy through environmentally self-identity.

Egoistic value is conceptualized by how an individual values him/herself focus on safeguarding or increasing his or her resources, make a person relationship to other people and living nature, and concentrating on self-welfare(Stern, 2000). Although egoistic is expressed as values that lack sensitivity to the environment the goal is the feeling of benefits (self-enhancement). Functional benefits and emotional benefits are the reflection of egoistic value goal(Steg, Bolderdijk, Keizer, & Perlaviciute, 2014). Previous research also shows that egoistic values are related to green behavior (Yadav & Pathak, 2016; Shin, Moon, Jung,& Severt, 2017).

The next value, altruism, is a value that involves acting to increase the welfare of others incurring personal costs but lacking personal gains (Stern, 2000). As with most prosocial behavior, pro-environmental behavior has inherent characteristics of altruism and can be construed as such(Griskevicius, Van den Bergh, & Tybur, 2010). Several studies have found that altruistic values are stronger among people who engage in pro-environmental activities(Schwartz, 1992). Further research found that altruistic values have respectively a positive impact on consumers' environmental identity (Gatersleben, Murtagh, & Abrahams, 2014; Herbes, Friege, Baldo, & Mueller, 2015).

The other values to be raised in this study are biospheric also proven as value orientations that influences the subjective norm variable and explain a person's intention process towards a green hotel (Choi, Jang, & Kandampully, 2015). This finding is in line with Nguyen, Lobo and Greenland (2016) who examined green behavior in Vietnam. Biospheric values showed a strong influence to encourage consumers to choose sustainable product (Kiatkawsin & han, 2017; Tate, Stewart, & Daly, 2014). Therefore the hypotheses are:

H1a: Egoistic value has a positive effect on the green functional benefit

H1b: Altruistic value has a positive effect on the green functional benefit

H1c: Biospheric value has a positive effect on green functional benefit

H2a: Egoistic value has a negative effect on green monetary cost

H2b: Altruistic value has a negative effect on green monetary cost

H2c: Biospheric value has a negative effect on green monetary cost

2.3. The Effect of Green Functional Benefit on Green Satisfaction

The concept stating the relevance of benefits and satisfaction has been expressed previously by Kotler and Keller (2013). Previous research also revealed that benefits are anticipated high, then the opportunity for individuals to behave positively is high and shows a significant influence on satisfaction (Li & Murphy, 2013). Other researches also reveal that consumers who receive more benefits will be more satisfied which is the degree of pleasure consumers feel (Chan, To, & Chu, 2015). Prebensen and Xie (2017) have the same idea where they show that benefits positively influence satisfaction and consumer behavior.

H3: Green functional benefits have a positive effect on green satisfaction

2.4. The Effect of Green Functional Benefit on Green Loyalty

Previous research shows that when benefits are anticipated high, the chances of individuals to behave positively are also high (Lin, Lobo, & Leckie, 2017; Han, Meng, & Kim, 2017). Another study by D'Souza, Taghian and Khosla (2007) found that quality has a higher effect than perceived prices on the decision to buy environmental products. Functional benefits based on environment have also been investigated where it affects consumer satisfaction and loyalty (Han, Meng, & Kim, 2017). Functional benefits shown through green performance on green building are also proven to affect green behavior consumer (Amos, Zhang, & Albert, 2017). Therefore the proposed hypothesis is:

H4: Green functional benefits have a positive effect on green loyalty

2.5. The Effect of Green Monetary Cost on Green Satisfaction

The mental theory of accounting by Prelec and Loeweinstein (1998) states that the perceived utility received will be reduced due to the costs incurred by consumers. Cost incurred by this consumer is perceived sacrifice which will negatively affect consumer behavior, including satisfaction (Kotler & Keller, 2013; Bonini & Oppenheim, 2008) In rationality, people will avoid costs, therefore the higher perceived cost, the lower someone's satisfaction will be, and vice versa (Chen & Chang, 2013). Several previous studies have shown that inferior quality and the perception that high-cost green products negatively affect green behavior (D'Souza, Taghian, & Khosla, 2007). This is in line with research by Prebensen and Xie (2017) stating that prices on green products have a negative relationship with satisfaction and loyalty. Therefore the proposed hypothesis is:

H5: Monetary costs on green brands negatively affect someone's satisfaction

2.6. The Effect of Green Monetary Cost on Green Loyalty

Cost incurred by consumer is perceived sacrifice which will negatively affect consumer behavior (Kotler & Keller, 2013). Previous studies stated the impact of costs on behavior consistently. Ulku and Hsuan (2017) concluded that competitive prices significantly influence consumer buying behavior. Lower pricing will increase one's green consumption. Likewise the opinion expressed by Tan, Johnston and Yang (2016), which examines various green consumption inhibitors, among them are product perceptions, hard to be green, green stigma, perceived sense of responsibility, and readiness to be green. Those variables are representation of the various sacrifices felt by consumers. Furthermore, previous research proved how sacrifice plays an important role as a barrier in green behavior. One of the examples is proposed by Gleim, Smith, Andrews and Cronin Jr. (2013), which states that the high price of green products and lack of buying experience negatively affects a person's green behavior.

H6: Monetary costs on green brands negatively affect someone's loyalty

2.7. The Effect of Green Satisfaction on Loyalty

According to Aysel, Unal, Candan and Yolfirim (2012), satisfaction is an important antecedent to shape one's loyalty regarding green. This is supported by research conducted by Aksoy et al. (2015), in which satisfaction, the representation of cognitive, emotional, physical, sensorial, and social experience influences customer loyalty. Another previous research by Chen and Chang (2013) also supports the relationship between satisfaction and loyalty. In this study, it is reported that satisfaction affects loyalty. Therefore the proposed hypothesis is:

H7: Satisfaction on green brands positively affects one’s loyalty

2.8. Research Framework

The type of research used is causal research because this study aims to examine the effects of egoistic, altruistic, and biospheric values on green functional benefit, green monetary cost, green satisfaction and green loyalty as shown in Figure 1.

Figure 1: Conceptual Framework

3. Methodology

This research uses quantitative method to calculate data and make conclusion to the sample taken. The population for this study is green brand consumers in Indonesia who actively buy green brands (at least 3 times in the past year). To get a sample that can describe the population, Hair formula is used in determining the number of research samples, which is 5-10 times the number of indicators (Hair, Black, Babin, & Anderson, 2009). The sampling technique used is purposive sampling in which the characteristics of the sample are categorized by age, and buy the green brand minimally 3 times in the past year.

This research uses online survey questionnaire in form of Google Docs with accessible link being spread to e-mail addresses. After filtered by the criteria, this study involved 402 respondents that were collected between the first week of November 2017 until the first week of January 2018. Respondents are welcome to answer questions in the link by clicking on the available answer options. Their answers will then go straight into the Microsoft Excel data format and ready to be processed. This online survey technique is self-administered, and web-based.

Data analysis method used in this research is quantitative analysis, using the Structural Equation Modeling (SEM) with Lisrel program, which combine factor analysis, structural model and path analysis. The analysis includes analysis of measurement model, structural model test, and hypothesis test. The test of moderation variables will be done with the interaction model, because both variables are continuous(Wijanto, 2015).

4. Results

4.1. Description of Respondents

The total number of respondents are 402 consisting of 175 men (43.53%) and 227 women (56.47%). In this study, the number of respondents is almost the same between men and women, although the frequency of female respondents is greater. From the Age profile, the number of respondents who answered the questionnaire aged 21-30 years is 217 people (53.98%) followed by respondents aged 31-40 years as many as 110 people (27.36%), the third rank is respondents with the age of 41-50 years as many as 57 people (14.18%). This is in accordance with the previous research by Nielsen (2011) which states that the millennial generation is the majority generation of green brand users and more environmentally conscious. From the Education profile, the majority of respondents who answered the questionnaire is 217 students (53.98%) with undergraduate education (S1), followed by the second place with 120 Masters (29.85%) with Master degree education. From the description of the respondents, it is found that participants who show green behavior are the most from those with higher education and from the female group.

4.2. Results of Analysis of Measurement Model

The Structural Equation Modeling (SEM), LISREL version 8.7 and two step analysis approaches as suggested by Gerbing and Anderson (1984) were adopted to analyze the data. To measure the same concepts convergent validity test is applied. According to Wijanto (2015), standard factor loading, composite reliability, and average variance extracted are used as indicators to assess the convergent validity. Based on the table on appendix 1, all items have Standardized factor loading above 0.5, so it is said as valid. Construct Reliability results from CR ranged from 0,90 to 0.93 shows a reliable measurement model is reliable if the value of CR> 0.70. The VE value is said to be reliable when VE> 0.50 (Hair, Black, Babin, & Anderson, 2009) and the value of VE were in the range from 0.52 to 0.75, so it is concluded that the diversity of loading of all indicators is reliable (Appendix 1)

4.3. Structural Model Analysis

There are two analysis of this structural model, which are the Goodness of Fit test and hypothesis testing for causal relationships. Goodness of fit testing uses the measurement of RMSEA, NFI, NNFI, PNFI, CFI, IFI, RFI, SRMR, GFI, AGFI and PGFI. Most of the result shows a good fit. Structural Model represents the relationships between latent variables hypothesized in research model (Hair, Black, Babin, & Anderson, 2009). The procedure used 402 samples to test the significance of regression coefficients to estimate parameters. Table 1 illustrates the research model.

Table 1: Hypothesis Test Results

*Significant with t value > 1.96.

Two of hypothesis 1 are proven, with egoistic and biospheric value have positive effect on green functional benefit (t = 3.19, value of coefficient = 0.16; t = 3.68, value of coefficient 0.40), while altruistic value is not supported by data (t = 1.42, value of coefficient = 0.15). This mean only egoistic and biospheric value have influence to green functional benefit while altruistic value doesn’t have it. Hypothesis 2 also shows the same pattern, with egoistic and biospheric value have negative effect on green monetary cost (t = -2.89, value of coefficient = -0.17; t = -2.23, value of coefficient = -0.26), while altruistic value is not supported by data (t = 0.43, value of coefficient = 0.048). Hypothesis 3 is proven, with green functional benefit has significant positive effect on green satisfaction (t = 12.53, value of coefficient = 0.72). Hypothesis 5 also proven, with green functional benefit has quite significant positive effect on green loyalty (t= 5.31, value of coefficient = 0.37). Hypothesis 6 is proven, with green monetary cost has significant negative effect on green loyalty (t = -10.03, value of coefficient = -0.47). Hypothesis 4 and 7 are not proven in this research model with t = -1.77, value of coefficient = -0.072, and t = 0.50, value of coefficient = 0.041 respectively.

5. Discussion

The findings of this study indicate that egoistic has a positive and significant effect on the green functional benefits. This means that this is in line with the previous research showing that egoistic values are related to green food product behavior (Kareklas, Carlson, & Muehling, 2014). Likewise, Yadav and Pathak (2016) concluded that egoistic values encourage consumers to behave positively in the context of green food. The next finding, altruistic, doesn’t have effects on the green functional benefits. This is parallel with previous studies which show that altruistic is an important variable in shaping socially behavior, but not in line with environmental behaviour (Werff & Steg, 2016; Shin, Moon, Jung, & Severt, 2017). This study also shows the results that biopheric affects a person's green functional benefits. This is in line with the Values Theory and VBN which state that biospheric values are predictors of green behavior (Stern et al., 1999) and research by De Groot and Steg (2008) who find that biospheric values are driving green behavior relating to benefits to the environment.

Another finding obtained is that the higher the egoistic value a person has will make the monetary cost he feels towards the green brand lower. In other words, egoistic values make one not feel heavy paying high green brand prices. This is in line with the statement of D'Souza, Taghian and Khosla (2007) who found that consumers were willing to pay a higher price for green products and previous research which stated that egoistic motivation made someone not mind paying high (Birch, Memery, & Kanakaratne, 2018).

The next finding, that is altruistic values, has no effect on green monetary cost. The findings of this study are in line with the statement submitted by previous research that altruistic differentiated into social-altruistic and biospheric has unequal consequences (Stern & Dietz, 1994). This study’s finding is also supported by previous research by Lee et al. (2014), which states that altruistic values do not directly influence one's green behavior. The effect of altruistic values on green behavior occurs when mediated by PCE (perceived consumer effectiveness) and environmental awareness. The results of another study show that the higher the biospheric leads someone to not mind paying green monetary costs. This is consistent with the previous findings that biospheric is relevant to the level of activities that prioritize environmental welfare even though they have to pay high prices, interest, effort, or other costs (Davis et al., 2011). Likewise, research by Steg, Bolderdijk, Keize and Perlaviciute (2014) concluded that consumers who endorse biospheric values will show willingness to accept negative consequences, including prices.

This research also shows that there is a green functional benefit positive effect on satisfaction. This is in line with Chen (2013) and Young (2010) who found that product attributes positively influence the purchase of green products. Also the research by Yadav and Pathak, 2016 concluded that functional benefits on green food such as taste, quality and health benefits are factors that influence the purchase of green products. This is also consistent with previous findings that perceived benefit influence loyalty (Lin, Lobo, & Leckie, 2017).

The next results of the study is green monetary cost have a negative effect on green satisfaction. Since the potential customer could accessed, price comparison will be easy to conduct (Sihite, Harun, & Nugroho, 2015). This research also shows that green monetary cost has a negative effect on loyalty. Another appropriate study by Hsu, Chang and Yansritakul (2017) states that price sensitivity influences as a moderating effect of antecedent relations with the behavior of buying green personal care in Taiwan. This is in line with the statement that prices on green products have a negative relationship with satisfaction and loyalty (Hall, Jeanneret, & Rai, 2016; Hartmann & Ibanez, 2007). It is mean that the less objections consumers to product prices, the higher consumer satisfaction will be (Kotler & Keller, 2013).

The next finding from this study shows that green satisfaction doesn’t affect the increase in green loyalty. This is in line with previous research showing the conclusion that the relationship between the two in the consumer behavior must be reviewed, because there are still many gaps between the two (Casidy & Wymer, 2016). Based on the previous research, it turns out that the relationship between satisfaction and loyalty has been examined in a broader view and contradictory results with each other (Kamran-Disfani, Mantrala, Izquierdo-Yusta, & Martínez-Ruiz, 2017). Previous studies also found that factor satisfaction is not a determinant of the drivers of behavioral loyalty (Jiang & Zhang, 2016)

6. Conclusions

Although several of these studies show that the hypothesis is not fulfilled due to the relationship, but, the research show that values orientation has indirect effect to green satisfaction and green loyalty. Egoistic and biospheric values have effect to green satisfaction and green loyalty within green functional benefit and green monetary cost as mediation. While altruistic values have no effect to green satisfaction and green loyalty.

This research also reveals finding that satisfaction does not affect loyalty. This means that one's loyalty does not depend on high or low satisfaction. Therefore, the next research should use other variables as mediation beyond satisfaction, or add other variables as mediation of satisfaction with green loyalty. For example, attitude or commitment. Various shortcomings still exist in this study including that this study uses a survey method even though the variable appointed as antecedent is the values orientation as the psychological factor of the consumer. Therefore, researchers suggest to use experimental design methods in the next study to be more explorative. In addition, further research should be the values orientation positioned as a moderating variable so that it classifies consumers with each dominant values orientation and compared the differences in influence on green behavior. The researcher also suggest to make a research on the influence of values orientation towards green behavior in the scope of social marketing, for example, a research related to waste management, the use of environmentally friendly transportation, green life style, and organic food.

The next research is expected to involve other moderation and mediation variables such as green self identity and green commitment. Thus it is expected to be able to strengthen the relationship orientation values with green loyalty. In addition, the next research can also make comparisons between regions of particular countries, for example comparing developing countries with developed countries, or Asia and Europe and involving community culture as one of the moderation variables.

Appendix