1. Introduction
The use of sales promotion has gradually increased and the expenses of sales promotion make up roughly one fourth of consumer promotions’ marketing budgets in some consumer product companies (Raghubir, 1998; Inman, Winer, & Ferraro, 2009). Recently, the environment protection and social responsibility have attracted urgent attention from governments, businesses, consumers, and society at large (Banerjee, Iyer, & Kashyap, 2003; Grinstein & Nisan, 2009), and the idea of using green premium as promotion tool could have an advantage in conducting marketing. Based on the definition of premium stated by Kotler and Keller (2016), green premium can be referred as an offer of environmental-friendly product from sellers at a low price or free that is used as an extra incentive toward consumers.
Past research has demonstrated that premium can be a powerful tool to create values for customers and positively promote products while maintaining consumers’ quality perceptions (Darke & Chung, 2005). Besides, it can contribute to enhance consumers’ purchase intentions (Helm, Mark, & Bley, 2009; Neha & Manoj, 2013). We had reviewed past studies focused on green purchase behavior and effectiveness of the premium.
It can be seen from Table 1 that all the previous researchers agree that environmental consciousness and environmental concern have significant impacts on green purchase intention as well as green purchase behavior. However, there is still a lack of theoretical evidence regarding the effect of green premium on consumers’ responses. There has been limitation about the research that worked on self-expressive benefit, and there are conflicting results among these past studies. Some of them proposed that green self-expressive benefit is a motive that makes consumers buy green product (Ahmad & Thyagaraj, 2015; Choi & Cho, 2015), whereas others disagree with this opinion (Hartmann & Apaolaza-Ibáñez; 2012). These parallel outcomes among prior studies motivate further studies, which could reexamine the influence of the perceived green self-expressive benefits in formulating consumers’ behavior. The fit between premium and product is proved to be one of the most important factors that determines consumers’ reactions (d’Astous & Landreville, 2003; Helm, Mark, & Bley, 2009; Montaner, De Chernatony, & Buil, 2011; Buil, De Chernatony, & Montaner, 2013; Palazon & Delgado‐Ballester, 2013). As the result, it is indispensable to analyze the influence of this perceived fit in case of using the green premium.
Table 1: Past Studies about Green Purchase Behavior and the Premium effectiveness
With all limited academic evidence mentioned above, this research aims to shed the light on the determinants of consumers’ intent to purchase the product bundled with green premium. Firstly, we investigate the effects of green self-expressive motive and the fit between green premium and product on consumer’s perceived value for green premium and attitude toward the bundle. Secondly, we examine the relationship among the perceived value for green premium and attitude toward the bundle, and also explore the effects of attitude toward the bundle on purchase intention.
Therefore, this study will advance the theory about green premium as promotion tool, and provide the ideas of choosing and managing target customers in the respects of green self-expressive motive and the fit to marketers.
2. Theoretical Background and Hypotheses Development
2.1. Premium and Green Premium
Sales promotion can be categorized into price promotions and non-price promotions sale (Srinivasan, Pauwels, Hanssens, & Dekimpe, 2004). Since price promotion approaches have been found to have negative impact in the long-term, cause the price sensitivity, and reduce brand equity (Mela, Gupta, & Lehmann,1997; Yoo, Donthu, & Lee, 2000; Ataman, Van Heerde, & Mela, 2010), non-price promotion strategies have been perceived as potential alternatives, especially with the increasing use of premiums (Palazon & Delgado‐Ballester, 2009).
Premium is one tool of non-price promotions which has received great attention recently. According to Promotional Products Fact Sheet by Promotional Products Association International (PPAI) in 2018, promotional product industry sales in 2017 increased 9.31% accounting for $23.3 billion - the highest sales volume within 18 years. Premium is defined as an offer of sellers at a low price or free that is used as an extra incentive toward consumers (Kotler & Keller, 2016). There have been certain conflicts among opinions regarding premium’s effectiveness. Some researchers demonstrate that non-price promotions are considered less powerful compared with price promotion (Diamond & Johnson, 1990). Customers may perceive premium as a little gain (Diamond & Johnson, 1990) and think that they pay extra for the gift (Simonson, Carmon, & O’Curry, 1994). In contrast, according to Darke and Chung (2005), premium is an effective tool to not only promote product as well as communicate value to customers but also maintain consumers’ quality perceptions. Premium is suggested to be one of the most influential factors determining consumers’ purchase intentions (Neha & Manoj, 2013).
Developed from the definition of premium stated by Kotler and Keller (2016), in this research, green premium refers to an offer of environmental-friendly product from sellers at a low price or free that is used as an extra incentive toward consumers. Green premium is getting more popular among companies which can be seen through various campaigns, for instance, Starbucks gives away reusable cups and straws to enhance the awareness of customers about the environment protection. Lush which is an eco-friendly cosmetic brand also uses its bath bombs as premiums for customers.
2.2. Perceived Value for Green Premium
Perceived value refers to overall assessment of consumers about the benefits of a product built on the comprehension of what is gotten and what is given (Sinha & DeSarbo, 1998; Sweeney, Soutar & Johnson, 1999). It is verified that the perceived value can exert profound influence on marketing performance (Sweeney, Soutar, & Johnson, 1999), such as differentiating firm’s product from other competitors’ product (Aaker, 2012), achieving favorable long-standing customer relationship, affecting consumer trust (Kim, Zhao, & Yang, 2008) and enhancing consumers’ purchase intentions (Steenkamp & Geyskens, 2006; Zhuang, Cumiskey, Xiao, & Alford, 2010).
In order to distinguish green premium from others, this research focuses on a special value called green-perceived value. In the study of ecological value for the green product of Koller, Floh, and Zauner (2011), the green-perceived value is described as consumption-related issues regarding the natural environment and the humans’ impact on it. The perceived green value is referred as consumers’ perceptions of obtaining additional benefits from purchasing, consuming and disposing of green products in a manner that is sensitive or responsive to ecological concerns, compared with that of non-green products. In this research, we use the definition of green-perceived value introduced by Chen and Chang (2012). Green-perceived value is defined 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 (Chen & Chang, 2012). According to Chen and Chang (2012), green-perceived value can be observed through the fact that the environmental functions of green products can provide very good value for consumers. Besides, green products convey more environmental concern than other products; be more friendly to environment and provide more environmental benefit than others. Green-perceived value is proved to be positively correlated with green trust (Sweeney, Soutar, & Johnson, 1999; Eid, 2011; Sirdeshmukh, Singh, & Sabol, 2002) and purchase intentions (Gounaris, Tzempelikos, & Chatzipanagiotou, 2007).
2.3. Attitude toward the Bundle
Bundling is described as the sale of two or more separated products (both goods and services) in one package (Stremersch & Tellis, 2002). The “separated products” refer to the ones that have their own separated markets or there are at least a certain number of consumers wishing to purchase this product separately. With the presence of green premium, the bundle is expected to consist of at least one main product and one green product as premium. A consumer’s attitude toward a particular product shows how he or she evaluates this product entirely (Hoyer, MacInnis, & Pieters, 2012), therefore, attitude toward the bundle can be defined as the total evaluation of consumer toward the bundle as a whole.
2.4. Factors Affecting Perceived Value for Green Premium and Attitude toward the Bundle
2.4.1. The green self-expressive motive
Previous researchers have put effort in studying self-expressive benefit and how it affects consumers’ responses to a brand. If consumers perceive that they can get benefits from consuming a product, these benefits may become motives for them to use this product. As the result, in this study, self-expressive benefit is regarded as psychological motive (Hartmann & Apaolaza-Ibáñez, 2012), specifically, self-expressive motive.
Self-expressive motive refers to the ability of the purchase and consumption of an offering to provide a mean by which a person can express himself or herself (Aaker & McLoughlin, 2009). In support of this notion, Aaker and Joachimsthaler (2012) stated that a self-expressive motive exists when the brand provides a vehicle by which the person can proclaim a particular self-image. As the result, the brand is a mean for customers to fulfill their self-expressive needs, and customers will choose a brand which its image is closest to their own self-images (McDonald, De Chernatony, & Harris, 2001). The self-expressive motive is closely linked to the need for social approval proposed by Keller, Parameswaran, and Jacob (2013) which refers to the use of a brand to both gain acceptance and create a certain image to others.
The concept of self-expressive motive is based on signaling theory which demonstrates that consumers choose environmentally-friendly products because they have social visibility need (Aaker, 1999). Signaling refers to the process of implicitly expressing information about oneself by taking part in behaviors that communicate personal traits as well as preferences to others. As stated by Glazer and Konrad (1996), when the higher potential of signaling exists, people have more willingness to consume in a manner that benefits society. Self-expressive motives are what consumers get when consuming a product in order to expose personal characteristics as well as preferences to others; and to feel a sense of value, while expecting acknowledgement for this behavior from others (Hartmann & Apaolaza-Ibáñez, 2012; Kahneman & Knetsch, 1992). Individual consumptions of eco-friendly products kick off an opportunity for consumers to display their environment concerns to others. Hence, in case of using green premium, self-expressive motive can be concretized as green self-expressive one which refers to the ability of green premium’s consumption to express personal environment concern, feel a sense of value, and achieve acknowledgement from others.
It is suggested that consumers may use eco-friendly products conspicuously not only to display pro-environmental attitudes but also to signal their altruism (Hartmann & Apaolaza-Ibáñez, 2012). Besides, consumers are more willing to consume, and pay a higher price, for green self-expressive benefits, because of not only the environmental impact of their action but also the fact that they want to feel better about themselves (Hartmann & Apaolaza-Ibáñez, 2012). As the result, it can be predicted that when consumers have high motivation to express themselves as those who care for environment, they may perceive green premium as having more values. It also be proved that consumers form better responses toward green product when they have good perception of green self-expressive benefit about the product (Choi & Cho, 2015). In this research, we refer green self-expressive motive as a cause of increasing perceived value for green premium and attitude toward the bundle.
H1: Green self-expressive motive has positive impact on perceived value for green premium.
H2: Green self-expressive motive has positive impact on attitude toward the bundle.
2.4.2. The fit between green premium and product
Perceived fit refers to the congruence or proximity between the promoted product and the premium, and is considered a fundamental factor in designing premium-based sales promotions (Hiam, 2000; Rossiter & Percy, 1997). This element’s effect has been studied in several research streams such as brand extensions (Aaker & Keller, 1990), sponsorship (Simmons & Becker-Olsen, 2006) or cause-related marketing (Nan & Heo, 2007). The researches in sponsorship demonstrate that the stronger the link between the sponsor and the sponsored event or entity, the greater the impact on the sponsor’s image and the attitude towards the sponsoring itself (McDonald, 1991). Other evidences can be seen through the balance theory proposed by Basil and Herr (2006) which shows that the relationship between firm and the charity becomes greater when fit between them exists. Fit is believed to enhance perceptions of the strength of the cause-related marketing (CRM) alliance, resulting in more positive responses (Basil & Herr, 2006).
Similar phenomenon can happen to green premium promotion. The study of Chandon, Wansink and Laurent (2000) shows that effective promotions are those offering benefits that are congruent with the promoted product. Furthermore, the perceived fit has a significant influence on consumer’s responses toward promotions (d’Astous & Landreville, 2003). When the fit is high, consumers experience cognitive consistency and respond favorably to the offer, whereas, when the fit is low, consumers experience cognitive inconsistency and report negative reactions (Buil, De Chernatony, & Montaner, 2013). Consequently, in case of using green premium, if green premium does not fit with promoted product, consumers may doubt about the reason why company chooses to use this green premium as well as find it hard to catch the congruence between premium and product. Therefore, they may not be able to form favorable perceived value for this green premium and favorable attitude toward the bundle. On the other hand, if the fit between green premium and product exists, the opposite result will be observed.
H3: The fit between green premium and product has positive impact on perceived value for green premium.
H4: The fit between green premium and product has positive impact on attitude toward the bundle.
2.5. The Relationship among Perceived Value for Green Premium, Attitude toward the Bundle and Purchase Intention
Perceived value for green premium plays an important role in forming attitude of consumers toward the bundle. It is proved by various researchers that perceived value strongly affects consumers’ attitudes (Teas & Agarwal, 2000; Haghirian, Madlberger, & Tanuskova, 2005). Furthermore, study of Ruiz-Molina and Gil-Saura (2008) shows that social value has significant effect on customers’ attitudes in certain industries. In general, consumers will evaluate the product more favorably when they think that they can obtain certain values from this product. Hence, we expect that when consumers purchase the green product bundle, the greater value consumers perceive, the better attitude toward the bundle they form.
H5: Perceived value for green premium has positive impact on attitude toward the bundle.
According to Spears and Singh (2004), purchase intention refers to personal action tendencies relating to the brand. It reflects what the consumers think and will buy in their mind (Blackwell, Miniard, & Engel, 2001). Consumers’ attitude toward promotions is believed to play a crucial role in enhancing willingness to buy (Vaidyanathan, Aggarwal, Stem, Muehling, & Umesh, 2000). With the advanced dual mediation model, Helm, Mark, and Bley (2009) demonstrated that the attitude toward the bundle can directly influence buying intention as well as moderate the relationship between the premium attitude and purchase intention. This effect can be expected in case of the bundle with green premium, since the bundle is also a kind of product. As the result, we propose that when consumers have great attitudes toward the bundle, it will increase purchase intentions.
H6: Attitude toward the bundle has positive impact on purchase intention
2.6. The Effect of Product Attitude on Attitude toward the Bundle and Purchase Intention
Product attitude is defined as the consumer total evaluation of product (Hoyer, MacInnis, & Pieters, 2012). Attitude toward a product can be positive or negative, favorable or unfavorable. d’Astous and Jacob (2002) have demonstrated the effect of attitude variables on consumers’ reactions to premium-based promotional offers. Moreover, in the research of Helm, Mark, and Bley (2009), it is confirmed that consumers’ product attitude has a positive impact on consumers’ attitude toward the product bundle. In another word, the more favorable the product attitude, the more favorable attitude toward the bundle.
H7: Product attitude has positive impact on attitude toward the bundle.
The factors affecting purchase intention can be seen in the theory of planned behavior (TPB) proposed by Ajzen (1991). According to TPB model, attitude is considered one of three main factors affecting behavioral intention. Attitude refers to feeling or experience that forms a tendency to act toward a person, things or situation (Diallo, Chandon, Cliquet, & Philippe, 2013). Furthermore, the theory of reasoned action developed by Fishbein and Ajzen (1975) also shows that attitudes and subjective norms can affect intention. As the result, we propose that if consumers have favorable product attitudes, they will have higher intentions to purchase the product bundle with green premium.
H8: Product attitude has positive impact on purchase intention.
The hypotheses can be displayed in the Figure 1 below.
Figure 1: Research Model
3. Methodology
3.1. Procedure
Starbucks was chosen for empirical study to explore the effect of green self-expressive motive and the fit between green premium and product. We use two kinds of Starbucks product bundles as experimental products. The bundle A is comprised of Starbucks coffee and a reusable cup and straw set which is green product, while the bundle B is comprised of Starbucks coffee and a key ring which is not green product. Participants see the illustrative pictures of Starbucks product and its premiums (A and B) at the beginning of completing the survey questionnaire.
Since the research target is Vietnamese people, 60 Vietnamese participants were recruited to conduct the pretest. The pretest is analyzed and used to correct the questionnaire for main survey. After that, the questionnaire for on-line survey was built at Google Forms and spread out via popular social media sites such as Facebook, Google+, Twitter. Respondents exposed to the questionnaire were asked to complete it. In total, 314 Vietnamese people participated in the survey. 71 of responses were excluded because they did not perceive reusable cup and straw set as green premium or did not think that the reusable cup and straw set and the key ring have the same price after seeing the illustrative pictures of Starbucks product and its premiums. 243 responses were used for testing the hypotheses. The majority of participants are female accounting for 76.1%, while the number of male and other genders make up 23.5% and 0.4%, respectively. 49.0% of participants are from 26-35 years old and 44.0% of them are from 16-35 years old also. Participants who are under the age of 16, 36-45 years old, and over the age of 45 just contribute 1.6%, 3.7%, and 1.6%, respectively.
3.2. Measures
Green self-expressive motive: Three statements measuring green self-expressive motive are adopted from the research of Hartmann and Apaolaza-Ibáñez (2012). The three items are ‘With Starbucks, I can express my environmental concern,' ‘With Starbucks, I can demonstrate to myself and my friends that I care about environmental conservation,'and ‘With Starbucks, my friends perceive me to be concerned about the environment,’ which are measured by the 7-point Likert scale from (1)=not at all to (7)=very much.
The fit between green premium and product: The fit between the green premium and product is rated with two items (d’Astous & Landreville, 2003) which are ‘The green premium is appropriate for Starbucks's product,' and ‘There is a good association between the green premium and Starbucks's product,’ which are answered based on the 7-point Likert scale from (1)=not at all to (7)=very much.
Perceived value for green premium: This paper refers to Chen and Chang (2012) to measure the perceived value for green premium. Respondents were asked to give out their evaluations of green premium by answering the three items: 'The green premium conveys more environmental concern than other premium,' 'The green premium is environmentally friendly than other premium,' and 'The green premium has more environmental benefit than other premium,’ based on the 7-point Likert scale from (1)=not at all to (7)=very much.
Product attitude: Attitude toward product is measured by the items coming from the scale of Helm, Mark, and Bley (2009). Respondents were asked about their appraisal views on the products. These items include a list of bipolar adjectives under 7-point rating scale which are ‘Dislikeable/ Likeable,' 'Unattractive/ Attractive,' 'Useless/ Useful,' 'Innutritious/ Nutritious,' and 'Unreliable/ Reliable'.
Attitude toward the bundle: The value expression benefit scale of Chandon, Wansink, and Laurent (2000) is adopted. Three items used include ‘With the bundle A, I feel good about myself,' 'With bundle A, I can be proud of my purchase,' and 'With bundle A, I feel like I am a smart shopper,' which are rated based on 7-point Likert scale from (1)=strongly disagree to (7)=strongly agree.
Purchase intention: Referring to Baker and Churchill (1977), who measured the inclination of a person to buy a specified good, four items are used. ‘Would you like to try bundle A?,' 'Would you buy bundle A if you happened to see it in Starbucks store?,' 'Would you actively seek out bundle A in Starbucks store in order to purchase it?' and 'I would patronize bundle A,’ which are answered based on 7-point Likert scale from (1)=no, definitely not to (7)=yes, definitely.
4. Results
4.1. Reliability, Validity and Correlations among Constructs
Cronbach’s alpha is used to check the internal consistency or reliability of a psychometric instrument. In addition, we also apply the confirmatory principal component factor analysis based on Varimax rotation in SPSS 22.0 program to investigate convergent validity. The analysis results are illustrated in Table 2. There are six principal components including product attitude, purchase intention, green self-expressive motive, perceived value for green premium, attitude toward the bundle, and the fit between green premium and product, in which all the items are judged to converge to their own construct. It can be seen that all α values are higher than .8, which indicate good internal consistency.
Table 2: Results of Analyzing the Components
Regarding correlations among constructs, all values of AVE (AVESEM=.764, AVEFIT=.767, AVEPA=.632, AVEVAL= .701, AVEAB=.794, AVEPI=.738) are found to be higher than .5 and are higher than the squares of correlation coefficients at each construct, which indicates that the items used for measuring each construct are converged to their own construct.
4.2. Testing Hypotheses
Tested by structural equation model of AMOS 21.0 program, the research model shows good fits with the results of GFI=.883, AGFI=.846, CFI=.954, TLI=.945, IFI=.955, RFI=.898, NFI=.915, RMSEA=.066, even χ2=325.397 (DF=159, P=.000). The hypotheses analysis results are displayed in details in Table 3. It can be seen that H4 was not accepted (Estimate=.044, CR=.631, P=.528), which indicates that the fit does not have direct effect on attitude toward the bundle. However, all the other hypotheses were accepted, which demonstrates that green self-expressive motive and the fit between green premium and product can enhance perceived value for green premium (H1 and H3). Besides, the finding supports the direct effect of green self-expressive motive on attitude toward the bundle (H2). It is also proved that perceived value for green premium positively influence consumers’ attitude toward the bundle (H5), which in turn increases intent to purchase (H6). Finally, the research also indicates that favorable product attitude can improve attitude toward the bundle (H7) and purchase intention (H8) .
Table 3: Results of Testing Hypotheses
χ2 =325.397 (DF=159, P=.000), GFI=.883, AGFI=.846, CFI=.954, TLI=.945, IFI=.955, RFI=.898, NFI=.915, RMSEA=.066
5. General Discussion
5.1. Research Summary
With the increasing concern for environment, companies are getting more involved in the sustainability marketing race. There is a need to combine the environmental-friendly factors in marketing campaigns. As the result, the concept of green premium is introduced to marketers. In this research, we focus on two factors that are expected to affect perceived value for green premium, which in turn influences attitude toward the bundle and then purchase intention. These two factors include green self-expressive motive and the fit between green premium and product to which past researches have given little attention. Besides, we also examined whether these two determinants can directly affect the attitude toward the bundle or not. Additionally, product attitude is added to the model as a covariate to see whether it can influence attitude toward bundle and purchase intention.
The findings show that green self-expressive motive has both positive impact on perceived value for green premium and attitude toward the bundle while the fit between green premium and product has positive impact only on perceived value for green premium but not on attitude toward the bundle. The perceived value for green premium is proved to positively influence attitude toward the bundle, which in turn increases purchase intention. It is also found that favorable product attitude leads to favorable attitude toward the bundle and enhances purchase intention.
The fit between green premium and product has no direct positive impact on the attitude toward the bundle. The perceived value for green premium plays mediation role in the effect of the fit on the attitude toward the bundle. Even if consumers think that there is the fit, the value perceived for the green premium is judged to be important to them when they evaluate the bundle.
In conclusion, it can be suggested that using green premium can facilitate consumers’ intention to purchase the bundle product with green premium. The green self-expressive motive and the fit between the green premium and the product are two significant exogenous determinants in increasing perceived value for green premium, which in turn, positively influences attitude toward the bundle even with the effect of product attitude as covariate on the attitude towards the bundle. Furthermore, the attitude towards the bundle enhances intention to purchase the bundle product with green premium even with the effect of the product attitude on the intention.
5.2. Theoretical Contributions and Managerial Implications
As shown in the results of this study, the findings suggest that the green self-expressive motive and the fit between green premium and product can enhance consumers’ perceived value for green premium. The perceived value positively affects attitude toward the bundle, which in turn, positively influences the intent to purchase the bundle with green premium. Therefore, this study contributes to the advancement of the theory about green premium used for conducting marketing.
Consumers are getting more interested in environment problem, hence, companies can be backfired if their products are harmful to human, society, and environment. Based on the findings, marketing managers have to pay attention to green premium as a non-price promotion tool since it can help customers with green self-expressive motive and feeling the fit perceive more values for the green premium. Moreover, they should keep their eyes on the new trend of sustainable marketing. They should develop and combine the environment-friendly elements such as green premium product in their marketing plan. Green premium may help improve the attitude toward the bundle leading to the increasing purchase intention. Lastly, they must be careful when launching the product with green premium because not all consumers might react positively to the green premium. They should choose target customers that have high level of green self-expressive motive. The customers might be the ones that like to express their environment concerns to themselves or to others. Moreover, when choosing green premium they must take into consideration the fit between product and green premium. The higher the fit, the better the effect.
5.3. Limitations and Future Research Directions
Even with the findings of this study, there are limitations to this study.
Firstly, besides green self-expressive motive and the fit between green premium and product, there can be several other determinants that can affect the intention to purchase the bundle product with green premium, for instance, premium nature, premium attractiveness, premium monetary value, smart-shopper self-perception, and environment consciousness. These determinants are ripe for future study. Secondly, this study is conducted with only Starbucks products, therefore, further research focused on other products or services is needed. Thirdly, we did not introduce moderating variable. Further researches can explore whether such factors as price sensitivity, brand fame, or culture difference (Mia, 2017; Zhang, 2018; Ramana & Retnosari, 2018) can moderate the process of inducing the effect of green self-expressive motive and the fit between green premium and product on purchase intention.
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