Year

2012

Degree Name

Master of Marketing - Research

Department

School of Management and Marketing

Abstract

The prevalence of environmental issues in the media has contributed to an increase in environmental consciousness amongst the public. In order to cater to the needs and desires of this quickly growing market segment, companies have begun to adapt their marketing strategies. By displaying a pro-environment third-party organisation (TPO) seal-of-approval endorsement in the product labelling, marketers hope to legitimise their environmental claims and convey a perception of environmental consciousness to consumers. Although the effect of endorsements on consumers and their purchase intentions has been researched quite extensively, relatively little has focused on the effect of endorsements from a TPO. Moreover, literature relating to the effect of the presence of a pro-environment TPO endorsement in product labelling is nearly non-existent.

This study was designed to answer the research question: Does the presence of a proenvironment TPO endorsement and/or the presence of an environmental claim in product labelling affect consumers’ product-labelling likeability, brand likeability and purchase intention? It also aimed to help determine if consumers are vulnerable to being misled by proenvironment TPO endorsements. Other independent variables, including perceived TPO credibility and participants’ product involvement, were also measured to determine if they had an impact on participants. Environmental consciousness, environmental behaviour, environmental knowledge and scepticism were also evaluated to determine if they had a moderating or confounding influence on the effect of the independent variables on the dependent variables.

To investigate the research question and test the hypotheses, the study employed an experimental, between-subjects design consisting of 8 different conditions. Using an online questionnaire distributed via an online panel, data was obtained from 268 Australian residents. The data was tested using various analyses in SPSS, such as bivariates, analyses of variances (ANOVAs), analyses of covariance (ANCOVAs) and multiple analyses of variance (MANOVAs).

Results indicate that displaying a pro-environment TPO endorsement in the product labelling can be a beneficial marketing tool in influencing consumers’ product-labelling likeability, brand likeability and/or purchase intention, but consumers’ level of product involvement, amount of environmental behaviour and their level of environmental knowledge can affect this influence.

Consumers with high-product involvement had greater purchase intention when they viewed product labelling that did not have a pro-environment TPO endorsement than when it did. This finding may mean that the presence of a pro-environment TPO endorsement in the product labelling actually deters participants with high-product involvement from intending on purchasing the product. Although there was not a significant difference in purchase intention of participants with low-product involvement who viewed product labelling with a TPO endorsement and without a TPO endorsement, a relationship between low involvement and the effect of the presence of the pro-environment TPO endorsement on purchase intention was found. Thus, it is suggested that displaying a pro-environment TPO endorsement would be most advantageous if the product were a fast moving consumer good (FMCG) rather than a typically high-involvement product, such as jewelry. However, this suggestion should be further researched before it is applied as a marketing strategy. No correlation was found between environmental objective and subjective knowledge, which indicates that although consumers think they are quite knowledgeable about the environment, they may actually know very little. Participants’ level of environmental objective knowledge was found to have a significant impact on their purchase intention when the TPO endorsement was present in the product labelling. When the TPO endorsement was present in 7 the product labelling, participants who were labelled as having no objective environmental knowledge had significantly higher purchase intentions than participants who were labelled as having high objective knowledge. This finding is quite significant as the majority of participants were found to have little or no objective knowledge. Although many public policy groups claim that scepticism helps compensate for consumers’ lack of knowledge and enables them to decipher between legitimate and illegitimate claims, in this study, scepticism was not found to affect participants’ purchase intention. This finding highlights the need for a legislating body that extensively evaluates TPO endorsements, environmental claims and their legitimacy to ensure that consumers are not misled. Additionally, individuals that reported that they frequently engage in other forms of environmental behavior, such as recycling, had greater purchase intention when they viewed product labelling that featured an environmental TPO and/or environmental claim than when it did not. This finding may indicate that a spill-over effect occurs in regards to environmental behaviour, in that people who engage in one form of environmental behavior are likely to engage in other forms of environmental behavior.

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