CHAPTER 1: INTRODUCTION 1.1 Research Title The Factors influencing purchase intention towards green products. 1.2 Background of Research The purpose of this paper is to determine the intention to purchase green products for Malaysian. Environmental problems like over used and utilization of natural sources have become one of the major problem that concerned by most people. Businesses are no exception for this environmental problems and they are responding to this issue with environment-friendly products from reusable and recyclable products such as rechargeable batteries, organic food and more. The green consciousness of consumers in developing countries have risen in past decades. In Malaysia, the market to service the environments has risen about 30-40 percent a year (Zainudin, 2013). Also, Saturdays in Malaysia are stated as the No Plastic Bag Day. This campaign is promoted by the hypermarket chain such as Jusco and Carrefour in order to encourage the green lifestyle and reduce the usage on plastic bag yet the environmental degradation. 1.3 Research Gap & Problem Statement In the 21st century, people are getting more conscious about health problem and the standard of living a healthy lifestyle. Since they have the awareness of green lifestyle, the most important thing for organizations is to find out what consumers wants and needs in this green environment. Although most of the people are keen to a healthy lifestyle, but there are some people still prefer living in an unhealthy lifestyle. Therefore, analysing and identifying the factors that influence the purchase intention on green products is vital. 1.4 Research Objectives The three objectives in this research are: I. Identify customers’ lack of awareness of green products. II. To conceptualized consumption values as a multidimensional construct which consists of six dimensions of values ( Functional Quality, Functional price, Social Value, Attitude, Environmental Concern and Social Influence ) III. To examine the relationship between the determinants of green purchasing behaviour and the demographic variables of the respondents. 1.5 Research Questions There are research questions that will need to be answered by this phase of the research. I. What are the factors that influence Malaysian citizen increases their awareness in purchasing green products? II. How do consumer approach in green product? III. Why do consumer choose green product? 1.6 Significance and Justification of Research The significance of this research is to provide the benefits of green products on consumers and increase the purchasing. The greater demand of using green product the more effective in environment lifestyle changing. But now a different view is that people are now more concerned about their consumption styles. The focus of consumers has shifted towards environmental protection. Everyone has the responsibility to make environment green. Hence the awareness about the importance of green environment becomes an important ingredient of green strategy. Therefore, the in-depth study on green purchasing behavior and their attitude towards green products is of crucial importance today. CHAPTER 2: LITERATURE REVIEW This section starts with the literature review with the concept of the green products which means that the theories behind consumer behavior are also presented regarding identification of the influencing factors. 2.1 Price Consumers normally purchase depends on the price of the products especially in developed countries (Lung, 2010). However, green products tend to have higher price than normal products that prices become the main determinant for them to purchase. It is generally accepted that consumers in developed countries have high concerned about environmental problems and willing to pay premium prices for green products. Consumers in the United States, Texas, has expressed their opinion as they would only consider the green lifestyle if the prices are same or lower than the non-eco friendly products and they would be more likely to purchase it when cost savings are involved (PRNEWSWIRE, 2015). Also, It is surprisingly when a market survey from Marketsensus declared that green consumers in developing countries indicated the most readiness to support the green lifestyle than other Asia-Pacific countries do (Mei, Ling & Piew, 2012). For instance, about 95% of Thai consumers and above 80% of Malaysian and Korean are willing to pay more for the green products, yet below 60% of consumers in Hong Kong and Australia are willing to pay more for them (Lung, 2010). Talking about price, it must be varies to the personal income of consumers. Some green firms use low price strategies to attract and encourage consumers to buy eco-friendly products (Kar Yan & Yazdanifard, 2014). At this moment, firms create a competitive advantage in the marketplace (Kar Yan & Yazdanifard, 2014). In order to sell the green products in higher prices, firms need to differentiate the products by creating extra products values in terms of quality, packaging, function, taste and so on (Tiwari et al., 2011). Starbucks, a global firm that is best suitable for the example of selling eco-friendly products at premium price. Starbucks work hard to minimize the environmental footprint by reducing material waste and building green and energy-efficient stores (Global Assets, 2012). They also approach to ethically sourcing their products from the coffee they serve to the green aprons worn by their baristas (Global Assets, 2012). Although Starbucks is pricy, but still get a lot of support from loyalty customers. 2.2 Perceived Value Consumers normally purchase green products in order to improve the environmental performances (Yaacob & Zakaria, 2011). In some situation, individual perceives health advantages of organic food or energy saving of an environmentally friendly air conditioner are mostly observed (Kong et al., 2014). In other words, consumers are actually willing to pay for the value of direct benefit they receive. For instance, many consumers are willing to pay for a home cleaner for its value of reducing exposure to potentially harmful chemicals in home. However, their pressure always been indicated as one of the major contributions to business environment commitment as they may exert pressure if they ignoring or boycotting those environmentally unfriendly products (Yaacob & Zakaria, 2011). The green values increase the awareness of social values as well. Some consumers do really care about their purchases that the green products they purchase are accepted by their social surrounds (Doszhanov & Ahmad, 2015). Moreover, some consumers would more likely to place a higher value on a safer packaged food brands that have shown environmental sensitively even if they are not going to pay for a lower life-cycle carbon footprint (Lurie, 2017). 2.3 Environment Concern This is an essential trait that can show to a person's empathy, different preferences, and environment awareness. Based on the new environments paradigm, environmental concern could be categorized from unconcerned to highly concerned. (Milfont and Duckitt, 2017) When consumers are more worried about the environment, they are probably assessing the impact of buying on green product. (Follows and Jobber, 2017) Moreover, the more environment concern has, will slightly affect the more purchasing behavior on green product. According to (Lee and Shin, 2017) “a higher awareness level of corporate social contribution and local community contribution, as CSR activities, had more positive effects on consumers’ purchase intentions”. Thus, create environment awareness toward green products has greatly affects on improving knowledge and increase purchaser’s favorable attitudes. 2.4 Quality A product quality is an important perspective in generating loyal customers and customer satisfaction. The quality of the product is a result of a good execution or which it can meet consumer’s need and it is customized. (Anon, 2017) Therefore, the higher the product quality, the more purchaser and customer satisfactions of the retailer and wholesalers. (impgroup.org, 2017) Customer satisfaction, loyalty and the intentions of buying green product are directly related by the product performance. Furthermore, based on my research, the product quality is a first impression and has a great relationship between customer satisfactions. In order to raise customer loyalty and satisfaction, keeping high level of the product quality is always the best method. (Chumpitaz and Paparoidamis, 2004; Kotler et al., 2005). 2.5 Social Influence Social influence can be defined as “change in an individual” of behavior, feelings, beliefs either intentionally or unintentionally that results the interaction of a person with others. Social influence is well-defined as three types which is conformity, compliance, and obedience. In this process, individuals will change their own behaviors or attitudes under the influence of another person who is realize to be a professional on the matter at hand. The influence of others is an important factors of an individual’s behavior (Choshaly, 2017). As we has guess, social influences surrounded by the environment make a huge effect by developing and changing on an individual’s thoughts, expectations, and cognitive competencies. The social environment has a strong effect on green purchasing behavior (Cheah and Phau, 2005). According to Bandura (1997), social learning theory suggests that individual behavior is based on both the environment and a person’s motivation to learn proactively from important social referents. 2.6 Attitude Understanding attitudes can help an organization to have a better access on how consumers view green products and the willingness of consumers to purchase green products (Hamid, 2014). Ibrahim (2002) defines attitude as a “combination of affective, behavioral, and cognitive reactions towards an object,” indicating that under certain requirements, attitudes correlate with behavior, but this relationship is not always reciprocal. Brehm and Kassin (1996) recommend that attitude will forecast behavior when limited only to particular issue of the environment rather than when applied to general issues. They recognize three psychological factors that influence the passion of individual’s attitudes: their own consequence, self-interests, deeply held values such as one religion’s, close friends, family members and social groups. For instance, when individual find out that a lack of concern on environmental protection will negatively affect their family, health or reduce the standard of their lifestyle, they act immediately with a better sense of urgency (Brehm and Kassin, 1996).