Salman Jahangir (25767)

ABR Quantitative Midterm submission

Submitted to: Dr. Huma
Date: 16/04/23

Rationale & Research Gap:

Agriculture in Pakistan is of prime importance. It contributes 18.9% to our GDP. It’s a source for
not only food security for local consumption as well as export, but it also supplies raw material
to our industries, specially textile, which is our largest exporter (Azam & Shafique, 2017). As the
world is moving towards sustainability, given the awareness for environmental concerns,
Pakistan still lags in adoption for such measures. We have a very limited setup for organic food
that caters to a small demographic.
As shown by (Akbar et al., 2019), Pakistan consumer puts positive value in social, emotional,
conditional constructs regarding the intention for consumption of organic food. However,
unlike developed countries, we do not have a mature green marketing approach to create a
need for green products. Our younger population, which will be the decision makers of the
future, have a huge potential towards consumption of green products. We want to explore this
potential for the current market, based on empirical data. There isn’t much work done in
Pakistan on how the green marketers impact the green purchasing decision.
This research can help the managers to understand the current gap in the marketing mix that
lacks substantial influx of green products given that the concern and awareness for health,
quality, sustainability, and environment is rising. It’ll help the managers to better strategize and
consequently increase the profitability of the green market. It can also help the policymakers
and regulators to have deeper insight of the market trends regarding green products and
regularize to promote the green markets.
Research Questions:
This research is aimed to answer the following questions: what are the main factors of green
marketing that are affecting the young consumers’ purchase decision of a green product in a
developing country? What is the current market situation of green products in Pakistan? What
are the relationships among the variables of the proposed model for a green purchase
decision?
Literature Review:
Green Willingness to Purchase:
Green willingness to purchase is the inclination of consumer to purchase green products
because of their increased utility value (Lim, Yong, & Suryadi, 2014). Utility value increases in
terms of health, safety, quality, and environmental impact. Studies show that the consumer is
willing to pay higher price for increased utility value and reducing health risks and
environmental concerns (Rodríguez, Lacaze, Lupín, & products, 2007). Willingness to pay is
defined as the surplus of money that the consumer pays before and after adding food
attributes. For green products, food attributes pertain to health, safety, quality, and
environmental concerns. If the perceived value of the green product is low, the green
willingness to purchase is negatively affected.
Green products are costlier than regular products. However, the customers are willing to pay
the premium price if they get the required attributes out of their green product. An example of
a green product is organic food. It is free of artificial ingredients and agents such as fertilizers,
pesticides, and genetically engineered organs (Katt, Meixner, & Technology, 2020). In their
study, it was found that consumers have perceived value for organic food. Such products have a
competitive advantage for their health benefits. Promoting these benefits influences consumer
behavior in favor of these products. Such products do not compete in prices. This conclusion is
also concurred by (Smed & Jensen, 2003). According to them, food quality and safety has a
positive influence on willingness to purchase.
Theory: For this construct we use the same theory as our main theory for developing
relationships of all the variables included in this research. Hence, we’ll be using the theory of
planned behavior (TPB). This theory helps us understand human behavior in a specific context
(Ajzen & processes, 1991). TPB is used to predict human behavior towards a specific act. If a
person has positive intentions towards a behavior, they are likely to decide to engage in
behavior.
Green willingness to purchase has a positive relation with the consumer’s purchase behavior
who have perceived value in health, safety, quality and environmental friendliness
(Nekmahmud & Fekete-Farkas, 2020). We’ll use “Green Willingness to Purchase” as a variable
and attempt to establish its relationship with Green Purchasing Decision. Thus, our hypothesis
is:
Hypothesis 5 (H5): Young, educated consumers’ green willingness to purchase influences on the
green purchase decisions.

Green Future Estimation:

Future estimation is predicated on current market trends (Nekmahmud & Fekete-Farkas, 2020).
To understand the future trends of the green products, it is important to understand how the
current market is reacting towards these products. Developed countries have an already huge
demand and supply systems established for green products. Green marketing has already
matured and established itself in these markets. The consumer base has seen a sustained
growth for green products. Most of the big producers are focusing and including green products
in their product line. Amazon has acquired whole food chains and is actively promoting green
marketing. Big food chains are adding value to their products by making them more
sustainable.
In developing countries, the trend for purchase of green products is still nascent. Given how
frequent environmental calamities are increasing concerns for the environment, consumers
have an increased value for green products. Majority of the population in Pakistan is still you.
30% of the entire population are aged between 10-24. These will be the future consumers with
increased concerns for the environment. If they have a positive experience with green
products, their purchasing behavior will repeat. Thus, we postulate following hypothesis:
Hypothesis 6 (H6): Green future estimation of a product has a significant positive influence on
green purchase decisions in young, educated consumers.

Green Willingness
of Purchase (GWP)

Green Purchasing Decision (GPD)

Green Future
Estimation (GFE)

Proposed conceptual partial model of green purchasing decision.

Plan of Analysis:
Statistical technique: We’ll be using IBM SPSS statistics 23 software for the statistical analysis of
the data. We’ll use partial least square-structural equation modelling (PLS-SEM) model to
analyze the data. We’ll try to find the correlation of variables and test the hypothesis based on
that. PLS-SEM can be used for regression analysis that will help to establish the relationship of
our variables and test the hypothesis.
Reliability Analysis:
Reliability analysis will be done using Cronbach’s coefficient alpha and t composite reliability.
This will help us test the internal consistency of the constructs. Cronbach’s alpha will test how
closely items are related in a set.
References:

Ajzen, I. J. O. b., & processes, h. d. (1991). The theory of planned behavior. 50(2), 179-211.
Akbar, A., Ali, S., Ahmad, M. A., Akbar, M., Danish, M. J. I. j. o. e. r., & health, p. (2019).
Understanding the antecedents of organic food consumption in Pakistan: Moderating
role of food neophobia. 16(20), 4043.
Azam, A., & Shafique, M. J. A. R. I. J. A. S. T. (2017). Agriculture in Pakistan and its Impact on
Economy. 103, 47-60.
Katt, F., Meixner, O. J. T. i. F. S., & Technology. (2020). A systematic review of drivers influencing
consumer willingness to pay for organic food. 100, 374-388.
Lim, W. M., Yong, J. L. S., & Suryadi, K. J. J. o. G. M. (2014). Consumers’ perceived value and
willingness to purchase organic food. 27(5), 298-307.
Nekmahmud, M., & Fekete-Farkas, M. J. S. (2020). Why not green marketing? Determinates of
consumers’ intention to green purchase decision in a new developing nation. 12(19),
7880.
Rodríguez, E., Lacaze, V., Lupín, B. J. I. m., & products, t. o. q. f. (2007). Willingness to pay for
organic food in Argentina: Evidence from a consumer survey. 297.
Smed, S., & Jensen, J. D. (2003). Demand for low fat dairy products–demand for healthiness or
taste: Edwards Elgar Publishing, Cheltenham, UK.