Green Supply-Chain Management and Green Purchase Intention, The Role of Green Brand-Equity

Abstract

This study aims to analyze the impact of green supply chain management on customers’ green purchase intention in Iranian beverage industry. To this end, this study examines the role of brand equity as a mediator variable. The research paradigm is positivistic, its approach is deductive and its strategy is survey. A questionnaire sample consisting of 48 questions was handed out via e-mail, Telegram software and cyberspace to the sample population consisting of 30 manufacturers and their consumers, Three for each. Facial and content validity of the questionnaires are assured by the review of experts and using standard questionnaires formerly designed. The structural validity also relied on confirmatory factor analysis. Reliability is 0.79 according to Cronbach's alpha. Data analysis is done using smart PLS software and testing by means of correlation matrix, Structural equation model and the model fitness test. The findings of our study showed a significant and positive correlation between Green Supply Chain Management and the Green brand equity. It was also revealed that green brand equity also plays a significant role in determining the customers green purchase intention.

Keywords: Green supply chain managementGreen purchase intentionGreen brand equityIranBeverage Industry

Introduction

Interest of environmental and awareness of the consumers have come to increase, as demand of consumers for green products and services have come risen. Today because government pressure, cost issue, competitive pressure, increase consumer base, subsidies from government and social responsibility business turn to green marketing and it’s unavoidable (Kilic & Özdemir, 2018). Regulators set various environmental consumer standards, such as recycling content and environmental performance measures, leading to greater purchase intentions and behaviour (Sarkis & Zhu, 2018).

Green products purchase intention is “possibilities and tendency of an individual to achieve products compatible with the environment” (Ali & Ahmad, 2012; Dehghanan & Bakhshandeh, 2014). Green products purchase intention is a determination to act in a good predictor of actual behaviour in purchasing the product Ramayah, Lee, & Mohamad, 2010). In order to achieve nationally determined contribution targets and sustainable development, the industry should assume a critical responsibility for Environmental Protection (Rimal, Zhang, Stork, Sloan, & Rijal, 2018). Behaviours such as buying drinks contained biodegradable containers, purchasing and consuming recycled plastic and paper, energy-saving light bulbs and detergents containing decomposable materials tending to return back to nature (Zand Hesami & Parvinchi, 2014).

There is some evidence that business become more profitable after transform to green manufacturing system and turn to adopt green philosophies (Taylor, Chuang, & Yang, 2013). If companies seek success by turning green products and services must grow consistent with marketing principles. In this regard, the development of current concepts of marketing and branding within a green framework seems necessary. If companies can provide products and services meeting the customer’s environmental requirements, customers will show more interest in their goods and services. Companies should look for opportunities to improve the environmental performance of their products to strengthen their green brand equity (Sanidewi & Paramita, 2018).

Due to public attention, manufacturers tend to shoulder environmental responsibilities. Meanwhile, the consumers’ attitudes change simultaneously with changes in the factors influencing the characteristics of green products (Ghosh, 2010). This issue demonstrates that with Green supply chain management, customers green purchase intention can be impressed.

Given the role of consumer, authors suggest that production of green products is only a necessary but not sufficient requirement to protect the environment. Moreover, further attention to the role of consumers in supporting green activities is noted (Dehghanan & Bakhshandeh, 2014).

Haghighi and Khalil (2011), considering the insights and attitudes of Iranian consumers is necessary due to their importance in developing the marketing plan. Deep understanding of the attitudes and customer preferences to participate in green activities could lead to designing more efficient and effective green programs (Baker, Davis, & Weaver, 2014).

Beverage industry was selected as the case of this study, since drinks and beverages are directly linked with human health. Policy makers in the industry have turned to environmental compatibility issues mainly in the delivery of their products due to legal issues and consumer sentiments. This industry, as one of the drivers of the development of food industry is of great importance in Iran. Meanwhile, the Business environment is in such a situation that only development of detailed planning in this regard, can guarantee success of beverage Industry for domestic consumption and export.

The questions to be addressed are as follows: how much The Green Supply Chain Management impacts green purchase intention? What kind of role the Green brand equity plays as a mediator?

By examining past researches, three main variables as green supply chain management, green brand equity and green purchase intention are detected and their factors and components are examined. Then, the effects of green supply chain management on green purchase intention is investigated by considering Green brand equity, as a mediator variable.

Problem Statement

In this section, we examine three main variables' theoretical frameworks including Green supply chain management, green brand equity and green purchase intention.

Research Questions

The questions to be addressed are as follows: how much The Green Supply Chain Management impacts green purchase intention? What kind of role the Green brand equity plays as a mediator?

Purpose of the Study

As mentioned before, analyzing the correlation between three variables including Green Supply Chain management, Green purchase intention and Green brand equity, shed some light on this field and enables us to have some investigated suggestions to executives and strategists in related industry as well as academic researchers in this field.

Research Methods

Research Hypothesis

H1: Green supply chain management has a positive impact on green brand equity dimensions.

H2: Green brand equity has a Positive impact on green purchase intention (Figure 01 ).

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Findings

In this section, first all descriptions of questionnaire are provided in the form of table followed by the findings. To interpret the results, many numerical and graphical techniques have been used. In this part of study using smart PLS software and SPSS, several analyses have been conducted.

Research model analysis by PLS software

After running the above model, we can find the values of influence and the factor loads which will be discussed in the following. It is worth noting that, the Software that uses Structural Equation Modelling based on the statistical methods than the existence of conditions such as Linearity of independent variables, Non-normal data and a small sample, are Compatible (Haenlein & Kaplan, 2004). The Software Output After testing the conceptual research model is shown below in Figure 02 .

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Effects model and factor loadings on their T-value

These models differ in terms of their reporting but their result is the same. In the other words, a significant amount must be less than 5% and the t-value should be greater than 2 to be said the effect of hidden variables and the factor loadings between manifest and latent variables are significant. In this model, generally all values are with an appropriate significance level. In this model, it is clear that Supply Chain Management has a great and significant effect On brand equity. In other words, the impact of supply chain management on the variable equity is (0.66). On the other hand, Green brand equity is impacting the green purchase intention significantly. Green brand equity impact on green purchase intention is about (0.76).

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As seen in the research model, all factor loadings are greater than 40% that this issue indicates the appropriateness of the criteria and reliability of the measurement models. The following table 2 shows the values of model variables, which show an acceptable fit of Measurement in presented model.

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As can be seen from the above table 3 , the square root of latent variables in this study which is in the existing place in the diagonal matrix, is higher than The amount of correlation between them that is the follow places and left diagonal, which indicates good model fit. According to the presentation, Measurement models has a good fit.

In Structural model, the most important indicator is the coefficient of determination (R2) which shows the impact of an exogenous variable on an endogenous variable, and three 0.19, 0.33 and 0.67 values are considered to be strong and average.

To review the overall model fit, only one benchmark called GOF is used. The value of model fitness index should be Greater than 36 percent. By achieving a zero value, it was confirmed that the overall fitness of the model is very good. The general fitness of above Model was evaluated by GOF criteria which is equal to 0.514 in this research.

After ensuring the overall fit of the model, it is the turn to examine details of model fit and hypotheses tests. In this phase, the effect coefficient of each variable and its significance are examined. To assess the relationship between the variables in the model, the significant t-values will be used. If the value of these numbers is greater than 2 and less than -2, it shows the validity of the correlation or the effect between variables and thus is confirming the hypothesis of the research. As it has been shown in the model, all t-values are higher than 2. This is an endorsement of the research hypotheses as well as three indicators of the original.

Conclusion

Iran, as many countries suffer from a high level of air pollution, Poor water quality, sound pollution caused by traffic, great amount of waste disposal and rapid decline in energy resources. Environmental problems are created mainly due to abnormal consumption and unsustainable activities. By making small changes in lifestyle and consumption habits, each person can contribute to the valuable movement of saving the environment. To this end, Iranian government can apply different strategies to encourage sustainable consumption and the development of green behaviour. Due to the increasing environmental problems and the adverse impact of consumerism on the human physical and spiritual state, turning to Green products is a must. By innovating existing products and turning them into green ones, companies can explore this market through sustainable growth (Nejati, Salamzadeh, & Salamzadeh, 2011).

The current research Results Showed that Green Supply Chain Management through Green brand equity impact on green purchase intention and this can increase the overall quality of products and services of companies producing drinks and beverages. Higher quality can increase green brand equity of product, and subconsciously affect the customer green purchase intention. According to our study, it is recommended to managers in the beverage industry that by replacing pollutant materials/components and dangerous in organization, they can focus on reducing resource consumption and the creation of waste during production and distribution. Moreover, they can plan for separation, reuse and recycling, processes that impact the operational and environmental performance of their organizations. In this way they can improve their green brand equity and finally make an impact on purchase intention of customers.

The other proposed ways are improving the ability to launch new products, increasing the quality of products, increasing the flexibility of the organization and capability of responding to the needs of customers, improving product quality and meeting customer expectations.

This can come as a useful starting point for producers, to develop marketing strategies for communication between the consumer perspectives and producers. Attending the green brand equity can increase satisfaction and establish long-term relationship based on trust in the field of the environment. Because green marketing is an effective approach to creating advantage, Manufacturers must establish a green supply chain management to encourage customers willing to purchase. Given that, retailers are as a communication channel between producers and customers, so training and concessions to retailers can lead to the relationship between retailers and consumers in terms of perceived value of the green brand equity for consumers.

Given that risk in green purchase behaviour must be reduced and by reducing the risk there will be a growth in green purchase, thus manufacturers must have the necessary information to compare their products with other manufacturers’ products based on the performance and environmental services.

So it is required that the companies provide more information on their products. Without providing reliable and credible information to customers, manufacturers’ attempts to convince customers to choose their products will be very a difficult task. This is because customers may become suspicious and distrustful about the company claims of being green, so the best strategy for marketers is to provide detailed information about the environmental credentials of their products to customers.

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