a study on consumer loyalty of green products at … · a study on consumer loyalty of green...

A STUDY ON CONSUMER LOYALTY OF GREEN PRODUCTS AT ERODE DISTRICT.

AUTHOR: CO-AUTHOR:

Dr.P.Mohanraj, M.B.A., M.Phil., Ph.D., Mr.S.Rajesh, M.B.A., M.Phil.,PGDCA.,

Associate Professor, Ph.D. Research Scholar,

Department of Management Department of Management,

Nandha Arts and Science College, Erode Nandha Arts and Science College,Erode.

E-Mail: [email protected] E-Mail: [email protected];

Ph:9095292461 Ph : 98439 29523

ABSTRACT

In this research paper, we take a peek into Loyalty towards green products as a comparison between

expectation and what is truly obtained by the customers.

For this research ,the researcher was selected 100 customers who were purchasing and using green products

for at least six months in erode district of tamilnadu. A structured questionnaire was framed and collected their

opinion towards loyalty in purchasing the green products and their satisfaction in purchasing and using green

products by using convenience sampling method. The collected details were subdued into tables by using simple

percentage analysis, mean score analysis and chi square test.

Keywords: customer loyalty ,green products, period of using.

INTRODUCTION:

Definition: Customer loyalty indicates the extent to which customers are devoted to a

company’s products or services and how strong is their tendency to select one brand over the

competition. Customer loyalty is positively related to customer satisfaction as happy customers

consistently favor the brands that meet their needs. Loyal customers are purchasing a firm’s

products or services exclusively, and they are not willing to switch their preferences over a

competitive firm.

Brand loyalty stems out of a firm’s consistent effort to deliver the same product, every

time, at the same rate of success. Organizations give special attention to customer service,

seeking to retain their existing current base by increasing customer loyalty. Often, they offer

loyalty programs and customer rewards to the most loyal customers as an expression of

appreciation for doing repeat business with them. Typical example of customer loyalty is

Starbucks. The company has managed not only to retain its customers but also to expand its

customer base through exemplary loyalty programs. Capitalizing on the fact that it has created a

successful, recognizable brand worldwide, Starbucks seeks to enhance the customer experience

every time, every time, at the same rate of success. In fact, customer loyalty is built from the

company to the customer. The more satisfied the customer, the more like to do repeat business

with a firm. Then, customer loyalty encourages customers to shop particular brands regularly, to

Dr.P.Mohanraj, Mr.S.Rajesh, Int. Jou Eco. Res, 2019, V10 i4, 16 – 28 ISSN:2229-6158

IJER – JULY – AUGUST 2019 available online @ www.ijeronline.com

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mailto:[email protected]

mailto:[email protected]

spend more money, to advertise the brand with a mouth-to-mouth advertising and to have a

positive shopping experience.

5 ways of earn and build customer loyalty for the product:

1. Know Your Customer and Let Them Know You.(Eg)Send “Happy Birthday” & Other

Personalized Emails

2. Reward Loyalty with a Customer Loyalty Program .(Eg)Card-Based Customer Loyalty Programs

3. Make Customer Loyalty Easier Eg)Store Customer Data

4. Be the Best at What You Do (Eg)Make Your Value Prop Part of Your Brand5.Encourage

5.Customer Feedback. (Eg) make alterations based on feed back.



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IMPORTANCE OF CUSTOMER LOYALTY TO A BUSINESS:

1. Customer Acquisition And Retention

2. Repeat Business

3. Cross/Up Selling Opportunities

4. Reduce Marketing Cost

5. Minimize Service Cost

6. Forecast Accuracy

7. Improve Brand Image

8. Stand Tall Among Competitors

9. Honest And Quality Feedback

BENEFITS OF CUSTOMER LOYALTY:

1.Brand Ambassadors

2. Word of Mouth

3. Pricing

4. Forecast Accuracy

REVIEW OF LITERARTURE:

Mohamad Rizan, Ari Warokka and Dewi Listyawati (2014), Journal of Marketing

Research and Case Studies, DOI: 10.5171/2014.724178 Introduction The shift in the marketing

paradigm (Gronroos, 1997), as a result of globalization of businesses and the evolving

recognition of the importance of customer retention, customer loyalty, market economies and

customer relationship economies, has brought companies to deliver the benefits that accrue to

customers. The global financial crisis has left bankers searching for a profitable path forward in a



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permanently altered competitive landscape. It becomes worsened with the sunk-public trust in

financial-services companies, underscoring the need for retail bankers to repair badly damaged

customer relationships. Therefore, Bose (2002) reports that it is becoming evident that

companies have to modify fundamentally the way in which marketing is done, i.e. a shift from

managing a big pool of clients to managing a specific customer base. This modification includes

establishing, maintaining and enhancing relationships for the sake of building up long-term

relationships with customers so that the economic goals are achieved. This effort is also to

answer the fact that it has been the practice by companies to devote greater attention and

marketing effort to attracting new customers rather than retaining existing ones (Kotler, 2000).

The transactional marketing, which is the old-fashioned paradigm, used to emphasize the

concepts of 4Ps that focused only on attracting businesses, but not so much on customer

retention (Gummesson, 1999). Prior studies in relationship marketing (Kotler, 2001; Doyle,

2000; Piercy, 2002) confirm that retaining the companies’ existing-customers is more profitable

than attracting new one. As a result, the concept of relationship marketing was developed on the

basis that customers vary in their needs, preferences, buying behavior and price sensitivity.

Besides, relationship marketing also helps to increase market share, profitability and reduce the

cost (Reichheld, 1993). Based on this growing concept, in this study, the researchers would like

to examine why relationship marketing is becoming a more important marketing strategy than

others in business environment, especially in financial services. In the increasingly competitive

global monetary world, relationship marketing has been advocated as an excellent way for banks

to establish a unique long-term relationship with their customers. The quick pace of developing

technologies has intensified the competition and made it difficult to gain strategic advantage

through physical products alone. At the same time, customers are more demanding; they not only

expect excellent high-quality goods, but they also expect high level of service available with

them as the requirement for their loyalty to the banks. Meanwhile, most of the core

products/services in commercial banking are fairly generic, and it is difficult for most of this kind

of financial institution to compete purely on this core service. Consequently, banks use the

relationship marketing concept as a strategy to build loyalty with each customer, which leads to

improved financial and market performance, and an increased competitive edge (Ravesteyn,

2005). Our study will provide some important contributions, such as a testing of the two types of

the relationship marketing’s influence on customer loyalty, i.e. direct and indirect powers, and



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experimenting on the retention strategies and tactics used by Indonesian banks to build

relationships and make the customers loyal to the banks through customer satisfaction and

customer trust. It will also expand the implementation of relationship marketing in emerging

Southeast Asian banking industry. In this study, we will test specifically the intervening effects

of customer satisfaction and customer trust in the nexus between the relationship marketing and

customer loyalty. The expected empirical findings of this study will be valuable information to

set and update the current marketing approach to increase customers’ closed-engagement to their

bank. The satisfied customers, whose high trust on their bank, as reported in many studies, tend

to deal with more 3 Journal of Marketing Research and Case Studies

Kotler (2000) argues that customer satisfaction management includes the comparison

between the expected delivered value and the real delivered-value as well as the image of the

company, the readiness to reaction, the dependability and the product attributes. Furthermore,

Kotler, Armstrong, Saunders, and Wong (2001) conclude that customer satisfaction is

completely dependent of the customer expectation and how the customer's actual perception of

the product's performance matches the expectations. The customer will be satisfied if the

performance matches or exceeds the expectations, and in contrary, the customer will be

dissatisfied if the performance falls short of the expectation. Prior studies reveal that relationship

programs enhance the flow of information between the bank and customers and increase

customers’ positive feelings towards their bank. Thus, it will increase the customer satisfaction

and relationship strength of the banks (Barnes and Howlett, 1998; Ennew and Binks, 1996).

Therefore, based on those empirical findings, hypothesis 2 is proposed as below: H2:

Relationship marketing tactics influence customer satisfaction. Relationship Marketing and

Customer Trust The final concept necessary to build relationships is trust. In business, trust

refers to the confidence that one partner, the customer, has in the business’s reliability and

integrity to deliver goods and services (Proctor, 2000). Trust relates to the belief that a customer

has in an honest investment and engagement with the service provider (Peltier, Pointer, and

Schibrowsky, 2006). In the banking context, trust is defined as customer confidence in the

quality and reliability of the services offered by the organization (Garbarino and Johnson, 1999).

It becomes the moral values that are established to enhance their business relationship between

banks and customers. Dwyer, Schurr, and Oh (1987) argue that trust is considered the foundation

of strategic partnerships, and it seems to be a mediating or intermediary element in provider-



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customer relationships. Prior studies find trust to be the core of the relational approach and

consider it key to the development of the notion of commitment in provider-user relationships

(Gundlach and Murphy, 1993; Nooteboom et al., 1998; Tax et al., 1998; Ratnasingam and Phan,

2003). According to Urban, Sultan, and Qualls (2000), trust is also considered as a key element

in establishing long-term relationships with customers and in maintaining a company’s market

share. Therefore, based on the prior empirical findings, hypothesis 3 is proposed as below: H3:

Relationship marketing tactics affect customer trust. Customer Satisfaction, Customer Trust and

Customer Loyalty Customer satisfaction is important because satisfied customers are less likely

to switch to a competitor (Kotler, 2001). Customer loyalty and the ability to retain customers are,

therefore, highly dependent on the customer's actual satisfaction; undoubtedly, customer service

is a key ingredient in relationship marketing and consequently, in customer retention (Sheth 5

Journal of Marketing Research and Case Studies We implemented the work of Morgan and Hunt

(1994) to gauge customer trust, which used two dimensions, i.e. confidence in exchange partner's

reliability and integrity. Both dimensions are operationalized in six indicators. To measure

customer loyalty, we used the Griffin’s four dimensions of customer loyalty (2009), i.e. buy

regularly, buy a cross-section of product or services, refer others, and immune to the pull of the

competition. All indicators are measured. A five-point Likert scale is used, ranging from

“strongly disagree” (1) to “vigorously agree” (5). To examine the hypotheses, we used Structural

Equation Model (SEM). Before using SEM, we tested the reliability and validity of the

indicators/constructs.We used the corrected item-total correlation method to study the constructs'

validity. For relational marketing tactics’ constructs, all items have values more than 0.361 (the

table value for df = 28, α ≤ 0.05). It means that items used to measure relational marketing tactics

are valid. The indicators’ values of customer satisfaction, customer trust, and customer loyalty

are also more than the table value (0.361). Meanwhile; the values of Cronbach’s alpha for

relational marketing tactics, customer satisfaction, customer trust, and customer loyalty are

0.913, 0.918, 0.900, and 0.943, respectively. Therefore, it can be said that all constructs used in

this study are valid and reliable.



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STATEMENT OF PROBLEM:

Customers are basically will to purchase the green products because it’s a eco friendly and it is

does not causes any harmful to their body and their environment. There are so many of evidence

indicating customers are choose the products which are related to green products. The

manufacturer and marketer of green products are easily retained their customer due to their

quality of their natural products. Unfortunately some of the customers are switch over from

green products to artificial products. So ,the customer loyalty towards green products may vary.

Hence , a research emerged that has to examine the loyalty of the customers towards green

products in erode district.

OBJECTIVES OF THE STUDY

To study the demographic profile of the respondents who are using green products in

erode district.

To evaluate the consumer loyalty towards green products in the study area.

To evaluate the consumer loyalty can determining the satisfaction level of a customer

towards green products.

RESEARCH METHODOLOGY

Descriptive research study has been used in this research. For examining the loyalty of the

customer towards green products in erode district, the researcher has taken 100 customers who

have purchase and utilizing the green products for atleast six months.A well structured

questionnaire was framed and collected the customer’s opinion towards green products.

The details are subdued into percentage analysis, mean score analysis , chi-square analysis have

been used for this study.

RESEARCH DESIGN

Research design is the basic framework which provides guidelines for the research

process. The research design specifies the methods for data collection and data analysis.

In this research descriptive research design is made use of which describes the customers

characteristics and consumer loyalty of the study.



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LIMITATIONS OF STUDY

The study is limited to consumers of erode district only.

The sample size restricted to100 respondents .

RESULTS AND DISCUSSION:

S.No. Factors No. of Respondents % Satisfaction

Mean Score

Age

1. Upto 30 years 6 6 3.8

2. 31 - 40 years 13 13 3.7

3. 41 - 50 years 63 63 4.3

4. Above 50 years 18 18 4.0

Total 100 100

S.No. Factors No.of

Respon

dents

% Satisfacti

on

Mean

Score

Gender

1 Male 66 66 4.2

2 Female 34 34 3.9

Total 100 100



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Educational Qualification

1 Illiterate 27 27 3.6

2 School Level 35 35 3.8

3 Graduate 12 12 4.0

4 Post Graduate 14 14 4.2

5 Professional 12 12 3.9

Total 100 100

Occupation

1 Govt. employee 11 11 3.8

2 Private employee 24 24 4.1

3 Professional 9 9 3.9

4 Farmer 26 26 3.7

5 Business 11 11 4.3

6 Housewife 9 9 3.8

7 Others 10 10 3.5

Total 100 100

Monthly income

1 Upto Rs.15,000 18 18 3.7

2 Rs.15,001 - 25,000 41 41 3.9

3 Rs.25,001 - 35,000 18 18 4.2



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4 Above Rs.35,000 23 23 3.9

Total 100 100

Frequency of purchase green products

1 daily 28 28 3.7

2 Weekly once 32 32 4.5

3 monthly once 40 40 4.3

Total 100 100

Factors determining

of customer loyalty

1 Customer identification 25 25 3.5

2 Convenient purchase 35 35 4.9

3 Customer service 30 30 4.2

4 Rewards and reputations 10 10 1.2

Total 100 100

Factors determining customer satisfaction of green

products

1 Quality of green products 30 30 4.2

2 Corporate image 15 15 4.5

3 Price of the product 30 30 4.2

4 Availability of product 25 25 3.9

Total 100 100



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It is noted from the above table that among the four categories of the age of the sample

respondents, majority (63.0%) of the respondents with the age group of 41 - 50 years. While in

gender based study, it is found that majority (66.0%) of the respondents are male. In the case of

educational qualification, majority (35.0%) of the respondents are having school level education.

Of the 7 category of occupational status of the respondents, majority (26.0%) of the respondents

are farmer. The analysis states majority (41%) of the respondents earn above Rs.35,000. And

majority (40%) of the respondents and their frequency of purchase green products are monthly

once. It could be found from the loyalty score analysis that maximum respondents have

perceived high level of satisfaction on the loyalty factors in convenient purchase of the product.

IMPACT FACTORS TOWARDS GREEN PRODUCTS AND CUSTOMER LOYALTY:

Impact indicators

An attempt has been made to know the impact score towards green products of the

respondents. The details are furnished in the following table.

impact factors towards green products

S.No. Particulars Mean Score

1. Available of the Green products in the market 4.3

2. Variety of Green Product 4.1

3.

Expectations of customer towards

green product

4.0

4. Personal relationship with customer 4.2

5. Market Segmentation 3.9

6. Quality of the Product and service 4.2



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S.No. Particulars Mean Score

7. Create customer loyalty 4.3

8. Price of the product 4.2

From the above table, it is found that impact score of the retailers towards available of

the Green products in the market as 4.3, Variety of Green Product as 4.1, Creativity /

Innovation Features as 4.0, Product Design According to Usage as 4.2, Product

Segmentation as 3.9, Quality of the Product as 4.2, Durability of the product as 4.3, Price

of the product as 4.2 and Offers and discounts as 4.3. It is found from the analysis that

majority of the respondents are satisfied with Available of the Green products

impact factors towards Customer loyalty:

(1)strongly disagree (2)disagree (3) agree (4)neutral (5) strongly agree

s.no Particulars Mean score

1 I often tell positive things to my green customer 4.3

2 I often recommend green product to others. 4.5

3 I often loyal to my products 3.8

4 I often get feedback from my customer 4.1

From the above table, it is found that impact score of the retailers towards customer loyalty of

the Green products in the market as 4.3, often tell positive things to green customer,4.5 mean

score for recommend green product to others. 3.8 often loyal to their products.It is found from

the analysis that majority of the respondents are satisfied with Available of the Green products in

the market and also loyal to their product and stick on the same brand and product for long time.



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FINDINGS AND SUGGESTIONS:

It could be found from that the satisfaction score analysis that maximum of the

respondents have perceived high level of satisfaction towards retailers in green

marketing in erode who belongs to 41-50 years aged, male, school level,farmers, earn

monthly from Rs.15000 to 25000, and are as loyal customer to green product for

minimum 3 years in their field.

It is found from the analysis that majority of the respondents are satisfied with quality

and Availability of the Green products and their service in the market.

It found that the mean score of recommends the green products is high and it shows the

customer are highly recommend the green products to others.

Quality and Price is the attribute that consumers reflect on when making a green product

purchasing decision. The green retailers will produce and sell the products with high

quality in low price helps to retain the customer for their product .

It would be suggest that the green retailer should adopt some technique to reduce the cost

of production of the green product.

It would recommend to create more awareness to all people relate to green product and

green retailers.

CONCLUSION:

Finally research concluded that the study is mainly focused on customer loyalty towards

green products in erode district. To maintaining a customer by using eco friendly

products and provide healthy environment to both society and customer. Its right time to

all non-green customers to switch over to green customer by using green products. Its

our duty to safeguard our environment to our future generation as the same. Its is only

possible when we all become a customer of green product to give healthy environment.



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a study on consumer loyalty of green products at … · a study on consumer loyalty of green...

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