The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

Alternative fuel vehicles in South Africa: What drives green consumer behaviour?

By Brett Hamilton and Prof Marlize Terblanche-Smit

  • June 2019
  • Tags Strategic Management
16 minutes to read

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What drives green consumer behaviour?

While alternative fuel vehicles (AFVs) still account for a relatively small percentage of total vehicle sales, awareness of the impact of car usage on the environment is growing among consumers. Vehicle-emission controls are on the increase, and so too the number of AFVs available in the market.

With this increased awareness in mind, this study explored the underlying reasons that influence green consumer behaviour as this will allow retailers and marketers to develop more effective green marketing strategies.

The team explored the very factors that underlie consumer behaviour while considering the influence of attitude, subjective norm and perceived behavioural control on behavioural intention. They also looked at how a general positive attitude toward the environment results in a limited purchase of environmentally friendlier cars, often referred to as the attitude-action gap.

Concerns about pollution, limited fossil fuel reserves and climate change mean that consumers have become aware of the effect of their behaviour on the environment. This has given rise to ‘green consumerism’.

Growing environmental consciousness

Concerns about pollution, limited fossil fuel reserves and climate change mean that consumers have become aware of the effect of their behaviour on the environment. This has given rise to ‘green consumerism’. In addition, many companies are adopting green marketing strategies and environmental product attributes as a form of competitive advantage.

In the automotive industry, AFVs have been introduced as a green alternative that is less harmful to the environment. These vehicles use a conventional petroleum or diesel internal combustion engine in addition to at least one other type of propulsion system – such as an electric motor, bio-fuel, fuel-cells or compressed natural gas, or pure electric drive. The AFVs that were initially available in the South African market were hybrid electric-drive vehicles that use an internal combustion engine along with an electric motor. However, pure electric-drive vehicles have now also become available.

… many companies are adopting green marketing strategies and environmental product attributes as a form of competitive advantage

Offering green products that are less harmful for the environment, such as AFVs, holds many potential benefits as it meets the needs of environmentally concerned consumers while positively impacting on the brand image, reputation and financial performance of a company.

However, despite a significant rise in green awareness among consumers, merely offering green products does not guarantee long-term market success for companies as there remains a gap between positive attitudes and actual market data.

For example, in Belgium only 0.48% of new vehicles registered in 2013 were AFVs. In the UK, low-carbon cars (those emitting less than 100 g of CO2 per km) represented only 0.1% of car sales during 2013, while in South Africa, only 0.12% of new vehicles sold during 2013 were AFVs.

In many cases, these low figures are in spite of government incentives for the purchase or use of green vehicles, government disincentives for the use of conventional vehicles and the availability of numerous AFVs in the market.

… understanding green consumer behaviour is important as more alternative fuel vehicles become available and consumers have greater opportunities to express their environmental values and attitudes.

While technological factors (such as battery technology limitations and high costs) and situational factors (such as economic and regulatory factors) do curtail the adoption of AFVs, major barriers are found to wider adoption based on attitudinal factors. Consequently, understanding green consumer behaviour is important as more AFVs become available and consumers have greater opportunities to express their environmental values and attitudes. The development of marketing strategies for this growing demand relies greatly on understanding consumer behaviour and specifically on positive consumer attitudes as forerunners to purchase behaviour.

The theory of planned behaviour

To examine the purchase intention of South African consumers with regard to AFVs, the theory of planned behaviour (TPB) was used. Developed by Icek Ajzen in 1985, this framework can be used to define, predict and change consumer behaviour.  According to the TPB, actual behaviour is determined by the intention to perform behaviour (behavioural intention, BI), while this intention is jointly influenced by an individual’s attitude towards performing behaviour (A), perceived social influence of referent others (subjective norm, SN) and perceived behavioural control (PBC) over performing behaviour. These three determinants of intention, in turn, follow from an individual’s beliefs.

  • Attitude and behaviour: An attitude can be defined as an enduring favourable or unfavourable evaluation or feeling consumers have towards a product, behaviour, service, object or event. Individuals are more likely to perform specific behaviours if they have a positive attitude. Numerous studies support this positive relationship, including those related to purchasing environmentally responsible products or performing environmentally friendly behaviours.
  • Subjective norm and behaviour: Relating to the perceived social influence of others and the motivation to comply with the actual behaviour sought from referents, an individual may have more than one referent other, and it might also be a group known as a reference group.

The development of marketing strategies for this growing demand relies greatly on understanding consumer behaviour and specifically on positive consumer attitudes …

  • Perceived behavioural control and behaviour: It can be difficult for consumers to perform despite having a positive attitude and despite positive social pressure to perform certain behaviour. It is expected that the level of actual control that individuals have over behaviour will moderate their intention. For example, when individuals have an intention to perform behaviour and also have a high level of control over behaviour, it is likely that they will choose to perform that particular behaviour.
  • Perceived behavioural control as moderator: Research has found that despite consumers having a positive attitude towards behaviour, they may not develop an intention to perform behaviour when they perceive difficulties to do so. This might very well explain the so-called attitude-action gap.

How was the study conducted?

The data for this study was collected from a self-administered, internet-based survey of South African consumers who subscribe to the weekly CAR magazine web letter, the biggest selling automotive magazine in the country. Of the 201 responses, 196 were suitable for use in the study.

Given the demographic statistics of CAR magazine readers, and the 48.2% male population of the country, the 95.41% male and 4.59% female responses were expected. Most of the respondents (21.94%) were between 25 and 29 years, with 51.53% of them being younger than 35 years of age. The respondents were highly educated, with 82.14% having attained a qualification beyond matric or grade 12. Of the respondents, 61.73% indicated a monthly household income of more than R25 000. The group with the highest representation (20.41%) had a monthly household income of between R30 000 and R39 999. Half of the respondents indicated that their monthly household income was more than R30 000, indicating an affluent sample.

What did the study find?

The research found a significant positive relationship between attitude and behavioural intention, confirming that consumers with a more positive attitude towards AFVs will exhibit a greater intention to purchase.

In addition, the correlation between subjective norm and behavioural intention to purchase AFVs was confirmed, indicating that consumers who perceive greater social pressure will exhibit a greater intention to purchase. In general, respondents felt a positive social norm towards purchasing AFVs, and the significance is due to at least two factors: environmental behaviour and complying with social norms.

Environmental behaviour is often a new behaviour for consumers. This is certainly the case with AFVs and it often means that consumers lack the knowledge required to make an informed decision. They therefore rely on the support and guidance of friends, family or opinion leaders as well as the media to guide their behaviour. Since driving and owning a vehicle is a highly visible behaviour, the image associated with the behaviour is often also a significant determinant. This may influence the need of consumers to comply with social norms or to conduct what they perceive to be is the right behaviour.

The research found a significant positive relationship between perceived behavioural control as moderator and behavioural intention. In general, respondents feel control factors inhibit their ability to purchase an AFV. These control factors include purchase price, having access to charging facilities and the ease of using an AFV over a conventional vehicle.

Contrary to expectations, this study did not find that perceived behavioural control moderates the relationship between attitude and intention. It was expected for control factors, such as price, to impact the relationship between attitude and intention, and in some way, better explain the attitude-action gap caused by these factors, possibly preventing consumers from developing an attitude towards intention. So, while perceived behavioural control does impact the formation of the intention to purchase an AFV, it does not moderate the formation of attitude towards purchasing an AFV. This is possibly because the highly affluent sample did not consider a control factor such as price to impact their attitude towards purchasing an AFV because they can afford it, or the control factors are independent from attitude formation and the relationship between attitude and intention.

Since driving and owning a vehicle is a highly visible behaviour, the image associated with the behaviour is often also a significant determinant. This may influence the need of consumers to comply with social norms …

  1. How does this impact on green marketing strategies?
    1. Attitude was the most significant determinant of behaviour. As such, creating a positive attitude towards AFVs must be a significant consideration for developing an effective marketing strategy. Retailers and marketers should focus on direct channel factors and the fact that consumers often feel that AFVs are expensive. Marketing and advertising should focus on the benefits of AFVs, specifically on fuel cost savings and lower engine maintenance costs compared to conventional vehicles. They should therefore convince consumers that they will be able to afford AFVs.

     

    1. Since image plays an important role for purchasers of AFVs, retailers and marketers should focus on differentiating AFVs from conventional vehicles in terms of packaging – but not at the expense of price, functionality and practicality. Consumers will have a positive attitude towards AFVs if these products are perceived to offer equal or greater functionality and ease of use compared to conventional vehicles. Retailers and marketers should emphasise the recharging process, driving range, access to recharging stations, the operation of the vehicle (which is no different from the conventional) and the practicality of AFVs, with specific reference to its cabin space and luggage capacity.

     

    1. AFVs are often perceived to be more expensive to maintain and operate. Therefore, the following should be communicated: the cost benefit aspect of AFVs, its reliability, the availability of service centres, as well as a comparison between the lifetime costs of running an AFV against that of a conventional vehicle. Consumers will have a more positive attitude towards AFVs if they have the opportunity to trial a product, and therefore retailers and marketers should focus on providing test-drive opportunities to consumers. This will help consumers to draw informed conclusions about the practicality and functionality of AFVs.

     

    1. Marketers should focus on creating normative pressure and improving the knowledge of consumers regarding AFVs. To counter a possible lack of knowledge, retailers and marketers should focus on improving the channels through which consumers are informed about AFVs (thus offering multiple information search facilities). As a lack of knowledge means that consumers are influenced by their referent others, retailers and marketers should focus on developing knowledge-sharing platforms among consumers, which may also assist in delivering messages of price, image, functionality, practicality and (indirectly) trialability. This will strengthen word-of-mouth marketing. Knowledge-sharing platforms can include social media channels where consumers can share information with friends, family and colleagues.

     

    1. As consumers do rely on others to develop an intention to purchase an AFV and are influenced by them, it is important for effective marketing strategies to target end consumers as well as the reference groups of the end consumers. This can be done by considering referent others as part of the target group of the end consumers or as a separate target group.

     

    1. Consumers still believe that the ability to purchase an AFV – which is often a new behaviour for them – comes with obstacles. A positive attitude can therefore be fostered by focusing marketing efforts that provide information via advertising, test-drives, media coverage and in-store activities. Knowledge-sharing should remain a core focus of any marketing effort both by improving information search facilities and by creating social media platforms that will allow consumers to interact with referent others.

     

    • Find the original journal article here: Hamilton, B. & Terblanche-Smit, M. (2018). Consumer intention to purchase green vehicles in the South African market: A theory of planned behaviour perspective. South African Journal of Business Management, 49(1), a190.

    https://sajbm.org/index.php/sajbm/article/view/190/1128

    • Brett Hamilton is a former automotive media professional and holds extensive knowledge of the industry. He is currently a visiting lecturer in Corporate Finance at USB and is a director at First River Capital. He conducted the research via a database that he could access as a result of his contacts in the industry.
    • Prof Marlize Terblanche-Smit lectures in Strategic Marketing and Branding on the University of Stellenbosch Business School’s MBA programme. She also consults as a strategic marketing practitioner. Her consumer behaviour background guided this article from a consumer and academic perspective.
    • Reference: Ajzen, I. (1985). From intentions to actions: A theory of planned behaviour. In J. Kuhl & J. Beckmann (eds.), Action-control: From cognition to behavior, pp. 11-39, Springer, Heidelberg.

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