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Graduate School of Business & Operations Management
Chang Jung Christian University
The effects assessment of firm
environmental strategy
and customer environmental
conscious on green
product development
Adviser ： Liming Chuang & Chun-Chu Liu
Doctoral Student ： Shu-Tsung Chao
Date ： Oct. 27, 2011
Outline
1
Abstract
2
Introduction
3
Literature Review and Hypotheses Dev.
4
Methodology
5
Results
6
Conclusion and Recommendation
7
References
Graduate School of Business & Operations Management
Chang Jung Christian University
Abstract
Abstract
The purpose of this study is to examine why both
parties (industry and consumer market) （Dyadic
Perspective、雙值觀點 ） have mutual interests （共同利益 ）in
protecting the environment, but they still are hesitant
to act green. （對綠色行動仍然猶豫不決）
The study used two-stage sampling from consumer
market to depict ideal green product characteristics
and reliable toy companies. （描繪出理想的綠色環保產品特性 ）
Abstract (cont.)
Customers :
 This research shows that the willingness to buy (購買意願)
green toys increases if most people in society buy green
toys represents that customers are environmentally
conscious(環保意識) and care about protecting the
environment or buying green toys is the result of a new
economic trend (新的經濟趨勢) and childhood education.
 The willingness to buy green toys increases if customers
think that green products implies an enhancement on new
product development (加強對新產品開發) to toy
manufacturers.
Abstract (cont.)
Manufacturers :
 If manufacturers are able to manage the difficulty of
cooperation with all parties in the supply chain (供應鏈)
and difficulties related to production (生產之困難度) , they
are willing to adopt customers’ perceived value on green
toys for their new product development strategy.
This research aims to find the effect of consumer
perceived value and company eco-innovation (生態創
新) on green product development.
Graduate School of Business & Operations Management
Chang Jung Christian University
Introduction
Introduction
In recent years, there has been an upsurge (上昇趨勢) in
the reporting of research in the area of eco-innovation,
green innovation or sustainable (可持續發展)
development innovation with regards to R&D,
production processes, new products and new services
(Conway & Steward, 1998; Forster & Green, 2002; Hart, 1997; Pujari, 2006; Pujari,
Peattie, & Wright, 2004; D. Pujari, G. Wright, & K. Peattie, 2003).
Academic researches on corporations and
environmental concern have increasingly been
published since 1990s.
Introduction (cont.)
Most studies concentrate on examining companies’
new strategies in response to regulation of
environmental protection (Huang, 2004). (檢視公司對環保法規
的反應之新策略)
Fails to clarify what exactly is supposed to be done
by companies (無法澄清究竟什麼是公司應該做的)
particularly with regards to new product
development (Pujari, 2006) , with a combination of
company perceived value and consumer perceived
value toward green product development strategy.
Introduction (cont.)
The purpose of this study is to understand why is it
that even though both parties (industry and consumer)
have mutual interests and understanding of
environmental protection they still are hesitant to act
green.
The study adopts a two-stage sampling process :
 the first stage investigates the consumer market by
collecting their points of views on consumers’ perceived
value on green toy development
Introduction (cont.)
 the second stage identifies the concept of organizational
eco-innovation strategy on green product development,
and then compares the results between the both parties
To conclude what are the important factors involved
in the strategies for developing green products.
People have started to think about how compensate
for the related loss（如何彌補相關損失）. Some have
begun to live in a more simple way to consume less
and make less waste also known as LOHAS. (樂活)
Introduction (cont.)
 In the past decade, when companies promote and sell green
products, the environmental concerns always draw attention
and recognition and expect consumers to adjust their buying
intentions and develop new buying behavior. (環境的問題總是
吸引關注的，並期望消費者增進自己的購買意願和發展新的購買行為)
 This study includes consumer perceived value on green
products that is beneficial at the product management level
（有利於產品開發管理水準的提昇以開發綠色產品） to develop
green products that comply with consumers’ demands for
marketing management to plan an efficient green marketing
plan. （以符合消費者之需求為動力以規劃進行高效的綠色行銷)
Graduate School of Business & Operations Management
Chang Jung Christian University
Literature review and
Hypotheses development
Conceptual Model
Stage 1
Stage 2
Green Economy
H2
Organization Culture
H1
H5
Green Product
Development
Customer Perceived
Value
H3
H4
Willingness to Buy
H6
Green Management
H8
H7
Green Design
Quantitative Qualitative
Figure 1. Conceptual Model
Green Economy
Environmental economics plays a key role in
identifying options for efficient natural resource
management (環境經濟在有效的自然資源管理中扮演著關鍵的作
用) that facilitate sustainable development (Munasinghe,
1993) (可促進持續性發展)
Various stakeholders, such as consumers,
governments, and environmental groups are
increasingly paying their interests in the
environmental performance of products (Johansson &
Magnusson, 2006).
Green Economy (cont.)
H1: Green Economy has positive influence on green
product development.
H1: Green Economy has positive influence on
green product development.
Green Economy
Organization Culture
H1
Green Product
Development
Customer Perceived
Value
Willingness to Buy
Green Management
Green Design
Figure 1. Conceptual Model
Consumer Market Awareness
There is 89% consumers concerning about what they
buy would impact the environment and 79%
consumers willing to pay additional 5% for
Biodegradation or recycle material made packaging
(Makower, 2009). (生物分解或回收的材料)
On the other hand, there is few research discussing
about toy safety, however, preventing childhood
injury (預防兒童傷害) is very important to parents and
primary caregivers (主要照顧者) and governments.
Consumer Market Awareness (cont.)
H2: Green Economy has positive influence on customer
perceived value.
H2: Green Economy has positive influence on
customer perceived value.
Green Economy
Organization Culture
H2
Green Product
Development
Customer Perceived
Value
Willingness to Buy
Green Management
Green Design
Figure 1. Conceptual Model
Customer Perceived Value
According to Holbrook’s (1999) definition on
perceived value, the total value consumers received
from products or service includes the value of
product, service, personal, image, however, to obtain
above value , customers must pay its cost, that
includes monetary (貨幣) , time, energy and mental
cost, which so called customers’ cost.
Consumers are fascinated on (著迷) some specific
characteristics of a product. It seems a magic power
to make them attached. It aims to build consumer’s
loyalty to the products.
Customer Perceived Value (cont.)
H3: A higher degree of customer perceived value
positively influences customer’s purchase intention.
H3: A higher degree of customer perceived value
positively influences customer’s purchase intention
Green Economy
Organization Culture
Green Product
Development
Customer Perceived
Value
Green Management
H3
Willingness to Buy
Green Design
Figure 1. Conceptual Model
Willingness to Buy
Willingness to buy is a normal effectiveness
measurement and often used to anticipate (預測) a
response behavior. Patterson (1997) provides a
model of the customer purchase intentions.
Previous studies have provided ample evidence for
the positive influence that perceived value has on
purchase intention or consumers’ willingness-to-buy
(Dodds, Monroe, & Grewal, 1991; Monroe, 1990; Zeithaml, 1998).
Willingness to Buy (cont.)
H4: A higher degree of purchase intention positively
influences green product development strategy.
H4: A higher degree of purchase intention positively
influences green product development strategy.
Green Economy
Organization Culture
Green Product
Development
Customer Perceived
Value
Green Management
H4
Willingness to Buy
Green Design
Figure 1. Conceptual Model
Organization Culture
Market orientation is the business culture that
produces outstanding performance through its
commitment to creating superior value for customers
(Slater & Narver, 2000).
Also, the marketing concept states that organizational
success depends upon satisfying customers’ needs
better than competitors (Kolter & Armstrong, 1994). (組織的成功
取決於對滿足客戶的需求之能力優於競爭對手)
Organization Culture (cont.)
Some researchers have posited that market-oriented
values and market-oriented activities are both aspects
of the market-oriented culture has been found as one
of the key factors of business success (Gainer & Padanyi,
2005) as well as new product innovation and the
market focus helps a business develop an
understanding of its target market and their needs
(Pujari, 2006).
Organization Culture (cont.)
H5: A higher degree of marketing orientation in the
organizational culture positively influences green
product development strategy.
H6: A higher degree of marketing orientation in the
organizational culture positively influences green
management.
H5: A higher degree of marketing orientation in the organizational
culture positively influences green product development strategy
Green Economy
Organization Culture
H5
Green Product
Development
Customer Perceived
Value
Willingness to Buy
Green Management
Green Design
Figure 1. Conceptual Model
H6: A higher degree of marketing orientation in the organizational
culture positively influences green management.
Green Economy
Organization Culture
H6
Green Product
Development
Customer Perceived
Value
Willingness to Buy
Green Management
Green Design
Figure 1. Conceptual Model
Green Management (Life-Cycle Assessment)
 Life-cycle assessment is the measuring greenness tool which
provides an objective evaluation from raw material
acquisition to final waste treatment (原料收購到最終廢棄物處理)
which so called “Cradle-to-Grave” (從搖籃到墳墓) perspective
to evaluate the overall greenness of a product and to optimize
all stages of a product (Bhat, 1996; Jørgen Hanssen, 1998).
 Life-cycle assessment aims to set up the goal of maximum
performance while minimizing waste of green products,
through the measuring assessment, the value represent how
will a product performs compared with what the customer
wants and is willing to pay (Bhat, 1996).
Green Management (Life-Cycle Assessment) (cont.)
H7: A higher degree of green management positively
influences green design.
H7: A higher degree of green management positively
influences green design.
Green Economy
Organization Culture
Green Product
Development
Customer Perceived
Value
Green Management
H7
Willingness to Buy
Green Design
Figure 1. Conceptual Model
Green Design
 An effective green design enhances product quality, reduces
costs in developing green products and generates cyclic
efficiency (Bhat, 1996; Braungart et al., 2007)
 Green design also involves two broad segments to set up
green strategies: Source Reduction and Waste Management
(Bhat, 1996).
 Eco-efficiency as a “social action strategy” seeking to “reduce
the use of materials in the economy in order to reduce
undesirable environmental impacts….and produce a relatively
higher degree of economic affluence which is more fairly
distributed” (Schutz & Welfens, 2000).
Green Design (cont.)
As Braungart (2007) defining the concept of eco-efficiency
is: dematerialization, increase resource productivity,
reduced toxicity, increased recyclability (down
cycling) and extended product lifespan. (非物質化，提高
資源生產率，降低毒性，增加可回收率與延長產品的壽命)
To consider green design on toys, the safety always
the prior category in discussion and made strong
connection on designing stage.
Green Design (cont.)
H8: A higher degree of green design positively
influences green product development.
H8: A higher degree of green design positively
influences green product development.
Green Economy
Organization Culture
Green Product
Development
Customer Perceived
Value
Green Management
H8
Willingness to Buy
Green Design
Figure 1. Conceptual Model
Graduate School of Business & Operations Management
Chang Jung Christian University
Methodology
Conceptual Model
Stage 1
Stage 2
Green Economy
H2
Organization Culture
H1
H5
Green Product
Development
Customer Perceived
Value
H3
H4
Willingness to Buy
H6
Green Management
H8
H7
Green Design
Quantitative Qualitative
Figure 1. Conceptual Model
Sampling Plan
We obtained data on the degree environment concern
between consumers and manufacturers
A two-stage sampling will be used in this study.
 At phase one stage, we collect 220 adult customers equally
divided into two groups: married and have child/children
at age under eight; married or single, few experience on
raising child/children.
Sampling Plan (cont.)
At stage two, we visit twenty toy manufacturers who
have intention to develop green business.
 The questionnaire contains environment concern and the
process of Eco-Innovation that includes organizational
culture, green management and green design and product
development requirement
Sampling Plan (cont.)
This is an important part of the study, it’s the
combination of consumers’ perspective and
manufacturers’ perspective on green products.
It shows whether toy manufacturers consider
consumers’ value into their new product
development strategy, and furthermore to define the
key successful factors of new product development at
Eco-innovation process.
Data Analysis Procedure
 Descriptive Statistic Analysis
 Factor Analysis and Reliability Test



Factor Analysis
Item-to-Total Correlation
Internal Consistency Analysis (Cronbach’s alpha)
 Multiple Regression
 In-Depth Interview
Graduate School of Business & Operations Management
Chang Jung Christian University
Results
Data Collection
This experiment includes two sample groups, one is
consumer group another is a few of toy manufacturers.
Consumer Group :
 220 above 20 years old respondents that assuming the
targeted consumer group is with economic independence
and owns decision power on purchasing decision.
 The returning response was 167, after eliminating
incomplete information provided, the effected response is
152. The total effective response rate is 69%.
Data Collection (cont.)
Toy Manufacturers :
 20 Taiwanese toys makers who are interested of this
subject, the valid and completed response was finished
the first part of semi-structured questionnaires and
accepted a phone interview.
 The response with completed information provided
only 6 toys makers . The total effective response rate is
30%.
Empirical results
Table 1. Result of Simple Regression for
Green Economy and Consumer
Perceived Value (four factors)
( Testing for H2 )
Dependent Factor—
Factor 1 of “Consumer
Perceived value”—
(Quality and
Efficiency_PVM1)
Dependent Factor—
Factor 2 of “Consumer
Perceived Value”—
(Status and
Esteem_PVM2)
Model 1
Model 1
Beta (β)
Beta (β)
Green Economy (GEM)
.520***
.442***
R2
.271
.196
Adj-R2
.266
.190
F-value
56.374
36.981
P-value
0.000
0.000
D-W
1.851
1.906
VIF Range
1.00
1.00
Independent Factors
“Green Economy”
Dependent Factor—
Factor 3 of “Consumer
Perceived value”—(
Play and
Aesthetics_PVM3)
Dependent Factor—
Factor 4 of “Consumer
Perceived Value”—
(Ethics and
Spirituality_PVM4)
Model 1
Model 1
Beta (β)
Beta (β)
Green Economy (GEM)
.570***
.397***
R2
.325
.158
Adj-R2
.321
.152
F-value
73.34
28.417
P-value
0.000
0.000
D-W
1.949
2.001
VIF Range
1.000
1.000
Independent Factors
“Green Economy”
*p<0.1, **p<0.05, ***p<0.001 ; significantly level at t >1.96
Empirical results
Table 2. Result of Multiple Regression for Consumer Perceived Value and
Willing to Buy Green Toys
( Testing for H3 )
Dependent Factor— “Willing to buy green toys”—(WBM)
Independent Factors
“Customer Perceived Value”
Model 1
Model 2
Model 3
Beta (β)
Beta (β)
Beta (β)
Quality and Efficiency_PVM1
-
-
-
Status and Esteem_PVM2
.696***
.513***
.458***
Play and Aesthetics_PVM3
-
-
.129*
Ethics and Spirituality_PVM4
-
.282***
.266***
R2
.485
.530
.543
Adj-R2
.481
.524
.534
F-value
142.892
85.257
59.346
P-value
0.000
0.000
0.000
D-W
1.905
1.905
1.905
VIF Range
1.000~1.345
1.000~1.345
1.000~1.345
*p<0.1, **p<0.05, ***p<0.001 ; significantly level at t >1.96
Empirical results
Table 3. Result of Simple Regression for Willing to
Buy Green Toys and Product Development ( Testing
for H4 )
Dependent Factor—
“Product Development on Green Toys”—(PDM)
Independent Factors
“Willing to buy Green Toys”
Model 1
Beta (β)
Willing to buy Green Toys (WBM)
.629***
R2
.396
Adj-R2
.392
F-value
99.678
P-value
0.000
D-W
2.169
VIF Range
1.000
*p<0.1, **p<0.05, ***p<0.001 ; significantly level at t >1.96
Empirical results
Table 4. Result of Simple Regression for Green Economy and
Green Product Development
( Testing for H1 )
Dependent Factor—
“Product Development on Green Toys”—(PDM)
Independent Factors
“Green Economy”
Model 1
Beta (β)
Green Economy (GEM)
.584***
R2
.341
Adj-R2
.337
F-value
78.636
P-value
0.000
D-W
2.055
VIF Range
1.000
*p<0.1, **p<0.05, ***p<0.001 ; significantly level at t >1.96
Empirical results
In-Depth Interview with Toy Manufacturers :
 Discusses how toy manufacturers think about green toys
from different perspective, which involves organization
culture, green management, green toys design and new
product development.
 20 Taiwanese toys makers, distributors and traders who
are interested of this subject, the valid and completed
response was finished the first part of semi-structured
questionnaires and accepted a phone interview.
 The response with completed information provided only
6 toys makers. The total effective response rate is 30%.
Graduate School of Business & Operations Management
Chang Jung Christian University
Conclusion and
Recommendation
Research Conclusions
This research examines how the green economy trend
attracts consumers’ attention toward green toys by
satisfying their perceived value from purchasing toys
considering both the experience and expectations,
buying intention developed forming market demand
and then later transformed into the motivation to
develop new products on the manufacturers’ end.
This study not only considers the consumer’s point of
view but also considers that of the supplier.
Research Conclusions (cont.)
But due to their being so many factors to consider in
new product development, all of the factors couldn’t
be included in this study. Therefore, this study adopted
a broader approach using in-depth interviews with a
few toys manufacturers trying to link their perceptions
on green toy development with consumers’ real
demand in order to determine whether manufacturers
actually understand consumers’ expectations and
whether they are willing to satisfy them.
Research Conclusions (cont.)
Table 5. Hypotheses Summary and Result at Consumers’ End
Hypotheses
Result
H1
Green economy has positive influence on customer
perceived value on green toys.
Support
H2
Customer perceived value on green toys has positive
influence on willingness to buy green toys.
Support
H3
Willingness to buy green toys has positive influence on
green toys new product development
Support
H4
Green economy has positive influence on green toys new
product development
Support
Research Conclusions (cont.)
Semi-structured questionnaires and phone interviews
with manufacturers followed the result of the
regression analysis.
Representative respondents for manufacturers agree
that efficiency and quality are important considerations
for new product development.
Should consider consumers’ recognition and
acceptance of green toys.
Research Conclusions (cont.)
Most of the respondents imply that social
responsibility is important, but in reality, it is more
complicated due to the many factors that must be taken
into consideration, such as supply chain management
and production process management.
Research Conclusions (cont.)
Table 6. Hypotheses Summary and Result at Toy Manufacturers’ End
Hypotheses
Result
H5
A higher degree of marketing orientation
in the organizational culture positively
influences new product development
strategy.
Support, but if the market
trend or demand from
customers’ end is not clear,
manufacturers will not easily
make a move on new product
development on green toys.
H6
A higher degree of marketing orientation
in the organizational culture positively
influences green management.
Support and top
management’s support also
take important place.
H7
A higher degree of green management
positively influences green design.
Support
H8
A higher degree of green design positively
influences green product development.
Support
Limitation and Future Research
 It is rare to find academic research discussing both consumers
and manufacturers in one study because the research topic is
broad and so many conditions need to be considered.
 The aim of this research is to find the effect of consumer
perceived value and company eco-innovation on green product
development.
 In doing so three limitations were found and these limitations
need to be made clear and be understood by the reader.
Limitation and Future Research
(cont.)
First, the technical background of manufacturers was
not discussed. This could be a barrier for toy
manufacturers to transform their business model so as
to include green toy development, especially in the
Taiwan toy industry where most of traditional toy
manufacturers are OEM based without R&D teams.
Understanding the manufacturers’ technical
background could have a major effect on the responses
they give related to their willingness to go green or not.
Limitation and Future Research
(cont.)
Second, there is no standardized definition on green
toys in the market. During the research few academic
or industrial explanation for what green toys really are
could be found.
However, different groups may had different
explanations and ways of defining green toys. This
research is limited to the perspectives of manufacturers
and consumers. (本研究僅限於製造商和消費者的觀點)
Future research should consider the perspectives of
educationists and environmental groups, etc. This
could add to a clearer and more comprehensive
definition for green toys.
Limitation and Future Research
(cont.)
Finally, acquiring accurate information related to
environmental issues from manufacturers is not easily
achieved. (牽涉到環保法規等因素)
Improvements of environmental protection from ecofriendly production processes are hard to quantify and
measure.
In this research, respondents indicated they are willing
to establish criteria to for quality assurance tests (建立綠
色品質保證之測試標準) but also mentioned that it is very
difficult to design a systematic appraisal (系統評價) of
environmental protection to record in detail about
materials used or employed in the finished products.
Limitation and Future Research
(cont.)
Therefore, prefer not to disclose information openly to
the public or to customers to avoid being challenged
and monitored.
Further research could do more surveys and challenge
the findings of this study, testing whether this
phenomenon generally exists in other industries.
Graduate School of Business & Operations Management
Chang Jung Christian University
References
References
References
References
Graduate School of Business & Operations Management
Chang Jung Christian University