An empirical study on the influence of environmental labels on consumers

Abstract

PurposeDespite research studies indicating strong support for labelling information, uncertainty remains with respect to how labels influence consumers. This paper attempts to empirically investigate how consumers who differ in terms of environmentalism respond to labels.Design/methodology/approachThe data were collected on an Australian sample using a structured questionnaire administered on the phone using quantum research (CATI) data collection services. A total of 155 questionnaires were completed and used for data analysis. The data were analysed using both descriptive measures and correlations between variables.FindingsThere appears to be a proportion of consumers that find product labels hard to understand. The research found that there are consumers who will buy green products even if they are lower in quality in comparison to alternative products, but would look for environmental information on labels. With respect to price sensitive green consumers, there appears to be a relationship between price sensitivity and “always” reading labels as well as indicating that there is “sufficient” information on product labels to make informed purchase decisions.Research limitations/implicationsIt was beyond the scope of the research to account for some of the utilitarian approaches to interpretation or in‐depth comprehension of label information. The sample size of 155, although selected using a probability method, may, to some extent, limit the overall accuracy of the results.Practical implicationsThe research offers some important information on different green consumer segments that would alert managers on how best to position environmental labels. Findings such as “Satisfied with labels” correlates with “Labels are accurate”, which suggests that businesses need to provide a clear, accurate and easily legible label design to encourage satisfaction with the accuracy of content and the communication aspects of a label.Originality/valueThe paper contributes to better understanding of green customers purchase intentions and the usefulness of ecological product labels. It offers some insights and assistance to businesses in planning their green product/labelling strategies.