To Pay through the Nose? The Reasons for Millennials Willingness to Pay Premium for Green Products

Abstract

Many companies produce environmentally friendly goods and offer their products with varied attractive marketing mix strategies. One of the company's potential target markets is millennials because the growing number of this community has become enormous. In terms of behavior, millennials have a high level of consumption compared to other generations. However, there are big questions about the willingness of millennials to consume green products. This study aims to acknowledge the green product buying behavior among millennials, especially premium green products. The variables expected to influence the millennial's willingness to pay premium include environmental concern, reference group, and pro-environmental attitude. Data collected through a survey of 250 respondents. The hypothesis framework was tested using PLS-SEM modeling to evaluate the measurement and structural models with the assistance of Warp PLS version 7.0. This study found that millennials who consider the importance of preserving the environment and have a reference group that solicitude to the environment will have a pro-environmental attitude and willing to buy the green product, even though it has a higher price. Green product's management can use the result to formulate an effective green marketing strategy to target the millennials. Regarding the need for millennials' environmental behavior clearer picture in a developing economy, the present study inflicts the literature by describing the antecedents of millennials' willingness to pay premium green products. The results also give practical implications by shedding light on millennials’ green behavior variables. It helps green entrepreneurs conceive their strategic marketing management, and thus can boost the green economy and economic growth.

Citation

Anggraeni, R. and Susilowati, C. (2022), "To Pay through the Nose? The Reasons for Millennials Willingness to Pay Premium for Green Products", Sergi, B.S. and Sulistiawan, D. (Ed.) Modeling Economic Growth in Contemporary Indonesia (Entrepreneurship and Global Economic Growth), Emerald Publishing Limited, Leeds, pp. 135-150. https://doi.org/10.1108/978-1-80262-431-120221009