Do Southern English airline passangers consider airlines` environmental commitment/policy in their purchase decision making?

List of contents

Acknowledgements

Abstract

List of contents

List of figures

List of tables

List of appendices

Chapter 1 – Introduction
1.1 Introduction
1.2 Rationale
1.3 What are environmental policies
1.4 Aim and objectives
1.5 Chapter overview
1.6 Chapter Two: Literature Review
1.6.1 Chapter Three: Methodology
1.6.2 Chapter Four: Primary Research- Results and Findings
1.6.3 Chapter Five: Discussion
1.6.4 Chapter Six: Conclusion and Recommendations for
further research
1.7 Summary

Chapter 2 – Literature Review
2.1 Literature Review Overview
2.2 The importance of the climate change issue
2.3 Green marketing
2.3.1 Environmental policy and its relation to green marketing
2.3.2 Why Green Marketing?
2.4 Environmental Consumer Buying Behaviour
2.5 Environmental conscious flight ticket buying behaviour
2.6 Summary

Chapter 3 – Methodology
3.1 Methodology Overview
3.2 Research philosophy
3.2.1 Applied research
3.2.2 Deductive research
3.2.3 Positivism
3.3 Primary research
3.4 Quantitative data analysis
3.5 Survey sample
3.6 Questionnaire design
3.7 Pilot questionnaires
3.8 Data analysis
3.9 Analysis limitations
3.10 Research limitations
3.11 Summary

Chapter 4 – Results and Findings
4.1 Primary Research- Results and Findings Overview
4.2 General Information (Questions 1 to 5)
4.3 Are people in general environmentally conscious?
4.4 Do people consider airlines’ environmental commitment when
booking a flight?
4.5 Are people prepared to make more environmental conscious
purchases?
4.6 Summary

Chapter 5 – Discussion
5.1 Discussion Overview
5.2 How important is the climate change issue to consumers?
5.3 Can green marketing and environmental policy making bring about
a commercial benefit?
5.4 To analyse environmentally conscious consumer behaviour
5.5 To analyse if potential air travellers consider environmental attributes prior to booking a flight by looking at airlines’ environmental commitment
5.6 Summary

Chapter 6 – Conclusion and Recommendations
6.1 Conclusion and Recommendations Overview
6.2 Conclusion
6.3 Recommendations to the airline industry
6.4 Recommendations for further research

Bibliography

Appendices

Acknowledgements

At this point I would like to take the opportunity to thank all those people that have supported me the whole time while working on my dissertation.

First of all I would like to thank my parents and my grandmother who have enabled me to study abroad and have supported me financially as well as emotionally throughout my study.

Secondly, I also really appreciate the help that I received of my dissertation tutor Teresa Robinson whose assistance was vital right the way through the production of my dissertation. Also here a special thanks to her.

Furthermore, I am more than grateful for having met some new friends at university that have made this year an unforgettable and wonderful experience. A special thanks is due to Verena, Chrisi, Camilla, Derick and Armin who were always up for a useful distraction when it was needed.

Finally, I am thankful for those people that completed my questionnaires which provided me with the basis for my research.

Word Count: 11,825

Abstract

Environmental matters and in particular climate change are among the most discussed issues at present. The aviation industry has been in the spotlight of politicians, environmentalists and the Media for its detrimental impacts on the natural environment and the question rises as whether the increased publication of the problem leads to the more environmental conscious consumer purchasing behaviour in terms of booking flights? The study aimed to answer this question. On the one hand the topic was chosen as it represents a current issue; on the other the topic of environmental conscious consumer buying behaviour appears to be under researched.

The study intended to work through following objectives in order to find an answer to the main study aim:

- How important is the climate change issue to consumers?
- Can green marketing and environmental policy making bring a commercial benefit?
- To analyse environmentally conscious consumer behaviour
- To analyse whether potential air travellers consider environmental attributes prior to booking a flight by looking at airlines’ environmental commitment

First of all existing literature surrounding the topic of green marketing and environmental consumer behaviour was reviewed prior to conducting primary research. Primary research was conducted by means of a questionnaire which was distributed to 100 people at Bournemouth, Southampton and Heathrow Airport. The results were subsequently analysed with the aid of SPSS and related to the literature reviewed.

Research results exemplified that environmental concern among the population does not exist to an extent that environmental conscious purchasing is likely to take place. In terms of the booking of flights the majority of consumers do not consider airlines’ environmental attributes in their purchase decision making. Other factors such as travel costs and travel comfort still play a far more decisive role in most individual’s decision making. However, the study could reveal that one of the main reasons for this being the case was that most respondents were not aware that airlines’ can be environmentally responsible. Hence, the findings of the study recommend that airlines should show more evidence of environmental responsibility to potential customers.

List of Figures

Chapter Two: Literature Review

Figure 1 Literature Review Themes

Figure 2 Greenhouse gas emissions in 2000, by source

Figure 3 Marginal Social Cost

Figure 4 Green versus Societal Marketing

Figure 5 New FlyBe advertisement

Figure 6 Environmental – Value Attitude System

Figure 7 Britons’ attitude – behaviour gap

Figure 8 Perceived business benefits of good environmental practice

Figure 9 Summary of previous research on consumer buying behaviour

in regard to the airline industry

Chapter Three: Methodology

Figure 10 Research Approaches

Chapter Four: Results and Findings

Figure 11 Age group

Figure 12 Where have you lived in the last 3 years?

Figure 13 Income

Figure 14 The value to preserve the environment is most important to me

Figure 15 Do you consider an airline’s environmental commitment policy

when booking a flight?

Figure 16 I have never heard about ‘green’ airline activities

Figure 17 Airlines will have to show more evidence for their environmental commitment in the future

Figure 18 Airlines’ environmental commitment/policy as influential buying factor

Figure 19 Would you accept to be charged more in order to pay for the carbon footprint you cause by flying?

Figure 20 I would spend up to 20% more on flights if I saw the organisation used eco-friendly ways

Figure 21 Airlines should charge more, so less people would fly

Figure 22 Would you cut down on taking flights?

Chapter Five: Discussion

Figure 23 Most important factors when booking a flight

Figure 24 New FlyBe advertisement

Chapter Six: Conclusion and Recommendations

Figure 25 Objectives and summary of outcome

Figure 26 Model of how to achieve environmental conscious flight ticket

purchasing and competitive advantage

Figure 27 Recommendations for further research

List of Tables

Chapter Four: Results and Findings

Table 1 Natural environment aspect

Table 2 Statistics Natural environment aspect

Table 3 Cross tabulation: The value to preserve the environment is most important to me * where have you lived in the last 3 years

Table 4 Cross tabulation: ‘Green’ airline tax has been of special concern to me * where have you lived in the last 3 years

Table 5 Statistics What are the most important aspects for you when booking a flight?

Table 6 Cross tabulation: An airline’s environmental commitment/policy is the most important aspect for me when booking a flight

Table 7 Cross tabulation: Do you consider an airline’s environmental commitment/policy when booking a flight

Table 8 Summary of key findings

List of Appendices

Appendix 1 Stern Report summary

Appendix 2 Sample of Environmental Policy

Appendix 3 King’s approach of identifying false marketing

Appendix 4 Options facing the airline industry

Appendix 5 Summary of previous research on consumer buying behaviour in regard to the airline industry

Appendix 6 Questionnaire

Appendix 7 Full results of the survey

Appendix 8 The North – South divide in the UK

Chapter One - Introduction

1.1 Introduction

‘It is a common perception that businesses will only make environmental improvements if they can see a commercial benefit’ (NetRegs, 2005).

Over the last year the aviation industry has been in the spotlight of politicians, environmentalists and the Media for its detrimental impacts on the natural environment, although it only accounts for 3% of all global CO2 emissions (Lynam, 2006). Politicians are considering to add a further ‘green tax’ in order to curtail growth within the airline industry, which is intensively discussed among various stakeholders (as at 17/12/2006). Airlines, however, have increasingly introduced environmental policies in recent years, in order to demonstrate environmental responsibility in regard to the way they operate. According to NetRegs (2005) organisations will just undertake environmental improvements if, as a consequence a commercial benefit can be achieved. Commercial benefit may mean to attract more customers and to gain a competitive advantage. This study will therefore investigate if airlines experience any commercial benefits through being environmentally responsible, by investigating whether airlines’ environmental commitment is considered in consumers’ buying decision. The author will achieve the study’s aim by looking at past literature that may give hints and by conducting a survey among potential airline passengers. The author will focus on people that fly from southern English airports, as due to time and financial constraints this is the only way to achieve a meaningful outcome. To apply a small scale survey on the whole of the UK would seem to be inadequate.

1.2 Rationale

This topic has been chosen as it represents a current issue. The environment and climate change are extremely discussed amongst various stakeholders and the question arises as whether the increased publication of the problem leads to the consumer showing more environmental conscious purchasing behaviour in terms of booking flights?

What is more the author could not locate any literature, which dealt with environmental consumer buying behaviour in relation to the airline industry; thus this topic appears to be under researched. Some sources reveal reasons why airlines commit themselves to environmental issues (Nelms, 1997; Lynes and Dredge, 2006). These sources also mention the competitive edge that may be gained, however they have a micro-environmental perspective. They do not state the extent to which the actual customer’s purchasing decision is influenced by airlines’ environmental policies.

1.3 What are airline environmental policies?

Airlines often illustrate the extent to which they are environmentally responsible in their environmental policies. The low-cost airline Flybe (2006) states in its environmental policy how important the environment is to the organisation and how they aim to offset or curtail the negative environmental impacts caused through flying. Many other airlines have similar if not more extensive environmental policies, which also represent specific airline initiatives that target carbon offsetting. For instance, British Airways cooperates with an organisation called Climate Care that carries out carbon offsetting projects and is subsidised by British Airways passengers (British Airways, 2006). Environmental policies are a means to demonstrate environmental responsibility and will be further explored in Chapter Two.

1.4 Aim and Objectives

This study aims to test the hypothesis that

‘Consumers do not consider an airline’s environmental commitment in their purchase decision- making’.

The author has identified four research objectives, which will support the researcher to meet the overall aim of his study. The objectives will be explained in the following:

- How important is the climate change issue to consumers?

It is important to achieve this objective as it will clarify the importance of the climate change issue. It may also indicate the necessity to be more environmentally committed in general, including various industries but also consumers. As a result issues like this may change consumers’ attitude in terms of environmental attributes when making purchases. This objective will be achieved by using secondary sources and primary research.

- Can green marketing and environmental policy making bring a commercial benefit?

The second objective will describe green marketing and environmental policy making based on secondary sources. It is necessary to gain an overview of what green marketing and environmental policy making is and what kind of benefits it can bring. Achieving this objective will furthermore reveal examples of organisations that may have benefited commercially from introducing environmental policies and green marketing.

- To analyse environmentally conscious consumer behaviour
This objective is vital in order to understand environmental conscious consumer behaviour. By analysing environmentally conscious consumer behaviour, influencing factors that make a consumer to undertake environmentally conscious purchases will be identified. It will furthermore help to discover in the analysis whether many people are likely to consider environmental attributes when making purchases or only a small minority.
- To analyse whether potential air travellers consider environmental attributes prior to booking a flight by looking at airlines’ environmental commitment

This is the key objective, as it will reveal whether potential air travellers are concerned with environmental attributes before booking a flight. This subject area seems to be under-researched, since the author could not locate any topic related secondary sources. Hence, primary research will be necessary, meaning the objective will be met by conducting a questionnaire survey.

1.5 Chapter Overview

The author will include and relate certain aspects to the airline industry whenever it appears to be reasonable. The reason for adapting a generic point of view within the literature review is the very limited if not none-availability of secondary sources that consider environmental conscious consumer behaviour in regard to the airline industry.

1.5.1 Chapter Two: Literature Review

The literature reviewed for this research project will be summarised in Chapter Two. At first this chapter will illustrate the overall growing importance of the climate change issue, which will additionally expose the importance of reacting to this problem by changing attitudes for example. This part will be particularly related to the aviation industry.

Furthermore, the closely linked functions of green marketing and environmental policies will be investigated. Their relationship will be analysed and it will be explained to what extent environmentally friendly initiatives can commercially benefit an organisation, based on examples.

The final section of the literature review will concern consumers’ buying behaviour in general and subsequently focus on environmental conscious purchasing behaviour. Finally, the author will analyse aspects of specific importance to airline passengers when booking an airline flight.

1.5.2 Chapter Three: Methodology

The methodology will illustrate the research techniques used to achieve the study’s aim. This chapter will also justify the use of certain techniques by describing the advantages they bring to this research project. As the author could not locate any relevant secondary sources, information will have to be gained through primary research. Therefore 100 questionnaires were distributed to air travellers at southern English airports. The questionnaire included environmentally related questions, so to reveal environmental perception and whether an airline’s environmental commitment is considered in their purchasing decision.

1.5.3 Chapter Four: Primary Research- Results and Findings

This section of the project will summarise and analyse the most relevant findings of the questionnaire survey. Due to the number of questionnaires distributed, SPSS will be used in order to ensure that certain findings are reliable outcomes. SPSS bar and pie charts will be employed to provide the reader with visual results, which may increase the reader’s comprehensiveness.

1.5.4 Chapter Five: Discussion

The study’s objectives will be discussed in this chapter. The new knowledge that was gained through primary research will be compared to sources from the literature review to find out similarities and differences. Those similarities and differences will then be examined in order to clarify the validity of the findings.

1.5.5 Chapter Six: Conclusion and Recommendations for further research

Chapter Six will answer if it can be agreed to the hypothesis, ‘Consumers do not consider an airline’s environmental commitment in their purchase decision- making’. This section will give recommendations for further research on this topic to be considered, in order to receive a more meaningful outcome of this subject area.

1.6 Summary

This chapter has introduced the author’s research project to the reader. The study’s aim and objectives were explained, as well as the structure of this work. The next chapter will review the relevant literature in regard of this study.

Chapter Two – Literature Review

2.1 Literature Review Overview

This chapter will critically review the secondary sources examined for the study. Using previous research is a ‘vital step in the research process’, as it supports the author in finding solutions to certain matters (Veal, 2006: 121). What is more it is advantageous in terms of time and cost saving (Veal, 2006: 121-122).

The literature review consists of information from e-journals, academic books, web pages and newspapers. This information will provide the background for the study and be further discussed in chapter five.

Figure 1 - an overview of the literature review content.

Figure 1: Literature Review Themes

illustration not visible in this excerpt

2.2 The importance of the climate change issue

The increasing media coverage of global warming and its potential impacts on the eco-system indicates the importance of the climate change issue. The British Prime Minister, Tony Blair claims that global warming is one of the biggest threats of our age which global community faces (cited Independent, 2006). The earth is warming from year to year and has already warmed by 0.5°C over the past century (Mc Carty, 2001).

Bellamy, a former lecturer for botany at Durham University, claims that global warming is a natural phenomenon which cannot be fixed or stopped (cited Leake, 2005). However, most sources suggest that there is no doubt that mankind actively contribute to global warming through the emission of greenhouse gases such as CO² or Methane (Kobayashi, 2004; Morison, 1996; Dispensa & Brulle, 2003).

The airline industry is the subject of the current green debate, although it is only a small perpetrator of CO² emissions (Figure 2). Aviation policies are rethought and may result in flight tickets being additionally ‘green taxed’ (Hurst, 2006).

Figure 2: Greenhouse gas emissions in 2000, by source

illustration not visible in this excerpt

(Source: http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/30_10_06_exec_sum.pdf)

According to Stern’s report (Appendix 1) on the potential economic consequences of climate change the worst greenhouse gas causer is the power sector, followed by industry and transport including the airline industry that contributes 3% of greenhouse gases (cited Smith, 2006). Consequently, there are harsh discussions between pressure groups on the vindication of levying flight tickets any further. There are studies (Oxford study on additional airline taxing; The Stern Report) proposing an additional green levy on flights in order to cut carbon emissions, and by contrast are airlines which are huge employers and fear that flying will only remain for the rich and cease European economic growth (Ryanair, 2006).

Nevertheless, due to the current growth rate of low-cost operators the aviation industry is expected to double by 2020 (Kirby, 2004) and to become ‘the single biggest source of greenhouse gas emissions by 2050’ (Hickman, 2006); unless the aviation industry is reformed. Still it must be considered that other emission perpetrators should also have to be reformed in order to prevent putting airlines at a disadvantage.

The government and NGOs have been working hard to reduce emissions as the UK has set annual targets for emission reductions that it has to meet (Independent, 2006). Already ‘green’ airline taxes have been introduced, however it is controversial if additional such taxes will discourage people from taking flights (Sanger and Johns, 2006). The airline industry could finally emerge as the winner of additional levying and increase profits; hence the government should focus on educating air travellers on environmental issues and consequences. This can have a positive outcome, for example the conservation of Australian heritages depends upon public awareness (Lennon, 2001) which may prove that creating such awareness can be a better way to success.

However, businesses need to contribute too. It is becoming increasingly important for businesses, including airlines, to show environmental commitment with corporate responsibility and corresponding marketing strategies. Environmental legislation makes it essential for businesses to show environmental responsibility (Envirowise, 2007), but also consumer trends reveal that ethical consumerism is growing (BBC, 2006a). Mc Donagh and Prothero (1997: 385) suggest that ‘ one cannot ignore the environment in business any longer’.

2.3 Green marketing

Green marketing is part of a broader concept and not just about ‘ promotion or advertising of products with environmental characteristic’ (Polonsky, 1994). Hence, defining green marketing seems to be complicated as there is no universal definition for it. Peattie (1995) defines green marketing as follows:

‘Green or environmental marketing is the holistic management process responsible for identifying, anticipating and satisfying the requirements of customers and society, in a profitable and sustainable way’.

Peattie (1995) states that green marketing differs from societal marketing in a variety of ways. First of all as opposed to societal marketing, green marketing has an open-ended perspective on the basis of its environmental sustainable approach. Furthermore, as its formulation already gives away, green marketing is also more concerned with environmental issues and includes those as a key factor in all marketing related decisions (Figure 4). Eventually, it also has a wider perspective and considers ‘global concerns rather than those of individuals’ (Peattie, 1995).

Polonsky (1994) adds that green marketing is also about modifying an organisation’s production process and offering goods and services that are less detrimental to the natural environment. It is also very important to change a firm’s advertising strategy in order to exploit the competitive advantage that eco-friendly product advertising might bring. For instance the WTO argues that ‘nature tourism’ has become a vital part of the holiday landscape which is outpacing the whole tourism industry in terms of growth by three times (cited Mintel, 2005a). This demonstrates the potential that the green market possesses for the future.

2.3.1 Environmental policy and its relation to green marketing

An important first step to demonstrate environment corporate strategy and the greening of a business to the public is to communicate an organisation’s green approach or more eco-friendly approach to its employees (Hutchinson and Hutchinson, 1997: 120; Elkington and Burke, 1989; Müller and Koechlin, 1992 cited Tilt 2001). A company’s commitment to the environment is mostly manifested in an environmental policy (Sample Appendix 2). According to Hutchinson and Hutchinson (1997: 121) an organisation’s management and its employees are committed to act in compliance with the policy. Consequently, it is understood that environmental policies are an internal than an external means of modifying company cultures and improving eco-friendly approaches; in addition a research by Tilt (1997 cited Tilt, 2001) showed that environmental policies were mainly aimed at employees.

However, many companies publish their environmental policies demonstrating their environmental position and can result in a competitive advantage as green issues are becoming increasingly important to the public (Hutchinson and Hutchinson, 1997; Piasecki et al., 1999). Gray et al. (1995 cited Tilt, 2001) suggest that organisations also use environmental disclosures as a promotional tool. A survey conducted by Harte and Owen in 1992 (cited Tilt, 2001) identified that 40% of UK organisations revealed their environmental commitment to the public. Hence, it is assumed that there is a close relationship between marketing and environmental policy making (Nogas, 2003) and that environmental policies are part of a businesses’ marketing communication strategy. Tilt’s study (2001), which intends to analyse the importance of environmental disclosure in organisation’s annual report, demonstrated that environmental performances are predominantly capitalising public-relations and marketing issues.

2.3.2 Why Green Marketing?

Environmental concern among the population is growing; however green issues seem to play a less important part in academic writings; and especially in marketing (Polonsky, 1994). A possible reason was identified by the top marketing researcher King who carried out a study to identify why many company’s marketing failed (1985 cited Peattie and Crane, 2005). King found out that many companies used ‘false marketing’ and identified basic faulty approaches ‘which have been labelled as green marketing’ (Appendix 3; Peattie and Crane, 2005). Peattie and Crane (2005) utilised King’s approach to discover the problems of green marketing. As a result they and other researchers found out that a majority of organisations adopted flawed approaches towards green marketing, since the basics of the green philosophy occurred to be misunderstood (Peattie and Crane, 2005; Ottman et al., 2006; D’Souza, 2004).

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