Editorial Board

A Refereed Monthly International Journal of Management

Predicting Green Purchase Intention: The Role of Eco-Friendly Packaging and Perceived Consumer Effectiveness with Price Sensitivity as a Moderator

 

Dr.  Parveen Singh Kalsi,

Associate Professor

GNA Business School, GNA University

Phagwara, Punjab – 144401

Email: parveen.singh@gnauniversity.edu.in

 

Dr. Manpreet Kaur,

Associate Professor

GNA Business School, GNA University

Phagwara, Punjab – 144401

Email: manpreetkaur@gnauniversity.edu.in

 

Abstract

Despite increased environmental awareness, consumer purchase tendencies for eco-friendly products remains limited, mainly in price-sensitive markets. This study investigates how eco-friendly packaging (EFP) and perceived consumer effectiveness (PCE) influences green purchase intentions (GPI) with prominence on the moderation scope of price sensitivity. A cross-sectional survey from the Doaba region of Punjab was utilised and data collected from 279 respondents was analysed using PLS-SEM. Findings deduced that EFP and PCE yielded favourable influence on GPI. However, price sensitivity significantly moderated these relationships negatively. The study presented suggestions for marketers and businesses to cultivate perceived consumer effectiveness among customers with suitable implementation of value-driven pricing strategies and expand the accessibility and comprehensiveness of eco-labelled products, thus favourably generating the pro-environmental purchase intentions and expediting its transition to actual sustainable consumption.

Keywords: Green Purchase Intention, Eco-Friendly Packaging, Perceived Consumer Effectiveness, Price Sensitivity, Sustainable Consumption, PLS-SEM, SmartPLS

 

Introduction

Climatic changes, depletion of natural resources and waste management problems have pushed the global shift towards sustainable consumerism. The pertinent stakeholders i.e. consumers, governments and corporations are realising that eco-friendly behaviour pertinently reduces the environmental degradation (Peattie, 1995; Ottman et al., 2006).  Green purchase has purposefully grown as the consumers intend to buy environmentally friendly products.  The product packaging protects the product and also meaningfully exhibits the company’s sustainability driven proposition (Magnier & Schoormans, 2015). Further, reusable, recyclable and decomposable packaging often reduces environmental damage.  It also affects customers’ behaviour and environmental sustainability perspectives (Rokka & Uusitalo, 2008).  According to Chen & Chai (2010), consumers are more likely to trust and support a brand that uses sustainable packaging.  Green packaging usually increases product value and consumer satisfaction, encouraging repeat purchases. Also, eco-friendly packaging is getting increasingly essential in growing economies like India, where sustainability consciousness is rising (Yadav & Pathak, 2016). Hence, eco-friendly packaging has become a noticeable and substantial element in green purchase intentions in developed and developing markets.

Perceived Consumer Effectiveness (PCE), a feeling that an individual acts may improve the environment, also affects green purchase behaviour (Straughan & Roberts, 1999).  It is also noteworthy, that environmentally conscious consumers with high PCE are more motivated to possess like-wise buying preferences (Ellen et al, 1991).  Therefore, consumers are further expected to buy sustainable items if they consider they are helping the environment (Kim & Choi, 2005).  This resonates with environmental concern and proactive consumer behaviour, making it imperative in ecologically changing beliefs (Vermeir & Verbeke, 2006).  PCE boosts the green purchase intents by infusing responsibility and efficacy in consumers, accompanying eco-friendly packaging.

 

Price sensitivity affects customers’ buying tendencies and can strengthen or diminish environmental cues on purchase intentions (Balderjahn, 1988). However, recent literature elucidates that it restrains and restricts the decision of consumers for buying of eco-friendly products (Laroche et al., 2001; Dangelico & Vocalelli, 2017). Even though many consumers are environmentally conscious, but sustainable items and packaging cost more, which obstruct their purchase decisions (Haws, 2014; Testa et al., 2020). Thus, this research integrates these aspects to probe and investigate how the environmental perspective and price concerns influence green shopping decisions.

Review of Literature

Growing consumers’ driven concern for environmental issues has steered sustainability studies to emphasis on green buying intention. This section evaluates the literature on eco-friendly packaging and perceived consumer effectiveness, concentrating on their relationship; and price sensitivity’s moderating impact in green consumer behavioural studies.

Eco-Friendly Packaging (EFP) and Green Purchase Intention (GPI): In the contemporary era, eco-friendly packaging is a main aspect in sustainable consumer behaviour.  Van Birgelen et al. (2009) ascertained that environmentally friendly packaging boosts product value and purchasing intentions.  Empirical studies, infers that sustainable packaging in online and offline retail channels elevates brand image and green purchasing intentions (Magnier & Crié, 2015). Additional, Yeo et al. (2020) in their research deduced that consumers generally associate eco-friendly packaging with product quality and environmental responsibility, therefore packaging design and functional aesthetics are crucial.  Packaging promotes green purchasing intention through consumer environmental concern and like-wise attitudes, according to Prakash and Pathak (2017) and Shimul and Cheah (2023).  These studies express a strong link between eco-friendly packaging and sustainable shopping tendencies.

PCE and Green Purchase Intention: PCE signifies an individual’s opinion that their consumption choices meaningfully influence the environmental sustainability, and is defined as a psychological motivator for pro-environmental behaviour (Roberts, 1996), which was subsequently validated by Kim and Choi (2005) in their study. Thereon, empirical research conducted by Mostafa (2006), Das and Ramalingam (2019) and Joshi et al. (2021) established that customers with perceived market-place influence display enhanced intents to buy environmentally friendly products, often driven by a wisdom of personal responsibility and efficacy in reducing environmental damage. Zhuang et al. (2021) elucidated that PCE supports the intention–behavior link or relationship by extending cognitive motivation and ethical commitment for sustainable consumption. These studies classify PCE as a significant predecessor for green purchase intentions.

Price Sensitivity, EFP and Green Purchase Intention: Usually the price-sensitive consumers value affordability above environmental benefits, which can diminish the influence of eco-friendly packaging cues (Lavuri, 2022); and Ghali (2020) ascertained that price sensitivity decreases the constructive effect in the link between purchase intention and behaviour. Despite environmental benefits, perceived financial burden of green products at times dissuade consumers from paying relevant premium price and exhibiting relevant green behaviour (Sheikh et al., 2023). These findings emphasise the relevance of price sensitivity as a pertinent factor in the link between EFP and green buying intention.

Price Sensitivity PCE and Green Purchase Intention: Price sensitivity can reduce the constructive link between PCE and GPI; and Ghosh (2020) observed that pricing barriers can deter green product purchases even for buyers having ecologically conscious attitudes. Also, Joshi and Rahman (2015) inferred that premium prices can outplay psychological motives, separating intention from final purchase. Further, Sheikh et al. (2023) ascertained that price sensitivity escalates the intention–behavior gap, especially for expensive green products purchase. Additionally, possessing environmental awareness and perceived responsibility are not adequate; economic affordability is desirable to fit intention into action, according to Nguyen et al. (2017). These findings reflect and propose that price sensitivity adversely moderates the PCE-green buying intention association.

Statement of Problem

Notwithstanding the rising consumer awareness and concern over environmental issues, the actual commitment of eco-friendly products remains constrained and reserved, especially in the price-sensitive regions. Earlier research studies highlight the significance of sustainable packaging and perceived customer efficacy as notable determinants of green purchase intention. Nevertheless, these studies often neglect to gauge the influence of economic factors and predominantly, price sensitivity as a moderating variable.

 

Further, in the rising economies, where monetary constraints often surpass ethical consumption, this disregard becomes dominant. Consumers intend to act reasonably and responsibly; however, higher or premium prices of ecological products can obstruct their real purchase behaviour. Understanding this interplay among price sensitivity, green product cues and sustainable psychological motivators is crucial for the formulation of efficient means to encourage sustainable consumption.

 

Need of the Study

Ecological thoughtfulness and the implementation of sustainability-driven marketing strategies have become essential for companies seeking to win the challenges of environmental sustainability. Studies have ascertained a strong strength in eco-friendly packaging and perceived consumer effectiveness in shaping green buy intentions; however, the companies usually assume that the consumer willingness directly would translate into purchasing behaviour. This supposition ignores price sensitivity, especially in emerging economies or countries like India where price escalations or economic matters substantially impact or restrict the customers’ behaviour. In such cases, consumers may be ecologically conscious and believe in personal responsibility but reluctant to buy eco-friendly products due to their superior cost. Thus, this study examines how price sensitivity moderates the individual relationship of eco-friendly packaging and perceived customer efficacy with green purchase intention. The findings can help the companies to frame well-adjusted marketing strategies that suit consumer values and financial realities, enabling smoother inclusive and genuine transition to sustainability in emerging economies and markets.

 

Objectives of the Study

On the basis of the pertinent review of literature, this student intends to examine the:

1. Impact of eco-friendly packaging and perceived consumer effectiveness on green purchase intention.
2. Moderating role of price sensitivity on the direct relationship of eco-friendly packaging and perceived consumer effectiveness with green purchase intention.

Hypotheses of the Study

H1: Eco-friendly packaging enhances green purchase intention

H2: Perceived consumer enriches green purchase intention.

H3: Price sensitivity negatively moderates the relationship between eco-friendly packaging and green purchase intention.

H4: Price sensitivity negatively moderates the relationship between perceived consumer effectiveness and green purchase intention.

 

Research Methodology

The research utilised a quantitative and explanatory design to analyse and interpret the predictive relationships of eco-friendly packaging and perceived consumer efficacy with green purchase intention, along with the moderating role of price sensitivity.

Sample Selection

The research endeavoured a cross-sectional survey (Creswell, 2014) wherein participants were selected from Doaba district of Punjab which has the highest literacy rate among the three historically evident three sub-regions of Punjab; and is well known for its diverse consumer base. The study adopted purposive sampling to target Millennials and Generation Y, who are ecologically conscious, main income earners in their families and assert influence on the family purchase decisions. A total of 300 questionnaires were distributed, out of which 279 complete and valid responses were obtained. This sample size was considered adequate for robust statistical analysis, including Structural Equation Modeling (SEM), based on recommendations by Kline (2015), who advises a minimum sample of 200 respondents for SEM to ensure reliable and valid results when analysing complex models.

 

Sources of Data

To examine the constructs in this study, four well-established measurement scales were employed either adapted or directly adopted as per suitability and context from the previous literature: Green Purchase Intention (GPI) (Chen, 2010), Eco-Friendly Packaging (EFP) (Magnier and Crié, 2015), Perceived Consumer Effectiveness (PCE) (Ellen et al., 1991); and Price Sensitivity (PRS) (Lichtenstein et al., 1993). Responses were solicited using a Likert scale. The data collected from 279 respondents was considered for statistical analysis. Secondary data were used for literature review.

 

Tools used in the Study

SmartPLS4 was utilised to perform PLS-SEM, Bootstrapping and PLSpredict to analyse the data, enabling a comprehensive evaluation of both direct and moderating effects.

 

Data Analysis & Interpretation

Demographic Assessment

As detailed in Table-1, in terms of age distribution, 46.95% of the participants were Millennials (aged 29–44 years, N = 131), while 53.05% belonged to Generation X (aged 45–60 years, N = 148), demonstrating a near-even representation of both generational cohorts, with a slight predominance of Generation X.

Regarding gender, the sample encompassed 145 male respondents (51.97%) and 134 female participants (48.03%), signifying a well-balanced gender distribution.

Table-1 : Demographic Analysis of Respondents

Variable	Category	Frequency (N)	Percentage (%)
Age Group	Millennials (29–44 years)	131	46.95%
	Generation X (45–60 years)	148	53.05%
Gender	Male	145	51.97%
	Female	134	48.03%
Monthly Household Income	Less than INR 30,000	42	15.05%
	INR 30,000 – INR 60,000	129	46.24%
	INR 60,001 – INR 90,000	77	27.60%
	Above INR 120,000	31	11.11%

 

With respect to monthly household income, the majority of respondents (46.24%, N = 129) reported earnings between INR 30,000 and INR 60,000. This was followed by 27.60% (N = 77) falling within the INR 60,001 to INR 90,000 range. Respondents earning less than INR 30,000 represented 15.05% (N = 42), while a smaller segment (11.11%, N = 31) detailed their household incomes exceeding INR 120,000. These income-level distributions delineate that the research sample mainly represents middle-income households, offering important insights into the consumption patterns and attitudes relevant to the study related to price sensitivity.

Multicollinearity Assessment

Variance Inflation Factor (VIF) values assessed indicator multicollinearity as narrated in Table-2. All VIF values were reported under the threshold of 5 given by Hair et al. (2019), indicating that data possess no multicollinearity concerns and that the indicators are independent enough to estimate parameter values.

Table-2 : VIF Matrix

Item Code	VIF Score
GPI1	3.223
GPI2	2.729
GPI3	1.651
GPI4	1.597
GPI5	2.487
PCE1	1.260
PCE2	2.199
PCE3	2.192
PCE4	1.217
PRS1	2.356
PRS2	2.106
PRS3	1.882
PRS4	1.747
EFP1	3.823
EFP2	1.666
EFP3	4.381
EFP4	3.055
EFP5	1.580

 

Construct Reliability and Convergent Validity    

Each construct possessed adequate reliability and convergent validity using the measuring model. As illustrated in Table-3, the internal consistency was specified by Cronbach’s alpha of 0.738 (PCE) to 0.873 (GPI). Moreso, rho_A (ρₐ) and rho_C (ρ𝚌) composite reliability achieved scores above the 0.70 criterion for all constructions, validating the measurement scales’ dependability.

Average Variance Extracted (AVE) values varied from 0.547 to 0.669, all over 0.50, supporting convergent validity by showing that constructs capture a significant percentage of indicator variance. These findings reflected that study’s measuring scales accuracy and validity for structural equation modelling.

Table-3: Reliability and Validity Assessment

Construct	Cronbach’s alpha	Composite Reliability (rho_a)	Composite Reliability (rho_c)	Average Variance Extracted (AVE)
EFP	0.849	0.874	0.887	0.611
GPI	0.873	0.876	0.909	0.669
PCE	0.738	0.748	0.828	0.547
PRS	0.781	0.785	0.859	0.604

 

Discriminant Validity Assessment

As per Table-4, Heterotrait-Monotrait (HTMT) scores for all the constructs in the study varied from 0.194 to 0.803 which were considerably under the acceptable threshold of 0.90 as per Henseler et al. (2015), demonstrating proper discriminant validity. Further, the scores of square root of the AVE (diagonal elements) exceeded their respective inter-construct correlations (off-diagonal elements) as reported in Table-5 pertaining to the Fornell-Larcker criterion; thus, satisfying the requirement and confirming the adequate discriminant validity (Fornell & Larcker, 1981) for further analysis.

 

 

Table-4: HTMT Matrix

Construct	EFP	GPI	PCE
GPI	0.387
PCE	0.194	0.609
PRS	0.320	0.803	0.729

 

Table-5: Fornell-Larcker Matrix

Construct	EFP	GPI	PCE	PRS
EFP	0.782
GPI	0.363	0.818
PCE	0.127	0.529	0.739
PRS	0.259	0.665	0.573	0.777

 

Bootstrapping Results

All factor loadings as reported in Table-6 and diagrammatically illustrated in Figure-1 exceed 0.70, indicating indicator reliability and convergent validity (Hair et al., 2019). As detailed in Table-6, the constructs EFP (0.731–0.827), PRS (0.752–0.819), PCE (0.709–0.777) and GPI (0.723–0.896); all demonstrated reliability signifying that they were measured consistently. Further, the bootstrapping was utilised to determine the path coefficients and their significance.

 

Table-6: Model Assessment Results – Bootstrapping

Item Code	Loading	p-value
EFP1	0.827	0.000
EFP2	0.799	0.000
EFP3	0.763	0.000
EFP4	0.785	0.000
EFP5	0.731	0.000
PRS1	0.819	0.000
PRS2	0.752	0.000
PRS3	0.769	0.000
PRS4	0.767	0.000
PCE1	0.777	0.000
PCE2	0.748	0.000
PCE3	0.722	0.000
PCE4	0.709	0.000
GPI1	0.896	0.000
GPI2	0.861	0.000
GPI3	0.736	0.000
GPI4	0.723	0.000
GPI5	0.856	0.000

 

Figure-1 : Bootstrapping Results of the Structural Model

 

 

For path coefficients as specified in Table-7 in terms of direct and moderation effects, EFP significantly increases GPI with a reported (β = 0.210 with p < 0.001), indicating that eco-conscious packaging encourages green purchasing intentions. Further, PCE positively influences GPI (β = 0.152 with p = 0.002), demonstrating that customers actually motivated by their own efforts are more inclined to buy green items. The strongest direct effect was reported of PRS on GPI (β = 0.448 with p < 0.001) which highlights the influence of cost concerns on related green purchasing tendencies.

 

Table-7 : Direct & Moderation Effects

Path		Original sample (O)	Sample mean (M)	Standard deviation (STDEV)	T statistics |O/STDEV|	P values
Direct Effects	EFP -> GPI	0.210	0.213	0.044	4.835	0.000
	PCE -> GPI	0.152	0.149	0.049	3.072	0.002
	PRS -> GPI	0.448	0.448	0.053	8.419	0.000
Moderation Effects	PRS x EFP -> GPI	-0.198	-0.198	0.063	3.132	0.002
	PRS x PCE -> GPI	-0.120	-0.113	0.038	3.181	0.001

 

Further, the results revealed that Price Sensitivity (PRS) negatively moderates the relationship between EFP and GPI (β = –0.198 with p = 0.002) and for PCE and GPI (β = –0.120 with p = 0.001) which inferred that pricing sensitivity reduces the favourable impacts of eco-friendly packaging and perceived consumer efficacy on green purchase tendencies. Thus, the structural model results as specified in Table-8 confirmed significant relationships of predictors with GPI supporting all proposed hypotheses.

 

Table-8 : Hypotheses Validation Summary

Path		Original sample (O)	Sample mean (M)	Standard deviation (STDEV)	T statistics |O/STDEV|	P values	Decision
H1	EFP -> GPI	0.210	0.213	0.044	4.835	0.000	Accepted
H2	PCE -> GPI	0.152	0.149	0.049	3.072	0.002	Accepted
H3	PRS -> GPI	0.448	0.448	0.053	8.419	0.000	Accepted
H4	PRS x EFP -> GPI	-0.198	-0.198	0.063	3.132	0.002	Accepted
H5	PRS x PCE -> GPI	-0.120	-0.113	0.038	3.181	0.001	Accepted

 

 

 

Green Purchase Intention possessed a modest predictive accuracy (R² = 0.594), with three predictors explaining and elucidating 59.4% of its variance (Hair et al., 2021) as mentioned in Table-9.

Table-9 : Predictive Performance

Construct	Q²predict	RMSE	MAE
GPI	0.552	0.682	0.530

 

Model Predictive Performance

The model predicting Green Purchase Intention (GPI) yielded and demonstrated satisfactory predictive power of Q²predict of 0.552, indicating moderate explanatory ability (Hair et al., 2019). The RMSE (0.682) and MAE (0.530) signify adequate average prediction errors, balanced with standards reported in behavioral intention studies using Likert scales (Shmueli et al., 2016). Overall, these results established the model’s reliability and practical relevance in forecasting green purchase intention and related tendencies.

Findings

The results of the study enumerated that eco-friendly packaging positively and significantly enhanced consumers’ green purchase intentions, supporting the earlier findings by Suki (2016) and Prakash and Pathak (2017). Recent studies by Singh and Pandey (2023) and Duarte et al. (2024) also confirmed that ecological packaging is a vital facilitator of positive attitudes and purchase intentions related to green products.

Further, perceived consumer effectiveness positively and significantly influenced green purchase intentions, concurring with Das and Ramalingam (2019), Uniyal and Sangroya (2021), and Kumar and Polonsky (2017), who recognized PCE as a dominant factor for pertinent green consumer behavior. Also, research by Bleidorn et al. (2023) specified that high PCE nurtures sturdier environmental attitudes and conscious purchasing decisions. The research also established that price sensitivity weakened the positive impact of eco-friendly packaging on green purchase intentions, consistent with earlier researchers such as Lavuri (2022), Sheikh et al. (2023), who observed cost as an acute hindrance towards favourable environmental attitudes; and habitually restricts the price-sensitive consumers for relevant green purchases due to perceived cost burdens (Nguyen et al., 2017; Sheikh, 2023).

Furthermore, price sensitivity adversely moderated the PCE–GPI relationship, representing that even consumers with high PCE may be dispirited by price concerns. This result is in resonance with the outcome reported by Ghosh (2020) and Lavuri (2022), who emphasized that price sensitivity, can deteriorate the behavioral influence of PCE despite positive environmental attitudes.

Suggestions

Marketers should prioritise the practice of ecological packaging with relevant certifications and eco-labels to reduce the intention-behavior gap and also nurture Perceived Consumer Effectiveness (PCE) to support consumers’ belief in making a substantial contribution for environmental upkeep. Also, flexible pricing methods comprising reduced package sizes, bonuses and loyalty rewards can facilitate in reduction of price sensitivity; thus, making eco-friendly products more make purchasable. At the same time, businesses should transparently disseminate through integrated-marketing communications for their ecological driven business efforts to elevate engagement and trust among the customers. Further, businesses should provide premium products to affluent customers and alongside set-up cost-efficient production methods for generating long term sustainability by providing value to price-conscious consumers.

 

Consumers must comprehend the environmental problems related to waste management and recyclability issues to aptly pursue follow eco-friendly packaging to promote sustainability. Mindfulness of situational expediters such as availability of eco-friendly products with legitimate eco-label credibility certainly would help customers to translate their green buying intentions into relevant purchase decision.

Conclusion

This research endeavour exhibits that eco-friendly packaging and perceived customer effectiveness strongly influence the green product purchase intention. However, price sensitivity moderates their respective individual link, posing a vital hindrance. Even when customers comprehend the pro-green advantages and feel vested to act like-wise, high price sensitivity might expressively diminish the green purchasing intentions. This reveals that economic considerations in growing markets remain a potential obstruction towards sustainable purchase tendencies, indicating that green intentions may not be adequate to change consumer behaviour. The findings further accentuate the requirement for businesses and marketers to reconcile sustainability and affordability in an appropriate manner. To ease price sensitivity considerations, companies using eco-friendly packaging must utilise integrated communication to harmonize it with cost-effective pricing tactics. It can bridge the gap between green buying intentions and real purchase behaviour, enhancing customers’ belief, heightened participation and engagement with environmental sustainability efforts.

Limitations of the Study

This study utilised a cross-sectional data and self-reported measures, which may limit causal inferences including concerns for bias. Further, due to geographical constraints of the sample, the findings may not aptly generalize and converge with other regions.

Scope for Further Study

The future research on pro-environmental antecedents and transitions in green purchase behaviour should undertake longitudinal study to comprehensively causal relationships and behavioural propositions over time. Further, cross-cultural studies may be undertaken to ascertain economic and social disparities in consumer responses. Furthermore, the multifaceted role of economic and situational factors can be endeavoured by future researchers for proposing deeper research implications.

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