1

irInvestigating Consumers’ Purchase Perception and Intention in SMEs that Practice

Environmental Sustainability

A Research Proposal

Presented to the Senior High School Faculty

Integrated Basic Education Department

San Beda University - Manila

In Partial Fulfillment

of the Requirements in

Practical Research 2

By

ADIONG, Zairah Fareena

ALIVIA, Liand Reumuel

AUSTRIA, Albert John L.

DANTES, Yohance Matthew

DEJUCOS, Ivy A.

GAZZINGAN, Khayen Mae

PAGNAMITAN, Fred Ian

12 ABM 1, St. Dominic of Silos

October 2024
 2

CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

This chapter consists of the background of the study, statement of the problem,

theoretical framework, conceptual framework, hypothesis, significance of the study, scope and

limitations, and the definition of terms.

Background of the Study

Over the course of time, one of the prevailing issues that are currently occurring across

the world which pose serious risks in the human and environmental system is climate change.

In the context of the Philippines, this issue was evident when the highest heat index was

recorded in the country’s history in 2024, reaching 55 degrees celsius, specifically in Guiuan,

Eastern Samar. This concern is mainly caused by the activities created by humans such as

cutting down trees, burning fossil fuels, and harmful production of materials for daily used

products for which results in the deterioration of the environment, and could also lead to the

disruption of humans’ way of life in the long run.

It was discussed that consumers’ awareness and consciousness in the environment

affects their intention to purchase eco-friendly or sustainable products (Preetha, 2021). The

increased focus on environmentally sensitive goods and services means buyers are focusing

their buying behavior on sustainable products. The concept of sustainable development has

arisen as a result of this awareness and concern for the environment, highlighting the

requirement for sustainability and pushing for growth that has the least adverse impact on the

environment and society.

 3

According to Chen et al (2021), as several types of environmental damage result from

product materials, manufacturing processes should be minimized. Therefore, purchasing

sustainable products can help to prevent or mitigate environmental damage. While evidence

suggests that the total number of consumers keen on purchasing sustainable products has

improved recently, there remains little solid proof that sales of sustainable products have risen.

Studies regarding sustainable practices were mostly focused on the supply side or the

firms’ perspective, thus more research is needed on the demand side or consumers’ perspective

(Ünal et al., 2018). Furthermore, determining customers’ intention to purchase in Small and

Medium Enterprises or SMEs that operate without harming the environment, and their

awareness on sustainable practices, may help firms or enterprises not only to be informed on

consumers’ preferences, but also decide on what improvements on their operations shall they

undergo.

Statement of the Problem

This study aims to analyze the consumers’ perception and their willingness to purchase

in SMEs located in Metro Manila that perform environment-friendly or sustainable practices

in the production of their goods.

Specifically, this research intends to answer the following questions:

1. What are the consumers’ perceptions on environmentally sustainable practices?

2. How do consumers' perceptions of SMEs environmental practices influence their

purchasing intentions?

3. Which sustainability practices of SMEs are prioritized by consumers in sustainable

purchasing?
 4

Theoretical Framework

The basic framework of Theory of Planned Behaviour will be utilized in this study to

examine the purchasing behavior for environmentally sustainable products along with relevant

mediating and moderating factors. Several researchers have used the Theory of Planned

Behaviour for understanding the decision-making process concerning ethical behavior in many

contexts, as well as environmental and ethical utilization. The Theory of Planned Behavior

puts forward that an individual’s behavior is directed by three dimensions.

The Theory of Planned Behavior tends as a primary framework in this study,

prodicating that behavior, in this case, the take of eco-friendly products, is first and foremost

influenced by consumers’ purpose. The study records that consumers’ awareness and

consciousness with reference to environmental issues are involved in a key role in forming

their objective to purchase sustainable products. This lines up with the Theory of Planned

Behavior significance on the influence of attitudes, here appear for by consumers’ sense of

SMEs’ environmental practices, on behavioral aims. The Theory of Planned Behavior suggests

that productive attitudes with regard to a behavior to enlarge the chance of setting up intentions

to bring off that behavior. The statement that “consumers' perception and awareness in the

environment influence their purpose to buy eco-friendly or sustainable products” supports this

connection, as consumers who are aware of SMEs as committed to environmental

sustainability are further to be expected to make favorable attitudes with regard to buying from

these SMEs, increasing their purchase target.

Conceptual Framework
 5

Figure 1

Figure 1 provides an overview of the variables considered in this study. The

independent variable or the manipulated variable is the environmentally sustainable practices

of SMEs, and the dependent variables or the outcome variables are the perception and intention

of consumers to make purchases. Other than that, recycling behaviour, waste management,

eco-friendly packaging, and waste management are displayed as components under the

independent variable. These above-mentioned components are practices which are to be

considered as SMEs environment-friendly practices in the context of this research.

 6

Hypothesis

1. Null Hypothesis:

H1.1: Consumers’ perceptions in SMEs that practice environmental sustainability have no

positive impact on their purchase intention.

H1.2: Consumers have no intention of purchasing from SMEs that practice environmental

sustainability.

2. Alternative Hypothesis:

H2.1: Consumers’ perceptions in SMEs that practice environmental sustainability have a

positive impact on their purchase intention.

H2.2: Consumers have an intention of purchasing from SMEs that practice environmental

sustainability.

Significance of the Study

Consumers. This study offers valuable insights into consumer purchasing behavior,

specifically regarding environmentally sustainable products. The study intends to assist SMEs

in better understanding and connecting their products with the values of environmentally

conscious customers through studying the elements that impact purchasing intentions. In the

end, this information can encourage the expansion of sales of sustainable products while

enabling customers to make wise, environmentally responsible decisions. Consequently, this

strengthens the bond between customers and companies who put an emphasis on

environmental responsibility.
 7

Small and Medium Enterprises (SMEs). This study provides valuable insights into

how consumers perceive eco-friendly products, offering actionable information for enhancing

these perceptions. It may help SMEs create successful marketing, communication, and product

innovation strategies that are all focused on their sustainable initiatives. SMEs may better

design their products to match with eco-conscious principles and strengthen their brand

connection by understanding consumer motivations. In the end, this information will leverage

SMEs' commitment to environmental responsibility and help them prosper in a competitive

industry.

Lawmakers. This study provides a foundation for policymakers to develop or refine

regulations, incentives, and initiatives that support sustainable business practices. By

understanding consumer behavior and purchase intentions regarding eco-friendly products,

policymakers can craft more effective policies that encourage both businesses and consumers

to prioritize environmental responsibility. Campaigns that improve consumer knowledge of

the benefits of making sustainable decisions can also benefit from these insights. In the end,

these actions will support long-term environmental sustainability and a more sustainable

economy.

Academic researchers. This study contributes to the growing body of knowledge on

sustainability by focusing on consumer behavior within the context of small-to-medium

enterprises (SMEs). It provides empirical information on how consumers perceive and respond

in relation to sustainable consumption, which can help advance knowledge in important fields

including consumer decision-making, environmental psychology, and sustainability

 8

marketing. The results offer a strong basis for more study, which will help in the improvement

of current frameworks and ideas. It also creates new opportunities for broad study that connects

sustainability with business operations and consumer engagement.

Scope and Limitations of the Study

The primary focus of this study is to examine two variables, specifically, the

consumers’ purchase perception and purchase intention of purchasing in Small and Medium

Enterprises (SMEs) that practice environmental sustainability. On the grounds of this study to

be conducted, selection of respondents must be consumers who purchase in SMEs, and

residing, studying, or working in the area of Metro Manila.

The researchers shall not consider the consumers’ purchase perception and purchase

intention in large firms that perform environmentally sustainable practices, as this study aims

to focus solely on SMEs. Respondents of this study must be located within Metro Manila and

shall not consider those who are beyond or outside the target locale.

Definition of Terms

The section provides the terminologies, and their operational definitions used

throughout the study:

Term 1. Small and Medium Enterprises (SMEs)

 9

Small-sized enterprises are considered to have employees not exceeding 99, while medium-

sized enterprises consist of 100-199 employees, which doesn’t exceed 200 or more than of

workers.

Term 2. Environmental Sustainability

The practice of operating a business in a way that ensures long-term resource availability by

minimizing negative environmental impacts through green initiatives and practices.

Term 3. Purchase Perception

The consumer's opinion, attitude, or belief about a product or service, shaped by marketing,

branding, personal experiences, or environmental factors.

Term 4. Purchase Intention

It is an intention and willingness of consumers to purchase goods or products within a certain

period of time.

Term 5. Sustainable Products

These are products that undergo operations or are produced without depleting natural resources

that may cause harm for the environment, animals, and human’s way of living over the course

of time.

CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

 10

Sustainable Practices in SMEs

According to Yacob et al. (2019), energy management, water conservation, and eco-
friendly packaging are essential in promoting green initiatives among SMEs. Such practices
form a reputation of sustainability that is fast becoming the new competitive advantage.
However, resource constraints and the requirements of expert advice often stunt the full uptake
of green practices, despite the green practice that encourages SMEs on sustainable practices.
Nevertheless, in spite of all these challenges, SMEs may obtain long-term advantages in terms
of profitability and consumer loyalty if sustainability is considered an integral part of their
operations.

In the past decades, the world has witnessed significant growth in environmental issues
such as the generation of waste, climatic changes, and depletion of natural resources. Due to
this, there has been a substantial upsurge in consumers who prefer green products. Hence,
exploring the stable set of characteristics of green consumers becomes extremely important for
organizations to develop customer‐oriented targeting and segmenting strategies (Mehta &
Chahal, 2021).

Consumer Perception of Sustainability

According to Suki (2016), the most determining factor about green product purchase
intentions is consumer awareness and brand trust. Consumers with increased knowledge
regarding environmental issues are likely to be more disposed to purchasing sustainable
products, especially when they trust the environmental claims of the brand. Trust itself
amplified by green practice expertise would lead to stronger buying intentions for green
products. Suki finally concludes that awareness as well as brand credibility plays an important
role in promoting green consumer behavior.

Small Businesses’ Firm Performance from a Sustainable Development Approach

According to Masocha, R. (2018), the relation between environmental sustainability

and also firm performance in South African's SMEs specifying the analyzation of innovation,
social measures and ecologically. A survey of 208 SME owners and managers employed
structural equation modeling for the hypothesis to put into test. It states that SMEs adopting
 11

sustainable practices has a strong possibility to achieve better overall performance also
providing practical insights for improving the competitiveness inside the market.

Furthermore, Musa and Chinniah (2018) pointed out that many SMEs worldwide do
not have adequate knowledge of environmental management and thus rarely understand the
concept of environmental management. Its effects are that the possibilities of SMEs being
involved in activities that are environmentally friendly are very low.

Rodríguez-Gutiérrez et al. (2018) that research into SMEs generally went up in the past
decade due to the contribution of its economic sector to the performance of the economy. Large
firms that have the most contributors to the economy are being challenged as the role of SMEs
in the market is becoming more of an understanding.

Environmental Awareness and its impact on Buying Behavior

According to Rather and Rajendran (2014), there is a significant correlation between a

consumer's level of awareness and their green purchasing behavior. Consumers who are highly
or moderately aware of green products tend to exhibit strong or moderate green buying
behavior, while those with little or no awareness show low green purchasing behavior. The
study underlines how important it is to raise consumer knowledge of eco-friendly products in
order to encourage more environmentally conscious shopping decisions and support long-term
environmental sustainability. This suggests that promoting green consumerism in the area
could be aided by awareness campaigns.

The effectiveness of marketing efforts to raise awareness of green brands in consumers'

minds. It delves into how marketing communications influence consumer behavior and how
people are persuaded to choose greener products. Maheshwari (2014) used environmental
behavior surveys like the Dunlap and Van Liere HEP-NEP and the Roper Starch Worldwide
survey. The findings revealed that consumers are not sufficiently exposed to marketing
communications about green products. And suggests that more effective marketing strategies
could be implemented to promote eco-friendly products that meet both environmental and
functional needs.
 12

Consumer Attitudes Toward Green Products

According to Mehta and Chahal (2021) it emphasizes how customers' awareness of the
environment is expanding, which is causing them to switch from standard to green (or eco-
friendly) products in what they purchase. This change highlights how important it is for
academics and marketers to comprehend the idea of "green consumers," including their traits
and actions. The primary goal of the study is to examine the characteristics of these
environmentally conscious consumers, especially since little is known about how these
consumers feel about green products in developing nations. By studying green consumers and
the factors influencing their decisions, the goal is to close this gap.

Consumers with greater knowledge of a brand perceive its quality more positively. This
shows a direct relationship between what consumers know about a brand and how they assess
its products. The study found that perceived quality plays a critical role in shaping consumers'
purchase intentions. Essentially, the more a product is seen as high quality, the more likely
consumers are to buy it. Brand knowledge indirectly affects purchase intention by boosting
perceived quality (Yang, 2019).

Environmental Awareness and Practices in SMEs

According to Gadenne et al. (2008) There has been a rise in demand for businesses that
practice environmental sustainability and it states that it comes within the influence of existing
and potential stakeholders' different groups such as environmental, external pressures,
financial institutions and suppliers. It also comes internally from managers or owners having
the term “a green attitude”. With it, the level of this implementation of eco-friendly practices
is low. In order to explore further, this analyzes the effects of certain influences that really
cause this and how it relates to the action needed by the business to reduce or aid this
environmental practices’ impact.

The effectiveness of further analyzing this article is to also see how legislation result
in environmental awareness, but this actions also might cause a rise in cost reductions from the
practices that it implemented, specifically environmental sustainability. Those that also get
influenced by their suppliers for its environmental practices does not perform a proper act for
environmental management systems.
 13

In the era of new technological revolution, seeking to survive and guarantee business
sustainability in their digital internationalization, enterprises choose to become
environmentally oriented. The need for new green business models has become evident in
recent years, and enterprises offer green services in creative and eco-friendly ways. However,
does the display of a green label on hotels' websites really promote the eco-conscious tourists'
online booking intention? This study aims to examine the impact of the perceived label on the
online sustainable hotel booking intention of the eco-conscious tourists, using the foundations
of signal theory.

Synthesis

Over the past decades, environmental issues became a major crisis all around the world,
giving rise to the consumers’ preferences to consume green or environmentally sustainable
products. As stated by Suki (2016), awareness of consumers on the issues arising the
environment is a major factor towards their intention to purchase. Those who have moderate
to high awareness on sustainable products are likely to have strong to moderate green buying
behavior or those who purchase environment-friendly goods more often than sometimes,
whilst those who have low or no awareness at all do not exhibit green buying behavior and
often support or purchase on businesses that operates in any manner that could possibly harm
the environment (Rather & Rajendran, 2014). For SMEs, environmental sustainability
practices such as energy management, water conservation, and eco-friendly packaging are one
of the significant factors in attaining success and increasing firms’ profitability. Moreover, it
is essential that consumers exhibit adequate knowledge on the environmental crisis, as a way
to have an interest in purchasing sustainable products.

REFERENCES

Alvaro, V. J., Castano, M. C., Cruz, A. F. D., Sebastian, M. A., & Torres, C. M. (2022).

Socially Oriented Behavior and Purchasing Emotions of Filipino Consumers towards

 14

Eco-Friendly Apparel Products. Journal of Business and Management Studies, 4(2),

203–212. https://doi.org/10.32996/jbms.2022.4.2.16

Barbaritano, M., & Savelli, E. (2021). How Consumer Environmental Responsibility Affects

the Purchasing Intention of Design Furniture Products. Sustainability, 13(11), 6140.

https://doi.org/10.3390/su13116140

Kim, R. C. (2016). Ethical Decision Making in International Business: A Study of Challenge

in Teaching to Future Global Talents. Business and Management Studies, 2(2), 1.

https://doi.org/10.11114/bms.v2i2.1469

Kumar, A., Prakash, G., & Kumar, G. (2020). Does environmentally responsible purchase

intention matter for consumers? A predictive sustainable model developed through an

empirical study. Journal of Retailing and Consumer Services, 58, 102270.

https://doi.org/10.1016/j.jretconser.2020.102270

Lee, C., & Lim, S. (2020). Impact of Environmental Concern on Image of Internal GSCM

Practices and Consumer Purchasing Behavior. Journal of Asian Finance Economics

and Business, 7(6), 241–254. https://doi.org/10.13106/jafeb.2020.vol7.no6.241

Maheshwari, S. P. & AJMR-AIMA. (2014). AWARENESS OF GREEN MARKETING

AND ITS INFLUENCE ON BUYING BEHAVIOR OF CONSUMERS: SPECIAL

REFERENCE TO MADHYA PRADESH, INDIA. In AIMA Journal of Management

& Research (Vol. 8, Issue 1/4) [Journal-article].

https://apps.aima.in/ejournal_new/articlesPDF/3_Dr_Shruti_P_Maheshwari.pdf

Masocha, R. (2018). Does Environmental Sustainability Impact Innovation, Ecological and

Social Measures of Firm Performance of SMEs? Evidence from South Africa.

Sustainability, 10(11), 3855. https://doi.org/10.3390/su10113855

 15

Masocha, R. (2018a). Delineating Small Businesses’ Firm Performance from a

Contemporary Sustainable Development Approach in South Africa. Questa Soft.

https://www.ceeol.com/search/article-detail?id=787467

Quader, M. S., Kamal, M. M., & Hassan, A. E. (2016). Sustainability of positive relationship

between environmental performance and profitability of SMEs. Journal of

Enterprising Communities People and Places in the Global Economy, 10(2), 138–

163. https://doi.org/10.1108/jec-05-2014-0008

Rather, R. A., & Rajendran, R. (2014). A Study on Consumer Awareness of green products

and its Impact on Green Buying Behavior. International Journal of Research, 1(8),

1483-1493. https://journals.pen2print.org/index.php/ijr/article/download/599/685

Shao, J., & Ünal, E. (2019, February 1). What do consumers value more in green

purchasing? Assessing the sustainability practices from demand side of business.

ScienceDirect.

https://www.sciencedirect.com/science/article/abs/pii/S095965261833422X

Suki, N. M. (2016). Green product purchase intention: impact of green brands, attitude, and

knowledge. British Food Journal, 118(12), 2893–2910. https://doi.org/10.1108/bfj-

06-2016-0295

Waheed, A., Zhang, Q., Rashid, Y., Tahir, M. S., & Zafar, M. W. (2020). Impact of green

manufacturing on consumer ecological behavior: Stakeholder engagement through

green production and innovation. Sustainable Development, 28(5), 1395–1403.

https://doi.org/10.1002/sd.2093
 16

Yacob, P., Wong, L. S., & Khor, S. C. (2018). An empirical investigation of green initiatives

and environmental sustainability for manufacturing SMEs. Journal of Manufacturing

Technology Management, 30(1), 2–25. https://doi.org/10.1108/jmtm-08-2017-0153