Should We Continue to Sell Green Products? A Case Study of Willingness to Pay More for Green Furniture Products

. The growing global demand for environmentally friendly products necessitates an in-depth examination of the factors influencing consumers' willingness to pay a premium. This study focuses on the furniture industry and aims to identify the key determinants that shape consumers' willingness to pay more for environmentally friendly furniture. Data were collected from 153 Indonesian consumers interested in purchasing household furniture products. Structural Equation Modeling (SEM) analysis, utilizing smartPLS software, was employed to analyze the data and derive insights. The findings revealed that the perceived value of green products and individuals' green attitudes significantly and positively influenced the desire to pay more for environmentally friendly furniture. Conversely, the green marketing mix did not significantly impact consumers' willingness to pay more for such products. These results highlight the importance of communication, outreach, public policy, and education in shaping the nation and state's positive perception and attitude towards green products. The implications of these findings are discussed in the context of promoting sustainable consumption practices and fostering a greener economy.


Background
The issue of sustainability has gained significant prominence worldwide, especially concerning the COVID-19 outbreak.The pandemic has made us realize the interconnectedness of global systems and highlighted the need for sustainable practices to ensure our planet and future generations well-being.Sustainability encompasses various aspects, including environmental, social, and economic considerations.
One of the primary drivers behind the push for sustainability is the problem of climate change.The consequences of climate change have become increasingly evident as we witness frequent and extreme weather anomalies.They serve as stark reminders of the urgent need to address climate change and adopt sustainable solutions to mitigate its impact.
Like many other sectors, the furniture industry also needs change in response to sustainability concerns.Manufacturers are reevaluating their production processes, materials, and supply chains to reduce their environmental footprint.This transition comes with inherent risks and challenges, known as transition risks.These risks arise from changes in regulations, market dynamics, processes, materials, or consumer preferences.Businesses must anticipate and navigate them effectively.
Implementing sustainable practices and adapting to these changes often incur additional business costs.Investments in eco-friendly materials, energy-efficient technologies, and sustainable production methods require financial resources.Risk issues such as the costs and benefits of sustainability issues have been the focus of researchers for a long time [1].These costs are eventually passed on to consumers, including those in the furniture industry.However, it is crucial to recognize that these expenses reflect a commitment to long-term sustainability and are essential for creating a more environmentally responsible and resilient future.The manufacturing industry in Indonesia comprises various product types.The Minister of Industry, Agus Gumiwang Kartasasmita, has announced that the country's industrial exports are projected to continue growing this year.In the first quarter of 2022, the export value reached approximately Rp.12.6 trillion or US$855 million, marking a 22.8% increase compared to the same period in the previous year.Furniture exports are expected to reach US$2.8 billion in 2021, demonstrating a 33% rise compared to 2020 [2].The increase in furniture exports can be attributed to innovative developments aimed at attracting buyers, differentiating from similar products, and enhancing functionality and quality.
However, the furniture industry's progress has been subject to certain emerging innovations, such as Fast Furniture.Fast furniture is mass-produced furniture that offers affordability, a luxurious appearance, and modernity but often lacks environmentally and socially friendly materials [3].The main challenge lies in the cost of green products.Furthermore, damaged and unsold furniture items are typically discarded as waste, contributing to increased carbon emissions and waste production from fast furniture manufacturing.Nevertheless, some furniture companies strive to incorporate environmentally friendly materials in their production processes.
A preliminary survey by the author reveals that not all customers are willing to pay extra for environmentally friendly products, especially fast furniture.Many customers prioritize a lower-priced product.The survey results indicate that 64.5% of customers prefer environmentally friendly products, even if they come at a higher price range of approximately Rp. 50,000.00 to Rp. 150,000.00.This value is equivalent to 10-15% of the selling price of the goods.On the other hand, 35.5% of respondents do not prioritize purchasing environmentally friendly products.Nonetheless, this minority can still influence customers who prioritize and purchase such products.
Given this situation, the research aims to delve deeper into this phenomenon.The study explores the Willingness to Pay More (WTPM) as the dependent variable for environmentally friendly products.Customer satisfaction significantly influences WTPM, while Green Perceived Benefit (GPB) or Value (GPV) can impact premium pricing.Superior shopping experiences, excellent customer service, high-quality products, effective packaging, and other methods that increase perceived value can offset the premium pricing.Affluent and highly educated consumers are more likely to be willing to pay more for a product [4].
Companies can also enhance perceived value and provide added value benefits to consumers.Most consumers are willing to pay higher prices when they understand the added value of products offered by furniture companies.The marketing mix concept of place, product, price, and promotion can be utilized to attract consumer interest in environmentally friendly products at higher prices.However, higher prices often act as a barrier to purchasing green products [5].Companies must address this issue by developing a comprehensive marketing mix strategy that raises environmental awareness among consumers, reference groups, and proenvironmental attitudes, ultimately increasing willingness to pay more.Furniture companies implement green marketing strategies to create environmentally friendly products.
Their concern for the environment influences consumer behavior in purchasing such products.Consumers with a pro-environment attitude tend to demonstrate a higher willingness to pay more [6].By utilizing environmentally friendly materials, implementing waste management practices, and initiating social initiatives, furniture companies provide opportunities for individuals to take small steps with positive environmental impacts.
The question might arise whether the marketing mix is enough to encourage consumers to buy these green products.Are consumers consistently willing to pay a higher price?This question becomes very critical if pricerelated issues become a determining condition for the sale of a product, mainly if the price is categorized as an elastic price.

The extention of theory of planned behaviour
The theoretical foundation used in this article is the Theory of Planned Behavior (TPB).TPB has been used in many studies to be able to see the intention of a behavior, according to the first researcher Icek Ajzen who proposed this theory [7,8].TPB is the fundamental theory.We use the extension of the theory to grab a bigger picture of such behavior and bring more understanding of certain phenomena [9][10][11].The Theory of Planned Behavior (TPB) is a widely used social psychological theory that can be applied to explain a range of phenomena beyond just intentions to change.The theory can be applied to explore and explain phenomena such as consumer behavior, health-related behaviors, organizational behaviors, environmental behaviors, and more by giving an additional variable.Researchers have enhanced the Theory of Planned Behavior (TPB) over recent years by incorporating additional elements from behavioral theory, aiming to create a more comprehensive and integrated model.This adaptation has been prompted by the need to address specific constraints associated with the TPB [12].
TPB posits that an individual's behavior is influenced by their intention to perform that behavior, which, in turn, is determined by three key factors: attitude towards the behavior, subjective norms, and perceived behavioral control.Attitude is the fundamental basis for determining an individual's behavior, encompassing their beliefs and understanding of the outcomes and consequences of specific actions.These attitudes are shaped by an individual's knowledge and background, strongly influenced by social conditions and situations that impact behavior.They encompass an individual's perception of social pressure and the expectations of significant others, such as friends, family, or colleagues.Individual perception is intertwined with the concept of values.
TPB and the concept of perceived value are related, yet they represent distinct psychological constructs.While TPB focuses on predicting and comprehending human behavior, perceived value pertains to individuals' subjective evaluation regarding the benefits and costs linked to a specific behavior or product.This is where the green concept becomes a yardstick for value [13].
Perceived value refers to an individual's perception of the overall desirability or worthiness of a green-oriented product or behavior.It encompasses the perceived benefits and costs associated with adopting and utilizing green products.A higher perceived value increases the likelihood of an individual engaging in green behavior or purchasing green products [14].Notably, perceived value itself is influenced by various factors, including personal needs, preferences, beliefs, past experiences, and situational factors.These factors shape how individuals perceive the advantages and disadvantages connected to a behavior or product and, consequently, their overall perceived value.

Marketing mix
One approach to fostering community or society values is developing a green-oriented marketing mix concept [15].The marketing mix is a framework marketers employ to formulate and execute marketing strategies, comprising four key elements commonly known as the 4Ps: Product, Price, Place, and Promotion.Each of these elements plays a pivotal role in shaping the perceived value of a product or service in consumers' minds.
As previously discussed, perceived value refers to an individual's subjective assessment of a product or service's overall desirability or worthiness.Several factors, including elements of the marketing mix, influence it.The product element of the marketing mix pertains to a tangible or intangible offering that satisfies consumer needs or wants.Product quality, features, and design all impact perceived value.For instance, a product with superior quality, unique features, and an attractive design may be deemed more valuable than a similar product with lower quality, fewer features, and an unattractive design.
The price element of the marketing mix relates to the amount of money consumers are willing to pay for a product or service.Price can affect perceived value in multiple ways.A higher price may indicate higher quality or exclusivity, increasing perceived value.Conversely, a lower price may suggest poor quality or subpar performance, diminishing perceived value.Green products are often perceived as having a higher value and price.
The place element of the marketing mix encompasses the channels or locations through which consumers can access products or services.The availability and convenience of distribution channels can influence perceived value.For instance, products that are widely available and easily accessible may be perceived as more valuable than products that are challenging to find or purchase.
The promotion element of the marketing mix refers to the communication activities employed to promote a product or service.Promotional messages, imagery, and tone can impact perceived value.For example, promotions highlighting product benefits and unique features may enhance perceived value, while promotions focused on price reductions may diminish the perceived value.The marketing mix elements can shape the perceived value of a product or service in consumers' minds.Consumers' perceived value, in turn, shapes their attitudes toward a product or service.When individuals perceive high value associated with a particular product or behavior, it tends to result in a positive attitude.Conversely, attitudes can also influence an individual's perceived value.Attitudes act as filters through which individuals evaluate and interpret information.People with a positive attitude toward a specific product or behavior are more likely to perceive it as having higher value.Conversely, a negative attitude may lead to a lower perceived value.The above concept ultimately determines consumers' willingness to buy or pay more for green products.

Willingness to pay more
The willingness of consumers to pay more for green products is influenced by various factors, including their awareness of environmental and social impacts, their values and beliefs, and their perceived benefits associated with green products.While cost considerations are important, consumers who prioritize sustainability and are environmentally conscious may be willing to pay a premium for products that align with their values [16].
However, it is crucial to note that the current production systems, which have often focused on cost reduction and efficiency, may overlook the environmental and social impacts in the long run.This highlights the need for a shift towards sustainable and responsible business models that consider the broader impact of production processes.
To address this issue, businesses can adopt strategies such as incorporating eco-friendly practices into their operations, ensuring supply chain transparency, using sustainable materials, and engaging in ethical sourcing.By integrating these practices, businesses can create green products that minimize negative environmental and social impacts while still meeting consumer demand.
Additionally, effective communication and education are essential in increasing consumer awareness of the value and benefits associated with green products.By highlighting the positive environmental and social aspects, businesses can help consumers understand the importance of supporting sustainable practices and encourage them to be willing to pay more for green products.
Overall, the willingness of consumers to pay more for green products depends on their values, awareness, and perceived benefits.To promote this willingness, businesses need to prioritize sustainability, incorporate responsible practices into their operations, and effectively communicate the value of green products to consumers

Methodology
This study employs descriptive method, utilizing crosssectional primary data.The study incorporates four variables, namely: 1. Green Marketing Mix (GM), 2. Green Perceived Value (GPV), 3. Green attitude (GA), and 4. Willingness to Pay More (WTPM).The variables are further delineated with their respective indicators as outlined in Table 1.
The research methodology employed in this study involves a descriptive survey that was administered to consumers seeking household furniture products.The analysis phase encompasses testing both the inner and outer models, as well as evaluating the research hypothesis.The literature review reveals existing correlations among the variables.Drawing from preliminary research, the research hypothesis was established as follows (Figure 1).

H1 Green marketing mix has a significant effect on Green Perceived Value. H2 Green marketing mix has a significant effect on Green
Attitude.H3 Green marketing mix has a significant effect on Willingness to Pay More.H4 Green perceived value has a significant effect on Green Attitude

Result & discussion
This research was conducted based on a survey involving 153 participants who were in search of household furniture products.Among these respondents, 25.4% belonged to the age group of 17-25 years, while 51.8% fell within the 26-36 age bracket.Additionally, 22.8% of respondents were aged between 37-50 years.The majority of participants expressed their interest in undertaking new home decorations and were actively seeking furniture products to enhance and furnish their residences.
Among the 153 respondents, 13.8% reported a monthly income below 1 million.On the other hand, 38.9% of respondents had incomes ranging from 1 million to 5 million per month.Furthermore, 29.6% of participants had a monthly income between 5 million and 10 million, while 17.7% had a monthly income exceeding 10 million.It is noteworthy that 19.6% of the respondents who completed the questionnaire identified themselves as students.Regarding employment status, 73.3% of respondents were government employees, 3.9% were entrepreneurs, and 3.2% were housewives.
Following the modeling and calculation processes using SmartPLS 4.0 software, certain indicators exhibited factor loading values below 0.7.As a result (Table 2), the indicators GM2, GM6, GM7, GM8, GM11, GM12, GP1, GP2, GP5, and GP6 were removed.However, the remaining indicators were deemed acceptable and valid since their factor loading values exceeded 0.7.During the Discriminant Validity test, it was observed that all variables had Average Variance Extracted (AVE) values exceeding 0.50.The AVE values for each variable were as follows: Green Attitude (0.738), Green Marketing Mix (0.653), Green Perceived Value (0.705), and Willingness to Pay More (0.775).This indicates that these variables meet the required criterion for discriminant validity.
Furthermore, in the analysis of Cronbach's Alpha, the reliability coefficients for the variables were found to be Green Attitude (0.824), Green Marketing Mix (0.893), Green Perceived Value (0.793), and Willingness to Pay More (0.904).These results indicate that all variables demonstrate high reliability.
Moving on to the analysis of the inner model or structural model, the R-square results were obtained as follows: Green Attitude (30.1%), Green Perceived Value (5.5%), and Willingness to Pay More (20.2%).Based on these findings, it can be concluded that the constructed model only explains 20% of the phenomenon related to Willingness to Pay More, while the remaining 80% lies outside the scope of this research.
The results of the inner model analysis conducted using the SmartPLS 4.0 software are presented in Table 3.Based on this result, it can be concluded that H1 Green marketing mix has a significant effect on green perceived value.H2 Green marketing mix has a significant effect on green attitude.H3 Green marketing mix has no significant effect on willingness to pay more.H4 Green perceived value has a significant effect on green attitude H5 Green perceived value has a significant effect on willingness to pay more.H6 Green attitude has a slightly significant effect on willingness to pay more.
An interesting result from this research is that GM has no influence on WTPM.However, if the mediating variables GPV and GA are given, it turns out to be able to encourage WTPM.On the other hand, GPV has a very large role in encouraging GA, but GA does not have a large enough influence on WTPM.There is one part, namely the Subjective Norm (SN) which has not been included in this study, thus influencing the results of this research.This finding is also a concern for the next researcher to include the SN variable.The exclusion of the SN variable is a limitation of this study.
Another notes, based on the obtained results, it is evident that green perceived value has the most significant impact on willingness to pay more.To enhance the green perceived value, the furniture company can adopt various strategies, such as engaging in celebrity endorsements.Such endorsements can have a positive influence on individuals and motivate them to opt for environmentally friendly products.Additionally, the company should focus on continuous innovation and improving the value and quality of their products.
The green attitude, being the second most influential factor in determining willingness to pay more, requires a different strategy.Creating video content can effectively inform the public about green issues and climate change, thereby fostering a better understanding and acceptance of environmentally friendly practices.Today, our aspirations for building a better society should revolve around promoting a green society that serves a greater purpose.
However, Moreover, consumers' perceptions of fairness and the value-for-money proposition can further shape their willingness to pay more for a specific product or service.

Summary
From the description above, GM cannot be used as a strategic way to encourage WTPM.The development of understanding and values within GPA requires education and encouragement from the community and even regulation from the government.Corporations must contribute to socialization and shape perceptions of green value and attitude.It highlights the importance of developing Green Perceived Value and Green Attitude, which takes time.Yet, corporations often face the challenge of needing immediate solutions to meet sales or company targets.
Many corporations recognize that their actions and practices can have a significant impact beyond their bottom line, and they are expected to contribute positively to society.Corporations need to demonstrate their commitment to sustainable practices, such as reducing their carbon footprint, implementing eco-friendly manufacturing processes, or supporting environmental causes.By doing so, they can gradually develop a reputation as environmentally responsible.Balancing short-term financial targets with long-term sustainability goals requires strategic planning and decision-making.It may involve trade-offs and finding creative solutions that align with both immediate needs and long-term sustainability objectives.This situation poses a significant task for all stakeholders involved.Conducting comprehensive education, developing strategic policies, and developing a wider and sympathetic green ecosystem will be indispensable for all levels of society.
Future research endeavors could incorporate exogenous variables like trust, perceived quality, loyalty, and other factors that were not explored in this study, including the subjective norm variable.Exploring these aspects, along with utilizing the same research methodology across different industries, would expand our understanding of consumer behavior towards green products and contribute to the preservation of our planet.

Table 1 .
Detail of variables and indicators.