Company environmental performance and consumer purchase intentions

Evidence for the impact of CSR, and more specifically environmental, initiatives on consumer behavior is both contradictory and equivocal. This quasi-experimental study examines the relationship between the perceived environmental performance of a company (PEP) and consumers' purchase intentions, and then determines whether this relationship is moderated by the degree of consumers' environmental involvement (EI) and by the relative price of company products. Surveys were posted to a random sample of residents in Hobart, the capital of Tasmania, Australia. Responses (n=698) show that participants report higher purchase intention for products from high versus low PEP companies, and that participants' EI and product price moderate this relationship. Those with high EI report greater purchase intention for high PEP companies and the reverse for low PEP companies, indicating that participants with high EI are more positively influenced by their perceptions of a company's environmental performance. However, participants are more likely to favor a high PEP company when the relative price of a product is low versus high, irrespective of their level of EI. The strong relationship between companies' PEP and consumers' purchase intentions affirms that developing and managing an environmental brand image may deliver significant benefits, as long as it is appropriately communicated to consumers, and as long as consumers see the added value of making such purchases.