Green Business Practise on Consumer Behaviour in Small and Medium Industries (SMIs)

Abstract

This study aims to determine consumer behavior in small and medium industrial businesses influenced by green products, green packaging, and green promotion. The analysis unit of this research is small and medium industry business (SMIs)  actors located in Berau Regency, East Kalimantan. Increasing public awareness of environmental issues encourages business actors to apply the concept of green marketing as one of the strategies to increase competitiveness and attract consumer interest. The sampling technique used purposive sampling with a total of 50 respondents. The analysis tool used is SEM-PLS with the help of SmartPLS 4.0 software. The results of the study show that, in terms of direct effects, green products and green promotions have a positive and significant effect on green brands, while green packaging has a positive but insignificant effect on green brands. Furthermore, green products, green packaging, and green promotion were found to have a positive and significant effect on consumer behavior, whereas green brand had no significant effect on consumer behavior. Regarding the indirect effect, green brand was unable to mediate the relationship between green products, green packaging, or green promotion and consumer behavior, as all mediation paths showed insignificant effects. This study concludes that green marketing strategies are more effective at influencing consumer behavior through direct effects than through the establishment of a green brand as a mediating variable. The implications of this study are that SME operators in Berau Regency need to prioritize improving the quality of environmentally friendly products, using more sustainable packaging, and implementing informative and consistent green promotions. On the other hand, strengthening the green brand still needs to be carried out through integrated branding strategies in order to increase consumer trust and exert a greater influence on consumer behavior in the future.

Keywords: green products, green packaging, green promotion, green brand, consumer behaviour