The Influence of Sustainable Product’s Attributes Toward the Willingness to Pay for Sustainable Product

Abstract

As a result of this growing concern for environmental issues, a new market for sustainable products has emerged, with engaged consumers driving it even further. It influenced the new trend and resulted in new behaviors in their daily lives, resulting in a more sustainable lifestyle. Several studies on sustainability have increased year after year, including sustainable products, which are on the rise. This study aims to determine the contribution of sustainable product’s attributes on customers' willingness to pay more for sustainable products, mainly to assist the sustainable industry in developing strategies that correspond with the values of sustainable products and also sustainable product consumer values. This study was carried out using quantitative methods using online surveys distributed to respondents who fit the criteria, had an interest in sustainable products, and live in Indonesia. This study resulted in 204 respondents who have used or intend to use sustainable products, dominated by respondents who live in Bandung and Jabodetabek. To identify and analyze the attributes that influence the willingness to pay more for a sustainable product, the researcher uses Structural Equation Modelling (PLS-SEM) to process the survey findings. The results of this study is the willingness to pay more towards sustainable products significantly affected by eco-label, eco-packaging, and local production. From these variables, local production is the key variable that influences customers to spend extra money for sustainable products. This findings demonstrates that the suggested model contributes to the literature and is valuable for understanding in depth the attributes that motivate potential customers to pay more for sustainable products. As a result, companies can get recommendations on how to establish effective marketing campaigns.