Journal Search Engine
ISSN : 2288-4637(Print)
ISSN : 2288-4645(Online)
The Journal of Asian Finance, Economics and Business Vol.6 No.3 pp.205-214
DOI : https://doi.org/10.13106/jafeb.2019.vol6.no3.205

# Key Determinants of Repurchase Intention toward Organic Cosmetics

Phuong Ngoc Duy NGUYEN1,Vinh Tan NGUYEN2,Nguyen Ngoc Thao VO3
2 Vice Director, Academy of Politics Region II, Vietnam. Email: vinhnguyenktpt@gmail.com
3 Research Assistant, School of Business, International University – VNUHCM. Email: vongocthaonguyen510@gmail.com

This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
1 First Author and Corresponding Author. Deputy Manager, Office of Research and Development, School of Business, International University - VNUHCM, Vietnam. [Postal Address: Quarter 6, Linh Trung Ward, Thu Duc District, Ho Chi Minh City, 700000, Vietnam]. Email: nndphuong@hcmiu.edu.vn
April 25, 2019 June 27, 2019 July 1, 2019

## Abstract

This paper aims to discover factors and their influences degree to repurchase organic cosmetic in Vietnam. In addition, this research also discloses the main segments that have high demand re-buying intention based on demographic groups of gender, age, income, educational level, job, type of products, and place of production. Twenty-eight scale was designed based on previous studies and adjusted to match the 5-point Likert scale to conduct measurement. By using survey method to test hypotheses and set up conceptual models to collect 295 Vietnamese consumers who have experience in consuming organic cosmetic by explain the results through Smart PLS software. The findings show that there is positive attitude of customers to the intention of acquiring organic cosmetics, green perceived and customer satisfaction. In addition, customer satisfaction, knowledge of products, safety values, and environmental protection consciousness also play important roles to form a positive attitude of customers for products. Moreover, the consciousness of green living of consumers accounts for a high proportion in creating customer satisfaction for organic products. The results show useful information for current premises to determine the factors that influence the decision to repurchase organic cosmetic product, that provide business strategies.

JEL Classification Code: M30, M31, M37.

## 1. Introduction

On the demand side, customers have more positive sight with the organic product than others, due to being healthier (Beharrel & MacFie, 1991). The statistic described that the consumption degree on organic products remarkably went up (Verhoef, 2005). For instance, the German collected the revenue from selling the green staples about €2.05 billion in 2000, compared with that figure in 2004, grew up to €3.5 billion. Furthermore, organic products stably developed in 2014 by 7.4%, the sale volume of organic products soared from €22.4 to €47.4- about 110% (IFOAM-EU, 2016). Besides the organic cosmetic also have significant consumption in America, Australia, and EU. The market showed that the sale volume of organic cosmetic in the United States was achieved about $700 million in 2015, and this figure will be able to increase to$1.650 million in the next ten-year period.

According to Luu (2017), about 80% citizens buy at least one cosmetic product in year, in that one fourth of the cost of personal care is spent on beauty products. Specially, the demand for green cosmetics is on the rise. Vietnamese and French women have same demand to use the organic products- consumption degree fluctuates from 20-50%. Therefore, human have a trend to purchase and using the natural and organic products, such as food, article of daily necessity, personal care products. Because they interested in not only enhance appearance but also maintain healthy.

Almost previous researchers focus on the customer willing to buy organic cosmetic products in the developed and developing countries context, such as in USA (Kim & Seock, 2009; Kim & Chung, 2011), in Greece (Tsakiridou, Boutsouki, Zotos, & Mattas, 2008), in Malaysia (Abd Rahman, Asrarhaghighi, & Ab Rahman, 2015), in India (Pudaruth, Juwaheer, & Seewoo, 2015) and in Vietnam (Nguyen, 2014; Nguyen & Nguyen, 2017). While there is a little study re-buying behavior of customer toward organic cosmetics (Ghazali, Soon, Mutum, & Nguyen, 2017). Therefore, some of the outcomes from the previous research that is able to apply factors to research this study. The researchers conduct this study to observe Vietnamese consumers’ establishment to repurchasing organic cosmetic and analyze main determinants on attitude toward repurchasing organic cosmetic and customer satisfaction. Besides that, it is essential to investigate correlation among attitude, customer satisfaction, green perceived value, and repurchase intention. The results of the study expect to provide useful information about the attitude towards repurchasing toward organic cosmetic products, identify the level of significance of these factors and help manager to propose managerial implications to enhance customer repurchase intention organic products.

## 2. Conceptual Framework and Hypotheses Development

In this section, related theories and previous studies have been discussed to identify key determinants influence on repurchasing intention organic cosmetic products.

### 2.1. Health Consciousness, Environmental Concern, Product Knowledge, Safety Value, Satisfaction, and Attitude toward Repurchasing Organic Cosmetic Products

Hypothesis 1: Heath consciousness positively affect to the consumer attitude toward repurchasing organic cosmetic products.

Chan and colleagues (2000) define environmental concern is the individual feeling level toward environmental issue, they tend to pay more attention to ingredient of products and produce process. Organic cosmetic is as seen as eco-friendly products due to non-toxic and easy decomposable (Van Loo, Diem, Pieniak, & Verbeke, 2013). Therefore, the environmental concern is seen as a primary step in developing organic consumption. Due to the eco-friendly products, process of producing organic cosmetics is operated without animal testing, chemical toxic, and synthetic chemicals (Prothero & McDonagh, 1992). The environmental attention is a basic step leading to purchase organic products for the environmental protection purpose (Dembkowski, 1998; Smith & Paladino, 2010). The previous research of Kim and Chung (2011), Smith and Paladino (2010), Yadav and Pathak (2016), the green products are conveniently consumed by customers who have high environmental consciousness. Later, Ghazali (2017), environmental concern is one of factors impact to the attitude repurchasing intention toward organic personal care products. Therefore, environmental concern positive impact on consumer attitudes toward purchasing and repurchasing organic cosmetic products. In sum, it is hypothesized that:

Hypothesis 2: Environmental concern positive effect to the consumer attitude toward repurchasing organic cosmetic products.

Knowledge is significant key leading to customer purchase decision, especially applying in organic products (Hill & Lynchehaun, 2002). If the customers haven’t knowledge about information or high experience degree about the organic products’ benefit, they will not buy its (Chryssochoidis, 2000). With some customers who have high level of education, they often want to find the way to growing organic product and have high positive attitude with this figure (Smith & Paladino, 2010; Nguyen, 2015) and being more able to consume the green yields (Wandel & Bugge, 1997). Furthermore, the knowledge about organic have high impact to the attitude repurchase intention toward organic or natural personal care products (Ghazali et al., 2017). Therefore, product knowledge positively effects on consumer’s attitude toward purchasing and repurchasing organic cosmetic products. After recapitulating the previous studies, the following hypothesis has been proposed:

Hypothesis 3: Product knowledge positive effect to the consumer attitude toward repurchasing organic cosmetic products.

Food hygiene and safety is one of the top problems in the modern social, hence, human tend to use organic food because healthy protection demands. In the previous study, above 50% customer buy the organic products in the first time because of non-chemical ingredient (Yin, Wu, Du, & Chen, 2010). Applying to the cosmetic case, human have high risk of cancer, respiratory disorders, and so on due to chemical ingredients such as paraben, lead, and others toxic elements. Besides, this figure is recognized far away non-toxic and chemistry ingredient that is made from origin plants and herbs. Safety consciousness is one of the reasons that stimulate consumer’s positive attitude toward organic produce (Nguyen, 2015; Paksoy et al., 2014). This figure is also helpful to boost the consumer attitude toward repurchasing organic or natural personal care products (Ghazali et al., 2017). Therefore, safety value has optimistic influence on consumer’s attitude toward purchasing and repurchasing organic cosmetic products. The discussion of previous studies leads us to the following hypothesis:

Hypothesis 4: Safety value positive effect to the consumer attitude toward repurchasing organic cosmetic products.

According to the role of satisfaction in a customer behavior model, the satisfaction directly impacts to the attitude (Oliver, 1980). It is argued that the satisfaction has significant influence on attitude degrees, which in turn influences customer’s intention. Besides previous studies demonstrated the positive relationship between satisfaction and attitude (Sivadas & Baker-Prewitt, 2000; Davis & Heneike, 1994). In the case of repurchasing, the customer satisfaction also has high impact on customer attitude toward repurchase intention (Koelemeijer, 1993). From those background, it is suggested that:

Hypothesis 5: Customer satisfaction positive effect to the attitude toward repurchasing organic cosmetic products.

According to Fishbein and Ajzen (1980), people often attend to an action when they have positive attitude with this action. Therefore, the previous studies of Van Loo et al. (2013) and Kim and Chung (2011) showed that customer who have high attitude with any product is easily purchase it. Amount of successful research about positive correlation between attitude and intention in consuming organic products (Smith & Paladino, 2010) such as green hotel (Han & Kim, 2010); organic yogurt (Van Loo et al., 2013); organic skin/hair care products (Kim & Chung, 2011). In the repurchase case, the attitude has a significant role that leading to the consumer repurchase intentions, which  has been confirmed based on studies about the re-buying Korean cosmetic of Thailand (Wangwiboolkij, 2012)  and organic personal care product in Malaysia (Ghazali et al., 2017). In sum, the research proposes the following hypothesis:

Hypothesis 6: Attitude toward repurchasing organic cosmetic product positive effect to the consumer repurchases intention.

### 2.2. Green Perceived Value, Customer Satisfaction and Attitude toward Repurchasing Organic Cosmetic Products

Perceived value is a general customer’s assessment of the benefits received and the payment value of a product. Previous studies of Cronin, Brady, and Hult (2000); Keh and Sun, (2008) recognize an optimistic relationship between perceived value and customer satisfaction. Following to this theory, Chen and Chang (2012) determine the green perceived value (GPV) is perceived value that is establish based on an environmentally friendly expectation of customer. Numerous previous studies of Chen (2013); Lam, Lau, and Cheung (2016); and Sun, Chang, and Huang (2016) set up a sanguineous correlation between GPV and the customer's pleasing. Therefore, the green perceived value positive impact to the customer satisfaction. Therefore, seventh hypothesis is established as follows:

Hypothesis 7: Green perceived value positive effect to the customer satisfaction.

Customer satisfaction is the result of comparison between anticipation and real indication after the trial period (Tse & Wilton, 1988). Hence, it easily understands when relate the satisfaction with the repurchase intention. Numerous previous researches of Bolton (1998), Cronin and Taylor (1992), and so on that supported to the positive relationship between them. This is the main factor leading to customer re-buying intention (Sharma & Patterson, 2000). According to the previous studies of Sun et al. (2016) and Nguyen (2015), the customer who is more satisfaction with a beauty product will tend high degree to pay money for this cosmetic product again. Lam et al. (2016) research the influence rate of satisfaction on repurchase intention toward green products. These study shows that the customer satisfaction has positive development with the green repurchase intention. Therefore, the study is to determine that the customer satisfaction is positive influence with the repurchase intention toward organic cosmetic products. The discussion of previous studies leads us to the following hypothesis:

Hypothesis 8: Customer satisfaction positive effect to the attitude toward repurchasing organic cosmetic products.

### 2.3. Green Perceived Value and Repurchase Intention

In 2010, Zhuang, Cumiskey, Xiao, and Alford (2010) determined that perceived value plays an essential role in buying intention. This is consistent with the Sweeney and Soutar (2001) evidence, if the perceived value is low, purchase intention will be decreased. This element help customer post-purchase behavior to positively ratio develops (Tam, 2004). Moreover, based on the demand for green products and environment protection, Chen and Chang (2012) create a research to confirm the optimistic linking between green perceived values and willing to pay green products. In 2013, Chen made another study to find out the positive connection between the value of green awareness value and the loyalty. Hence, the research recognize that green perceived value has high positively influence on green repurchase intention, in accordance with result of Lam (2016). Applying the previous results for this study, it is to confirm that green perceived value directly optimistic influence on organic cosmetic repurchase intention. In sum, the research proposes the final hypothesis, following:

Hypothesis 9: Green perceived value positive effects to the consumer repurchase intention toward organic cosmetic products.

## 3. Research Methodology

### 3.1. Operationalization of Constructs

The employ employed previous studies to conduct measurements for different structures and reconfirmed for this model. Most of the previous measurement models were designed based on 5-point Likert scale to conduct measurement, with the principle of from the lowest level (1) “strongly disagree” to highest level (5) “strongly agree.”. First, the measurement of health consciousness is created with seven items by mixing and designing based on the previous studies of Michaelidou and Hassan (2008), Lea and Worsley (2005), and Bauer, Heinrich, and Schäfer (2013). Second, the five-item construct for the environmental concern is also synthesized and adjusted based on the articles of Lindeman and Vaananen (2000), Lea and Worsley (2005), and Bauer et al. (2013). Product knowledge is significant key leading to customer purchase decision, especially applying in organic products (Hill & Lynchehaun, 2002). Furthermore, the factor applies the four-item measurement designed from Bauer et al. (2013) study to investigate the safety value. Exploring the consumer’s attitude toward repurchase intention organic cosmetic throughout the measurement scale five-item that are created based on Bansal and Taylor (2002) research. Next, customer satisfaction is defined as the result of comparison between anticipation and real indication after the trial period (Tse & Wilton, 1988), which is measured by four items in the Oliver (1996) study. Moreover, the five-item measurement scale of green perceived value is adapted from the research of Patterson and Spreng (1997). Finally, the repurchase intention construct is seen as the willing to buy a product or brand again of user, which has eight items designed from studies of Davidow (2003), and Bredahl (2001).

### 3.2. Survey Administration and Sample

The study applied a survey method to test hypotheses and conceptual models. This study considers Vietnamese people to be consumers of organic cosmetics and has at least one experience of using products at all. Google form data collection is also applied. This is an effective method to save time, data storage and ensure privacy. The questionnaires were delivered into cosmetic sales pages (Facebook, Instagram, Zalo) as well as personal mail messages. Besides, the hardcopy questionnaire was also distributed in schools as well as organic cosmetics stores in HCMC area. After the survey process, 320 actual announcements were dispensed with 295 replies, representing a return rate of 92.18%.

Among the respondents, of which 250 are female (about 85%), and the remaining 15% are male. The result shows that the most population age from 18 to 29 with 200 consumers, which occupied for 68%. Following, the age ranging from 30 to 45 that account about 22%, while minor amount young consumers about 4%. In terms of marital status, the single one weights for 62 % and 34.6% for married one, respectively. However, most of them still have no children, it accounts for 56%. Regarding respondents’ job, the majority of them are students, office workers and specialist, and other segment respectively accounting for 43%, 32%, 20%, meanwhile, only 5% of retailers use products. About income, the target customers of organic cosmetics are spread out in 3 to 7 million (33%), 7-15 million (28%), and over 15 million (24%), while, consumers with incomes below 3 million also account for a good rate of about 15%. Furthermore, the customers who have used organic cosmetics mostly completed college or are in college, accounting for more than 70% of all respondents. More important, the product segment account for about 32% of the consumption of organic body care and 29% figure for organic skin care products. Finally, the consumption of US and French products accounts for 50% of the total survey, followed by 30% respectively divided by Russia, Vietnam, and Australia product.

## 4. Results

The aim of this study is to examine the relationship between predictors and online repurchase intention. The data was analyzed using PLS-SEM since it is suitable to analyze complicated structural model and identify predictors, according to Hair, Ringle, and Sarstedt (2011). PLS-SEM is considered to be appropriate for exploratory studies.

### 4.1. Model Test

To make certain the measurement model, applying PLS to appriciate the feature of all the scales that is participating in this study. Because of accomodating of reflective indicators, checking the reliability and validity of data is a fundamental and indispensable step in data analysis (Hair et al., 2014). Each value of the index are tested the suitable level to ensure the measurment of intended target. General, thirdteen objects were dropped from the measurement scale. in the detail, the researcher removed a number of items out of the scale due to break standard rules of factor loading including two items of health consciousness, two items of environmental concern, one of safe value, two items of attitude, two of satisfaction, and five items of repurchase intention. The measrement scale remains twenty-eight items for eight constructs. The indicator loadings are larger than 0.7 (Table 1), demonstrating convergent validity (Hair et al., 2013). The composite reliability of each facors in this model scale are greater than 0.4, which be able to reinforce the feasibility of measurement (Hair et al., 2014). Followed by checking the average variance extracted (AVE) value of construct to measure the convergent validity of the model,  the values that are shown in Table 1 range from 0.586 to 0.806- higher than the AVE ratio standard that is 0.5, therefore, all eight-element suitable to certify convergent validity of model.

The discriminant validity was tested using the Fornell-Larcker criterion of model that is calculated by the SmartPLS software, indicators that are highlighted by researchers are similar connections (Table 2). Thus, it is easy to see that these indicators are larger than other indicators in the same column. Therefore, all items satisfy the above conditions, so the validity of discrimination can be said to be appropriate.

### 4.2. Structural Model

In PLS, the predictive realism level of the model was estimate throughout the R2 value that reinforce the model's trustworthy value. The outcome of the model is high index, which explain the high validity of the subsidiary factors based on independent variables. The result of the model is be able to explain following as 50.1% of the variance in Repurchase intention (RI), green perceived value (GPV) explains 44.7% of the variance in customer satisfaction (CS), and 57.7% the variance in attitude (AT) is formatted by health consciousness, environmental concern, product knowledge, safe value, and customer satisfaction. Moreover, due to the R2 values of the model are only average, the study analyzed the predictive relevance (Q2) factor to be more certain about the suitability of the model. According to Chin (2010), the Q2 values for each variable need to be greater than zero for potential variables. As the result we get in the table below: the Q2 values fluctuate from 0.3 to 0.401 which show the underground structures in this model are completely reasonable. In summary, the model exhibited an acceptable fit and high predictive relevance.

PLS use the nonparametric bootstrapping proposed by Davision and Hinkley (2013) to calculate the significant coefficient. After the bootstrapping process, t-values were calculated to see if whether the coefficient are considerably different from zero. According to Hair et al. (2011), the techniques of non-parametric bootstrapping were utilized in every single sign change, 295 cases and 1000 micro-samples. The results showed in Table 3, the path coefficients, t-statistics, and p-value for all latent, which are acceptance or rejection of the advance assumption. In the case of antecedents to attitude, environmental concern (EV) (β=0.159, t=3.474, p<0.01), product knowledge (PK) (β=0.140, t=2.553, p<0.05), safety value (SV) (β=0.166, t=2.932, p<0.01), customer satisfaction (CS) (β=0.371, t=5.607, p<0.01) were optimistic effect to customer's attitude repurchase intention. Therefore, the H2, H3, H4, H5 are supported. While, the p-value of the path that linking between health consciousness and attitude is greater than 0.05 and T-statistic value smaller than 1.645, so H1 is no supported in this model.

In the relationship between variables with repurchase intention, all significant level of attitude (ATR) (β=0.222, t=3.026, p<0.01), customer satisfaction (CS) (β=0.343, t=4.543, p<0.01), and green perceived value (GPV) (β=0.238, t=3.359, p<0.01) significant impact to the repurchase intention. Therefore, three-path including H6, H8, H9 are supported in this structural model. Moreover, the hypothesis H7 between green perceived value and customer satisfaction is also supported due to the value of significant level is less than 0.01, path coefficient equal 0.669, and T- statistic value satisfy the criteria.

## 5. Discussion and Managerial implications

The study investigated important factors affecting repurchase intention on organic cosmetics. The results show that health consciousness (β=0.118, t=1.556, p<0.12) does not affect customers' intention to buy organic cosmetics. It is incompatible with Ghazali et al., (2017) proof of the health-conscious influence of Malaysian attitudes towards buying organic. However, in accordance with Nguyen's (2015), it is evidence that health consciousness does not affect the attitude of Vietnamese customers. Furthermore, we applied questionnaires of Michaelidou & Hassan, (2008), and Bauer et al., (2013) to conduct surveys. Therefore, the above results have achieved a certain level of confidence. On the other hand, the remaining factors are consistent with the previous results of Ghazali et al., (2017). The sense of environmental protection (β=0.159, t=3.474, p<0.01), understanding of products (β=0.140, t=2.553, p<0.05), safety values (β=0.166, t=2.932, p<0.01), and customer satisfaction (β=0.371, t=5.607, p<0.01) all have positive effect on the attitude of product acquisition. In which satisfaction has the best effect on customer attitudes. Therefore, marketers should promote product quality as well as services quality to increase product consumption.

In addition, green awareness values (β=0.669, t=18.2, p<0.01) also have positive effect on consumer satisfaction. They were recognized by Lam et al. (2016) on the repurchase intention toward green products. The results also showed that the advance degree attitude for repurchase intention organic cosmetic has been explored to positive impact on re-buying intention of consumer (β=0.222, t=3.026, p<0.01). These findings were consistent with the previous studies on the intention of acquiring organic or natural personal care product in Malaysia (Ghazali et al., 2017). Furthermore, customer behavior investigated by employing measurement questionnaire of Bansal and Taylor, (2002). Therefore, the positive attitude of customers has a great influence on the intention of acquiring Vietnamese consumers. Based on the empirical evidence, the study also confirmed that the green awareness value (β=0.238, t=3.359, p<0.01) and customer satisfaction (β=0.343, t=4.543, p<0.01) also positively affected the repurchase intention. Moreover, the intention to buy products has been recognized by previous researchers as the effect of customer satisfaction (Patterson & Spreng, 1997) and green perceived value (Chen & Chang, 2013). That result is similar to Lam et al. (2016), when they conducted a survey of consumers' intention to buy green products.

In summary, the repurchase intention toward organic cosmetic is most affected by customer satisfaction, followed by green awareness and ultimately the attitude of consumers. Therefore, the manufacturer should focus more on the friendliness of the product in order to increase customer acquisition intent. In order to increase re-consumption, marketers also upgrade perception green value of their products.

## 6. Conclusion and Research Limitations

The study result given that the repurchase intention for organic cosmetic in Vietnam is impacted by attitude, customer satisfaction and green perceived value. It can be concluded that buying attitude has a significant impact on customers repurchase intention. Also, product awareness, environment concern and safety affect the attitude of acquisition. Thereby the manufacturer can set up handbooks or posters to help people define what organic cosmetics are. Moreover, international anti-counterfeiting and organic certification stamps should be emphasized to ensure safety for users and the environment. However, customer satisfaction plays an important role in customers' attitudes and intentions. Therefore marketers need to have suggestions for quality improvement, packaging, services, consulting and customer care department as well as listening to comments from consumers. Managers can open more free skin screening services to customers, free or have a fast delivery policy, as well as make more special treatment products such as acne treatment, anti-aging. Besides that the higher green awareness value, the easier it is to consume organic cosmetics. Therefore manufacturers can use recyclable packaging, or special slogan sentences to increase green awareness of consumers, or organize campaigns to exchange old packaging to receive gifts.

The paper also has some limitation in constitution and survey process. It does not reflect all the factors that may affect the intention of acquiring customers' organic cosmetics, such as value for money, the influence of organic brands or organizations as well as the level of customer trust. So future study can develop more broadly. Moreover, the survey only obtained convenient responses, it will not fully reflect all market segments as well as the desire of Vietnamese consumers. Besides, the researcher only focuses on the people living in the two big cities of Ho Chi Minh City and Hanoi, so the next study can focus more on others area.

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