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DO ETHICS MATTER IN CONSUMER PURCHASE BEHAVIOUR?

Fig 1: IKEAs reusable blue bag embraces the green imperative.

JACQUELINE BEI WALKER Lord Ashcroft International Business School (LAIBS) Anglia Ruskin University Cambridge - 2009

ABSTRACT
In recent years, ethical trade and Corporate Social Responsibility have gained a lot of attention in the UK, yet limited attention has been given to the role and impact of ethical concerns on consumer purchase behaviour. The overall purpose of this study is to contribute to a better understanding of ethical consumerism. A self-administered questionnaire was used as the data collection technique in order to achieve the objectives of this study. The results of the findings revealed that, despite consumers high level of awareness of ethical issues there is little evidence that these issues greatly affect consumers purchasing behaviour. In fact, price seems to be the most important indicator of their purchasing behaviour. The uneven distribution of wealth also makes it impossible for all consumers to choose ethically sound products. The findings of this study are a useful source of information for marketers who may want to attract this green segment of the market. Furthermore, whether or not marketers are pursuing the ethical strategy, they should also bear in mind that even if a good eco-performance is unlikely to yield competitive advantages, a poor eco-performance can still lead to competitive disadvantages.

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ACKNOWLEDGEMENT
This dissertation could not have been written without the support from Mr. Tim Froggett who did not only serve as my supervisor but also encouraged and challenged me through the dissertation process and never accepting less than my best efforts. Many thanks to my professors at the Ashcroft International Business School for helping me to think through their challenging course work. Also, sincere thanks to staff at the AIBS for assisting me with administrative tasks related to my studies.

I would also like to acknowledge and extend my heartfelt gratitude to my mentor, Mrs. Lynn Morgan for her time, knowledge and assistance during my studies.

Most especially I would like to thank my husband, Clive Walker and our children, for their support, love, encouragement without which I could not have survived the process.

And especially to God, who made all things possible.

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CONTENTS
Title Page Abstract Acknowledgement Table of Contents List of tables 1. Introduction 1.1 Background 1.2 What is ethical consumerism? 1.3 CSR vs. Profit 1.4 Aims & Rationale 1.5 Objectives 2. Literature review 2.1 Ethical issues 2.1.1 Environmental issues 2.1.2 Child Labour 2.1.3 Fair-trade 2.1.4 Factory farming 2.2 The Ethical Consumer 2.3 Barriers to ethical consumption 2.4 Conclusion of literature review 3. Methodology 3.1 The Empirical study 3.2 Sampling 3.3 Questionnaire 3.4 Limitations 4. Results of findings 5. Discussion of findings 5.1 Consumers interest and knowledge of ethical products 5.1.1 Age and Ethical Awareness 5.1.2 Gender and Ethical Awareness 5.1.3 Awareness of Key ethical issues 5.1.4 Awareness of Ethical Products Attitude-Behaviour gap Barriers to Ethical Consumerism 5.3.1 Price 5.3.2 Source of information 5.3.3 Complexity of Ethical consumerism Negative Ethical Purchasing Behaviour i ii iii iv v 1 1 2 8 9 9 7 7 7 8 9 10 10 12 15 16 16 19 22 23 24 31 31 31 31 32 33 34 36 36 38 39 41 44 44 46 48 52

5.2 5.3

5.4

6. Conclusions & Recommendations 6.1 Conclusion 6.2 Managerial Implications & Recommendations 7. Bibliography 8. Appendix 1

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TABLE OF FIGURES
Fig 1: IKEAs reusable blue bag embraces the green imperative. Figure 2: A sugar bowl with 'East India Sugar Not Made by Slaves' on the side. Figure 3: The Ethical Consumerism Report Figure 4: Environmental issues Figure 5: A child carrying unbaked bricks Figure 6: Fair-trade Logo Figure 7: Broiler chicken i 1 4 7 8 9 10

Graph 1: Age groups Graph 2: Gender Graph 3: Purchase decisions Graph 4: Most Ethical Companies Graph 5: Most important Ethical Issues Graph 6: Years of Ethical concerns Graph 7: Consumers willingness to pay for ethical products Graph 8: Purchasing products made from exploitation of workers Graph 9: Unethical product by association Graph 10: Labels Graph 11: Ethical Marketing Graph 12: Do Consumers give unwanted belongings to charity? Graph 13: The Ethical Consumer Graph 14: Age and Ethical Awareness Graph 15: Gender and Ethical Awareness Graph 16: Ethical Issues Graph 17: Ethical premium pricing Graph 18: Complexity of Ethical Consumerism Graph 1: Reusable products

24 25 25 26 26 27 27 28 28 29 29 30 30 31 32 33 37 39 43

1.0 INTRODUCTION
The act of buying is a vote for an economic and social model, for a particular way of producing goods. We are concerned with the quality of goods and the satisfactions we derive from them. But we cannot ignore the conditions under which products are made the environmental impact and working conditions. We are linked to them and therefore have a responsibility for them. By Anwar Fazal, former President of the International
Organization of Consumer Unions

(Harrison; 1997).

1.1 Background
Ethical consumption of some sort has existed over the centuries. According to an article on the BBC website related to the abolition of slave trade, in 1791 thousand of pamphlets were printed encouraging people to boycott sugar produced by slaves. Estimates suggest that 300.000 people abandoned this product resulting to a drop in sales by a third to a half. At the same time sales of sugar from India where slavery was not used increased tenfold over two years (BBC.co.uk. 2008).

Fig 1: An earthenware sugar bowl with the words 'East India Sugar Not Made by Slaves' inscribed on the side. Source: BBC.co.uk

While the notion of ethical consumption can be traced back at least to the 18th century as seen above, there have been a growing debate and criticism over the past decades about the impact or role of ethical consumerism. The concept of ethical consumerism has grown significantly and the meaning of ethical consumerism has evolved from an environmental issue (green consumerism) to incorporate issues such as 1

child labour, Fair-trade, factory farming, food miles, health related issues, CO2 emissions, government regimes, etc.

1.2 What is Ethical consumerism?


Defining ethical consumerism is not an easy task since the term means different things to different people. Some studies on ethical consumption concentrate only on environmental issues and thus omit ethical issues that have come to the force in the recent years such as child labour (Tallotire et al 2001). Harrison et al (2006) refer to ethical consumerism as a set of debates and strategies in which consumption is not so much the object of moral evaluation, but more a medium for moral and political action.

Green consumption is often thought of as the process of avoiding certain types of products, such as those causing pollution or cruelty to animals (Schaefer and Crane, 2001; Strong, 1996). It can also represent positive product choices, such as the purchase of environmentally friendly products, or recycling behaviour. (Carrigan et al 2004)

Ethical consumerism refers to buyer behaviour that reflects concern with the problems that arise from unethical and unjust global trades, such as child and low-paid labour, infringement of human rights, animal testing, labour union suppressions, inequalities in trading relations with the Third World and polution of the environment. (Lee; 2008)

Recent studies on ethical consumerism suggest that consumers are giving increasing considerations to the ethical components of products and business processes and that these concerns have financial implications for the businesses involved (Auger et al, 2007). According to Baker (2003), the ethical investment Research Service estimated that the value investments in the UK held in ethical investment funds passed the 4 billion mark by mid-2001 and although it is relatively small compared to the total funds, the impact on corporate reputations of being de-listed from a particular ethical fund gives them a disproportionately large influence in public relations terms.

Interest in ethical and environmental investment is set to intensify with new initiatives such as the FTSE4Good index of socially responsible companies. Also, businesses in Europe are now affected by a series of EU environmental legislations and governmental laws, for example green taxes such as landfill taxes are being introduced in many EU countries including the UK. According to BBC news, the EU in 2007 announced plans to introduce a mandatory emissions standard for vehicles. Car companies will be forced to achieve a fleet average of 130g of CO2 per kilometre for their trucks and cars by 2012. The UK government has also set a goal of cutting carbon dioxide emissions by 20% by 2010. The government has set targets in some sectors, aiming, for example, to reduce imports of organics and to reach a target of 70% home grown organics by 2010. (Mintel)

According to the 2007 Ethical Consumerism Report, household expenditure of ethical goods and services has almost doubled in the past five years. It further states that, on average, every household in the UK spent 664 in line with their ethical values in 2006 compared to just 366 in 2002. These figures reflects total economic value attached to broad range of personal choices such as food, finance, charitable donations that are related to concerns for the environment, animal welfare and human rights, support for local communities via local shopping or boycott of brands whose behaviour conflicts with their ethical priorities. The Co-operative Bank states that, eight in ten consumers would choose eco-friendly product, given the choice.

Fig 3: The Ethical Consumerism Report 2006. Source. The co-operative Bank

1.3 CSR vs. profit


A growing number of scholars believe that companies can no longer be seen purely as private institutions but as a social institution responsible not only to its shareholders but also to its stakeholders, which include consumers, employees, creditors, communities, etc. (Balabanis et al; 1998). This arguement is similar to the stakeholder theory, whereby a company is responsible to all its stakeholders for its success. The concept of CSR implies that companies could be accountable for its actions that affect communities and the environment.

Some scholars such as Milton Friedman (1970) have, however, argued that the social responsibility of companies is to maximize profit for its shareholders. Companies exist to make profit and even ethical companies must make profit and expand in order to survive. According to such scholars, a company can contribute to society by remaining in business thereby allowing its employees to keep their jobs, its suppliers to keep a customer, its customers the products demanded and to its shareholders profit. This could explain the continuous dominance of companies such as Tesco with its everyday low pricing strategy obtained through ruthless cost-cutting. By dictating the terms in which it operates to employees, suppliers, communities, etc, Tesco has managed to provide its key stakeholders (customers) what they demand most: low prices.

Furthermore it can be argued that in a free market economy, where there are no government regulations, the theory of supply and demand will help adjust itself in response to customers needs. In other words, in a free economy, activities flow openly with no cost to entry or exit, producers and consumers can obtain true information about a product, its prize, its characteristics and availability. Consequently, if customers are not satisfied with a product, they could use their buying power to impose their values to companies through boycott. It can also be argued that demand and supply at equilibrium maximizes the efficient allocation of available resources. Consequently, there is no waste of natural resources.

It can further be argued that there is no such thing as an ethical company since the production of any goods produces waste and increases the level of CO2 emissions in the atmosphere. Furthermore, a journalist, Jon Entines 4

investigation of The Body Shop in 1994 found that only a very small fraction of its ingredients came from the Trade not Aid program, a program claimed to help developing countries (Entine 1995).

Some companies hire PR firms to portray a false image of them which could hinder or distort the flow of information required by consumers to make informed choices (also known as greenwashing). John McMurtry in his book Unequal fredoms: The Global Markets as an Ethical systems (1998) however, argues that there is no purchasing or investment decisions that does not in itself imply some moral choice.

1.4 Aims & Rationale


I chose ethical consumerism because the market for ethical products is growing fast and ethics could be a major factor in consumer purchasing behaviour in the future. My research will also seek to understand why ethical consumption and the purchase of ethical products/services has not become common practice despite increase public awareness of ethical issues.

1.5 Objectives
Identify the scale of UK consumers interest and knowledge of ethical products/services Determine if gender and age influence UK consumers ethical purchase decision Examine the barriers to ethical consumerism Elaborate on the attitude behaviour gap.

2.0 LITERATURE REVIEW


2.1 The ethical issues
There are many ethical issues that are of concern to consumers, but for this dissertation the following will be discussed: environmental issues, animal welfare abuses, child labour and Fair Trade.

2.1.1 Environmental issues

Fig 4: Environmental issues Source: stopgreenwash.org

Economists tell us that natural resources are scarce but that human wants are unlimited, and as Gandhi once famously said: There is enough on earth for everybody's need, but not for everyone's greed (enough.org; 2008) The social and environmental consequences of the unquestioning pursuit of economic growth of the 21st century have become increasingly noticeable; e.g. increasing level of greenhouse gasses in the atmosphere, a hole in the ozone layer caused by CFC releases, widespread destruction of the rain forest, a growing list of endangered species and ecosystems, etc (Baker; 2003). Environmental issues gained a lot of momentum in recent years because of a growing awareness that rather short-sighted lifestyles in all parts of the world have led to the depletion of energy sources, pollution, deterioration of soil fertility, reduction of biodiversity and climate change (Solomon et al; 2002) Despite this growing environmental concerns some anti-environmentalist such as Bjrn Lomborg (2001) , the author of Skeptical Environmentalist 6

have criticized the claims of overpopulation, scarcity of raw-material and resource consumption as unsupported, claiming that environmentalists are diverting resources to environmental issues when those resources could be used effectively elsewhere (e.g. in poor countries to eradicate poverty and diseases) forcing the global community to adopt inappropriate policies which may have adverse effects on humanity.

Lomborg (2001) dismisses the idea that overpopulation will lead to widespread hunger and argues that technological improvements in agriculture should help eradicate hunger. He claims that food products are not threatened by human prosperity with the exception of fish which he claimed could be improved through fish farming. He also finds no indication of widespread deforestation and notes that the Amazon forest still retains more than 80% of its cover. He however, points out that deforestation is linked to poor economic conditions in the countries concerned and that higher economic growth should tackle the problem of deforestation. He also claimed that concerns regarding waste is exaggerated as the entire waste produced by the USA in the 21st century could fit into a square of 28km (i.e. 0.009% of US total surface).

2.1.2 Child Labour:

Fig 5. A child carries unbaked bricks to a kiln at a brick factory in Raichak, India, in December 2000. Scenes like this remain a fact of life in India, despite a ban on hard labour by children . Source: nationalgeographic.com. (2008)

Hundreds of millions of girls and boys throughout the world are engaged in work that deprives them of adequate education, health, leisure and basic freedoms, violating their rights. Of these children, more than half are exposed to the worst forms of child labour such as work in hazardous environments, slavery, or other forms of forced labour, illicit activities such as drug trafficking and prostitution, as well as involvement in armed conflicts.

(International Labour Organization. ILO. 2008) Although consumers in the UK are concerned about this issue, child labour is not regarded as unethical in all countries. For example, Pakistan has no legislation against child labour. In fact, it is encouraged since it improves familys income, keeps children off the streets and away from worst danger and boosts the national income.

2.1.3 Fair Trade:

Fig 6 :Fair-trade logo Source: fairtrade.org

Fair trade is also concerned with issues of ecological concern, which stretch beyond pollution affiliations to include concerns for the degradation of natural resources, sustainable use of raw materials, communities and cultures. (Strong. 1997)

Cafe Direct, the UKs first Fair Trade brand coffee, is a collaboration between organizations such as Oxfam, Traidcraft, Twin Trading and Equal Exchange. Initially sold through alternative channels, Cafe direct is now UKs 6th largest coffee brand and commands around 7% of the UK coffee market. However, critics say too many fair trade dollars wind up in the pockets of retailers and middlemen including non-profit organizations (BBC.co.uk). 8

2.1.4 Factory farming

Fig 7: broiler chicken Source: advocacy.britannica.com

The increasing consumer awareness of animal exploitation and cruelty has played a crucial role in persuading consumers to give due consideration to animal welfare. It has been argued that the trend of mass production resulting in pain and suffering for animals poses ethical issues. Animals on factory farms have their genes manipulated, pumped with hormones, antibiotics and other chemicals to encourage high productivity. As awareness of this issue grow in the UK, the government and EU are fighting to regulate the industry and remove inappropriate behaviour towards these animals. The Farm Animal Welfare Council was founded in 1979 to tackle these issues.

However despite the growing concern for factory farming it can be argued that not everyone can afford free range products especially lower income consumers. Also free range products are not sufficient to feed the growing population in the UK. (advocacy.britannica.com)

2.2 The ethical consumer


It is also not very easy to define an ethical consumer since it is not easy to determine the reasons behind a purchase. Some consumers may buy a product because it is healthy, others because it is cheap, or simply because it is the only choice available. According to Harrison et al (2006), an ethical purchaser may have political, religious, spiritual, environmental, social or 10

other motives for choosing one product over another. Consumers are rarely consistent in their purchase behaviour (Strong. 1997 p 36). For example the consumer who buys product from Body Shop because of its fair trade values may also buy products from Nestle or Gap.

Some consumers might be misled in their choice of ethical products. For example Quorn products which many people consume as an ethical alternative to meat is often made using eggs from battery-farmed chicken. (Doane D. 2001). The Body Shop, has always presented itself as an ethical company, yet the company is now owned by LOreal, a company that not only holds none of the values of Body shop, such as its refusal to test cosmetics on animals, but is also partly owned by Nestl, the target of the worlds largest international consumer boycott because of its aggressive and unethical marketing of infant formula (Spurr B. 2006).

Wagner (1997) as cited in Baker (2003) indicates that attempts to profile the green consumer have not always yielded strongly indicative results due to the fact that one study has been repeatedly contradicted in another. Also such results were frequently inconclusive and sometimes contradictory.

Accordingly, Baker (2003) suggests that the solution to this difficulty is to try and understand the purchase rather than the purchaser. Many green purchases involve some form of comprise over conventional purchases such as paying a premium in the case where improving eco-performance could increase production costs, accepting a lower level of technical performance in exchange of improved eco-performance as in the case of rechargeable batteries that provide less power but are ultimately cheaper and greener, or travelling to non-standard distribution outlets such as health food shops. In this perspective, Harrison et al (2006) argues that any important economic action is going to help some groups and hurt others. According to Baker (2003), in the past, customer satisfaction has been judged in terms of the performance of the product at the moment of consumption. A green consumer may reject a product because they become aware of the 11

environmental harm that the product causes in production or disposal. They may also avoid a product because they disapprove of the activities of the producers suppliers or investors.

According to Tallontire (2001), regular fair-trade buyers are untypical of the population as a whole: they are better educated, wealthier, mostly female, over 30 years of age and tend to work in the public sector or caring professions. Research into Oxfam fair-trade buyers reveals that they are generally under 50 years of age, a Guardian newspaper reader, white/British, married, Labour supporting, undertaken further education (Oxfam Campaigns, 1995).

2.3 Barriers to ethical consumption


As stated in Baker (2003) Many research have found out that the majority of consumers profess concern for the environment, a desire to buy greener products and a willingness to pay more for them or accept technical performance reductions. However, the number of consumers measurably changing their purchasing behaviour to buy ethical products is much less and this has generally been interpreted as a failure to back up intentions with purchase and a tendency to over report social and environmental concerns. (e.g. Baker; 2003, Lee; 2008; Solomon et al; 2002).

Furthermore, a survey by corporate edge as cited in Carrigan and Attala (2001) found that 57% of their sample said they would stop buying a brand if they knew child labour has been employed and only 21% supported actions against companies perceived as unethical. This shows that there is a notable difference between professing support for an action and actually carrying it out. They also found out that although consumers express willingness to make ethical choices, social responsibility was not a dominant criterion. In fact, there seem to be a disparity between increase awareness and ethical purchase behaviour. Some of the reasons for this behaviour also known as the attitude-behaviour gap are as follows:

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Environmental preferable products may not meet consumers criteria of price, performance, quality and easy access (Hurtado, 1998 as cited in Tallontire et al, 2001; Carrigan et al, 2007). Following in the same argument, Tallotire et al (2001) points out that while income could be a major factor in consumers willingness to pay premium prices, other factors such as the awareness of the ethical issues related to the product and market characteristics also play a part. In the case of market characteristic, Tallotire et al (2001) cites the example in the UK of consumers willingness to pay premium for fair trade coffee particularly for roast and ground as oppose to instant coffee. Harrison et al (2006) presumes that ethical consumption has to be open about the high price of ethical goods and services so that if humanity wants a decent society, it has to pay for it or society and the biosphere will pay anyway.

Insufficient information about ethical benefits of products could also be seen as a barrier. The National Consumer council (NCC) identified a core of willing consumers who could find neither the products nor the accurate information to guide their behaviour (Harrison et al 2006). They further argue that unless the consumer is an avid reader of newspapers or uses ethical consumer guides, which rate companies accordingly, companys information does not filter down otherwise. Uusitalo and Oksanen (2004) support the above argument by pointing out that because consumers do not devote time searching external information or evaluating the alternatives, the intentions and choice of product remain unchanged. However, even when they search for information, on-pack information may lack credibility with consumers (Tallontire et al. 2001. p18)

The Internet enables products and companies to search prior to purchase. For example, www.scorecard.org, www.ethicalconsumer.org provides products and company information. Also, new technologies coming out soon in the UK will include Hand-held bar code scanners used to provide point of sale information on companys practises (Harrison et al; 2006). Uusitalo and Oksanen (2004) presume that, ethical products requires that a large amount of effort be invested in information acquisition and decision making. 13

Citing further barriers to ethical consumption, Harrison et al (2001) argue that there is a general distrust of information from companies among ethical consumers. At the heart of this distrust is the persistent problem of greenwashing, whereby companies make deliberately misleading

statement. Harrison et al quote the example of the little red tractor meat label, that proclaim kind to Animals when its underpinning welfare standards are generally no higher than minimum legal requirements.

Other barriers to ethical consumerism include the fact that many people have little inclination to pay a premium especially with the global economic crisis affecting most of the UK population. Tallontire et al (2001) claim that, consumers need to be convinced that their purchase behaviour can make a difference in ethical terms in order to be persuaded to buy. Also the lack of product in the market could be a barrier. Furthermore, Carrigan et al (2007) argue that whilst consumers often punish unethical companies through boycotts, they do not necessarily reward ethical companies. According to Carrigan et al., many people believe that businesses have a responsibility not to do harm (e.g. use slave labor or produce dangerous by-products during manufacturing) but that they do not automatically have an obligation to help others (e.g. sponsor a local community project). Also if a companys behaviour has no direct impact on an individual, they are unlikely to take action.

Also, broadcasting green ethical credentials could attract scrutiny and criticism especially when some parts of the company have not been ethically overhauled. (Harrison et al., 2006). That is the reason why, although companies like the co-operative bank are keen to publicise their ethical initiative, some companies such as B&Q prefer the low key approach. Uusitalo and Oksanen (2004) also argue that even though information helps some consumers make ethical choices, some consumers may feel that the additional information is confusing and may increase their sense of uncertainties.

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Uusitalo

and

Oksanen

(2004)

however

presume that,

production

satisfaction could motivate consumers over time to take the trouble to select an ethical product and pay the premium price for it. Consumers also need up-to-date and accurate information in order to make ethical choices. Information about firm should be conveyed to consumers in such a form that it is easily reached and does not cause them unnecessary inconveniences.

2.4 Conclusion of literature review


Within the literature, there is the debate as to the commitment of consumers towards ethical purchasing (Carrigan et al. 2004). Most research has concluded that consumers are very interested in both negative and positive ethical purchasing meanwhile others have found a gap in the ethical attitude of consumers (e.g. Carrigan and Attala 2001; Carrigan et al; 2004; Tallotire et al; 2001)

There also appears to be a divergence between opinion polls on green and ethical consumers values and the volume of sales of ethical product (Tallotire et al 2001). However, Tallotire et al (2001) point out that those promoting the concept of consumption of ethical products recognize the limitation of quantitative survey because of the relatively low awareness of concepts such as fair trade. One advantage of survey, however, is that they manage to grab the press headline, claim Tallotire et al (2001). Tallotire et al (2001) further point out that the common methodological flaw of all surveys they do not allow for the difference between what people do and what they say. The following findings will focus on ethics and how they relate to consumer buying choices. It will also try to understand why there is the attitudebehaviour gap and what marketers could do to remove the barriers to ethical consumption.

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3.0 METHODOLOGY
3.1 The Empirical Study For my research, I will adopt an inductive approach as it involves theory generating as oppose to theory testing as in the case of the deductive approach. I will therefore, collect data and develop a theory as a result of my data analysis to find out whether ethics play an important role in consumers purchase behaviour. Saunders et al (2007) describe the inductive theory as a research approach involving the development of a theory as a result of the observation of empirical data. Saunders et al (2007) argues that followers of induction would criticise deduction because of its tendency to construct a rigid methodology that does not permit alternative explanation of what is going on.

The inductive research approach is particularly important for my research due to the fact that I am more interested in understanding the role ethics play in consumers buying behaviour, rather than the deductive approach which will tend to describe what is happening. Also, the inductive approach is more appropriate for my research because I lack prior knowledge on ethical consumption to be able to frame a hypothesis. In other words, my objectives are to understand what ethical consumption is and its importance to consumers.

From this research approach, I will be using interpretivism philosophy since it requires the researcher to seek to understand the subjective reality and meaning of participants (Saunders. 2007). The challenge here is to enter the social world of our research subjects and understand their world from their own points of view, claims Saunders et al. (2007). This philosophy focuses on the way in which individuals behave based on the way they interpret situations as oppose to positivism in which individuals behaviour is viewed in terms of the external forces that affect them. Interpretivism is very compatible with the inductive research approach because of the complexity of consumers behaviour. It could also be argued that positivism would not be appropriate in my research as the social world of business 16

and management is far too complex to lend itself to theorising by definite laws in the same way as the physical sciences. Also rich insights into this complex world will be lost if such complexity is reduced to law-like generalisation (Saunders et al. 2007. p 106). Bryman (2004) argues that the study of the social world requires a different logic of research procedure, one that reflects the distinctiveness of humans as against the natural order.

Grounded theory will also be used during my research project since a combination of inductive and deductive approaches is helpful to explain consumers purchasing behaviour. According to Saunders et al (2007) in grounded theory, data starts without the formation of an initial theory framework. Theory is developed from data generated by a series of observation. This type of theory will therefore, be very relevant for my research in this perspective. Grounded theory is also known as an inductive/deductive approach by Collis and Hussy (2003) as cited in Saunders et al (2007).

An exploratory research will be adopted during the preliminary stage of my research to help refine my research question into a researchable one. Exploratory research is very useful at the preliminary stage when the researcher has limited amount of experience and knowledge about a research issue. According to Zidmund (2003), there are three interrelated reasons for conducting an exploratory research; (1), diagnosing a situation (2) screening alternatives and (3) discovering new ideas. Zikmund (2003) also states that the purpose of the exploratory research is to progressively narrow the scope of the research topic and to transform discovered problems into defined ones, incorporating specific research objectives. He further adds that exploratory research is a useful preliminary step that helps ensure that after such exploration the researcher should know exactly what data to collect during the formal project and how the project will be conducted. According to Saunders et al (2007), there are three ways of conducting exploratory research as follows: o o A search of the literature; Interviewing experts in the subject; 17

Conducting focus group interviews;

I chose to search the literature using primary, secondary and tertiary sources to gather information needed for my study. My primary sources of information included questionnaires, reports, theses and reading pass dissertations and thesis copies. My Secondary sources of information include books, journals, newspaper, ethical magazines, etc. While my tertiary sources of information come from google.co.uk, yahoo.com, abstracts, dictionaries, indexes and encyclopaedias. I will also visit health/organic/fair-trade shops to find out information about ethical consumers. The above sources of information can also be defined as Secondary data since they are all previously collected data. In order to successfully investigate the role of ethics in buying behaviour, I will use mixed method research. This method uses both quantitative and qualitative data collection techniques and analyses either at the same time or one after the other. (Saunders et al. 2007). Qualitative methods could be defined as an array of interpretative technique which seek to describe, decode, translate and otherwise come to terms with the meaning, not the frequency of certain more or less naturally occurring phenomena in the social world (van Maanen. 1983) tba to reference list. While quantitative methods are predominantly used for any data collection techniques or data analyses that generates numerical data, such as questionnaires, statistics or graphs. (Saunders et al. 2007).

The advantages of using this technique in my research are the fact that the more techniques you use the richer the information you get since different methods can be used for different reasons. For example I will use the questionnaire to collect quantitative data which would allow me, for example to verifier if age or gender effect consumers ethical purchase behaviour. I will also use questionnaires to collect descriptive or explanatory data related to consumers perception of what is an ethical company.

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Another advantage of using mixed methods is the fact that it enables research triangulation to take place. The idea behind research triangulation is that by combining different methods, empirical materials, and theories, researchers can hope to overcome the weakness and biases that often come with single methods, single observer and single theory studies. Tashakkori and Teddlie (2003) as cited in Saunders et al (2007) argue that mixed methods are useful if they provide better opportunities for you to answer you research questions and where they allow you to better evaluate the extent to which your research findings can be trusted and interferences made from them.

For this research I will collect quantitative data by using the statistical technique called SPSS to analyse, interpret, present and explain the data collected through the questionnaire. I will also use the questionnaire to collect descriptive or explanatory data related to respondents definition of an ethical consumer. I may also choose to use individual in-depth interviews at a latter state of my research to address any discrepancies or pending issues related to my research.

Quantitatively-based

marketing

research

enquiries

are

particularly

important in research as it adds depth and understanding into the role of ethics in the buying habits of consumers. While qualitatively based marketing research was particularly very important in the early stages of market studies, when concepts were being explored, insights into behaviour gained and research ideas generated. Chisnall (2005) argue that quantitative methods bring rigour and disciplined enquiry to the overall research activities and is likely to benefit significantly from the more flexible and spontaneous approach of qualitative techniques for example in the design of effective questionnaires and the development of creative promotional ideas.

3.2 Sampling The first sampling question to be asked is who is to be sampled? There are two types of sampling techniques; Probability sampling in which every 19

member of the population has a known, nonzero probability of selection (e.g. simple random sample), and the non-probability sampling, in which the probability of any particular member of the population being chosen is unknown and members of the population are selected on the basis of personal judgement (e.g. Quota sampling).

Taking into consideration the impossibility to survey the entire population, I will be using a non-probability sampling called cluster sampling for my research. This method of sampling is very useful where the populations under survey are widely dispersed. This form of probability sampling occurs when interviews are concentrated in a relatively small number of groups or clusters which are selected at random (Chisnall. 2005. p 110). The purpose of cluster sampling is to sample economically while retaining the characteristics of a probability sample (Zikmund. 2003; p. 389). For example if a Fair-trade coffee marketer can assume that the product will work as well in London as in Manchester cluster sampling may be used. In my research, I assume that consumers attitude towards ethical products to be the same in the Cambridge population as anywhere in the UK. Zihmund (2003) stresses, that ideally the sample should be a mirror image of the population.

Although cluster sampling is attractive in terms of cost and time, the drawbacks include the fact the sampling error is higher given the small scale of my sample size. Consequently the resultant sample might be biased or non-representative of the population. However, taking into consideration that respondents come from all works of life, are of different ages, from privileged and unprivileged backgrounds, it could be argued that the sample portray an even representative of the UK population. I decided not to chose the other types of probability sampling such as the systematic, stratified, multistage or simple random sampling because of the high cost and time entail in carrying out the research

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Target group The target group for this study will be based on people around Cambridge because of (a) the relatively accessible data from this segment (b) limitation of time (c) limitation of financial resources. Furthermore, in order to ensure objective evaluation of my findings, the segment will be evenly distributed between two age groups (i.e. 16 14 and 25+) in order to determine if age matter in ethical purchasing behaviour. Other segments of the UK population such especially children and young adults below 15 were not included (this segment also affect the purchasing behaviour of their parents) because of the possibility that they might not grasp the meaning of ethical purchasing. Fifty respondents will be randomly chosen for this research. The questionnaires will be handed to respondents at different venues, on different days of the week and also through the internet to avoid any bias.

Finally my choice of

methodology will be governed by ethical

considerations especially when collecting data from people through the use of the questionnaire. I will ensure that my research is both methodologically acceptable and morally defensible to those involve in my research.

According to Saunders et al (2007) research ethics related to questions about how we formulate and clarify our research topic, design our research and gain access, collect data, process and store our data, analyse data and write up our research finding in a moral and responsible way. There are two types of philosophical standpoints related to ethics. Deontological view, argues that the end served by the research can never justify the use of research which is unethical while teleological view argues that the end justify the means. I will adopt the deontological view by not deceiving anybody to obtain research data and making sure respondents get feedback from me once my research is completed.

My questionnaire will be designed to ensure that none of the questions are biased or would cause discomfort, stress or any discomfort whatsoever. I 21

will abide to any confidentiality or anonymity promises made at all times. I will also avoid applying any pressure on participant to give me information they do not want to and will be sensitive to the impact my work could have on those related to my research.

3.3 Questionnaire A lot of time was spent designing the questionnaire. This was important as questionnaires are the best way of collecting data. I also took into consideration my aims and objectives in order to create an effective questionnaire. The aim of the questionnaire was to seek to identify the role of ethics in my respondents buying choices. Chisnall (2003) define questionnaire as a method of obtaining specific information about a defined problem so that the data, after analysis and interpretation, result in a better appreciation of the problem.

There are many types of questionnaires and various methods of interviewing the respondents. A structure style questionnaire consists of a series of formal questions designed to attract answers of limited response and the unstructured style questionnaire where consists of a freer style of investigation whereby the interviewer encourages conversation to develop. The design of the questionnaire also differs depending on how it is administered. Self-administered questionnaires are completed by the respondent while interviewer-administered is completed by the interviewer based on answers of the respondent.

For my dissertation, I will design a well structured, self-administered questionnaire which will be delivered mostly by hand and collected immediately thus ensuring the reliability of responses and data since no one else but the respondent will be answering the questions. Respondent will be selected randomly from students who are not related to me in order to avoid bias. Also, collecting the questionnaire immediately will not only be time efficient but will also mean that the questions are not discussed with others, thereby contaminating their response.

22

Virtually all data collected by questionnaires will be analysed by computer using SPSS. Therefore, I will establish a coding scheme and incorporate it on the question before collecting data.

After the completion of the questionnaire procedure, data collected will be recorded, analyzed, interpreted and presented in a way to help answer the research questions and to meet my objectives. Once data has been entered and checked for accuracy and errors, data analysis can now begin.

3.4 Limitations The results of the survey are limited to the Cambridge region, which may not be adequate for drawing a general conclusion about the ethical consumerism of the entire UK population. Future research should look at a broader-based sample drawn from many cities around the UK.

23

4.0 RESULTS OF FINDINGS


This chapter encompasses the summary of the data collected through the questionnaire in appendix 1 and findings from its analysis.
1) Age groups

Age groups

70 60 50 40 30 20 10 0 Percent
Graph 1 Age groups

16-24 34

25+ 66

24

2) Gender
Gender

Male 34%

Male Female Female 66%

Graph 2 Gender

3) Some products are considered ethically acceptable e.g. Fair-trade products. Is it

Some products are considered ethically acceptable e.g. Fair-trade products. Is it...

6%

28%

A consideration I buy ethical products 54% Never a consideration Missing

12%

Graph 3 Purchase decisions

25

4) How do you rate the following companies as ethical companies? Number the most important 1, the next 2 and so on. If a factor has no importance at all, please leave blank.

Most Ethical Company

6% 10%

The Body Shop Primark Nestle TheCo-opBank Microsoft Missing 30% 44%

8%

2%

Graph 4 Most Ethical companies

5) Please number each of the ethical issues below in order of importance. Number the most important 1, the next 2 and so on. If a factor has no importance at all, please leave blank.

Most important ethical issues


30

25

20

15

10

Ethical Sourcing 26

C02 Emissions 18

Recycling 28

Food Miles 18

Plastic Bags overuse 10

Percent

Graph 5 Most important Ethical issues

26

6) How long have you been concerned about these issues?

years of ethical concern

Missing

4 years +

3 years

2 years

1 year

10

15

20

25

30

35

40

45

Graph 6 years of ethical concern

7) How much are you willing to pay for a product that is ethically sound?

How much are you willing to pay for ethical product?

35 30 25 20 15 10 5 0 Up to 10% Percent 34

Up to 20% more 28

More than 30% 8

Normal price 30

Graph 7 consumers willingness to pay for ethical product

27

8) Would you buy a product knowing that it has been produced by people working for low wages in poor condition?
Would you buy a product knowing that it has been produced by people working for low wages in poor condition?

Don't Know

No Percent

Yes

0 Yes Percent 30

10

20 No 48

30

40

50 Don't Know 22

Graph 8 purchasing product made from exploitation of workers

9) If you had purchased ethically sound products from a company that was taken over by a less ethically sound company, would you continue to purchase the product? E.g. LOreal took over The Body Shop. McDonald took over Prt - Manger.

45 40 35 30 25 20 15 10 5 0 Yes No Don't know Yes Percent 34 No 22 Don't know 44 Percent

Graph 9 unethical products by association

28

10) When shopping for non-food items, do you look at the label to see where the product is made?
When shopping for non-food items, do you look at the label to see where the product is made?

Always 16%

Sometimes 68%

Always Sometimes Never

Never 16%

Graph 10 labels

11) Some people argue that advertising products as ethical is just a ploy to
charge higher prices. Do you agree or disagree?

4% 2% 2%

Strongly Agree Agree 38% 54% Disagree Strongly Disagree Missing

Graph 11 Ethical Marketing

29

12) Do you give unwanted clothes, books, etc to charity shops, door to door
collections?

70 60 50 40 30 20 10 0 Always Frequently Never Missing

Graph 12 Do consumers give unwanted belongings to charity

13) Would you class yourself as an ethical consumer?

Are you an ethical Consumer ?

Don't know 42%

Yes 42%

No 16%

Graph 13 Ethical consumer

30

5.0 DISCUSSION OF FINDINGS


This chapter encompasses the ways in which the empirical findings provide answers to the research question and objectives. It should be noted however, that not all the numerical and statistical details of each question from the findings will be presented, in order to avoid excess and irrelevant information which could create confusion.

5.1 Consumer interest and knowledge of ethical products 5.1.1 Age and Ethical Awareness Ethical awareness was high among the age group of 25+ (see graph below). Cross-tabulations between age-groups and ethical buying decisions show that the majority of older respondents of the 25+ age group considered ethical consumerism when buying a products as oppose to a small amount of respondents aged 16 24.

25

20

15 16-24 25+ 10

0 A consideration I buy ethical products Never a consideration

Does ethics matter in buying decision

Graph 14 Age and Ethical awareness

5.1.2 Gender and Ethical Awareness

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Crosstabulation between gender and consumers buying decisions indicate that ethical awareness was higher among women and less for the male gender.
18 16 14 12 10 8 6 4 2 0 A consideration I buy ethical products Never a consideration Male Female

Does ethics matter in buying decision

Graph 15 Gender and Ethical awareness

From the findings on the role of age and gender in ethical awareness, we could define the demographic profile of an ethical consumer as female, aged 25+. This is not surprising as research show that females form a higher proportion of shoppers in the UK. Many researches have concluded that ethical consumers are more likely to be female, married, well educated with a relatively high income or generally in a better position to afford premium priced products. (Carrigan and Attalla: 2001; Strong C: 1996: Mintel reports). Also, a research carried out by mintel (2008) revealed that womens press regularly features article on environmental and human interest issues, which helps them to be more informed on ethical issues. It further states that, even with the changing structure of the population (e.g. smaller households, more single people) women are still the main shoppers for the household.

5.1.3 Awareness of key Ethical issues Respondents were asked to grade on a scale of one to five the most important ethical issues to them. Ethical sourcing was high on respondent list with 26 per cent of respondent followed by recycling (28%), C02 emission and food miles both came third with (18% respectively) and the overuse of plastic bags came last with only (10%) of the score. The above 32

findings not only indicated that respondents were aware of ethical issues but it also showed the selective nature of consumers. Carrigan and Attala (2001) study also arrived at the same conclusion that consumers are selectively ethical in their attitudes as not all ethical issues provoked the same reaction from them. This could explain why the overuse of plastic bags was very low on repondents list of ethical priorities.

Most important ethical issues


45 40 35 30 25 20 15 10 5 0 C02 Ethical Emission Recycling Sourcing s 26 13 18 9 28 14 Plastic Bags Overuse 10 5 Percent Frequency

Food Miles 18 9

Percent Frequency

Graph16 Ethical issues

5.1.4 Awareness of Ethical Products/companies When asked to identify socially responsible firms among 5 selected companies, The Body Shop was select as the most ethical company (44 per cent see graph 4). The body shop, an ethical pioneer, is well known for its anti-animal testing. Second most ethical company was The Cooperative Bank in second position (30 per cent), well known for its ethical banking policies and its Ethical consumerism reports.

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Most Ethical Company

6% 10%

The Body Shop Primark Nestle TheCo-opBank Microsoft Missing 30% 44%

8%

2%

Graph 4 Most ethical companies

Not surprisingly, Primark fell at the bottom of the list as the least ethical company. These results come five months after Primark was publicly exposed through a very damaging hour long BBC Panorama investigation, watched by 4.2 million viewers in Great Britain, which found out that Primark suppliers in India were using child labour (timesonline.co.uk: 2008). Timesonline.co.uk website also has an exclusive survey that show that out of all clothing retailers on high street, Primark is the worst offender when it comes to failing to address social and environmental issues.

5.2 Attitude Behaviour Gap The above findings clearly prove that although UK consumers are aware of ethical issues and products, this does not necessarily translate into sales nor does it lead them to boycott unethical companies and reward the good ones.

34

Would you buy a product knowing that it has been produced by people working for low wages in poor condition?

Don't Know

No Percent

Yes

0 Yes Percent 30

10

20 No 48

30

40

50 Don't Know 22

Graph 8 purchasing product made from exploitation of workers

In the graph above, about 48 percent of respondents claim that they would not buy a product knowing that it has been produced by people working for low wages in poor conditions.

For example, although Primark is rated as the least ethical company, surprisingly, it is one of the few companies doing very well in recent months despite the tough economic climate. In fact Associate British Foods (ABF) revealed this month that Primarks profit rose 16.5 per cent to 233 million pounds, with revenue up 21 per cent to 1.93 billion pounds in the year to September 13th with like-for-like sales up 4 per cent (Marketwatch.com 2008: timesonline.co.uk 2008). It is also set to open 4 new stores in the UK including one in Cambridge by Christmas.

The success of Primark is in stark contrast with ethical companies such as Marks and Spencer, which for the first half ended Sept 17, saw its profit drop by 44% to 221 million pounds (MarketWatch.com:2008). Many other ethical retailers including John Lewis, whose sales fell 14 percent in November, are discounting their stock for up to 20% to attract customers despite their ethical credentials.

35

Some products are considered ethically acceptable e.g. Fair-trade products. Is it

6%

28%

A consideration I buy ethical products 54% Never a consideration Missing

12%

Graph 3 Purchase decision

The attitude behaviour gap is also clearly evident in the finding on graph 3 below which reveal that although for a vast majority of respondents (54 per cent) ethical sound product was a consideration during purchase decision only as little as 12% actually buy a product because of its ethical credentials. It was however never a consideration for 28 per cent of respondents. The most notable example of this attitude behaviour gap are high-end eco-friendly restaurants that may source sustainable fish but also offer foie gras on the menu (mintel 2008)

5.3 Barriers to ethical consumerism Some of the main reasons why there is an attitude behaviour gap with respondents of this study could be due to some barriers to ethical consumerism. Some of the reasons are outline below as follows:

5.3.1 Price Although income could be a major draw back for ethical consumers willing to pay ethical premium, however, the graph below from this study show that even among self-identified ethical consumers, price could be a barrier to ethical consumerism. This is in line with the ideas of rational choice theory (RCT) whereby, people will choose the object that provides the greatest reward at the lowest cost.

36

How much are you willing to pay for ethical product?

Normal price

More than 30%

1
0

1
2

Up to 20% more

Up to 10%

7
4 6

Are you an Ethical Consumer? Yes Are you an Ethical Consumer? No Are you an Ethical Consumer? Don't know
Graph17 Ethical premium pricing

Also, according to retail analyst TNS (2008), disposable income is at its lowest level for a decade due to high taxes, housing costs, food and fuel prices, etc. In other words, consumers have less money to spend each month after they have paid their bills.

This could explain why in recent months, bargain supermarkets chains such as Lidl and Aldi are doing extremely well and attracting middle class shoppers, while at the same time, profit at organic supermarkets such as Whole Foods Market is declining. TNS worldpanel grocery market share figures published for the 12 weeks ending 7th September 2008 also confirmed the trend of shoppers responding to strong low price messages.

3
10 12

7
14 16 18

37

5.3.2 Source of information


Some people argue that advertising products as ethical is just a ploy to charge higher prices. Do you agree or disagree?

4% 2%2%

Strongly Agree Agree 38% 54% Disagree Strongly Disagree System

Graph11 Ethical Marketing

From the results of my study above, it is clearly evident that respondents do not believe in green marketing. Consumers are finding it very difficult to differentiate between those companies which are genuinely ethical and those taking advantage of the benefits of being green. Using ethical credentials to sell a product could be a barrier to ethical consumerism because of consumers perception that they are being manipulated or misled by companies regarding their ethical practices. Harrison et al (2001) argue that there is a general distrust of information from companies among ethical consumers because of greenwashing. In 2008 the environmental group GreenPeace launched a website called stopgreenwash.org aim at; informing the public on these unethical practices, confront deceptive greenwashing campaigns, give consumers/activists and lawmakers the information and tools they need to hold companies accountable for their actions.

In 2007 Terrachoice an environmental marketing company released a study called The six Sins of Greenwashing (terrachoice.com. 2008) which found that 99% of 1.018 the consumer products randomly surveyed for the study was guilty of making false and misleading green marketing claims. A total of 1.753 ethical claims were made by these companies and only 1 out of the 1.018 was found not guilty of greenwashing. According to this study the 6 sins are as follows: 38

Sin of the Hidden Trade-Off is suggesting that a product is green based on a single or minor environmental attribute without considering the major environmental issues such as global warming, energy, etc. (2) Sin of No Proof is an environmental claim with no evidence or supporting information. (3) Sin of Vagueness is any claim that is poorly defined or its real meaning is likely to be misunderstood by the intended consumer. (4) Sin of Irrelevance may be claims which are irrelevant and therefore distracts the consumer from finding a truly greener option. (5). Sin of Lesser of Two Evils are claims that may be true withing the product category but that risk distracting the consumer from the greater environmental impacts of the category as a whole for example organic cigarettes. (6) Sin of Fibbing is committed by making claims that are simply false.

5.3.3 Complexity of Ethical consumerism Another barrier to ethical consumerism related to information could stem from the fact that marketing effort could become so complex for consumers to accurately compare company product value. (Talontire et al. 2001). The graph below from my study show such complexity whereby respondents were ask if they will continuously purchase a product which has been taken over by an unethical company and the majority (44%) were not so sure.
If you had purchased ethically sound products from a company that was taken over by a less ethically sound company, would you continue to purchase the product? E.g. LOreal took over The Body Shop. McDonald took over Prt - Manger .

22%

34%

Yes No Don't know

44%

Graph18 Complexity of Ethical Consumerism

39

It could be argued that people would prefer ethical consumerism to be more straightforward. Although in this case low level of information related to what the take over implies could be blame for the 44% respondents skepticism. The complexity could also involve the fact that not all stages of a products production are ethical. For example raw materials could be obtained through very poor working conditions and then manufactured in an ethical manner. Not surprisingly when questioned about ethical purchasing, some consumers will state that they cannot perceive any difference between the ethics of one company vs another (Carrigan and Attala, 2001).

There is a widespread of consumer skepticism about ethical marketing, which is being fuelled by initiatives from campaign groups such as Friends of the Earths Green Con of the Year Awards (Baker 2003). However, although ethical marketing have had bad press not all information is greeted with skepticism. 25 years after the publication of Our Common Future also known as the Brundtland report (1987) related to the growing concern of the deterioration of the human environment and natural resources, many companies such as The Body Shop and B&Q have deliberately avoided the brand sell style of marketing preferring to concentrate on editorial coverage and in-store promotions than the conventional advertising (Tallontire, 2001; Bake 2003).

Some consumers seem to appreciate information on labels of products than other forms of marketing even though information on labels could be difficult to understand. The results of my findings below show that a vast majority (68 per cent) of respondents sometimes check the labels of nonfood items for information on country of origin.

40

When shopping for non-food items, do you look at the label to see where the product is made?

Always 16%

Sometimes 68%

Always Sometimes Never

Never 16%

Graph10 labels

A Gallup poll for the CWS also indicated that 67% of consumers want more information and clearer labeling (Tallontire, 2001). The rise of easily accessible information, increase media engagement on ethical issues and the use of internet to publish information on the ethics of company still accounts for the increasingly informed ethical consumers. Labeling has been a particularly important issue in green marketing, as it provides customers with a simple and trustworthy signal of a products social and ethical credentials (Baker 2003).

5.4

Negative Ethical Purchasing Behaviour

In graph 8 below, when respondents were asked if there will buy a product knowing that it was made from the exploitation of workers in very poor working conditions, 48 per cent said no. In other words, 48 per cent of respondents would boycott a product because of unethical conducts.

41

Would you buy a product knowing that it has been produced by people working for low wages in poor condition?

Don't Know

No Percent

Yes

0 Yes Percent 30

10

20 No 48

30

40

50 Don't Know 22

Graph 8 purchasing product made from exploitation of workers

With exception of certain fair-trade products, for many years the main form of ethical consumerism was negative ethical purchase behaviour according to Tallontire (2001). Although such boycotts are organized by campaign groups for example Baby Milk Actions boycott of Nestle, many consumers may chose to boycott a product or services associated with a particular ethical issues as is the case of my findings. The Co-operative Banks 2007 Ethical Consumer report, found out that the value of consumer boycotts of clothing retailers did grow by 20 per cent in 2006 reflecting concerns amongst some consumers that low prices of clothing, for example, could mean poor labour conditions. The values in this reports reflects the money that consumers switch from one product to another due to concerns over a companys record on ethical issues.

42

Do you give unwanted clothes, books, etc to charity shops, door to door collections?

Missing

Never

Frequently

Always 0 10 Always Percent 30 20 30 40 50 Never 4 60 70 Missing 2

Frequently 64

Graph 19 Reusable products

It is however be important to note that there could be other reasons why consumers switch from using a particular product. For example it could be for health reasons, price, availability of products, etc. In the graph above, respondents were asked if they give unwanted clothes, books, etc to charity shops and a vast majority (64 per cent) frequently give products to charity shops. Other reasons for giving unwanted items to charity could include peer pressure, lack of recycling bins, etc.

43

6.0 CONCLUSION & RECOMMENDATIONS


6.1 Conclusion

The aim of this research was to find out if ethics matter in consumer buying behaviour. The findings from this research demonstrate that even though UK consumers seem to be more aware and knowledgeable about ethical issues, as a result of more media coverage of companies such as Primark, it does not necessarily translate into sales of more ethical products.

Price seems to be the most important indicator of consumers purchasing behaviour especially due to the present economic downturn. The effects of ethics of consumers buying behaviour is very limited due to barriers to ethical consumerism discussed above.

The study also reveals that consumers are rarely ethically consistent. For example those who buy fairly trade products might not care for animal tested products. As stated in Baker (2003) perhaps the solution to understanding green purchasing behaviour is to try and understand the purchase rather than the purchaser. Many ethical purchases involve some form of compromise such as paying an ethical premium or accepting lower level of performance or travelling to non-standard distribution outlets such as a health shop for ethical products.

Consumers also need to be aware that the ethical issues are real problems and that purchasing these products will make a difference (i.e. Fair-trade product). According to Baker (2003) recent years have witnessed an increasing range of conservation-orientated behaviour among consumers from the recycling of cans and bottles to the boom of returning consumer durables to the supply chain through small ads or car boot sales. The findings also revealed that there is no such thing as an ethical consumer. As stated in Baker (2003) all consumers are ethical consumers in some way or the other in that, when faced with two products that are identical in all respect except that one is superior in term of its ecoperformance, they would choose the one with high eco-performance. And to reiterate John McMurtrys statement, there is no purchasing or investment decision that does not in itself imply some form of moral choice. 44

Also some significant contribution to ethical consumerism seems to be generally overlooked such as product maintenance, and avoiding or delaying purchase through a make-do and mend mentality (Baker. 2003).

The increasingly well informed consumers are not only demanding ethically and fairly traded products, but are also challenging manufacturers and retailers about their ethical claims. Furthermore, although consumers are skeptical regarding companys ethical marketing strategies, information from non-governmental organization (NGOs) are trusted by consumers. As stated in Baker (2003) an international social attitude survey by Edelman showed that 60 per cent respondents trusted these organizations compared to 15 per cent who trusted the government and 10 per cent who trusted the major corporations.

It could also be argued that ethically consumerism is becoming very important in todays business and an organization which ignores this trend of ethical consumption and its potential growth, could be at risk of loosing customers or potential market shares. Increasing media interest on issues such as climate change are dominating headlines each of which are creating market opportunities and threats to many companies. Within the society, concern about the environment and social impact of businesses are also growing in many ways. The Co-operative Banks Ethical Consumer Reports are encouraging UK consumers to make ethical choices.

Environmental performances is very important for companies wishing to attract investors. Eco-performance of companies could act as a key to gain entry into new markets as in the case of mercury free battery ranges. Also competitive advantage could be gained through good ethical performance as in the case of The Co-operative Bank which gained as many as 200.000 customers because of its ethical policies. (Baker 2003). Ethical concerns are also creating demand for new products in market segments such as cars, cleaning products, etc.

According to Baker (2003) green marketing successes also involves the 4 Ps (i.e. Product, Price, Place and Promotion) of the marketing mix meeting the 4 Ss criteria, namely: Satisfaction of customers needs 45

Safety of products and production for consumers, workers, society and the environment Social acceptability of the products, their production and the other activities of the company Sustainability of the products, their production and the other activities of the company.

Ethical issues are also changing production economics of products such as cars, chemical and power generation. Rising landfill costs and tougher regulations on emissions means that production costs are increasingly influenced by what is discarded after production.

Ethical products need to be supported by marketing communications that allow the individual consumer to feel a sense of making a difference in order to secure a commitment to regular ethical purchase behaviour and develop brand loyalty. The emphasis on individual producer stories in many fair trade adverts and labeling clearly attempts to fulfill this role.

6.2

Managerial implications & Recommendations

The findings of this study have important implications for business especially for marketing managers who may want to attract this segment of the market.

Since consumers need to be convinced that their purchase behaviour do make a difference in order to be persuaded to buy, marketers need to convey future ethical marketing information in a manner that does not confuse or alienate consumers.

As stated in Baker (2003) a number of prescriptive and regulatory guidelines have been developed to guide marketers in formulating and making claims about the environmental performances. Davis (1993) as stated in Baker (2003) suggests the following: Ensure that the promoted product benefits has a real impact. E.g reduced harmful emissions. Identify the products specific benefits in terms of the product attribute that contributes to improved environmental performance. 46

Provide specific data about the benefits e.g. specifying the proportion and nature of recycled content. Provide a context to allow consumers to make meaningful comparisons. Define any technical terms used. Explain the benefit since consumers often have limited

understanding of environmental issues.

Coddington (1993) as stated in Baker (2003) recommend that firms engaged in a greening process should set up an environmental task force in which marketers play a leading role. He identifies marketing managers as being superbly qualified for the task because marketers are able to identify and analyze the marketing implications of corporate environmental exposures and initiatives. Marketers can help identify new business products and service opportunities that arise out of those exposures. Marketers can work to ensure that when corporate environmental policies are developed, the marketing implications are given due considerations. He further states marketers must co-ordinate their activities across

departments such as R&D, manufacturing, packaging, sales and public relations.

Finally, marketers have to be aware of the fact that whether or not they are pursuing an ethical strategy and even if a good eco performance is unlikely to yield competitive advantages, a poor eco-performance can still lead to competitive disadvantages.

47

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