Consumer behaviors in purchasing ethical products - Dissertation Example

Introduction The current generation of consumers in the United s and in the United Kingdom has come to have plenty of expectations concerning the products that they purchase and it has taken quite an effort by the various companies involved to ensure that these consumers are satisfied. Sales for organic and ethical products in the United States and the United Kingdom are rising, more so than sales for conventional products, and consumer demand for these products is increasing despite the global economic downturn. These consumer behaviours that have developed over the years have made the study of their characteristics and origins most useful. It has become the trend in these two countries for consumers to buy products that are perceived to fulfil environmentally friendly, natural, organic, local, or humane requirements and enhance the corporate responsibility profile of the companies that are involved in the supply of such products. In the United Kingdom, most of the ethical products that have come to be sought out by most of the population are in the food industry and according to the grocer, Asda, stated that almost half of the mothers in the United Kingdom spent more on organic food than any other and this was despite the strained financial situations in many households. While some of the major retailers in the United States, such as Wal-Mart and Safeway are increasing their aids of organic products, in the United Kingdom, on the other hand, the retailers seem to be reducing their offerings of similar products. Despite this being the case, among the offerings that are directing the way in retail stores are augmented sales of organic breads and grain foodstuffs and "ethical" beverages. Among the banks of the United Kingdom which adhere to a strict ethical policy, is the Co-operative Bank whose main policy has always been that no deal goes to corporations tangled in the arms trade, animal testing, among many other unethical activities. In this bank, the clients elect every year to determine how their money is used, and because of this, new anxieties are frequently involved, such as genetic modification or climate change. One of the most remarkable achievements of this bank is that it has rejected over nine hundred million pounds value of loan bids since it agreed its ethical policy and current practices in 1992. Because this bank does not invest its customer’s money in the stock exchange, it has been found to be more stable than other banks, and this has contributed immensely to its continued growth during the credit crisis. Because of the growth in the awareness concerning social responsibilities, ING’s clients have continuously agitated for the offering of ‘ethical’ products and services so that they can be sure they are making a contribution to a more sustainable society. In order to satisfy these demands, ING has continuously moved with the times and has started offering products and services such as a ‘green’ savings account, a ‘green’ loan or insurance policy, or ‘sustainable’ investment funds and as a result, this company has set for itself the target of introducing a range of new ethical products and services every year. Research Objectives The objective of this line of investigation is to scrutinize the diverse issues concerning ethical consumer behavior in the United States and the United Kingdom. Furthermore, there is the need to determine whether or not ethical consumerism is a trend which is here to stay despite the economic recession in these two countries. In order to help in the realization of the objective of the study, it is necessary to pose the following questions: 1) What information is used by consumers to make choices on buying ethical products? 2) What is the influence of market communication of ethical products purchases in UK and USA? 3) What is the influence of Price Purchasing of Ethical products in USA and UK? 4) What are the in-store advantages of Ethical products in USA and UK? Preliminary Literature Review When people make decisions regarding purchase of a product or service their decision contributes to more sustainable pattern of consumption since each purchase has ethical, resource, waste and community implications (Young, Hwang, McDonald and Oates, 2010). When people engage in adoption of sustainable lifestyles, the individuals both in USA and UK get involved in the increasingly complex decision-making process, and the daily decisions on ethical solutions result in trade-offs between conflicting issues and results in motivational and practical complexity of green consumption (Barr & Gilg, 2006). Ethical issues surrounding consumer products are in various categories with the first one being the use and disposal of products with regard to their energy consumption levels and recyclability. The other category that can influences consumers in buying ethical products involves the production and transport of the product, including even heavy metals used, which are often regarded as toxic, non-recycled or recyclable materials as well as conditions under which the products are made including work rights (Hughner et al, 2007). Food and clothing marketing and sales are especially considered as a major industry in promoting Ethical products among consumers. The increased usage of organic and healthy diet is also promoted throughout developed countries. The demographic variables following fair trade for food industry also includes gender segregation and attitudes towards using ethical food (Wright & McCrea, 2008). The study De Pelsmacker, Driesen, &Rayp (2005) reveals a significant indicator in terms of consumer attitudes and behaviors for fair trade products (Ethical Brand). The consumers are reported to pay a slightly higher amount for ethical and fair trade food products. Loureiro & Lotade (2005) confirms the claims made in the earlier research when it indicates that consumers are receptive for Ethical food products and willing to pay more. However the study could not attempt to measure such response as performed by De Pelsmacker et al. (2005). While many companies in the United States and the United Kingdom have conducted surveys to find out how consumers end up buying ethical products, mostly online, this process has to be supplemented by these companies ensuring that there are open lines of communication available between them and consumers. This tends to be done to ensure that there is an understanding that helps in the determination of what the consumers want and this has the aim of creating a good and effective relationship between the retailers and the consumers of their products (Newman and Bartels, 2011). It has been found that the sales of decent goods have improved regardless of the economic decline, developing to more than fifty billion pounds in the United Kingdom alone. Subsequently, the commencement of the economic recession some years back, the importance of decent marketplaces from Fair trade goods and green energy to allow range and environmentally friendly food has developed from ?35.5bn to ?47.2bn. In addition, the annual ethical consumer markets reports have shown that sales in the sector have increased significantly since its inception in 1989 (Costache, 2012). Businesses that deal with ethical products in their merchandise have a competitive advantage to other businesses since current consumers both in UK and USA are complex therefore businesses that incorporate ethical product tap into a market niche that values the environment. Stores that have ethical products in their merchandise have significant marketing and business opportunities since such firms are able to build brands that attract the best talent and create trust in its stakeholders. In addition to retail marketing attempts like labels on products, the charm of ethical products is also established by promotion, distribution together with the branding strategy utilised in marketing ethical products. In Europe and Northern America, ethical consumption is increasing in supermarkets from fair trade to organic food retailers like UK’s Planet Organic and America’s Whole Foods whose sales have increased. In UK, fair-trade sales were up 62% in a period of 4 years and UK’s ethical food market is expected to $4 billion by end of the decade while in contrast UK’s total grocery market is worth more than $230 billion. The main supermarket chains in both UK and USA are involved in the act in a huge way with most of them launching organic food lines in an attempt to reduce unnecessary packaging as well as offering environmentally friendly shopping bags. Research Methodology The research methodology is adopted to cater the qualitative and quantities paradigms provide a detailed view of the local market (United Kingdom) and foreign market (United States). The primary and secondary research is conducted to understand the impact of market awareness and consumption of the ethical products. The primary research will mainly be based on the use of questionnaires where the questionnaires will be distributed to stores dealing in the United Kingdom, while the others will be sent to the United States stores. The secondary research is conducted through peer reviewed journals, books, and researches of various scholars. The sources of the research are academic in nature and ethical considerations of providing the academic sources are also fulfilled according to the requirements. Analysis It has been stated that in order to design effective programs to satisfy the needs of ethical consumers, the retailers involved must have proper information concerning the specific product that they would like to sell. In addition, it has been found that the retailers should also conduct surveys to find out whether ethical consumers find their products satisfactory, and they are obliged to ensure that they get the best products in the market for their shelves (Ismail and Panni, 2008). An example of such course of action is to ensure that their products are made to be safe in every way and to achieve this, the retailer must be aware of the dangers that can be found in during the production and processing of their products. In case those who make decisions within the retail stores are not aware of a particular problem in the product, it would be impossible for them to come up with reasonable solutions. The study draws as much as possible on impact assessment studies of existing schemes, but while this is the case, the availability of studies in relation to the various different labels and standards is sometimes limited. There are many methodological problems linked with thorough influence valuation, and investigative expectations may be essential in the definition of study findings to derive overall expected development impacts as it is beyond the scope of this study to undertake independent impact assessments on each of the labelling schemes being analysed. Advantages and Limitations The survey approach in this case study tries to emphasize quantitative analysis and data from various retail stores and using questionnaires, the data was analyzed using various statistical techniques. Through the study of the representative sample of those individuals who are ethical consumers, this approach seeks to discover relationships that exist between them and the products that they use, and hence come to a generalized statement about the objective of the study. The survey through questionnaires is capable of providing a snapshot of the situation dealing with ethical consumerism in the United States and the United Kingdom, and it has therefore, yielded plenty of information regarding the meaning of the data collected. Besides this, there are variables of interest to the researcher, which are not measureable when using this method and these include cross-sectional studies, which offer weak evidence of causes and effects. The fieldwork and other related methods are important because they provide insights and discoveries during the research process, but despite this, fieldwork is one of the poorer methods that can be used when verifying the hypothesis upon which this research is based. The use of questionnaires in this research documents the norm in an accurate manner and defines relationships between variables present in a sample and in identification of extreme results. The fact that there is a limited amount of literature on the subject means that the researcher will have to seek out both retailers and consumers of ethical products, to fill the questionnaires This might be a fruitless task especially if a majority of potential respondents, especially the retailers, refuse to be cooperative, but while this may be the case, it is most likely that future research will make more revelations concerning the various aspects of the ethical consumer behaviour in the United States and the United Kingdom. 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