Ethical Consumerism - Coursework Example

Ethical Consumerism Executive summary Ethical consumerism is an emerging phenomenon. It is a main driver ofvarious ranges of ethical approaches to trade. Other approaches such as conservation-driven trade fair-trade and the trade in organic products began as market niches but their presence is felt in commercial mainstream. Social, environmental and welfare of animals are some of the issues being addressed by mainstream with the adoption of excess of standards by major producers and retailers of fresh products, timber, beverages, apparel, fish together with other day-to-day consumer items. This report describes various meaning of consumerism and describes various approaches adopted by Cooperative group of companies in carrying out its social activities. The report concludes by providing the gap that exist the current study of consumerism. Ethical consumerism Ethical consumerism (also known as ethical purchasing, ethical consumption, ethical sourcing or ethical shopping) is a type of consumer activism that is based on dollar voting. This concept is practiced through positive buying where ethical products are given first priority. Ethical consumerism was first popularized by a UK magazine published in 1989 so as to produce rating tables which was inspired by criteria-based approach of the ethical investments movement. Ethical consumerism also means that several customers are willing to buy ethically sourced goods that are ethically made and distributed. On the other hand, an ethical consumer is someone who buys things that are ethically produced. Depending on the context used, ethical production means producing a product that is recycled, use of labor that is produced in facilities without using child labor and slavery, or producing food that is free range or organic raised. Therefore the whole idea of ethical consumerism movement is that you know what you are purchasing and that you buy products that are ethically produced since not knowing results to abuse and exploitation. Consumerism is used by other stakeholders as a tool for social change, basing on the theory that organizations make decisions basing on consumer demand. This idea is evidently limited by the massive power of large organizations which influence, if not create, consumer demand through branding and advertisement. Nevertheless, consumer power may be utilized to ensuring that companies are made accountable to the society; where common citizens in their consumer role can make companies to be accountable. Some authors (Ayglon 2009) regard consumerism as a tool for social change while others (Lang & Tahc 2003) discusses the concept of consumerism in a broader sense of consumer action, i.e. activities other than buying, such as lobbying of government or dialogue with manufactures and retailers. Ethical consumerism may be regarded as an evolution from the former consumerism movements. According to Ma (2014), there are three waves of consumerism. The first wave of consumerism focuses on consumer choice, basic product information and also product labeling (what the product does and how). The second wave was shown by investigation into the safety of the product and closely associated with broader questions of corporate responsibility. The third wave is seen as the link between citizenship and environmentalism. As it can be seen, the third wave brings together environmental issues and social values. It has three main components: (i) animal welfare, (ii) the environment, and (iii) human rights/working conditions and fair trade. The three headings have either positive or negative aspects: those practices and products that are upheld and promoted and those that are avoided/boycotted and deplored. There have been some further developments from ethical consumerism – sustainable consumption. Plans for exploring the potential for sustainable practices of consumption, i.e. going further than consuming certain niche products to understanding and managing demands so as to achieve economic, social and environmental goals with recognition that several policies continues to subsidize unsustainable practices. It also ensures that neither producer nor consumers face the full costs of environmental consumption. The great challenge of creating sustainable consumption policies is vital to sustainable development, but the main focus here is to understand the ethical consumer in mainstream and niche markets (Atherton 2007). The prevalence of Ethical Consumption The appearance of the ethical consumer has been over emphasized, but research shows that ethical consumption is much celebrated than practiced. Certainly, there has been a discrepancy between opinion polls on ethical and green consumer values, and the amount of sales of ethical products. Most of the data on ethical consumption is form of opinion polls and quantitative market research. Products under ethical category Being an ethical consumer means that you buy products that are produced in ethical manner and/or which do not cause harm to the society and the entire environment. It can be as easy as buying free-range eggs or as complicated as boycotting to buy goods produced through child labor (Kotler 2011). Products falling into ethical category include fair trade goods, organic products, electricity from renewable energy, energy-efficient bulbs, and wood products with approval from Forest Stewardship council and recycled paper. Lobby groups mostly flag up companies of concern and other consumer organization publishes magazines, but making a decision on what to buy and what not to buy is very challenging as making a decision on which ethical fund to invest in. Being an ethical consumer requires one to watch over his/her food miles, i.e. how much energy was used so as to get the product to you. For this reason, ethically responsible consumers are encouraged to purchase products which are locally produced. The Cooperative Group It is one of the leading supermarkets in UK started way back in 1844 and has several branches all over the world. Currently, the company is ranked as the leading supermarket in ethical consumerism. The company encourages new ideas to solve issues that are important to its stakeholders ranging from assisting the community to making difference in the entire world. It has open membership to everyone who subscribe to their values and principles. The Company has been driven by the following principles and values Core values Self-help- helping people to help themselves Self-responsibility – taking responsibility of their actions Equality –every member has one vote regardless of their money in the share accounts Democracy – members have a say in the running of the business Solidarity – share of common purposes and interest with every member Equity – carrying out business in fair and unbiased manner Ethical values The following are some of the company’s ethical principles Social responsibility- encouraging people to take responsibility of their own community and work in harmony to improve it Honesty- the company is honest in what they do and how they do it Openness-the company believes that nobody is perfect and they don’t hide when they are not Approaches used by Cooperative Group to become a more socially conscious business In its attempt to becoming a socially responsible organization, the company has adopted the following approaches Democratic reward and control For over a century, the company has been democratically owned and controlled. Being the largest consumer cooperative in the world, with over six million members, the company has earned over €50m from share of the profits. Some of the strategies include: The company will continue set new standards for honesty and openness globally and seek to maximize new technology so as to enhance the ability of the consumers to make ethical choices The company encourages ethical consumerism by engaging with members and extra profit share since 2012 The company will continue with profit sharing with its members that is amid the most generous and the broadest of any major business in UK The senior staff remunerate will be influenced by the extent to which the cooperative is perceived as a leading champion of Corporate Social Responsibility in the UK Supporting Cooperatives Despite the shrinking economy, the UK cooperative sector has been continually growing (Ayglon 2009). The company believes in the principle of cooperation amongst the players in the same industry and endeavors to support the sector, mostly in such areas as schools, sports clubs, rural services and community energy. In order to achieve this, the company intends to: Roll out a €20m International Cooperative Loan Fund Support the development of peer to peer lending amongst the members within the organization and people in developing countries. Keeping communities flourishing Since its inception, the Cooperative has aimed at serving various groups which are economically viable, and the company’s ethical offerings are for all not chosen few. To keep communities thriving, the company will: Continue to be socially inclusive, seeking to be physically present in every postal part of UK, and increase its number of stores by over 500 by 2015 Will make sure that at least 10% of its profits go to community with €5m going to poverty eradication programs around its stores and branches Will further grow its UK farming business and aim at supplying a quarter of all fresh produce in its stores by 2015, at the same time assist in securing the future of priority species in its locales Inspiring the young people Young persons in Britain are faced with difficult economic times, increasing poverty ladder and uncertain future shaped by climatic changes. The company has initiated a community program that directly benefits over 250, 000 young people across the UK. In order to achieve this, the company will: Provide €30m for inspiring young people, and creating a cooperative Academy to offer 2000 apprenticeships Broaden the work of the Cooperative Enterprise Hub and provide training and advice to support young people who wish to start up business. Support the establishment of over 200 Cooperative Schools, increase Green Schools programs which reach some 100,000 children per year, continuously campaign for votes at 16 and show how young people are ready, willing and able to be engaged Create an advisory panel comprising of young people who will form part of a newly appointed Board Champion for young persons Responsible retailing It is estimated that 60% of men and 40% of women will be clinically obese by 2050. The company is determined to play its part in improving the health of the nation assisting its customers and colleagues to make healthier food and lifestyle choices. The Cooperative will make honesty and openness as its core principles and endeavors to keep a leadership position on the improvement, labeling and extension of consumer information and advice. This will be achieved by: Continue targeting salt, reduction of saturated sugar and fat in key products even as it maintains product quality and food safety Ensuring that at least 30% of the food promotions are for healthy offerings Ensuring that healthier choice products are not expensive as compared to standard equivalent lines What influences consumer buying behavior A consumer buying behavior is influenced by the following factors Personal factors- these include such factors as age, occupation, lifecycle, economic circumstances, personality and self concept and lifestyle (activities, opinions, interests and demographics). These factors explain why people’s preference often changes their ‘situation’ changes Social factors- it include groups (reference group, member groups and aspirational groups) roles, family and status. This explains the effects of others on our buying behavior either directly or indirectly Cultural factors- it comprises of a person’s culture, subculture and social class. These factors are commonly present in a person’s values and decision process Psychological factors- it includes things that affect our buying decisions such as motivation, learning, perception attitudes and beliefs Conclusion As it can be seen, being an ethical consumer can be as easy as buying free-range eggs or as complicated as boycotting to buy goods produced through child labor. It also means that you buy products that are produced in ethical manner and/or which do not cause harm to the society and the entire environment. There is a need for further research on ethical consumerism, mainly on their meaning to consumers, levels of awareness of ethical issues and the way in which it translates to action. Therefore, this calls for more exploratory research which explores the meanings of ethical consumption for consumers. Present research highlights a big gap between the committed ethical consumer for whom ethical consumerism is a lifestyle –for whom it has been habitual –and ethical consumers who are new to the idea and for whom the entire context of consumer decisions may be significant (Shaw 2007). References ADAMS, R 1999, Who profits?, Lion Publishing, Oxford. Atherton, J 2007, Business Bites, Metro. p., p. 41. AYGLON, C 2009, Consumer Adoption of a New Product Launch., Oxfam Trading, Oxford. Kotler, P 2011, Principles of Marketing, Pearson Higher Education. LANG, TAHC 2003, The New Protectionism, Earthscan Publications, London. Ma, T 2014, Professional Marketing and Advertising Essays and Assignments, Tony Ma, New York. MINTEL 2007, Marketing Intelligence: Organic and Ethical Foods., Earthscan , London. MURPHY, DFAB 2009, In the Company of Partners, Policy Press, Bristol. Shaoming Zou, HF 2011, International Marketing: Emerging Markets, Emerald Group Publishing. SHAW, D,SEACI 2007, Ethical consumption: the contribution of ethical obligation and self-identity to the theory of planned behaviour., Journal of Marketing Management, vol 2, pp. 12-34. The Co-operative Group, Our History Read More