Business Report on Ethical Consumerism
The practice of ethical consumerism has gained increased importance in the last couple of years. Unlike in the past decades when consumers generally lacked information and were mostly passive and receptive to what was offered to them in the markets, the twenty first century is characterized by consumers who are not only very informed regarding the process of consumerism, but are also individualistic, autonomous and actively involved in the business process. Being an ethical consumer means purchasing and using products that are produced in an ethical manner, goods that causes no harm to the environment or society. A short survey carried out on university students to assess the factors impacting consumer behavior revealed that an estimated two thirds of the participants in the study are inclined towards the assessment of a firm’s ethical production and marketing processes before making decision to buy a firm’s products.
The practice of ethical consumerism has gained increased supremacy in the last couple of years. Ethical consumerism describes the tendency by consumers to inform their purchase decisions through references to ethical or moral principles or life philosophies (The Guardian, 2014). This paper describes the concept of ethical consumerism and offers a case study analysis of an ethical company, Kellogg Co. A short survey on consumer behavior is also described. The findings from this survey which assesses the factors impacting consumer behavior reveal that an estimated two thirds of the participants in the study are inclined towards the assessment of a firm’s ethical production and marketing processes before making decision to buy a firm’s products.
The most commonly used principles in ethical consumerism are social justice, environmental, human rights and animal welfare discourses. The contemporary consumers are constrained by increased scarcity of time and attention, as well as a mounting distrust of suppliers and distributors (Sudbury Riley, Kohlbacher & Hofmeister, 2012). Owing to such scarcity of time, consumers have to strike a balance between work and family life and at the same time respond to increased decision making demands in less time. These circumstances create need for fast foods as well as the desire for price premiums to lessen their burden (The Guardian, 2014). The scarcity of attention on the other hand makes it crucial for consumers to read and understand advertisements and marketing messages quickly (Bucic, Harris & Arli, 2012). Consequently, commercial firms that insist on using classical methods of marketing and persuasion are failing, particularly due to the emergence of a younger group of consumers who possess high levels of visual literacy and interest in ethical businesses.
As already mentioned, being an ethical consumer refers to purchasing and using products that are produced in an ethical manner, good that causes no harm to the environment or society (The Guardian, 2014). Ethical consumerism is intimately related to the issue of lack of trust by consumers. Unlike in the past decades when consumers were passive and uninformed, consumers in the contemporary day rarely offer their unconditional trust to manufacturers or suppliers of goods and services (Sudbury Riley, Kohlbacher & Hofmeister, 2012). On the contrary, consumers, particularly ethical consumers, have demands and high expectations to not only acquire value, but also to have the value delivered to them through ethical techniques and processes (The Guardian, 2014).
There are certain categories of products which are grouped as ethical. These include products in industries such as food and beverage, fashion, insurance, cosmetics and toiletries, energy, dairy, travel and soft drink industries (Azam & Qiang, 2014). The most commonly debated ethical group of products include fair trade goods, products that are organic in nature, products made from wood (for example paper) and renewable energy (The Guardian, 2014). In addition to assessing the manner in which products are manufactured, consumers can also be ethical through evaluation of their food miles. Food miles describe the quantities of energy that are used in order to make products accessible to consumers (The Guardian, 2014). It is for this reason that most ethical consumers prefer to purchase and consume locally produced and manufactured goods and services.
CASE STUDY OF ETHICAL COMPANY
Kellogg Co is one of the companies that are perceived to be very ethical and socially conscious. Kellogg Co. is a multinational food manufacturing firm based in the United States and has its headquarters at Battle Creek in Michigan (Kellogg Co., 2014). The company was founded on the 19th of February 1906 by Will Keith Kellogg. Kellogg Co. carries out manufacturing activities in more than 18 countries and markets its products globally in approximately 180 different countries (Kellogg Co., 2014). The largest manufacturing company owned by Kellogg Co. is situated at Trafford Park in Manchester, the UK. By the year 2010, Kellogg Co. had an estimated 30,600 employees across the globe (Kellogg Co., 2014).
A few weeks ago, Kellogg Co. was once again named the world’s most ethical company, 2014 by The Ethisphere Institute in Scottsdale, Arizona (Adams, 2014). The company has been recognized for being the most ethical company in the world since 2007 (Webber, 2013). According to Michael Byrne, the general counsel of The Ethisphere Institute, there are several requirements that a business firm must satisfy in order to earn a spot in the list of the most ethical companies in the world (Webber, 2013).
Adams (2014, para. 3) describes some of these requirements as “companies must have robust corporate compliance programs [and] strong social responsibility policies”. The companies must also “comply with federal sentencing guidelines, be abiding by international labor, anti-trust and trade laws, [and] they should be monitoring their supply chain to make sure that companies they contract are also sticking to international law and labor standards” (Adams, 2014, para. 3). Courtenay (2014) adds that there are several instances in which Kellogg Co. has depicted that it is truly an ethical and a socially responsible business enterprise. When the company’s shareholders filed a proposal via the Green Century Equity Fund, Kellogg Co. complied and committed that by the 31st December 2015, the company would only engage in the purchase of palm oil that is deforestation free (Dewey, 2013).
In its official website, Kellogg Co. asserts that “we know that corporate social responsibility is essential to our current and future success as a business. That is why we have created strategies, governance structures, corporate policies, commitment statements and codes of conduct that help to embed corporate responsibility into our every day operations” (Kellogg Co., 2014). Kellogg Co. has utilized different approaches in order to remain an ethical company since its formation more than a century ago (Dewey, 2014). One of the most significant approaches used by the company to become a socially conscious business is the corporate social responsibility (CSR) framework (Kellogg Co., 2014).
The company’s 2013 Corporate Responsibility Report reveals its CSR activities are guided by the company’s performance in four main areas namely, the “marketplace, workplace, environment and community” (Kellogg Co., 2014). Kellogg Company is committed to ensuring that all its different stakeholders, for instance customers, employees and the general community in which the company carries out its business operations are nourished and supported in order for them to flourish (Hamelin, Harcar & Benhari, 2013). One of the main ways in which Kellogg Co. supports the flourishing of the community is through engaging in philanthropic activities, for example, activities whose main objective is geared towards hunger relief (Kellogg Co., 2014).
Kellogg Co. also has a global code of conduct that ensures all its business operations across the world are carried out in an ethical and socially responsible manner (Hamelin, Harcar & Benhari, 2013). The company’s values include “integrity, accountability, passion, humility, simplicity and a focus on success” (Kellogg Co., 2014). Under each individual value, the company outlines the actions and behaviors that all stakeholders affiliated to the company are expected to demonstrate. These are depicted below:
i. Depict a commitment to ethics and integrity
ii. Demonstrate respect and value for all people regardless of their diversity (Kellogg Co., 2014)
iii. Listen to others in order to understand
iv. Presuppose positive intent
i. Assume personal accountability for actions and outcomes
ii. Focus on coming up with solutions and attaining outcomes (Kellogg Co., 2014)
iii. Engage in consultations and commit to implementing decisions which are made
iv. Engage relevant stakeholders in decision making processes and plans that affect them
v. Fulfill promises and commitments made to different stakeholders (Kellogg Co., 2014)
vi. Engage in personal commitment to ensure success and well-being of team members
vii. Ensure safe and healthy working environment through personal accountability
i. Value, enhance and fiercely safeguard the firm’s reputation
ii. Depict great pride in firm heritage and brands (Kellogg Co., 2014)
iii. Ensure customer service and satisfaction through the provision of high quality goods and services (Kellogg Co., 2014)
iv. Ensure the work environment is positive, fun, optimistic and lively (Kellogg Co., 2014)
v. Promote, support and implement creative ideas and solutions
i. Acknowledge and value the desire and openness to learn
ii. Seek and offer feedback in a timely and honest way
iii. Learn from both past successes and failures (Kellogg Co., 2014)
iv. Embrace personal change and continuous development
v. Never underrate or take lightly the competition (Kellogg Co., 2014)
i. Engage in a continuous process of simplifying and enhancing processes and activities
ii. Collapse internal red-tape and work across firm boundaries (Kellogg Co., 2014)
iii. Approach issues and people openly and in a straightforward manner
iv. Place a greater preeminence on results rather than form (Kellogg Co., 2014)
i. Ensure the attainment and celebration of results
ii. Ensure people feel valued and appreciated (Kellogg Co., 2014)
iii. Engage in coaching and feedback to enable others attain maximum potential
iv. Attain successes and wins through acting as a team
v. Develop and preserve a positive attitude (Kellogg Co., 2014)
SURVEY ON INFLUENCES ON CONSUMER BEHAVIOR
Consumer behavior is an area of study that has attracted a lot of interest in the current business world (Inoue & Kent, 2014). This is especially due to the tendency by twenty first century consumers to depict purchase and consumption behaviors that are very distinct from those of consumers in the past decades (Sudbury Riley, Kohlbacher & Hofmeister, 2012). I carried out a short opinion survey on a sample of students at the university in order to determine the factors that influence consumer buying behavior. The survey instrument used was a questionnaire (depicted below).
Questionnaire to determine the factors that influence consumer buying behavior by university students
a) Please do not write your name on the questionnaire.
b) The information you will give be treated with confidentiality
c) Kindly provide answers to the questions as honestly and precisely as possible.
d) Indicate your choice by a tick (√)
e) Kindly answer all the questions
Part I: Background Information
1. Kindly indicate gender: Female Male
18-30Yrs 31- 40 Yrs 41-50 Yrs 51 and above
3. Degree Pursued
Undergraduate Masters PHD
4. Working Experience
Below 2 Yrs 2 – 5 Yrs 6 -7 Yrs over 8 years
1. Please indicate your agreement/disagreement levels with the following statements by placing a tick (√) on the column you find most agreeable. The question asks that you rate the degree of influence the following persons or factors have on your purchase decisions.
Firm ethical behavior
Position in the society
Satisfaction by a previous product from a certain brand
B. Factors Considered in Making Purchases
2. Please indicate your agreement/disagreement levels with the following statements by placing a tick (√) on the column you find most agreeable. The question asks that you choose the most common factors that you consider in your purchase decisions.
Appearance and taste
Do you have any last comments? State briefly
The results from the survey carried out on 50 students at the university revealed that there are a variety of factors that influence consumer behavior. The identified factors are situational, societal, economic, psychological and personal in nature. While for some their disposable income was very relevant in determining their purchase decisions, others were influenced by their social class and perceptions of the different brands available in the market. Interestingly however, the study revealed that an estimated two thirds of the participants in the study are inclined towards the assessment of a firm’s ethical production and marketing processes before making the decision to buy.
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