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Ethical Consumerism: Do Ethics Matter To 2011

Generation Y consumers?
INTRODUCTION AND OVERVIEW

Stakeholders and the market in general expect firms to respond to ethically charged issues

through their marketing practices and other behaviours, ethically charged issues to which

firms have been called upon to respond include worldwide poverty and the spread of

disease, global warming, natural resource depletion, and the massive accrual of man-made

waste to name a few (Taylor et al…2007)

In the bid to conform to Societal ethical expectations, firms facing the same institutional

constraints conform similarly to normative pressures, a collection of firms would approach a

state of perfect competition where no firms possess competitive advantage through

differentiation and all players compete for the same scarce resources (Deephouse,1999). Yet

although differentiation can be a vehicle through which firms accrue important resources

and advantages, minimum acceptable level of conformity are required for a firm to remain

legitimate in the eyes of its many stakeholders (Dimaggio and Powell 1983). Based on these

often contradictory objectives, firms strive to strike the ideal balance of differentiation and

conformity in their marketing strategies and practices (Deephouse 1999).

Laczinak (1993) has argued that as the field of marketing develops a stronger ethical profile,

academically and professionally, marketers are finding it harder to ignore the „ethics‟ gap

between what society expects and what marketing professionals are delivering. However,

does society expect such behaviour or at least if it does, will it actually reward marketers for

their ethical behaviour by buying their products and boycotting those of unethical firms?

Given that this flurry of ethical concern is driven in some way by the belief that consumers

will be attracted to socially responsible firms, is there existing evidence to support that

belief?

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Marketers are encouraged to behave in an ethical manner because information about a firm‟s

ethical behaviours is thought to influence product sales and consumer‟s image of the

company (Mascarenhas, 1995) hence various companies and brands have moved towards

the ethical branding arena. Ethical spending in the Uk has doubled since 2002 (Co-operative

Bank, 2007) with the result that companies who possess a substantial and growing share of

this market have now become acquisition targets in order to extend the brand portfolio of

large multinationals (Mascarenhas &Carrigan 2008) examples of moves into the ethical

branding arena include the likes of L‟oreal and its take-over of The Body Shop; Unilever‟s

purchase of Ben &Jerry‟s; Horizon Organic holding‟s take-over of Rachel‟s diary; and

Cadbury Schweppes and its acquisition of Green and Black‟s.

However, do companies have clear objectives in mind when developing ethical marketing

policy especially for products directed and targeted at the Generation Y consumers?

Generation Y has tremendous spending power at $600 billion a year, in addition to the

influence the younger members of this group still exert over parental expenditures, they

number 76 million strong (Kennedy, 2001) and comprised 41% of the population in 2009.

Wolburg &Pokrywcznski (2001) describe Generation Y as the best educated and most

culturally diverse generation in history, a combination which others believe has made this

generation exceedingly tolerant and open minded towards different lifestyles such as

homosexuality, single parent households, etc (Morton, 2002; Paul 2001). Additionally

researchers explore Generation y‟s attitudes toward advertising (Beard, 2003) Celebrity

endorsers (Bush et al 2004), Corporate sponsorship (Bennett & Lachowetz, 2004) Ethical

internet-related behaviours (Freestone and Mitchell, 2004). Findings seem to paint a portrait

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of a generation that is media savvy and worldly enough to see through many advertising

tactics.

However, a study by Boulstridge and Carrigan (2000) investigated the response from this

segment of consumers to ethical and unethical marketing behaviour, what emerged was that

most consumers lacked information to distinguish whether a company had or had not

behaved ethically; Nestle and Exxon were known offenders, but there was little awareness

of any other socially responsible behaviour by companies, good or bad.

Martin and Turley (2004) observe that little is known about consumption patterns and

marketplace behaviours of older, college aged members of generation y; additionally a lack

of understanding exists regarding the motivations for consumption patterns of generation y

individuals.

As consumer attitudes, behaviour and skills are acquired via socialisation agents such as

family peers, school and the mass media (Moschis, 1987), the proliferation of media choices

including television, the internet and magazines has resulted in greater diversity of product

and lifestyle choices of Generation Y and marketing and retailing to this cohort requires a

different approach (Phelps, 1999). As such companies and brands should have clear

objectives in mind when developing ethical marketing policies; if Generation y consumers

are the target, firms should temper expectations with reality (Carrigan & Atalla, 2001).

Consequent with this view, it becomes imperative to conduct a research into which ethical

issues really matter to this segment market, particularly those likely to impact on them.

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OBJECTIVES

The proposed research would be looking in to Generation Y consumers, their general

perception and attitudes towards ethical strategies carried out by various organisations and

companies, the level of awareness of these strategies as well as their actual behaviour and

behavioural predispositions towards ethical purchasing. The exploratory study would be

answering the following questions;

 Are today‟s consumers fully informed about the ethical behaviour of marketers and does this

translate into efficient ethical purchasing?

Marketing scholars have stated that consumers are better informed, more educated and

awareness is greater for consumer rights and product requirements at least in the western

society (Hirschman, 1980; Barnes & McTavsh, 1983). However, possessing what they term

„Consumer sophistication‟ is no guarantee that consumers actually participate in wise or

ethical buying practices (Titus & Bradford, 1996)

 Do Generation Y consumers reward marketers for their ethical behaviour by buying their

products and boycotting those of unethical firms?

According to research, information about ethical and unethical actions has asymmetrical

influence on attitudes, such that vices detract from attitudes more than virtues enhance them

(Reeder & Brewer, 1979; Skowronski and Carlston, 1987)

 Is Social responsibility (In the form of ethical purchasing) the most dominant criteria in the

purchase behaviour of Generation Y consumers?

According to Ulrich and Sarasin 1995, consumers do care about ethical policies and its effect

but they care more about price, quality and value than corporate ethics. Hence, what are the

factors influencing purchase decisions of Generation Y?

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 Is there an attitude-behaviour gap between what Generation Y consumers say they do and

what their actual behaviour is?

LITERATURE REVIEW

In order to understand concepts of Ethical consumerism and Generation Y‟s attitudes,

behaviour and behavioural disposition towards ethics, the literature would be presented to be

the academic basis for further research development.

ETHICAL CONSUMERISM

Strong (1996) defined ethical consumerism as follows; Ethical consumerism refers to buyer

behaviour that reflects a concern with the problems of the third world, where producers are

paid low wages and live in poor conditions simply to produce cheap products for western

consumers and profits of multinational companies. Ethical consumers purchase products

produced in the third world by people paid a fair wage, who work in good conditions and

who benefit directly from the profits made.

While Doane (2001) defined the act of consuming ethically as the purchase of a product that

concerns a certain ethical issue (human rights, labour conditions, animal well-being,

environment, etc.) and is chosen freely by an individual consumer.

In the bid to understand and evaluate ethical consumption, Hunt and Vitell (1993) draws on

both the Deontological and Teleological ethical traditions in moral philosophy where

teleological is doing good (policy) and deontological is doing right (principle)

Green (2010) states that deontology is defined by its emphasis on moral issues, most often

articulated in terms of rights and duties. Consequentialism, in contrast, is the view that the

moral value of an action is, in one way or another, a function of its consequences alone.

Consequentialists maintain that moral decision-makers should always aim to produce the

best overall consequences for all concerned, if not directly then indirectly. Both

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consequentialists and deontologists think that consequences are important, but

consequentialists believe that consequences are the only things that ultimately matter, while

deontologists believe that morality both requires and allows us to do things that do not

produce the best possible consequences.

Ethical consumption campaign policies often rely on Teleological assumptions and appeals,

however Harrison et al (2005) state that ethical consumption is not so much the moral

evaluation, but more a medium for moral and political action. This is the dominant sense in

the case of consumer boycotts, ethical audits, CSR initiatives and fair trade campaigns.

Consistent with Ajzen‟s Theory of planned behaviour (which would be discussed later in the

proposed research), the H-V model posits that ethical judgments affect behaviour through

the intervening variables of intentions.

ETHICAL CONFORMANCE AND CITIZEN POWER

First wave: Co-operative Consumers

The emancipation of the ethical segment market began with a group of people identified as

the co-operative consumers; this was the first widespread organised consumer movement

that evolved as a result of working class reaction to excessive prices and poor quality goods,

food in particular. (Harrison et al 2005) the co-operative movement took off in its modern

form in Rochdale in north-west England in 1844, at the height of the industrialisation

process.

Second wave: Value for money consumers

The second wave of the consumer movement is today by far the highest profile wave of

consumer activism, to such an extent that it is often wrongly regarded as being the entire

consumer movement. Lang& Gabriel (2005) term this „value-for-money‟ consumerism.

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Unlike the co-operative movement, this second wave of consumer organisations has no

pretensions of offering a radically different vision for society. Its adherents see the role as

ameliorative, to make the market-place more efficient and to champion the interests of the

consumer within it. Their aim is to inform and educate the consumer about the features

which will enable them to act effectively as consumers (John, 1994). The value-for-money

model places considerable stress on rights to information and labelling and redress if

something goes wrong.

Third wave: Naderism

The third wave of consumer activism, like the second, emerged in the USA. Its figurehead,

Ralph Nader, became one of the most admired US citizens in national polls for years. Like

the second wave of the consumer movement, Naderism is adamant on the role of

information and that it should be free and fair. If the first wave saw capitalism as something

to be stepped away from (co-ops are non-profit organisations that share out rather than

accumulate or privatise profits), the second wave sees its own role as that providing

information for the consumer to be able to operate more effectively in the market-place. And

the third wave, Naderism, sees capitalism as something to be accepted but which has to be

worked hard on to prevent its excesses becoming norms. Harrison et all (2005)

Fourth wave: Alternative Consumers

A new wave of consumer organisations emerged slowly in the 1970s and accelerated in the

1980s, which in 1995 was termed „alternative consumerism‟ Yang& Gabriel (2005)

At the end of the 1980s the most influential was green consumerism. This stemmed from a

new environmental consciousness to consume wisely in a manner that did not damage the

capacity of future generations to consume at all. One effect of pressure from this era was

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that companies started to undertake environmental audits as a way of gaining competitive

advantage over their competitors, and fending off criticism.

FEATURES CONTRIBUTING TO THE GROWTH OF ETHICAL CONSUMERISM

 The Evolving Caring Customer of the 1990s: Consequent with the stance developed

in the fourth wave stage of consumer activism; „Alternative consumers‟ this segment

of shoppers have been identified by Strong (1996) as one of the features that

contributes to the growth of ethical consumerism. Reason being that the caring,

environmentally and socially aware consumers of the 1990s paved way for the

development of the Fair Trade Label and as such have led to increasingly well-

informed consumer who is not only demanding fairly-traded products, but is

challenging the manufacturers and retailers to guarantee the ethical claims they make

about their products. This is illustrated by the development of the Fairtrade Label.

Davies et al (2010): In 1991, the Fairtrade foundation was created in the UK by a

number of charities, including Oxfam, Christian Aid and the World Development

Movement. The foundation‟s primary responsibility was to oversee the Fairtrade

certification mark, a product label informing consumers that a product‟s supply chain

complies with the Fairtrade standards established by FLO (Fairtrade Labelling

Organisation). The Fairtrade standards aim was to ensure both better working

conditions and more sustainable farming practice in grower communities. The

standards establish minimum prices for a range of products and prohibit the use of

certain materials, such as toxic insecticides.

 Pressure Group Support: Strong (1996) clearly states that this feature does not

necessarily reflect the growth in ethical consumerism but, as green consumers become

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more actively ecologically and ethically aware, it is conjectured that there is a

tendency for these caring consumers to become ethically responsive as well as

environmentally responsive. However, various pressure groups and organisations

have been established as a result of concerns about environment and conservation

issues, membership of these pressure groups, the likes of Greenpeace, Friends of the

Earth, and Worldwide Fund for Nature etc. grew remarkable between 1981 and 1992

and as such has been able to increase the public concern and support of these pressure

group organizations.

 Media Interest: Strong (1996); ethical issues, such as paying third world producers

affair price, providing minimum wages, guaranteeing long-term trading commitments

and fair credit terms, the provision of minimum health, safety and environmental

standards, social justice and the sustainment of natural resources, have become

regular features of media reports and television documentaries.

 Increasing Corporate Responsibility: In a research carried out among large UK

retailers revealed that five out of the eight responding organizations claim to consider

issues of ethical consumerism and fair trade when making purchasing decisions.

 Increasing Supplier Power: The increasing power of the third world suppliers can be

illustrated by the growth of co-operative rather than competitive trading practices

between the third world producers, suppliers and organization buyers.

The principles set by Fairtrade Labelling Organisation (FLO) as a means to

differentiate its practices from the standard market practice, has encouraged

organizations to develop fair trading practices with third world suppliers, helping to

shift the balance of power from purchasing organizations to suppliers.

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 Wider Availability of Alternative Products: Getting ecologically-friendly products

into the supermarkets has been a huge challenge for environmentalists, but now the

big retailers are been persuaded to stock people-friendly, fairly traded products

(Vaughan, 1993) Retailers like Sainsbury‟s, Tesco and Safe way have paved way for

smaller retailers to stock ecologically-friendly products, playing a leading role in the

green consumer revolution in the grocery sector.

 High Quality and Performance of Alternative Brands: The increase in consumer

demand for fairly traded products reveals that consumers perceive the alternate

products as been of higher quality. Consumers are challenging manufactures and

retailers to guarantee the ethical claims they are making about their products, by

refusing to purchase products with unsubstantiated fair trade claims. Therefore, the

quality and performance of fairly-traded products are high, and guaranteed to be so

by, in some instances independent verification. Strong (1996)

Adopted from Strong 1996, “Features contributing to the growth of ethical consumerism-a preliminary
investigation”

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GENERATION Y CONSUMERS

Also referred to as Echo Boomers or Millennium generation, Generation Y is believed to

have unique characteristics that are different from preceding generations. This belief in

generational uniqueness is not new: it is rooted in an 80-year history of targeting American

youth and searching for insights into their psyche. According to historians Hollander and

Germain (1992), marketers as early as in the 1920s recognized the value of the “youth

market” (Gilles, 1992), and they regarded the college market as one of the most coveted of

all segments (Burns, 1926; Dumont, 1929; George, 1920). According to one source, the

reasons are many: (1) their sheer size makes college students an important market. (2)

Students are often put in the role of trendsetters to the thousands of visitors who attend

events on college campuses. (3) College students acquire preferences for goods and

establish brand loyalties that continue long after the college years. (4) Students are expected

to attain a high standard of living after graduation. (5) College students set examples to

attain to the remainder of the population by being more receptive to new products (e.g.,

students tend to be early adopters). (6) Students influence parental choices for major

purchases (Russell, 1926)

The spending power of college students is greater than in the past, and the newest youth

market is significantly larger than the previous. Figures depend upon how the groups are

divided, but one analyst estimates that Generation Y is three times the size of Generation X

(Cheng, 1999). By the year 2015 the campus population is expected to rise from the current

15 million students to 22 million (Bernstein, 1999)

This is the first generation to come along that‟s big enough to hurt a boomer brand simply

by giving it the cold shoulder and big enough to launch rival brands with enough heft to

threaten the status quo. As the leading edge of this huge new group elbows its way into the

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marketplace, its members are making it clear that companies hoping to win their hearts and

wallets will have to learn to think like they do, and not like the boomers who preceded them.

Soon a lot of other companies are going to have learnt the nuances of Generation Y

marketing, Neuborne& Kerwin (1999). In just a few years, today‟s teens will be out of

college and shopping for their first cars, their first homes, and their first mutual funds. The

distinctive buying habits they display today will likely follow them as they enter the high

spending years of young adulthood. Companies unable to click with Gen Y will lose out on

a vest new market and could find the doors open to new competitors. “Think of them as the

quiet little group about to change everything,” says Edward Winter of the U30 Group, a

Knoxville (Tenn.) consulting firm.

Marketers who do not bother to learn the interests and obsessions of Gen Y are apt to run up

against a brick wall of distrust and cynicism Morton (2002). Years of intense marketing

efforts aimed directly their way have taught this group to assume the worst about companies

trying to coax them into buying something. Ads meant to look youthful and fun may come

off as merely opportunistic to a Gen Y consumer. Hence, marketers who want to reach

worldly wise Gen Yers need to craft products and pitches that are more realistic.

APPLYING THE THEORY OF PLANNED BEHAVIOUR TO ETHICAL BUYING


BEHAVIOUR IN GENRATION Y CONSUMERS

To gain initial insights into the key determinants of intention to purchase fair trade grocery

products Shaw et al. (2000) used the well-known and extensively applied behavioural model

called the theory of planned behaviour (Ajzen, 1985). The theory of planned behaviour is a

theory of attitude-behaviour relationships that seeks to provide an explanation of behaviour,

that links attitudes, subjective norms, perceived behavioural control, behavioural intentions

and behaviour in fixed casual sequence.

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The theory of planned behaviour states that each of the measures of attitude, subjective

norms and perceived behavioural control are deemed to have underlying beliefs. Attitudes

towards performing the behaviour are deemed to be a summed product of individual‟s

beliefs and their evaluation of these.

Figure 2

Ajzen (1985) Theory of Planned Behaviour

Although the theory of planned behaviour has been applied in a variety of behavioural

domains, the context of ethical concerns in consumer decisions making has been neglected.

The theory of planned behaviour in its current form does not consider ethical or social issues

within its model measures

Hence, researchers like Fila & Smith (2006), Armitage &Conner have included to the model

of theory of planned behaviour, „barriers and Self-efficacy‟ as separate constructs that could

indirectly, through intention, or directly influence behaviour in youths.

Research has also suggested that the theory of planned behaviour be modified to incorporate

a measure of self-identity (Sparks and Shepherd, 1992; Sparks and Guthrie, 1998; and

Granberg and Holmberg, 1990). The rationale for this argument is that as an issue becomes

central to an individual‟s self-identity, then behavioural intention is adjusted accordingly.

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Hence Shaw et al. (2000) proposed a modified theory of planned behaviour with the notion

that ethical consumers make ethical consumption choices because ethical issues have

become an important part of their self-identity and as such self-identity was found to be

significant in the explanation of intention to purchase a fair trade product. This was

supported by earlier research which found that ethical consumers do not only identify with

one ethical issue but with a range of ethical issues, Sparks and Shepherd (1992).

Modified theory of planned behaviour: Ethical obligation and Self-identity

Figure 3

Shaw et al (2000)

The pertinence of the additional model measures of ethical obligation and self-identity in a

modified theory of planned behaviour highlight, that while many consumers acting in a self-

motivated manner may select coffee for example, on the basis of factors such as price and

taste, those concerned with ethical about ethical issues may be guided by a sense of ethical

obligation to others and a self-identification with ethical issues. (Shaw 2005)

The proposed exploratory study would be studying the attitudes and behavioural

dispositions of generation y consumers as regards ethical consumption, measuring it against

the modified theory of planned behaviour by Shaw et al (2000)

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METHODOLOGY

Carrigan & Atalla, 2001: Although there is doubt cast over the value of consumer research

towards ethical issues:

“One thing is clear, don’t do any research. Don’t ask the public any questions on this
subject. The answers are never reliable. In instances where the head says one thing and the
heart another, studies are useless if not misleading (Ulrich and Sarasin, 1995)”

The proposed exploratory study been a qualitative work of research would be carried out

using the semi structured interview, this gives room for the interviewer to conduct on the

basis of a loose structure, open ended questions that define the area to be explored, at least

initially, and from which the interviewer or interviewee may diverge in order to purse an

idea in more detail. (Britten 1995).

Qualitative research interview becomes adequate because while carrying out the exploratory

study, the aim is to discover the interviewee‟s own framework of meanings and the research

task is to avoid imposing the researcher‟s structures and assumptions as far as possible.

Nicky Britten in his paper “Qualitative interviews in medical research” stated that

qualitative interview studies address different questions from those addressed by

quantitative research, identifying with examples that qualitative research can also open up

different areas of research.

Britten (1995) defined the interviewing method as a well-established research technique. To

get adequate response during qualitative interviewing the interviewer would draw up

questions that are open ended, neutral, sensitive and clear to the interviewee.

The questions would be based on the following according to Patton (1987); behaviour or

experience, opinion or belief, feelings, knowledge, sensory and background or demographic.

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THE SAMPLE

The sample of the exploratory study would be generation y consumers (18-25 years) male

and female, university educated students from the United Kingdom, as it appears that the

market for ethical goods and services is experiencing a quick growth in recent years in the

UK Feng ( 2005)

Due to financial constraints in the provision for social environments and resources that

would enable the interview process comfortable for the interviewees; a sample size of 20

would be employed.

The Key Characteristic of the technique to be employed is to encourage respondents to

project their underlying motivations, beliefs, attitudes or feelings regarding the issues of

concern Malhotra (1999)

Whilst researchers Carrigan & Attalla (2001), Freestone & Mitchell (2004) employ focus

group as the sampling technique in discovering consumer‟s perception on ethical issues, the

interviewer chooses one-one interviewing with respondents as it gives room for honesty,

wherein an individual is not influenced or pressurised by peer mates into answering a

question. And also to avoid any discomfort amongst peers that may arise when discussing a

sensitive topic like ethical issues. Morgan (1993)

EXPECTED IMPLICATIONS

According to Foddy (1993) the following best illustrate the inadequacy of many of the

questions that have been used in social research in the past and serves as the researcher‟s

projection of future implications.

 Factual questions sometimes elicit invalid answers

 The relationship between what respondent say they do and what they actually do is not

always very strong

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 Respondent‟s attitudes, beliefs, opinions, habits, interests often seem to be extraordinarily

unstable

 Small changes in wording sometimes produce major changes in the distribution of responses

 Respondent‟s answers are sometimes affected by the question format per se. (Open ended

questions often produce quite different results from closed ended versions of the same

questions)

PROPOSED INTERVIEW QUESTIONS

 Do you consider yourself to be an ethical consumer?

 Are you aware of ethically charged issues like environmental or ecological

sustainability?

 What are the factors most strongly to influence your buying decision?

 Identify socially responsible firms you are aware of?

 Will a company‟s record on environmental or social responsibility affect your

purchase decision?

 What acts of misdeed by a company would affect your purchase behaviour?

 Have you ever boycotted a product?

 The next time you go grocery shopping, how likely are you to purchase a fair trade

product?

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