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The Impact Of CSR on Consumer Behaviour Assignment

In recent years, there has been a distinct change in the way companies and manufactures market their products. One of these changes, and probably the most controversial, is the use of ‘ethical branding’. ‘Fairtrade’, ‘organic’, ‘green’ are just some of the buzz words of this once niche trend which has now gone mainstream. This report will look 3 industries: fashion, transport and organic food to determine if this new marketing strategy has had the desired impact on consumer behaviour or do people actually care.

The topic of ethical branding and the rise of corporate social responsibility was chosen due to the the fact that the rise of ethical consumerism and branding has raised a number of moral, political and controversial questions. Firstly, Is ethical consumerism a niche trend gone mainstream? Secondly, Do ethics matter in purchase behaviour? Thirdly, do consumers care about the conditions under which products (ethical or otherwise) are manufactured? Finally, Do people only care where there products come from, when they can afford to care? Answering these questions will be the aim of our research.

Literature Review/ Secondary Research

The following facts are based around the for mentioned industries and their promotion of corporate social responsibility. These facts will further demonstrate the decision to use the rise of ethical branding as the topic for our presentation. These facts also clearly show how the objectives of our research were derived.

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In 2007 a Guardian report revealed that factory workers who make clothes for high street retailers are being paid as little as 13p per hour for a 48-hour week, India’s biggest ready-made clothing exporter, Gokaldas Export, supplier of brands such as Marks & Spencers, Mothercare and H&M, verified that wages paid to garment workers were as little as £1.13 for a nine-hour day. This falls below the minimum international labour standards established by the Ethical Trading Initiative (ETI), whose members include Marks & Spencers, Mothercare, Gap and Primark.

This article started a chain of media events targeting the high street fashion industry, First came ‘Blood, sweat, and t-shirts’ in may 2008, a BBC 3 series focusing on the working conditions in factory’s and sweatshops in India. In June 2008, ‘The devil wears Primark’ was scheduled to be broadcast on Channel 4, but was pulled due to apparent ‘editorial reasons’. The documentary looked at the conditions in the foreign factories that supply cheap clothing to high street stores for UK companies.

Following from the media attention the high street fashion industry was receiving, it seemed corporate social responsibility was the priority of ‘budget retailers’ such as Primark and H&M, A detailed section on CSR appeared on the H&M website www.hm.com. Primark followed suit and also in 2008, when www.ethicalprimark.com was launched.

The rise in corporate social responsibility was not only seen in the fashion industry. In 2007 Toyota

was recognized for its corporate environmental program, including long-term goals to reduce environmental impacts (5-Year Environmental Action Plan), waste minimization efforts, energy and resource conservation, and community outreach efforts (csrwire, 2007). The following year the Toyota Yaris was named ‘Green Car of the Year’ by The Environmental Transport Association.

However, while they were being recognised for their corporate environmental program, they were also coming under fire and being branded as hypocritical for selling the Yaris while at the same time signing up with Ford, GM, and Chrysler in opposing a Senate bill mandating higher fuel mileage standards. (Reich, 2007)

The organic food market has grown rapidly over the last decade. In 2006, £1,900,000 was spent on organic produce originating from the UK (Unknown author, 2006), and the BBC reports that the UK now consumes £1.2bn of organic food a year. However, a report in the Telegraph in 2007 states that food imported by air into the UK should be stripped of any ‘organic’ status due to the fact air freight emits more greenhouse gases per food mile more than any other form of transport.

Once we had sufficient knowledge of the use of ethical branding and corporate social responsibility, we began to search through academic journals, papers and books to analyse what research if any had previously been done on ethical branding. Although many mentioned ethical branding, there seemed to be very little research on the subject. The following are the academic sources that led to the aim and objectives of our research.

In David Jobbers book, ‘The Principles and Practise of Marketing’ (2004), he discusses the ethical consumer decision making process. Focusing on factors such as price, country of origin, but states that just because a consumer may have reservations about buying an unethically produced products, it doesn’t necessarily mean that the consumer won’t buy said product. Which brought up the question, Do people only care where there clothes/food come from, when they can afford to care?

A journal by Yin Fin (2005) identifies that the primary purpose of branding is to add sales and profitability, the primary purpose of corporate branding is to embody the value system of the company and to assist in promoting an enhanced corporate reputation. Corporate brand equity relates to the attitudes and associations that wide stakeholders have of a company opposed to those of an individual product. While keeping this in mind it appears obvious why Primark and H&M now have strong policies with regards to corporate social responsibility. But are their efforts to promote both corporate social responsibility and themselves as a ethical brand in vain?

An article by Marylyn Carrigan and Ahmad Attalla (2001) asks the question do consumers care about ethical behaviour? In there research, they found that negative information has more influence on consumer attitudes than positive information does. If this is true, following the media attention received by companies using the exporter Gokaldas, one would assume that the consumer would boycott, but this obviously isn’t the case and raises the questions, do consumers care about the conditions under which products are manufactured?

Primary Research

The first stage of the primary research for the presentation was the construction of an online questionnaire. Hosted on www.surveymonkey.com The decision to use an online questionnaire is based on the fact a potentially larger range of demographics that can be reached. In addition to this data is automatically entered into a database and can be automatically analysed.

The second stage of research involves a face to face discussions conducted with consumers to elicit their thoughts and opinions on the subject of ethical and unethical corporate behaviour. In the first stage we were trying to get broad opinions that cover many demographics, so the reason to use face to face interviews is get more qualitative data, with the ability to explore answers with respondents.

The final stage of research will involve a focus group with a small number of retail professionals to discuss what/ if any impact CSR policies and ethical branding have had on consumers. A focus group for the desired information seemed the best option due the fact open discussion can create more devolved and educated opinions and answers.

Analysis

The questionnaire was written to establish what were the main considerations taken into account by those individuals when purchasing clothing, food and motor vehicles. From analysing the collected data, we found that males in the 26-30 and 30+ age group are more concerned with the environmental impact of organic food brought in by air that an other demographic. In the 26 – 30 category, 60% of the men questioned thought about the environmental issues at hand.

The most interest facts that can be interpreted from the questionnaire is how the different demographics feel about CSR and the fashion industry. 60% of females in full time employment, in both age groups, have said that they price is not the only factor they take into consideration when buying clothes but would be the deciding factor, in addition to this the 75% these woman are aware of the social issues of the production of cheap clothing but try not to think about it. (%) of female in full time education say that price is the deciding factor in buying new clothes, but 40% said they don’t care care about the conditions in which there clothing was produced. 30% of the female students do give it thought and try to buy ethically. The final 30% stated that they are aware of the impact but try not to think about it. It can almost be said that the male participants are complete opposites, as the majority of them question would buy ethically and though of the environmental and political issues when buying from budget retailers.

High involvement purchasing is described as complex buying behaviour occurs when the consumer is highly involved with the purchase and when there are significant differences between brands. This behaviour is usually associated with the purchase of a new home or of an advanced computer. Which means low involvement is habitual buying behaviour that occurs when involvement is low and differences between brands are small. Consumers in this case usually do not form a strong attitude toward a brand but select it because it is familiar.

It would appear from the analyses of the questionnaire that men are more inclined to part take in high involvement purchasing regardless of what the product actually is, and women involve themselves in low involvement purchasing.

With regards to the organic food market, questioned had concerns of the growth of how ethical organic brands are. Males aged 26-30 and 30+ are more aware of the environmental impact of organic produce shipped in by air. Only male and female students were concerned that brands carrying ‘ethical’ logo were not actually ethically produced, this is based around the controversy surrounding the freedom food standards agency not carrying out proper checks on supposedly humanly reared livestock.

A male aged 41 who had once owned a Toyota Yaris, was now against the company due to their decision to back up a senate bill demanding higher fuel mileage costs. An 18 year old girl claims to have no change of opinion on this company as she focuses on the style, design and price as opposed to how it will affect the environment.

Conclusion

To conclude, ethical branding may have been a niche trend, and the industries researched in this paper have tried to capitalize on the growing concerns of some consumers. Our research may not have answered all the proposed aims and objective set out in the beginning of our investigation but we have uncovered the following. Male participants in our primary research appear to be more ethically minded than there female counterparts. For woman price appears to be the main factor when buying new products and they take little else into consideration, including how clothing is produced. It can also be said, based on our research that men are more of a high involvement shopper. There is obvious contradiction among consumers and suppliers alike.

Its unclear how the rise of corporate social responsibility and ethical branding will unfold, but it is obvious that companies need to succeed in using the ‘green’ trend, price as well ethical manufacturing is vital.

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