MBA Dissertation

An investigation of the decision making processtowards ethical products in economic

downswings: a case study of an Idealistic

Consumer Behaviour

Milagros Ponce 78736 July 2012

MBA Dissertation

An investigation of the decision making processtowards ethical products in economic

downswings: a case study of an Idealistic

Consumer Behaviour

Milagros Ponce 78736 July 2012

MBA Dissertation

An investigation of the decision making processtowards ethical products in economic

downswings: a case study of an Idealistic

Consumer Behaviour

Milagros Ponce 78736 July 2012

Abstract

This research is inserted in the analysis of the current purchase process towards

ethical products, in which explore the attributes inside ethical products, the

evaluation of the factors influence the decision making that closure the attitude

behaviour gap, and provide recommendations in how to influence this ethical issue

inside the process.

This arises from the data of a quantitative studies related with ethical products, in

which describe the 30:3 phenomenon linked with the attitude behaviour gap. The

case study was focused on the qualitative description of data collected by 8 semi

structured interviews, using a hybrid strategy with thematic analysis.

The findings related the major role of motivation as a moderating variable allowing

prevalence of an idealistic approach to the decision making in economic

downswings. In addition it gives to the fore the questionnaire bias weaknesses,

adding the importance of qualitative approach in Market research. Finally the

research limitation is the sample size for generalisation, and the implication for

companies to enhance CSR by ethical attributes inside their value chain.

This research provides a better understanding of a decisional model oriented to

ethical issues.

Keywords: Consumer behaviour, motivation, market premium, Idealistic

5.1 Introduction

The next above present the main conclusion in order to answer the main research

question answer based on the findings and contributions of this research. Only this

part was extracted from the main dissertation for Publishing purposes.

5.2 Conclusion

The conclusion for this study is in aim to answer the main research question which

is What makes ethical consumers buy ethical products during economic

downswings. The question resulted from an amount of the research based on

theoretical concept to underpin the final answer. Given the fact that the study

emerge from the statistics issue of the 30:3 gap, this implies the exploration of this

numerical finding inside the ethical market, which revealed a serious problem in the

reliability of the data instrument in trying to point the real demand of these ethical

products. Thus one of the reasons in choosing the qualitative approach is to

provided rich data for the exploration to be later explained (De Bock and Kenhove

2010; Carrington et al. 2010; Sommer, 2011; Papaoikonomou, 2011; Bondy and

Talwar, 2011; Key Note, 2011; Brown 2012).

The first aim was to critically analyse the current purchase process on consumers

towards ethical products. The study shown that the process initiates with one

cognitive theoretical model which is the consumer decision making, influenced by

intrinsic and extrinsic factors. This aim was fragmented in three parts, the first one

is the analysis of the ethical product attributes that initiates the decision making

towards the purchase. Second is the discovering of the intrinsic factor that boost

the choice; and third the external factors influencing the final purchase. The last

two were compared in order to evaluate their effect over the decision making

(Howard and Sheth, 1969; Blackwell Miniard et al. 2001; Bray, 2008; Babin and

Harris, 2011).

Given the fact that the individual in this study certify the need recognition as initial

point in Decision Making Blackwell, Miniard et al. (2001), this leads to achieve the

first objective. This is presented as ethical products attributes described by

environmental concern, fairtrade, health and animal welfare. This attributes

positioned in the consumer mind make an easier from extensive problem solving to

limited problem solving, which is supported by past experiences and purchasing

habits, simplifying their process (Shawn and Newholm, 2002; Sommer, 2011).

The exploration of ethical attributes is related in the second objective which is the

factors behind the ethical choice. Once the individuals acquire certain knowledge

related with their impact or harm (Sun et al. 2012), inmediately boost a change on

their action, as it is shown in terms of ritual experience helping aids, family values,

they are known as motivational factors (Bray 2008; Babin and Harris, 2010; Brown,

2011). This motivation is the evolution from a particular stimulus, that is learned

through the time, building up determined attitudes. As a consequence enables the

closure of attitude behaviour gap, in which as stronger a person maintains his

beliefs, stronger is his predictive action Ajzen (2011). In addition the variable of

perceived behavioural control acts as a the projection or the thinking about the

impact of the their ethical actions (Ajzen, 1991; Fukukawa, 2002; Shaw and Shiu,

2006; Carrington et al. 2010)

This purchase behaviour are putting in practice inside the actual economical

reality, which price sensitivity is much higher in recession times, and given the fact

that ethical products (faitrade, animal welfare, environmentaly oriented, health) is a

growth market premium (Bondy and Talwar, 2011; Key Note 2011), makes the

demand inelastic (Key Note, 2011). This is due to the new trade off mainstream,

in which other factors are considered besides price, which relies on these ethical

consumers practices that sustain this market (Carrigan et al. 2006; Young et al.

2010; Luchs, 2010). Moreover they are affected in certain minimal extent by the

price sensitivity due its beliefs attachments (Carrigan and De Pelsmacker, 2009;

Bondy and Talwar). Thus motivation is the moderating factor towards individual

behaviour in tough economic circumstances. Another reason for the sustainability

of this market is because many diverse ethical attributes are inside these products.

The participants beliefs about this ethical products are reflected in the interviews,

which their judgement opinion relies in the meaning value towards sustainability as

well as their acknowledge about the convergence of the price and this value (Ajzen

2011; White et al. 2012). Moreover their views towards the industry responsibility

are mainly claims, because of company power in the market and their negative

environmental outcomes (Carrigan, 2006; Luchs, 2010; Young et al. 2010; Vancaly

et al. 2011).

This study also covered the experiences towards ethical products on the

participation on ethical organisations and communities, as main factors of

purchase decision. In which Education issue arises on the ethical selection, as it

not only implies consumption practices but the helping matter actions related to the

literature with Idealistic dimension of the ethical domain. Therefore this study came

to know that these practices can be applied as a model of good practice. Well, not

guided by the action itself to consume or pleasure which emphasizes the

materialistic sense, where every action has a motive. That is the fruition of this

consumer group ideals trespassing own convenience (Dean and Croft, 2009;

Carrigan, 2009; Lu and Lu, 2010; Kozar and Marcketti, 2011)

Furthermore this study reached the given objectives based in a qualitative basis in

order to identify the factors that close the attitude behaviour gap, which turns

effective the ethical purchase process on this individuals (Ajzen, 1991; Chen and Li

Ping, 2006; Jansson, 2010; Brown, 2011). This is a measure of the evaluation

between intrinsic over extrinsic factors in the given circumstances of this case

study. And the recommendations emerged underline Education as main agent into

enhance sustainability practices in terms of environment issues, health, fairtrade

and no harm products (Sun et al. 2010; Bondy and talwar, 2011). The Review

covered form a broad concept which is consumer behavior to narrow this topic in

which is included in behavioural models and ethical dimensions, circumbscribed in

price sensitivity influences (Blackwell, Miniard 2001; Hayer mcInnis, 2005; Bray

2008; Babin and Harris, 2010; Ajzen, 2011) The analysis of data based on the

Research design developed a rich exploration and explanation of the phenomenon,

confirming and testing the findings related with the theoretical background. The

limitations of this were the sample size, the research could be improves to acquire

mayor data and interacting in focus groups (Saunders, 2009; Bryman, 2012).

Despite the fact that particularity of the case, the ethical factor analysed underpin

the Ethical Market growth, which none study identified the explanatory reasons

from this ethical consumption that maintains sustainable. This is contextualised

within the theory of Planned behavior (Ajzen, 2011) with a Problem solving

situational model (Blackwell and Miniard, 2001; Babin and Harris, 2011), in which

beliefs and motivation enhances the closure of the attitude behaviour gap. The

study explained motivation as intervienening factor between the economic

environmet and decision making process. Which also at the same time exposure

the involvement level of individuals with the perceived value. (Howards and Sheth,

1969; Varey et al. 2002)

The contribution to this study in order to answer the Research Question is the

importance of the qualitative data which enabled to explore the idealistic dimension

of this ethical consumer putting in context its process in a TPB model, where it is

linked the individual altruistic issue or impact awareness with the Perceived

behavioural control in Ajzen model (Vitell et al. 2001; Shaw and Shiu, 2006; Bondy

and Talwar, 2011; Sun et al. 2012)

This ethical factors also pointed the simplified and frugal buying trends, not always

relying on brands. In which the ethical attribute is well defined in their trade off,

explained with the high effort route in their cognitive activity reinforcing those habits

(Shaw et al. 2002; Babin and Harris, 2011).

5.3 Managerial Implications

Since the market place is highly volatile due to the overall power of mass media

and consumers, and the unethical facts makes a great damage to the company like

cases related with Child Labour and pollution activites companies like Mattel and

Nike, brings to mainstream the context of ethical practices (Bondy and talwar,

2011).

This refers to the ethical activities in what do they do with their money, but how

they make it firstly, which is related mainly in the value chain activities. These

ethical practices link together with the company performance which is denominated

Corporate Social responsibility.

Since companies have major influences on consumption, have the main

responsibility to arise values in the society related with the welfare and impact over

others. These are subscribed on the universal values dominated by the ethical and

moral argument. This is how the companies like M & S redirected their objectives

to responsible practices rather than consumer oriented. Therefore it is important to

apply ethical practices changing the customer hedonistic focus into ethical

mainstream, which is aligned with customer approaches (Carrigan, 2009, Luchs,

2010)

Even though that fairtrade is a niche market, the yielded value has the ability to

consolidate the attribute on the prevailing the trade-off, but it also must be

reinforced by the Communications and Marketing means to increase the consumer

attitudes. (Key Note, 2011; Sun et al. 2012)

Also the natural phenomena impacted by climate change brought environmental

awareness, as natural disaster as Katrina Hurricane, world is not a safe place in

which gives to shine the responsibilities that people must convey. Thus this

environmental awareness becomes a common value between consumers and

companies. The CSR foundations does not seek to be more profitable but more

sustainable. (Vermeir and Verbecke, 2006; Vancaly et al. 2011; Bondy and Talwar,

2011).

5.4 Research limitation

The limitation for this research is the number of the qualitative data, in a diverse

groups of ethical organisations. And the hipotesis limited to an explanation non

quantificable. It is a cross sectional study and no can be comparative in long term.

This as an inductive study limits the generality of the results. Also the sample

chosen was in UK, so leaves the exploration for other countries.

Additionally the research explore the intrinsic and extrinsic factor influencing the

consumer decision process. This research leaves a gap in the exploration of

relativistic consumer oriented to materialism approaches.

5.5 Future research

Finally it is important to emphasize the need of further qualitative research on the

relativistic choices in decision making process in order to explore the contrary of

this case, and more information is needed on the unrelisable actions of idealistic

consumers, and the major exploration on Marketing Communication effect on the

consumer towards the purchase decision. Furthermore the evaluation of the ethical

oriented companies and brand loyalties to sustain ethical practices.