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Decision making process towards ethical products during economic downswings

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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 …

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.

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  • 1. MBA Dissertation An investigation of the decision making process towards 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 process towards 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 process towards ethical products in economic downswings: a case study of an Idealistic Consumer Behaviour Milagros Ponce 78736 July 2012
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. 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
  • 6. 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
  • 7. 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).
  • 8. 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.