What’s stopping people from buying Socially Responsible products?

Word count: 1608

Part 1: Introduction:

The growth of Organic, Fairtrade and Free-Range alternatives is symptomatic of the increasingly socially responsible (SR) consumer. While not necessarily superior in terms of quality to their alternatives, these products create value for the customer by offering them the opportunity to internalise some of the externalities involved it its production (such as soil damage from over-farming, treatment of labourers, etc). This is typically done by increasing the cost. While a movement to entirely socially-responsible alternatives makes sense, the higher price serves as a significant barrier to purchase. As SR products gain popularity, however, costs have been improving (notably in cereals and grains), and the price difference is not as obvious as it once was. It would seem that other barriers, besides price, still slow the adoption of SR alternative products. What are these barriers? And how can they be overcome to influence consumer behaviour?

The purpose of this literature review is to collect, compare and contrast the opinions and research that exists on this topic, and determine what these barriers are. The findings could possibly help in the marketing and retailing of SR products, increasing demand, and encouraging sustainable business.

The literature review will gather various sources and draw upon the key messages in each, making additional notes at points where the conclusions agree or disagree with other sources. The information will be presented in a table, starting on the next page.

Part 2: Literature review:
NOTE: SOME PARTS ARE FAR TOO LONG AS INDICATED IN YELLOW HIGHLIGHT
Author(s) year    Point of view    Links to other sources    Key conclusions
Euromonitor International, 2014    People are generally aware of the benefits of organic food, but lack the consumer confidence to pay the higher prices.

It notes that the difference in price for pasta is low enough to be an “easy organic purchase”.    Price is almost universally mentioned as a factor.

This was the first mention of convenience factors. Which came up again in other sources.    Price is a key barrier, but in cases where price is not an issue (specifically pasta), organic alternatives are reasonably priced.

Conell, S. 2014.    Demand driven by concerns regarding “environment, animal welfare and health”.

Considered a discretionary purchase based on consumer confidence.

Actual health benefits debatable.
First mention of awareness of social problems  being a driver of growth. This would be repeated by other sources.

Again mentions of the price barrier.

Green scepticism is a major factor, where people are untrusting of SR claims.    Again, price is the main barrier.

People are more likely to buy green when they have more discretionary funds.

First mention of green scepticism.
Gielissen, Dr. Robert B. 2013.    People buy SR products for a number of reasons, including:
Fulfilling a moral duty,
Perceived importance of a social problem
Perceived effectiveness of the SR product at fixing the problem
Social Norms
Perceived Price (too high)
Perceived quality (too low)
Perceived availability (too low)

Of particular note was Social Norms, whereby many survey respondents believed SR products reflected well on themselves. Some saying they would “hate to admit” that they never buy organic.

Major conclusion was that the ‘moral duty’ is considered imperfect or optional.    The factors here guided future research, so there would be frequent references in future sources.

First mention of social norms, whereby people may judge others on their buying habits.    Many of the reasons listed pertained to a social problem. If the individual is unaware, ignorant or apathetic of the social problem, they cannot be expected to respond to it.
“…the qualitative
analysis also showed that personal experiences of people influence their attitudes towards the importance of the social problems that SR products aim to alleviate.”
Author(s) and year
(full details in references)    Point of view    Links to other sources    Key conclusions
Carrigan, M. Attalla, A. 2001.    Makes the point that even the most well intentioned consumer must be well informed to properly make ethical purchasing, and even then, they might not make the choice.

Notes an attitude-behaviour gap: “What seems to be emerging is that although consumers express willingness to make ethical purchases linked to good reputation, the reality is that social responsibility is not the most dominant criteria in the their purchase decision”.

Consumers will not reward ethical behaviour, but happily punish unethical behaviour (product boycott).

Challenge is here, very few are aware of socially responsible/irresponsible firms. Fewer still take the time to research products before purchase. “Perhaps it is not that consumers do not care, but rather they care more about price, quality and value than corporate ethics”.

Some respondents in the research assumed unethical behaviour of all firms.

“This indicates not only a low awareness of ethical and responsible behaviour by companies, but also an inherent cynicism among consumers in relation to such behaviour”.
Awareness has been mentioned again, as it had been by previous sources.

First mention of attitude behaviour gap, where beliefs fail to translate to action.

Mentions scepticism for the second time in my research.    Consumers judge products to criteria that primarily influence themselves. Typically these include price, quality and availability.

Boycotting and punishing an offending firm seems somewhat unchallenging to a consumer, possibly due to the ease of adopting an alternative.

Notably, some people warp realities to themselves to perceive what is essentially unethical behaviour as ethical.

“The perspective seems to be that companies such as Nike, are not considered unethical because economically they provide jobs and profits; proving this commercial ‘good’ would appear to be enough to be seen as SR behaviour”.

Author(s) year
Point of view    Links to other sources    Key conclusions
De Pelsmacker, P. Janssens, W. 2007.    Knowledge and attitudes (concern and scepticism) is a major determinant of SR purchasing behaviour. There is a prevalent belief that buying or endorsing an SR alternative will not necessarily fix the social problem.

Says that availability and price are not largely influencing factors.

States the biggest barrier to purchase is consumer indifference to social problems.
Scepticism mentioned for a third time. Awareness mentioned as a problem again.

First and only mention of availability and price not being major factors.

People are largely unaware or indifferent about social problems, and proper education/information could change their behaviour.
Henryks, J. Pearson, D. 2010.    Labels confuse people. Most consumers were unable to describe or recognise a Certified Organic Logo.

Many assumed organic product would feature earthy- or natural-looking labels, and some organisations exploit this.

“…some brands create a ‘halo of resemblance’…”

The reverse was true in the case of the food itself. Organic produce was believed to be smaller, and of less impressive colour, with obvious imperfection (on account of their organic production).

Australia alone has 6 different organic certification bodies, with different logos.
First mention of the power of confusion. Fits in well with the idea of scepticism.

People buy products that look like that might be SR, even if they’re not.    Consumer behaviour can be and is being manipulated through the use of labelling.

There sheer number of different organic logos confuses customers.

Author(s) year    Point of view    Links to other sources    Key conclusions
Kalamas, M. Cleveland, M. Laroche, M. 2013.    Extensive linking to Theory of Planned Behaviour: perceived behavioural control.
“…in other words, individuals’ perceptions of their ability to behave in a certain way. For example, the consumer may have a positive attitude towards the environmentally-benign alternative and this attitude could also be reinforced by the norms of their peer group, yet this alternative may not be selected due to a lack of immediate availability, because it is too expensive, not worth the extra cost/effort (e.g., due to the perceived futility of being green)”.

Particular focus on external
factors that limit the extent to which the individual believes they can influence the environment. Categorised into green giants (such as governments and/or firms) and green gods (deterministic fate and/or natural processes)People generally feel there is little they can do individually, but leap at opportunities to do things as a group (like recycling initiatives).
Convenience factor is mentioned again. First mention of a futility factor.

People are unsure that their acts will make any difference. This links well to Gielissen et al’s mention of “Perceived effectiveness of the SR product at fixing the problem”.    Buying SR is desirable until it becomes inconvenient. Consumers do not think their efforts will make a difference.

More education on social problems seems key here, so as to make consumers aware of what can be done to fix them.

A lot of consumers simply think social problems are out of their control.
Author(s) year    Point of view    Links to other sources    Key conclusions
Loureiro, M. McClusky, J. Mittelhammer, R. 2013.    Consumers harbour a willingness to pay for SR products, but are often stopped by the inferior cosmetic quality (inherent to organic food). At this point, a product quality and grade becomes a more important attribute in the minds of consumers (than SR).

Children under 18 in the household increase willingness to pay for SR products.

Certified Organic claims are considered ambiguous. Consumers are unaware of the environmental benefits associated with organic/SR production.

Also may be unaware there is actually a problem.    Attitude behaviour gap is mentioned again.

Certified organic claims can confuse people, as mentioned by Henryks et al.    Once again, there is an attitude behaviour gap. People have a willingness to pay premium that does not translate at the point of sale.

Presence of children increases willingness, a pressure to do well for your family.

Certified Organic claims do not really mean anything. specifically, consumers need more information on who is certifying their produce.

Consumers need to be educated on actual social problems.

Part 3: Conclusions

As was stated in the introduction, there are barriers to the purchase of SR products aside from price, including awareness, confidence, quality, availability and perceived futility. Curiously, price was considered a minor factor by some sources, especially given the small difference in price some products carry. Other sources gave it more influence that other attributes, stating that the higher prices barred all but high income consumers. Lack of confidence, awareness and confusion were possibly the most influential factors, as they indicate an information gap in the minds of consumers.

Possible recommendations for future study include research into the consumer behaviour governing purchasers of SR products of competitive prices. Also of interest would be research into which demographics are the chief purchasers of SR products.

Part 4: References

Carrigan, M. Attalla, A. (2001). The myth of the ethical consumer – do ethics matter in purchase behaviour? The Journal of Consumer Marketing, 18(7), 560-577. Retrieved from http://search.proquest.com/docview/220136571?accountid=13380

Conell, S. (2014). IBISWorld Industry Report UK0.002 Organic Food Retailing in the UK. Retrieved from: http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/uk/industry/default.aspx?entid=5010

Cleveland, M. Kalamas, Maria. Laroche, Michel. (2013) Pro-environmental behaviors for thee but not for me: Green giants, green Gods, and external environmental locus of control. Journal of Business Research, 67(2), 12-22.

De Pelsmacker, P. Janssens, W. (2007). A model for fair trade buying behaviour: The role of perceived quantity and quality of information and of product-specific attitudes. Journal of Business Ethics, 75(4), 361.
Euromonitor International. (2014). Organic Packaged Food in Australia. Retrieved from: http://www.portal.euromonitor.com.ezp01.library.qut.edu.au/Portal/Pages/Search/SearchResultsList.aspx

Gielissen, R. B. (2011). Why do consumers buy socially responsible products? International Journal of Business and Social Science, 2(3), 27

Henryks, J. Pearson, D. (2010). Misreading between the lines1: Consumer confusion over organic food labelling. Australian Journal of Communication, 37(3), 73-86

Loureiro, M. L. McCluskey, J. J. Mittelhammer, R. C. (2002). Will consumers pay a premium for eco-labeled apples? The Journal of Consumer Affairs, 36(2), 203-219. Retrieved from http://search.proquest.com/docview/195895176?accountid=13380

What’s stopping people from buying Socially Responsible products?

Word count: 1608

Part 1: Introduction:

The growth of Organic, Fairtrade and Free-Range alternatives is symptomatic of the increasingly socially responsible (SR) consumer. While not necessarily superior in terms of quality to their alternatives, these products create value for the customer by offering them the opportunity to internalise some of the externalities involved it its production (such as soil damage from over-farming, treatment of labourers, etc). This is typically done by increasing the cost. While a movement to entirely socially-responsible alternatives makes sense, the higher price serves as a significant barrier to purchase. As SR products gain popularity, however, costs have been improving (notably in cereals and grains), and the price difference is not as obvious as it once was. It would seem that other barriers, besides price, still slow the adoption of SR alternative products. What are these barriers? And how can they be overcome to influence consumer behaviour?

The purpose of this literature review is to collect, compare and contrast the opinions and research that exists on this topic, and determine what these barriers are. The findings could possibly help in the marketing and retailing of SR products, increasing demand, and encouraging sustainable business.

The literature review will gather various sources and draw upon the key messages in each, making additional notes at points where the conclusions agree or disagree with other sources. The information will be presented in a table, starting on the next page.

Part 2: Literature review:
NOTE: SOME PARTS ARE FAR TOO LONG AS INDICATED IN YELLOW HIGHLIGHT
Author(s) year    Point of view    Links to other sources    Key conclusions
Euromonitor International, 2014    People are generally aware of the benefits of organic food, but lack the consumer confidence to pay the higher prices.

It notes that the difference in price for pasta is low enough to be an “easy organic purchase”.    Price is almost universally mentioned as a factor.

This was the first mention of convenience factors. Which came up again in other sources.    Price is a key barrier, but in cases where price is not an issue (specifically pasta), organic alternatives are reasonably priced.

Conell, S. 2014.    Demand driven by concerns regarding “environment, animal welfare and health”.

Considered a discretionary purchase based on consumer confidence.

Actual health benefits debatable.
First mention of awareness of social problems  being a driver of growth. This would be repeated by other sources.

Again mentions of the price barrier.

Green scepticism is a major factor, where people are untrusting of SR claims.    Again, price is the main barrier.

People are more likely to buy green when they have more discretionary funds.

First mention of green scepticism.
Gielissen, Dr. Robert B. 2013.    People buy SR products for a number of reasons, including:
Fulfilling a moral duty,
Perceived importance of a social problem
Perceived effectiveness of the SR product at fixing the problem
Social Norms
Perceived Price (too high)
Perceived quality (too low)
Perceived availability (too low)

Of particular note was Social Norms, whereby many survey respondents believed SR products reflected well on themselves. Some saying they would “hate to admit” that they never buy organic.

Major conclusion was that the ‘moral duty’ is considered imperfect or optional.    The factors here guided future research, so there would be frequent references in future sources.

First mention of social norms, whereby people may judge others on their buying habits.    Many of the reasons listed pertained to a social problem. If the individual is unaware, ignorant or apathetic of the social problem, they cannot be expected to respond to it.
“…the qualitative
analysis also showed that personal experiences of people influence their attitudes towards the importance of the social problems that SR products aim to alleviate.”
Author(s) and year
(full details in references)    Point of view    Links to other sources    Key conclusions
Carrigan, M. Attalla, A. 2001.    Makes the point that even the most well intentioned consumer must be well informed to properly make ethical purchasing, and even then, they might not make the choice.

Notes an attitude-behaviour gap: “What seems to be emerging is that although consumers express willingness to make ethical purchases linked to good reputation, the reality is that social responsibility is not the most dominant criteria in the their purchase decision”.

Consumers will not reward ethical behaviour, but happily punish unethical behaviour (product boycott).

Challenge is here, very few are aware of socially responsible/irresponsible firms. Fewer still take the time to research products before purchase. “Perhaps it is not that consumers do not care, but rather they care more about price, quality and value than corporate ethics”.

Some respondents in the research assumed unethical behaviour of all firms.

“This indicates not only a low awareness of ethical and responsible behaviour by companies, but also an inherent cynicism among consumers in relation to such behaviour”.
Awareness has been mentioned again, as it had been by previous sources.

First mention of attitude behaviour gap, where beliefs fail to translate to action.

Mentions scepticism for the second time in my research.    Consumers judge products to criteria that primarily influence themselves. Typically these include price, quality and availability.

Boycotting and punishing an offending firm seems somewhat unchallenging to a consumer, possibly due to the ease of adopting an alternative.

Notably, some people warp realities to themselves to perceive what is essentially unethical behaviour as ethical.

“The perspective seems to be that companies such as Nike, are not considered unethical because economically they provide jobs and profits; proving this commercial ‘good’ would appear to be enough to be seen as SR behaviour”.

Author(s) year
Point of view    Links to other sources    Key conclusions
De Pelsmacker, P. Janssens, W. 2007.    Knowledge and attitudes (concern and scepticism) is a major determinant of SR purchasing behaviour. There is a prevalent belief that buying or endorsing an SR alternative will not necessarily fix the social problem.

Says that availability and price are not largely influencing factors.

States the biggest barrier to purchase is consumer indifference to social problems.
Scepticism mentioned for a third time. Awareness mentioned as a problem again.

First and only mention of availability and price not being major factors.

People are largely unaware or indifferent about social problems, and proper education/information could change their behaviour.
Henryks, J. Pearson, D. 2010.    Labels confuse people. Most consumers were unable to describe or recognise a Certified Organic Logo.

Many assumed organic product would feature earthy- or natural-looking labels, and some organisations exploit this.

“…some brands create a ‘halo of resemblance’…”

The reverse was true in the case of the food itself. Organic produce was believed to be smaller, and of less impressive colour, with obvious imperfection (on account of their organic production).

Australia alone has 6 different organic certification bodies, with different logos.
First mention of the power of confusion. Fits in well with the idea of scepticism.

People buy products that look like that might be SR, even if they’re not.    Consumer behaviour can be and is being manipulated through the use of labelling.

There sheer number of different organic logos confuses customers.

Author(s) year    Point of view    Links to other sources    Key conclusions
Kalamas, M. Cleveland, M. Laroche, M. 2013.    Extensive linking to Theory of Planned Behaviour: perceived behavioural control.
“…in other words, individuals’ perceptions of their ability to behave in a certain way. For example, the consumer may have a positive attitude towards the environmentally-benign alternative and this attitude could also be reinforced by the norms of their peer group, yet this alternative may not be selected due to a lack of immediate availability, because it is too expensive, not worth the extra cost/effort (e.g., due to the perceived futility of being green)”.

Particular focus on external
factors that limit the extent to which the individual believes they can influence the environment. Categorised into green giants (such as governments and/or firms) and green gods (deterministic fate and/or natural processes)People generally feel there is little they can do individually, but leap at opportunities to do things as a group (like recycling initiatives).
Convenience factor is mentioned again. First mention of a futility factor.

People are unsure that their acts will make any difference. This links well to Gielissen et al’s mention of “Perceived effectiveness of the SR product at fixing the problem”.    Buying SR is desirable until it becomes inconvenient. Consumers do not think their efforts will make a difference.

More education on social problems seems key here, so as to make consumers aware of what can be done to fix them.

A lot of consumers simply think social problems are out of their control.
Author(s) year    Point of view    Links to other sources    Key conclusions
Loureiro, M. McClusky, J. Mittelhammer, R. 2013.    Consumers harbour a willingness to pay for SR products, but are often stopped by the inferior cosmetic quality (inherent to organic food). At this point, a product quality and grade becomes a more important attribute in the minds of consumers (than SR).

Children under 18 in the household increase willingness to pay for SR products.

Certified Organic claims are considered ambiguous. Consumers are unaware of the environmental benefits associated with organic/SR production.

Also may be unaware there is actually a problem.    Attitude behaviour gap is mentioned again.

Certified organic claims can confuse people, as mentioned by Henryks et al.    Once again, there is an attitude behaviour gap. People have a willingness to pay premium that does not translate at the point of sale.

Presence of children increases willingness, a pressure to do well for your family.

Certified Organic claims do not really mean anything. specifically, consumers need more information on who is certifying their produce.

Consumers need to be educated on actual social problems.

Part 3: Conclusions

As was stated in the introduction, there are barriers to the purchase of SR products aside from price, including awareness, confidence, quality, availability and perceived futility. Curiously, price was considered a minor factor by some sources, especially given the small difference in price some products carry. Other sources gave it more influence that other attributes, stating that the higher prices barred all but high income consumers. Lack of confidence, awareness and confusion were possibly the most influential factors, as they indicate an information gap in the minds of consumers.

Possible recommendations for future study include research into the consumer behaviour governing purchasers of SR products of competitive prices. Also of interest would be research into which demographics are the chief purchasers of SR products.

Part 4: References

Carrigan, M. Attalla, A. (2001). The myth of the ethical consumer – do ethics matter in purchase behaviour? The Journal of Consumer Marketing, 18(7), 560-577. Retrieved from http://search.proquest.com/docview/220136571?accountid=13380

Conell, S. (2014). IBISWorld Industry Report UK0.002 Organic Food Retailing in the UK. Retrieved from: http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/uk/industry/default.aspx?entid=5010

Cleveland, M. Kalamas, Maria. Laroche, Michel. (2013) Pro-environmental behaviors for thee but not for me: Green giants, green Gods, and external environmental locus of control. Journal of Business Research, 67(2), 12-22.

De Pelsmacker, P. Janssens, W. (2007). A model for fair trade buying behaviour: The role of perceived quantity and quality of information and of product-specific attitudes. Journal of Business Ethics, 75(4), 361.
Euromonitor International. (2014). Organic Packaged Food in Australia. Retrieved from: http://www.portal.euromonitor.com.ezp01.library.qut.edu.au/Portal/Pages/Search/SearchResultsList.aspx

Gielissen, R. B. (2011). Why do consumers buy socially responsible products? International Journal of Business and Social Science, 2(3), 27

Henryks, J. Pearson, D. (2010). Misreading between the lines1: Consumer confusion over organic food labelling. Australian Journal of Communication, 37(3), 73-86

Loureiro, M. L. McCluskey, J. J. Mittelhammer, R. C. (2002). Will consumers pay a premium for eco-labeled apples? The Journal of Consumer Affairs, 36(2), 203-219. Retrieved from http://search.proquest.com/docview/195895176?accountid=13380