Implications of Ethical Consumption under Fairtrade - Essay Example

ESSAY: MARKETING: Implications of Ethical Consumption under Fairtrade Introduction Fairtrade is considered to be that form of trade based on transparency, respect and dialogue between the parties involved in the transactions. It enhances equity and upholding of trading ethics in the international trade (Arvola & Vassallo 2008, p. 443). Fair trade aims at protecting the rights of the producers in the developing nations. It is facilitated by the ethical behaviors of the consumers who ensure that they pay fair prices for the commodities they purchase from the producers. Fair trade is considered as the best alternative approach to trading partnerships that propels sustainable development of the marginalized producers (Auger et al. 2003, p. 285). Fair trade influence organizations and movements of products in the third world countries by ensuring that consumers pay fair prices for the products. Also, it ensures producers have healthy working conditions, and their rights are preserved from exploitation by some unethical consumer behaviors (Auger & Devinney 2007, p. 361). Discussions on Ethical Consumption It is important to note that ethical consumer behaviour allows users to express their personal feelings freely and show the sense of responsibility to societies. It also enables them appreciate products from different companies (Auger et al. 2003, p. 299). Hines and Ames (2000), affirms that 68% of the population buys a product from a company because of the company’s ethical reputation. Also, they argue that 51% of the population makes purchases in different companies due to its behavior. This indicates that a higher per cent of the population are driven by the ethical standards of a producer to buy their products, and this encourages fair trading (Auger & Devinney 2007, p. 365). If the ethical reputation of a company is not standard, then most consumers will tend shy away from purchasing their products. This unethical behaviour can be in the forms of prices or the poor qualities of their products. It can also be due to weak and unhealthy working conditions of the workers and the violation of the consumer rights (Arvola & Vassallo 2008, p. 445). According to a study of a group of European consumers, indicates that most of the consumers are willing to pay more money for proved ethical products from the companies. These consumers are also willing to import ethical products from the producers in the developing countries thereby improving the standards of the producers. In his study of Belgian consumers, Dolan (2009, p. 38) indicated that most of the consumers are willing to pay about 10% more for fair-trade despite the country of origin. Also, he asserts that most of the Italian consumers are willing to pay 9% more for the fair-trade products. In the UK, most of their consumers are also willing to pay more for the fair-trade products (De Pelsemacker & Janssens 2007, p.364). This clearly indicates that in buying Fairtrade products, ethical consumption is highly appreciated, and most of the consumers are paying more for the Fairtrade products. A proper understanding of the perceptions, buying behaviour, beliefs and consumer attitudes, therefore, are crucial in the promotion of Fairtrade, which will lead to ethical consumption (Bagozzi 2000, p. 200). Examples given by the United Nation on the effects on the unfair trading in the international markets indicates that most of the developing countries lose close to $700 billion annually in foreign exchange due to unfair treatments (Auger et al. 2003, p. 301). These involve tariff barriers and export restrictions on food and agricultural products (Creswell 2007, p.75). Through fair-trade, some of the trade barriers have been lifted, and most of the international consumers have been attracted to the products from the developing countries. This has been facilitated by ethical consumption that ensures consumers purchase according to the business ethical standards (De Pelsemacker & Janssens 2007, p.368).  Quality products from the developing countries are traded first under fair trading rules. This promotes the poor farmers from the poor countries (Auger & Devinney 2007, p. 361). Example of the unethical consumption and unfair trade was witnessed among some clothing retailers such as Primark, Asda, and Tesco. Research on these companies revealed that most of the workers work for very long hours with minimal pay and poor working conditions (Auger et al. 2003, p. 288). These kind of practices violates the principles of Fairtrade as they do not consider the rights of the workers, and this eventually undermine ethical consumption of the products (Arvola & Vassallo 2008, pp. 450). One example of Fairtrade is that which exist between Kenyan flower farmers and the UK market. The growing of flowers in Kenyan is noted to have created numerous employment opportunities for several poor Kenyans and this has attracted international market for the flowers in order to improve and develop the Kenyan economy through the export of the flowers to the UK market (Carrington 2001, p. 562). The trade between Kenya and UK clearly depicts the modern ethical consumption in Fairtrade because it promotes the poor farmers and saves them from the adverse effects of globalization. This kind of integration between Kenya and UK highlights the importance of Fairtrade and how it is facilitated by ethical consumption that ensures the development of the third world countries. This is because ethical consumption acts as a good base for self-formation and consumer behaviours are often instigated either politically or historically (Bagozzi 2000, p. 205). According to Creswell (2007, p.88), ethical consumption is viewed as an intermediary between the rich and the poor that relate economic ties and social ties between countries (Szmigin 2003, p.75). Fairtrade is considered as a development encounter with much emphasis on the consumer and ethical consumption as the agents of progress and economic transformation (Carrigan 2006, p.55). However, it is not very clear whether the international ethics, values and morals portrayed in Fairtrade are the actual consumer standards (Deng 2012, pp.44). This, therefore, raises one of the questions; are consumers ethical in their consumption? Much studies indicates that despite many consumers being attracted and motivated by the morals and values of ethical consumption in Fairtrade, the actual change in the consumption behaviour is very minimal (Carrigan 2006, p.55). During the business transactions, mostly the stated consumer intention of ethical consumption is rarely translated into the actual ethical purchasing behaviour. This is emphasized by the research done by Simon (1995) that determined that despite consumers having a sense of ethical responsibility as portrayed in Fairtrade, less than 20% engage in truly ethical consumption. Deng (2012) in his study realized that only about 44% of consumers will respond to companies’ ethical actions positively which can trigger their purchase of the company’s products. 12% of the consumers will, however, produce real purchasing action corresponding to their intended consumption behaviour. This, therefore, leaves about 44% of the customers with divided opinions either to make a purchase or not. This increasing gap between the consumption intentions such as in Fairtrade and the actual consumption behavior has led to the companies adopting various marketing strategies having ethical orientations in order to lure the potentially profitable ethical market segments (Auger & Devinney 2007, p. 361). Literature Review Theory of Planned Behaviour (TPB) One of the theories that tend to explain why some consumers despite having ethical consumption behaviours when buying commodities in Fairtrade, they are not ethical consumers is the Theory of Planned Behaviour (TPB). This theory was proposed by Ajzen (1991), and it accounts for the changes in consumer behaviours and his ethical consumption. The theory illustrates that consumer’s behavioural intentions and ethical consumption during purchases will only be expressed in his/her behaviour under volitional control (Creswell 2007, p.88). The theory contains other academic models that include the influence of personal ethics on a consumer’s intentions within this context. Verbeke (2008) noted the importance of integrating the role of individual’s values and moral norms with the purchase plans of any commodity whether under Fairtrade or personal consumption. Despite various criticisms, the theory clearly illustrates that an individual’s purchasing intentions will be greatly influenced by their actual ethical behaviours (Auger et al. 2003, p. 290). This makes the consumer on most occasions behave morally under Fairtrade due to the set principles of Fairtrade but in reality, they tend to be sceptical in their purchase considering the ethical behaviours of various companies. The theory is further supported by the following diagram; Figure 1 Illustrates the Ajzen (1991) formation of consumer behaviour as adopted by Creswell (2007, p.89). In reference to figure 1, consumer behavioural beliefs encompass the environmental health issues that are concerned as to whether the behaviour would be sufficient. The normative behaviour involves how the society would view the behavior while subjective suggests how a consumer feels the social pressure to act. It is observed that all the noted factors influence an individual’s intentions on consumption and the eventual consumer behaviour (Cui 2003, p.364). This indicates that under Fairtrade, the primary purposes to protect the producers from the poor developing countries through the sale of their products in the developed countries and this, therefore, influences the consumer’s ethical consumption. On the other hand, on individual’s consumption, the primary intention is for self-satisfaction of the needs and wants, and this influences his consumption behaviour and where to purchase their products. This mainly depends on his/her perceived behavioural control (Carrigan 2006, p.60). Discussions on the Change on Ethical Consumption If the consumer has a negative ethical behavior and attitude towards a particular company, there is possibility that they will have negative actual moral behavior towards the company and hence will not purchase its products outside Fairtrade (Carrington 2001, p. 570). I therefore wish to note that a person’s intention is a silent “predictor” for an individual’s behavior and it goes a long way in explaining, influencing and predicting the consumers’ behaviors and their purchasing willingness (Lorna et al. 2013, p. 411). To some extent, it can be vital to investigate both the consumption environment of a consumer and the consumer’s personal characteristics in order to determine the consumer’s purchase intentions and the difference in the ethical consumption under Fairtrade and the actual consumer’s ethical consumption (Bagozzi 2000, p. 210). It is also noted that many of the consumers may also have negative perceptions on the company’s intentions of doing good through their acts of charity which customers may view as business interest oriented and not the claimed charity (Andreas et al. 2012, p. 500). This will influence the behaviours of the consumer who will reject the company’s products terming the organizations as “corporate hypocrites”. This habit will, therefore, make the consumers think poorly and negatively on the corporates’ products if they claim active social responsibility with negative intentions (Arvola & Vassallo 2008, p. 448). These actions often make, consumers to behave differently from the ethical consumption under Fairtrade where they aim at promoting and protecting the producers from the poor countries so as to improve their economy (Shaw et al. 2007, p.35). Analysis and Conclusion From the correlation between the factors causing the difference in the ethical consumption under Fairtrade and the actual ethical consumption, it is very clear to highlight that most of the consumers are not very willing to make ethical decisions in their purchases (Dolan 2009, p. 38). It is noted that ethical marketing responsibilities cannot fully influence an individual’s decision-making process. Most of the consumers are considered to be much interested in the quality of the products from the companies, how fair are the products prices, the brand and how convenient are the products to fulfill their wants and for personal satisfaction (Bagozzi 2000, p. 188). From the above illustrations, it is also evident that most changes in the consumer’s ethical behaviours is influenced by the moral maturity of the individual. For example, some users may view the fairness and kindness of most Japanese Companies’ moral activities as merely a show of charity which is based on self-motivations and personal improvement of the company (Sen & Bhattacharya 2001, p. 231). In summary, it is therefore very vital for corporates to uphold their professional ethics in conducting their business transactions. This will build good relationships with the consumers and thereby influencing their consumption (Creswell 2007, p.88). Despite consumers practicing ethical consumption under Fairtrade, it is not necessarily that they will have ethical consumption due to the above illustrated factors. It is, therefore, important that both companies and consumers uphold their moral behaviours to avoid the change in consumption practices (Auger et al. 2003, p. 299). 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