Fairtrade and Ethical Consumerism - Essay Example

Fair trade and Ethical Consumerism of the of Introduction Ethical consumerism as a broad concept refers to the process of buying things or making purchase decision of the things that are considered as ethical. In today’s world of consumerism there are ultimately no purchase decisions that are made without taking in ethical consideration however it is quite unlikely that the common consumers who are constant pressure of daily budget will give much importance to buying ethical products or will be able to give much importance to ethical products even if they wish to. Ethical consumerism and ethical consumption is actually part of a bigger consumption buying behavior. As more ethical choices enter the consumers’ consciousness and psyche taking into consideration these matters becomes an important focus area for consumer research. Some argue that ethical consumers are ultimately consumers and whereas the consumers may be motivated in general to make consumption by several factors they are ultimately driven by a singular factor that is to make consumption. The following pages discuss the matter of ethical consumerism with the particular focus on Fair trade. The main purpose of the report is to discuss the implication of the statement while people or rather consumers who buy from fair trade are symbolically performing ethical consumerism it does not make them ethical consumers. Discussion How Fair trade works? Fair trade is actually an organized social movement whose stated goal and objective is to help the producers in developing countries to produce goods achieving better trading conditions and sustainability. Members of the movement advocate paying higher prices to exporters as well going in for higher social and environmental facts. The movement particularly focuses on the goods that are exported in particular from the developing countries to the developed countries but also focuses on the goods that are produced and used in the developing countries. The movement tries to achieve greater transparency and equity in international trading relationships. Most of the fair trade organization uses the definition given by fine as a standard while defining fair trade (Solomon, Bamossy, Askegaar and Hogg, 2013). FINE which is an organization made up of four main fair trade organizations in the world defines fair trade as- A trading partnership that is based on dialogue transparency and respect and is based on grater equity in international trade (Schiffman and Kanuk , 1999). There are several international organizations which serve as fair trade certifiers. Fair trade level is commonly used by the purchaser to make a positive buying decision. Fair trade organizations worldwide are engaged in providing active support to the producers, promoting ethical practices, raising awareness and advocating change of rules in the practice of international trade (Chisnall, 1994). Ethical consumerism Ethical consumerism actually originates from the utilitarian point of view. This view tells that the people or the consumers should accept all responsibilities be that social, moral or spiritual of any harms that have been committed at any distance in space and time as a direct or indirect result of one’s choices (Assael, 1998). The founder of the utilitarian concept advocated the view that the humans are duty bound to take all moral responsibility of the ramifications of the choices that they make (Foxall, Goldsmith and Brown, 1998). Even the ancient scriptures speak in volumes about ethical consumerism. The Judea-Christian philosophy considers that the god has created humans as moral guardians about the welfare of earth and the humans are morally responsible to engage in ethical behavior that leads to the welfare of all (Devinney, Auger and Eckhardt, 2011). Ethical consumerism is a broad term used to describe all the products that are manufactured by a company in order to cater to the people’s best selves (Irwin, 2015). However as most of the producers have focused on ethics in selling their products many have questioned whether ethical goods do really have the ability to change the world as envisioned earlier (Martinez and Poole, 2008). The pessimist argue that had the consumers been so aware of the ethical practices and valued them so highly then the goods that were produced by keeping in mind the highest standards of ethical choices would have the highest market share (Smidgen and Corrigan, 2006). Some argue that while companies that indulge in CSR activities do sometimes get the benefits out of it most of the times doing well for the society actually means sacrificing profits (Karman, 2010). However, the fact remains that whatever the pessimist may say; the consumers can part with their money if it is for an ethical cause. The case in point is that last year thousands of people took ice bucket challenge last year and gave $115 million in charity as a result. Ethical choices that the consumers make are mainly of two types either positive buying or moral boycott. Positive buying- This practice refers to the buying of goods that are ethical or goods from the company that employ ethical means to produces. This tendency of consumer is actually a reflection that they value ethical goods more than their petty self interest. Moral boycott- This refers to the tendency of the customers to reject all goods that are not made keeping in mind the ethical standards or by the company who do not follow ethical practice. In order to induce positive buying several standards have been introduced. In developed countries it is made mandatory to disclose along with information such as ingredients or the country of origin of products it is mandatory to mention the factory address where the goods have been produced. In certain developing countries such as China as well it is mandatory to include the address, phone no. and fax no. of the manufacturing company as well so that thee consumers can themselves judge whether the goods are being manufactured in the highest of standards. Moral boycott on the other hand is the practice of consumers to avoid purchasing of those goods that they believe has been made or manufactured unethically. There are several reasons as to why the consumers decide to boycott certain products including unethical and exploitive labor practices, manufacturing practices that cause harm to the society etc. Is a consumer buying from fair trade ethical consumers? The most fundamental aspect of the ethical consumerism that is commonly misunderstood is that there exists huge discrepancy between the no. of people who actually say that they eat decently and the number of people who actually show. The fact of believing in eating decently and actually consuming ethically are two different things. It is often preached that the consumers are becoming more and more ethical now days and are incorporating ethical factors in their purchase of products. Although it is true that there are many individuals who consider their values and beliefs while making a purchase, when the actual consumer behavior was examined, it was found that the percentage of shipping choices made by the consumer on truly ethical grounds was really small than most of the surveys tell and most of the observers like to believe (Guido, 2009). The problem with secondary data collection in this regard is that they deal with ethical consumerism lies in the fact that is that in most of these surveys the respondents report on their own purchasing habits or intentions, whether the data researches have been conducted through surveys or interviews (Harrison, Newhall and Shaw, 2005). However there is no validation of the results and most often than not the individuals have a habit of overstating the importance of social and ethical responsibility factors in their consideration criterion while making a purchase decision. There is a view that most of the consumer research data is pretty useless as there is always a difference in what people say in a research and what they actually do. There has been rare exception where a multinational corporation has acquired a company which deals with ethical products and invested in it in order to grow it as a separate line of business. There are several models that have been put forward by several behavioral and social psychologists, which try to explain why consumer can’t take into consideration ethics consistently while making purchase decisions, although most of these theories have focused on green consumerism rather than ethical consumerism (Lewis and Potter, 2013). Price is considered as one of the first barrier in consumers going on to ethical goods. It is true ethical goods or for that matter organic foods are purchased higher than other goods. There is no direct link between consumers’ willingness to pay and the organic or ethical goods and the higher price associated with these products (Strydom, 2005). Several surveys that have been conducted by research firms actually reveals that shoppers found that the high prices for organic foods were only accepted by consumers on 6% of the total green products. Researchers found that the freedom to purchase green products was a very complex decision and not only depended on the pricing decision. The consumers go on to afford the luxury of buying ethical products only after other conditions and concerns regarding purchase are satisfied (Evans, Jamal and Foxall, 2007). Thus the two factors that is believing in the fact that it is important to consume ethically and rating it as important while comparing it to other issues in everyday life are two very different things. It is the need of the hour to view ethical consumerism as just a part of the series of other consumer concerns. One of the factors that need to be taken into consideration among other factors while the consumers go in for buying an ethical product is convenience. Other important facts to consider are brand loyalty and quality of products. One of the several factors that have been debated in recent years is whether knowledge plays an important role in the consumer decision process while they choose to o in for the purchase of an ethical product (Engel, Blackwell, and Miniard, no date). While there are some researchers who have emphasized that more information is a deciding factor behind the consumer making an ethical choice; however the availability of more information does not guarantee the increase in ethical consumption. The choice of ethical issue in decision making is complex and it is very complex to determine the factors that are responsible behind a consumer making an ethical purchase decision (Kumar, 2009). Most of the surveys have also failed to find out what are the guiding factors that motivate a person to make an ethical choice when purchasing a new product. The reason is in most of the surveys the paramount difficulty that surveyors face is to determine the important questions that a surveyor should ask in order to get the right answer and if it is at all ethical to ask those questions (Coff, 2008). The problem with human psyche is that it employs a very complex thought process and the people do not have a single value for the things neither do they have a stable and consistent utility structure (Madaan, 2009). The idea that the humans have a single value and have a single preference has long been rejected. Daniel kahneman for example in his books states that people are neither too rational nor are the people complete selfish. The tastes of people in essence are not stable (Kahneman, 2011). Conclusion Through the proceedings of this essay it can be found out that ethical decision making has been a major factor that has affected the consumer psyche in the recent years. Surveys in general have tend to focus on the fact that the ethical choices that the producers take in producing a particular good becomes a deciding factor while the consumer makes a purchase decision. However there is another group of researchers that suggest that the results of the different surveys may not actually be true and that there is actually a difference in what people actually do in practice and what they say in a survey. There have been several studies that have focused on the fact as to why the consumers cannot take into consideration ethical choices every time they make a purchase. It is said that the consumer decision making process is actually a very complex process and there are several factors that the consumer takes into consideration before making a purchase decision about ethical products. The most important factor to note is that the consumers are neither too rational nor too selfish while making a purchase decision. The marketers should push for aggressive advertisement and better pricing if they want to push for higher sale of ethical products. References Assael, H. (1998). Consumer Behaviour and Marketing Action. Massachusetts: PWS-Kent. Chisnall, P.M. (1994). Consumer Behaviour. London: McGraw-Hill. Coff ,C. (2008). Ethical Traceability and Communicating Food. Copenhagen: Springer Science & Business Media. Desmond, J. (2003) Consumer Behaviour. Palgrave: London. Devinney, T., Auger, P., and Eckhardt , G. M. (2011). Value vs. Values: The Myth of the Ethical Consumer. 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European Advances in Consumer Research. 7(1). pp. 608-613. Read More