DO ETHICS MATTER IN CONSUMER PURCHASE BEHAVIOUR?

Fig 1: IKEA’s reusable blue bag embraces the green imperative.

JACQUELINE BEI WALKER Lord Ashcroft International Business School (LAIBS) Anglia Ruskin University Cambridge - 2009

i ABSTRACT

In recent years, ethical trade and Corporate have gained a lot of attention in the UK, yet limited attention has been given to the role and impact of ethical concerns on consumer purchase behaviour. The overall purpose of this study is to contribute to a better understanding of . A self-administered questionnaire was used as the data collection technique in order to achieve the objectives of this study. The results of the findings revealed that, despite consumers’ high level of awareness of ethical issues there is little evidence that these issues greatly affect consumers’ purchasing behaviour. In fact, price seems to be the most important indicator of their purchasing behaviour. The uneven distribution of wealth also makes it impossible for all consumers to choose ethically sound products. The findings of this study are a useful source of information for marketers who may want to attract this “green” segment of the market. Furthermore, whether or not marketers are pursuing the ethical strategy, they should also bear in mind that even if a good eco-performance is unlikely to yield competitive advantages, a poor eco-performance can still lead to competitive disadvantages.

ii ACKNOWLEDGEMENT

This dissertation could not have been written without the support from Mr. Tim Froggett who did not only serve as my supervisor but also encouraged and challenged me through the dissertation process and never accepting less than my best efforts. Many thanks to my professors at the Ashcroft International Business School for helping me to think through their challenging course work. Also, sincere thanks to staff at the AIBS for assisting me with administrative tasks related to my studies.

I would also like to acknowledge and extend my heartfelt gratitude to my mentor, Mrs. Lynn Morgan for her time, knowledge and assistance during my studies.

Most especially I would like to thank my husband, Clive Walker and our children, for their support, love, encouragement without which I could not have survived the process.

And especially to God, who made all things possible.

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CONTENTS

Title Page i Abstract ii Acknowledgement iii Table of Contents iv List of tables v

1. Introduction 1 1.1 Background 1 1.2 What is ethical consumerism? 2 1.3 CSR vs. Profit 8 1.4 Aims & Rationale 9 1.5 Objectives 9 2. Literature review 7 2.1 Ethical issues 7 2.1.1 Environmental issues 7 2.1.2 8 2.1.3 Fair-trade 9 2.1.4 Factory farming 10 2.2 The Ethical Consumer 10 2.3 Barriers to ethical consumption 12 2.4 Conclusion of literature review 15 3. Methodology 16 3.1 The Empirical study 16 3.2 Sampling 19 3.3 Questionnaire 22 3.4 Limitations 23 4. Results of findings 24 5. Discussion of findings 31 5.1 Consumer’s interest and knowledge of ethical products 31 5.1.1 Age and Ethical Awareness 31 5.1.2 Gender and Ethical Awareness 31 5.1.3 Awareness of Key ethical issues 32 5.1.4 Awareness of Ethical Products 33 5.2 Attitude-Behaviour gap 34 5.3 Barriers to Ethical Consumerism 36 5.3.1 Price 36 5.3.2 Source of information 38 5.3.3 Complexity of Ethical consumerism 39 5.4 Negative Ethical Purchasing Behaviour 41

6. Conclusions & Recommendations 44 6.1 Conclusion 44 6.2 Managerial Implications & Recommendations 46 7. Bibliography 48 8. Appendix 1 52

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TABLE OF FIGURES

Fig 1: IKEA’s reusable blue bag embraces the green imperative. i Figure 2: A sugar bowl with 'East India Sugar Not Made by Slaves' on the side. 1 Figure 3: The Ethical Consumerism Report 4 Figure 4: Environmental issues 7 Figure 5: A child ca