Ethical Consumerism

Write an analytical business report on what ethical consumerism means for businesses. 

Choose a company and explain and analyse how they operate ethically. This must take into account the ethics and values of the company you choose to focus on. 

The report must be written in business report format and include the following sections:

• An executive summary which gives a brief overview of the argument in your report including key findings and conclusions.

• A contents page which lists the sections and the page numbers.

• • An introduction which gives an overview of the structure of your report.

• A brief overview and analysis of ethical consumerism, identifying the examples of some of the products which fall into the ethical category. You must include a definition of ethical consumerism and arguments as to why it is a good strategy for businesses to adopt.

• A detailed review of one company claiming to operate ethically. Provide evidence as to how ethical the chosen company is linking this with their ethics and values.

• The results of a short opinion survey on what influences consumer buying behaviour, carried out by you from a small sample of 10-15 students at GSM London. You need to conduct primary research for this section.

• A conclusion which includes critical evaluation of ethical consumerism based on the evidence that you have gathered both from your primary and secondary research, focusing on the company you have chosen for detailed review.
• Recommendations as to what your chosen company should do to improve their performance in relation to ethical consumerism.
• You must include a references list after the main body of the report. Remember to use Harvard referencing where appropriate.

A copy of your opinion survey should be included in an appendix.

A brief introduction to ethical consumerism

On April 24 2013, a building known as the Rana Plaza collapsed on top of garment workers inside its factories, killing more than 1,100 people and injuring 2,500. It would be known as the worst ever accident in the garment industry anywhere in the world. 

It was later discovered that 28 brands that sourced clothes from the plaza included Primark, Benetton, Mango, Matalan and Bonmarché, prompting public concern about the working conditions of garment factories around the world which contribute to western high street fashion stores.

Ethical consumerism encourages people to think about how the products they buy are sourced and produced and which are not harmful to the environment and society. This can be evidenced through simply purchasing eggs that are free-range or boycotting goods/companies which promote child labour or unsavoury working conditions.

The range of product areas which fall into the ethical category includes:

• Banking  and finance
• Energy 
• Fashion
• Food  and drinks 
• Travel and tourism

Ethical consumerism is a growing market; a recent report from the Co-operative Bank showed a third of UK consumers claiming to be concerned about ethical consumption, with a large number of the public willing to challenge and boycott companies which do not comply with ethical standards. 

Introduction

Depending upon the ethical values such as methods of production, environmentally products, standards of labors and human rights people make their purchasing decision.  Ethical consumerism is a phenomenon that includes activities of ethical trade. Organizations have realized that insight into the behavior of consumers is the most significant aspect to develop tools and strategies to function in accordance with the business behavior and concerns of the consumers (Blythe, 2013). Consumers are in most time not seen to consider companies based on a set of technical specifications. On the contrary, the trust of the consumers to select a brand, product or a company is based on an organization's ethical behavior (Noel, 2009). 

A large number of business organizations adopt ethical practices since they believe in consumer's needs. Brief overview and analysis of ethical consideration have been discussed here in this report. The significance of these practices has been discussed in brief. In addition to this, this section also provides examples of services and products that are included within an ethical category.  In the following section, the ethics and values that are being followed in Starbucks have been discussed.  Primary data has been collected from GIS College, London in the following section. The data has been collected and graphically represented in order to understand the aspects that impact customer purchasing behavior. This section is followed by a conclusion and recommendations. 

Brief overview and analysis of ethical consumerism

Consumers in recent time are more concerned about the environment surrounding them and how they have been affected by the actions and activities of different organizations. They are becoming more concerned about the ethical practices that the companies are following and consecutively they prefer such companies over the ones that do not follow ethical codes of conduct.

This is moreover a crucial strategy to meet the expectations and demand of the consumers as well. Ethical consumerism is all about consumer awareness of the ethical issues that are needed to be understood and promoted through the activities of the business (Ferrell & Ferrell, 2009). It has been found in genetically modified products that most ethical consumer concerns are linked with food safety issues that are how it impacts on the environment. 

Ethical practices can be subject to both consumer and organization that have been providing services and products. It refers to a practice of production or purchasing of any service or products that minimize damage to the environment and society. Thus the practices that are likely to bring into the adverse impact on the society or the environment can be avoided through ethical consumerism. Ethical consumerism includes certain aspects such as – 

• Positive Buying – Positive buying is the practice to support ethical products such as purchasing organic products, fair trade and supporting ethical codes.
• Negative purchasing – Certain goods and services that are unethically produced are being avoided by consumers.
• Company based purchasing – Customers are inclined to make their purchases from the companies that are socially and environmentally responsible. Additionally, they also are willing to pay more to purchase of the products and services of those companies.  On the other hand, customers also have the power to avoid all the products made by one company.
• The fully screened approach – Individuals evaluate whether they are been following ethical business or practices and their products as well.

In accordance with the Co-operative Bank,( 2007)in the UK, a number of segments including ethical food and grocery products such as free range eggs and organic foods., ethical personal products such as clothing and cosmetics and financial products such as banking and investment are considered as ethical products and services. For the consumers, ethical consumerism, however, refers to the prevalence of consumer preferences for services and products that comply with the ethical policies and procedures. Consumers are likely to have an inclination towards purchasing services and products that have compliance with the ethical production or selling procedures. They also are seen to purchase products or services from the companies that have an ethical reputation.