The connection between marketing and ethics is becoming extremely important to companies today. Consumers now care about how the company goes about its business, and the implications the business processes has on people, animals and the environment.
Let’s examine a topic about companies marketing their products as being “ethical” products such as Fair Trade stamps, or environmentally friendly packaging. Companies will attempt at ensuring that the processes that go into creating a product are ethical, and the company will market the product reflecting these “fair” processes. Since these measures cost the company more money, the firms are hoping that “ethical” consumers will respect the companies more and therefore purchase a marked up product.
But as this Wall Street Journal article
examines, are consumers willing to spend the extra cash to “reward” these ethical companies? Summarizing the Journal’s experiment, they found that consumers are willing to pay a slight premium for an ethically made product. However, consumers are also willing to purchase a non-ethically made product if it’s offered at a great discount.
So, it seems as though a completely ethical product won’t necessarily win consumers over. As the article also suggests, if a company demonstrates a slight effort into making its product or service ethical then this could be enough to draw consumers’ attention. So this also raises the question for companies attempting to go “all in” with ethical production, is it worth it?
Sure, company executives may have it in their heart to want to show consumers that their company produces fairly made products. But in the end it all depends on the bottom line, and how it affects their year-end bonus. I think if you use this study as a base, spending just a little extra on ethical production is enough.
You have raised some very good points here Cody!
I think that there is only a very small amount of the population that is actually willing to buy “purely ethical” products and to pay this premium price for obtaining this factor. In day-to-day transactions for commonly bought items the general public will not pay this premium price due to the fact that mostly everyone else won’t pay it either. I think in order for ethical products to actually be successful in the current markets a huge coordinated effort would have to occur. Besides the perceived benefit of buying ethical product, and feeling “good about it”, consumer’s would have to see the difference they are making from the consistent buying of these products. Only then could we see a large shift of consumers’ willingness to pay for ethics, and for producers to produce in an ethical manner.
The ethical marketplace is a vast one and covers everything from toothpaste to tumblers. In fact nearly everything that we use in our daily lives can be acquired either from an ethical or non-ethical source. Ethical products from the ethical market used to be much more expensive but now that more and more consumers are demanding products like this, prices have become much more affordable. In fact, sometimes you will find prices are much the same, so going for the ethical market option makes a lot of sense.