Function Trumps Ethics in Consumers Minds
Social product features such as labour practices can affect a person's buying intentions, but most people will not trade off on functionality.
Are consumers willing to make tradeoffs to purchase ethically? The authors of this study conducted experiments with students in Hong Kong and Australia, and Amnesty International supporters. Labor practices or animal rights and the environment were the social product features studied. The results showed social product features can affect a person's buying intentions, but that most will not trade off functionality.
Some research suggests consumers will pay for ethicality but this has been examined mainly via case studies or survey results; consumers have not been forced to make a trade-off between social and functional features. This research asks whether social product features, or lack thereof, affect consumer purchase intentions, especially when they interact with functional features. Further, does information about the social attributes change the intent to buy?
Social features may make a difference but only once functional features are satisfied. Even "socially conscious consumers" (the segment identified as those for which all social attributes affected purchase intentions) also valued function and price.
Ethical features make a difference for at least some consumers. Shoes with ethical features made up 88 per cent of total purchases for athletic shoes by the Amnesty International supporters.
Some social features are more important than others. Of the social attributes studied, avoiding child labour was more important than working conditions, living accommodations and minimum wage; for soap, animal testing was more important than using animal by-products or being biodegradable.
- Providing information, like a backgrounder, on social attributes does not change intent to purchase.
Implications for Managers
Good social attributes can't make up for poor functional attributes. Socially conscious consumers exist but they also place great value on functional attributes. For example, in the case of athletic shoes, the likelihood that someone will purchase the ethical product with a premium of $4 without compromising functionality is 62 per cent. However, with the same premium and a sacrifice in functionality, the probability drops to 20 per cent.
- Point of purchase signage on a social feature may not increase sales.
Implications for Researchers
The authors note the sample was not representative; it would be interesting to see what proportion of a representative sample would choose products based on ethical attributes. A more realistic experiment may observe what people actually buy, or force them to buy something rather than asking which they would buy.
In the experiment, subjects where asked to consider and purchase 32 hypothetical soap bars or athletic shoe products, each with different functional and ethical attributes and prices. Some subjects were also provided background information on the social attributes (e.g. a news story). The social attributes examined for shoes were child labour, minimum wage, working conditions and accommodations; for soap, they were biodegradability, animal testing and animal byproducts. Researchers used 3 groups: Amnesty International members, Hong Kong undergrads, and Australian MBA students. In total, 1253 people were studied; 445 instruments were returned.
Can a product’s sustainability—or lack thereof—influence how consumers view its other attributes? In which contexts can sustainability hurt sales?
Reports and Articles
Eco-labels or sustainability ratings can be an important guide for purchasing sustainable products. But not all rating systems are equally effective.
Consumers will pay more for ethically produced goods, but they'll "punish" a company for unethical practices by more than they will reward ethical ones.
Consumers will pay a 10% premium for sustainability, and demand a greater discount for "unsustainability," but they won't trade off functionality.