Monday 23 May 2011

The myth of the ethical consumer

Recent research led by Timothy Devinney, professor of strategy at the University of Technology, Sydney has found that most people will not sacrifice product function for ethics. The research team concluded that proponents of ethical consumerism want to believe that people make socially oriented choices that override a general appraisal of product features and functionality but that this is a delusion. This looks to me like common sense, but it is useful to have hard research to back up my gut feeling.

The ethical consumer is an elusive person. I pay a premium in my local shop for eco cleaning products as I want the shop to stay in business; it is a short walk from my front door and over the long-term I will save by spending less on transportation, but the product has to work well and the premium has to be small. Even though I am a passionate advocate for sustainability I will not be persuaded to buy a sub standard product just because it claims to be green.

Green and ethical factors will become increasingly important to close sale transactions ranging from major corporate contracts to the sale of individual items. Such factors will be the deal clincher but green will not override the prime metrics of value-for-money and fit-for-purpose. First-class green products will dominate the market place in the future; second-class products that are green will sink without trace.

Companies should not plan to rely on ethical consumerism to underpin the business. Customers want quality and value; sustainable business is about delivering the required quality at a competitive price using sustainable processes. The payback comes from being ahead of the next ratchet up of government regulation and gaining some protection from the next hike in the price of energy and other resource inputs. There are numerous reasons to put sustainability at the core of business strategy but being able to sell to ethical consumers is very low down on the list of priorities.

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