I was reading an old blog giving 4 reasons why most consumers don’t care about corporate ethics. It was an interesting read, and I will respond in more detail on the other issues at a later stage. But one issue stood out again – consumers just aren’t willing to pay the price. This typical excuse simply argues that people won’t do something as opposed to delving deeper into why people buy products.
If price is the only issue then Nike would not sell one shoe nor would Starbucks sell one cup of coffee. Okay, so quality has something to do with it, so (some) consumers will consider price and quality when buying a product.
So why do (and did) people in the US still buy American cars? A few years back, American cars were generally more expensive and of lower quality. But people bought them, because they were American-made. Okay so price, quality AND origin can all be part of consumer decision making criteria.
So why do some people buy from from Home Depot instead of Lowe’s? They are equal in price, quality and origin. Well, maybe because the types and quality of services they provide cater to specific consumers. So consumer decisionmaking is about price, quality, origin and service.
And so on, and so on, and so on. There are always many reasons why people buy certain products and not others. We must realize that consumers are not a single robot or unit, but that everyone has their own criteria which they use to when making a decision to buy something. For some, quality ranks highest (that is why people are still paying $200+ for DVD players). For others, environmental impact or health attributes are most important.
Brand value is complex. and by going beyond price and quality to include environmental or social issues in the brand propositioning, helps companies further differentiate their products from competitors. By going forward with corporate responsibility messages, those issues become part of a range of brand elements.
Also, ethically-sourced products don’t necessarily have to cost more–although this is a common misconception. Some products might be more expensive, but corporate responsibility (CR) can also reduce costs and create opportunities. CR is about doing business better – all round. If you are working with your suppliers to make them more efficient, you gain. Paying staff a decent wage can make them more efficient, you gain. By looking after the environment can ensure you still have a product to sell tomorrow, you gain. As each consumer is different, so is each company. We need to acknowledge this and build the ‘corporate responsibility solution’ around what makes business sense for each individual company and product or brand.