Consumer Evaluations Of Sales Promotion – Analyzing Methods And Ethical Approach

Consumer concerns about ethics

Describe about the Consumer Evaluations of Sales Promotion?

In present times, companies are taking serious steps to develop products which are in line with the theory of ‘ethical consumerism.’ By definition, ethical consumerism refers to the ethics and values followed by consumers while making any purchase or buying products from companies (Jay, 2008). Under the idea of ‘ethical consumerism’, consumers base their ideas of buying products considering social, ethical and environmental attributes. Various studies suggest that only handful of consumers make their buying decisions depending upon the ethical basis (Alvarez and Casielles, 2008).  Task 1 aims at analysing the methods that can be adopted by companies such as Rana Plaza toenhance their business practices and prevent tragedies to occur in future (Bucaro, 2007). Alternatively, Task 2 aims at examining any organisation and how they operate ethically, taking into account their approach to consumerism, values and environmental friendliness.The organisation selected to examine to carry out the analysis is Adidas. Adidas is a multinational company based in Germany and engaged in manufacturing sports shoes and apparels for men, women and kids (Jay, 2008). The company is considered as one of the premier sport shoes manufacturing companies across globe and largest employers in world. In 2013, the total number of employees working for Adidas was 50,278.

Now days, consumers have become aware and looks not just for goods at fair prices but also qualitative products. As a result, consumers are considering ethics of the company as an important factor in deciding whether to buy the product or not (Auchmutey, 2009). This is evident of the fact that consumers are concerned about different issues that company might face from which product is bought. For instance, some of the issues of the company can include labour practices, diversity quotes, environmental policies etc (Braley, 2008). In the case study, a building in Bangladesh, Rana Plaza collapsed on garment workers of a factory in it. The collapse happened four months after a fire broke out at a similar facility. These kinds of tragedies have made consumers think twice before buying products (Anderson and Cunningham, 2008). In Bangladesh, one of the poorest economies in world had already a series of industrial accidents. Although Bangladesh has become one of the key exporters of cloth to developed countries such as USA and UK due to its low wages, the government, labour groups and western clothing companies are taking steps to minimise industrial tragedies (Birch and Moon, 2008). One of the steps being taken in this direction is encouraging ethical consumerism. By definition, ethical consumerism refers to buying goods and products that are developed ethically (Auchmutey, 2009). In broader sense, developing ethically refers to developing in a way that doesn’t harm to or exploit human, animals and natural environment. Ethical consumerism is carried in two ways: Positive Buying and Moral Boycotting. Positive buying refers to the process of favouring ethical products and businesses that operate on the principles of developing ethical products instead of just focussing on self interest (Rawwas, 2007). Alternatively, moral boycotting refers to the negative purchasing and company based purchasing. In the case study also, companies sourcing clothes from Rana Plaza can help enhance business practices to prevent re-occurrence of tragedies such as collapsing of buildings or breaking of fire (Rob, 2010). The garment industry contributes to 80% of Bangladesh’s yearly exports and employs a whopping 4 million people at present (Carroll, 2009). Two years back, over a thousand garment workers were killed and 2500 injured when on a very unfortunate day, Rana Plaza building in Bangladesh collapsed on them while they were working (Rallapalli, 2008). It is shocking that despite sourcing clothes to many western high street fashion stores like Mango and Benetton, the condition of the garment industry in Bangladesh is poor and the factories are highly vulnerable to many disasters (Rob, 2010).

Preventing tragedies in the garment industry

It is high time that the government, local manufacturers, consumers and of course the sourcing companies pulled up their socks and took initiatives to prevent any kind of disasters from occurring in this industry (Borzaga and Becchetti, 2010). The sourcing companies could consider the following few actions in order to prevent Bangladesh clothing factories disasters:

The sourcing brands like Primark, Bennetton, Mango, Matalan and Bonmache must put certain measures in place to make sure that the garment workers in the clothing factories in Bangladesh are paid enough. This would further help the workers and factory owners build and work factories that are structurally well equipped and sound have got sufficient fire escapes, and that there are enough health and safety provisions (Bateman, 2007).

The high street sourcing companies should understand that only making noises about carrying out initiatives and taking appropriate actions would not solve the problem. They need to actually carry out initiatives and take effective actions so that disasters like the one that took place in 2013 are not repeated (Bearden and Teel, 2007).

The sourcing companies must make investments per factory so that the changes could be efficiently implemented. They must understand that they could afford to invest money for betterment of the industry but the factory owners can’t.

The sourcing companies also need to ensure a sustainable supply chain. In order to do this, the large international or western brands like GAP and Walmart that source clothes from the factories in Bangladesh must make programmes like training and development of the workers part of ‘business as normal’. This would help the workers in developing their skills, further increase the efficiency of the factories thereby ensuring better working conditions for the workers (Grande, 2007).

The sourcing companies need to speak to the workers frequently about their concerns and problems being faced by them at work, and adopt appropriate measures to curb their problems.

Before sourcing clothes, the sourcing companies must check that the garment factories they are dealing with conform to building codes. If they do not, the companies must end the contract then and there. This would encourage the factory owners to revamp the factories and adopt appropriate safety measures.

The sourcing companies greatly need to encourage ethical consumerism. They could do this as part of being a sustainable corporate business. This would encourage consumers to think about environmental and societal aspects before deciding to buy clothes or any other product.

In second section, this report intends to evaluate the ethics followed by Adidas while developing their products. Adidas is a multinational company based in Germany and engaged in manufacturing sports shoes and apparels for men, women and kids (Dick and Basu, 2007). The company is considered as one of the premier sport shoes manufacturing companies across globe and largest employers in world. In 2013, the total number of employees working for Adidas was 50,278. Many large organizations, including Adidas, pay attention to offering the right product for all their consumers and increase the value of their relationship with each one of them (Grande, 2007). While they are optimum on offering some amazing products for all the customers, they have aimed at maintaining them completely compliant with the environment as well. The company aims at saving water, energy and reducing the carbon emissions (Rawwas, Vitell and Al-Khatib, 2006). They design shoes and other products through various re-usable materials. This is done by taking into consideration the use of renewable materials for manufacturing. Thus, the environmental footprints on the use of raw materials and various products are improved. To maintain the bridge of consumerism intact, the company carries out various audits for managing the sales and the manufacturing rates as well. They sponsor, advice and listen to all the possible outcomes to make sure that premium quality of products are effectively delivered (Rust and Zahorik, 2009). Thus, they are committed to build and maintain relationships by supporting various athletes through their products. They abide by all the ethical rules and make sure that every person gets hold of the best products that are offered under the brand name (Sirdeshmukh, Singh and Sabol, 2008). Through their products, they create a podium of communication for exchanging ideas, values and ethical support, which is unwavering along with a promise of eternity (Mazar, 2010).

Actions for sourcing companies to prevent tragedies

Consumerism defines the ideology of the purchase of goods by various customers, which will enhance the functioning of the company related to a certain amount of sales and marketing. Customers are the most important thing for any organization and it is through the customers that an organization will flourish considerably (Sullivan and Anderson, 2007). The importance of having innumerable customers and following epic consumerism is as follows:

Repeating the process of selling and purchasing is extremely important for any organization as it offers revenue and certainty for any business (Tsai, Liang and Liu, 2007).

All the organizations hugely depend on the customers for increasing the amount of revenue that is earned through their business. If the business is not developed as per the needs of the customers, then they might face a drastic downfall. The kind of visitors that nay business earns in a considerable amount of time can be only kept to the mark, if the consumerism is given huge importance.

Without the support of the consumers, no organization can survive in the ever-growing competition (Jay, 2008).

The sole purpose of any organization should be to value the words of the customer and modify their services accordingly. The aim of being a successful venture can only be fulfilled if the consumer’s are valued to a greater extent.

Customer satisfaction is the ultimatum, which keeps the business in the drive for achieving more and selling the products at better rates (Vredenburg and Wee, 2010). The relationship that a company builds through the consumers should always be in an ascending order. This is because, as long as the ladder of improvement is occupied on a daily basis, a company will reach to the pinnacle of success in no time. The stage to where the customers allow a company to rise depends on the satisfaction that any company offers (George, 2010).

Conclusion

In nutshell, it can be said that ethical consumerism can be one of the critical steps towards  encouraging companies to develop product that don’t harm natural environment, animals or anything related to it. The study indicates that one of the major reasons for such a buying behaviour of consumers is that they are not ready to make any compromise with price, quality and ethical considerations of the product. Hence, more and more companies are turning towards developing products based on ethical values. It is believed that the companies that don’t implement ethical consumerism at their operational level are likely to fail in the long run.

In addition to this, there is a great need for the government of Bangladesh, the local garment manufacturers and most importantly for the sourcing companies to adopt effectual methods and strategies to improve the overall condition of the clothing industry in Bangladesh. The western high street fashion brands such as Benetton and Mango to which the Bangladesh clothing industry caters must adopt measures in order to improve the deprived condition of the workers, poor safety and health measures at the earliest. The sourcing companies, the government and the workers themselves need to learn lessons from the disaster that took place at Rana Plaza in 2013. Because of this disaster which was a result of complete carelessness and negligence of the factory owner, builder, government and the sourcing companies, the garment workers in Bangladesh must be feeling like it has hit the crisis point. But the horrifying truth is that many more disasters are waiting to happen because the poor conditions in the garment industry of Bangladesh continue to exist. Urgent actions need to be taken for fixing the issues.

Ethical approach of Adidas

Some of the recommendations for the sourcing companies that buy cloth from the garment industry in Bangladesh are:

They must encourage ethical consumerism.

They must address all the issues that exist in the Bangladesh garment industry.

The sourcing companies must understand that they can fix the issues but the industry cannot. This is because the brand that source garments from Bangladesh garment industry are all high street brands that have been sourcing garments at very cheap costs and making unimaginable profits.

The sourcing companies must speak to workers about their concerns because there is no better way to ensure industry compliance with health and safety standards.

References

Alvarez, B. A. and Casielles, R. V. (2008) Consumer evaluations of sales promotion: The effect on brand choice. European Journal of Marketing, 39 (1), 54-70.

Anderson, W. and Cunningham, W.H. (2008) The socially conscious consumer, Journal of Marketing, 36, 23-31.

Auchmutey, J. (2009). “Trying on carbon-neutral trend”. Atlanta Journal-Constitution (The Atlanta Journal-Constitution).

Bateman, C. R. (2007) Framing effects within the ethical decision making process of consumers, Journal of Business Ethics, 36, 119-126.

Bearden, W. O. and Teel, J. E. (2007) “Selected Determinants of Consumer Satisfaction and Complaint Reports,” Journal of Marketing Research, 20, 21-28.

Birch, D. and Moon, J. (2008) Introduction; JCC theme issue: corporate social responsibility in Asia. Journal of Corporate Citizenship 13: 18-23

Borzaga, C, and Becchetti, L. (2010) The Economics of Social Responsibility. 6^th ed. New York: Routledge.

Braley, S. J. F. (2008). Ethics incorporated: Department managers set and enforce guidelines. Meetings and Conventions. 36(1), 58-66.

Bucaro, R. C. (2007). Tackling the ethics question in business. Club Industry. 17(1), 14.

Carroll, A. (2009) Business Ethics: Brief Readings on Vital Topics, 3^rd ed. London: Routledge.

Dick, A. S. and Basu, K. (2007) Customer loyalty: Toward an integrated conceptual framework. Journal of Academy of Marketing Science, 22, 99–113.

George, N. (2010). “It goes against our nature; but the left has to start asserting its own values”. The Guardian. Accessed on 28 Feb, 2015.

Grande, C. (2007-). “Ethical consumption makes mark on branding”. FT.com. Accessed 28 Feb, 2015.

Jay, K. (2008). “First Carbon Neutral Zone Created in the United States”. Reuters.

Mazar, N. (2010). “Do Green Products Make Us Better People?”, Nina Mazar.

Rallapalli, K. C. (2008) `Consumer Ethical Beliefs and Personality Traits: An Exploratory Analysis’, Journal of Business Ethics, 13(7), 487-495.

Rawwas, M. Y. A., (2007) `Consumer Ethics: An Empirical Investigation of the Ethical Beliefs of Austrian Consumers’, Journal of Business Ethics, 15(9), 1009-1019.

Rawwas, M. Y. A., Vitell, S. J. and Al-Khatib, J. A. (2006) `Consumer Ethics: the Possible Effects of Terrorism and Civil Unrest on the Ethical Values of Consumers’, Journal of Business Ethics, 13(3), 223-231.

Rob, G. (2010). “Accounting and accountability : changes and challenges in corporate social and environmental reportin.”, Journal of CSR.

Rust, R. and Zahorik, A. (2009) “Customer Satisfaction, Customer Retention, and Market Share,” Journal of Retailing, 69 (2) 193-216.

Sirdeshmukh, D., Singh, J. and Sabol, B. (2008) Consumer trust, value, and loyalty in relational exchanges. Journal of Marketing, 66, 15–37.

Sullivan, M. W.and Anderson, E. W. (2007), “The Antecedents and Consequences of Customer Satisfaction for Firms,” Marketing Science, 12, 125-143.

Tsai, M., Liang, W. and Liu, M. (2007) The effects of subliminal advertising on consumer attitudes and buying intentions. International Journal of Management, 24 (1), 3-14.

Vredenburg, H. and Wee, C. (2010) “The Role of Customer Service in Determining Customer Satisfaction,” Journal of the Academy of Marketing Science, 14 (2), 17-26.