Socially Conscious Consumerism

Highlights for Educators from a Systematic Review of the Body of

ResearchDr. June Cotte

Richard Ivey School of Business

Commissioned by:Network for Business

Sustainability

The Terra Bite Case Study

• A case study (available here) was developed to support this project. It

deals with voluntary consumer payment method

• The implicit assumption of the owners is ethical behaviour on the part

of consumers, most of the time

• Another implicit assumption is that socially responsible consumers will

pay enough of a premium to more than compensate for free-loaders

• The results of a knowledge project undertaken for the Network for

Business Sustainability looked deep into the evidence underlying these

and similar assumptions

Research Question and Approach

Are consumers willing to reward firms for their positive CSR-related actions?

• if so, by how much?• what factors influence whether they will?• do they also punish (monetarily)?

What is CSR?

Organic products Local purchasing

Recycling Slow food

Socially conscious consumerism

Environmental consumerism

Social marketing Green consumption

Cause-related marketing Eco-friendly products

Paying for ethical behaviour Sustainable products / consumption

Ethical firm behaviour Corporate social responsibility

Keywords searched:

What is included in the study?

• Search found nearly 1,700 academic articles and industry reports

• Excluded least relevant and worst quality studies

• Analyzed 91 articles on consumer willingness to pay for CSR initiatives

Results: Types of Studies

Results: Location of Consumers

Results: Meaning of CSR

Results: Meaning of CSR

Results: Consumer Willingness to…

Results: Attitudes

Results: Behaviours

Results: Intentions

Results: Intentions vs. Behaviours

Note: based on a small set of the total studies that included specific increases (13/91).

Conclusions

Behavioural studies trump surveys• Surveys yield wider range of results than observing consumer

choices

Attitude-Behaviour gap confirmed• Intentions > behaviours• Biggest gap on the environment: consumers are willing to

change but not pay more• Smallest gap on organic, ethical sourcing, and animal rights:

fewer studies show willingness to change, but those that do also show that consumers are willing to pay more

What’s a Marketer to Do?

“…assuming all else is constant, consumers are more likely to purchase from companies that engage in CSR actions, particularly in domains that consumers deem appropriate and personally relevant… [but]… little is constant in the real marketplace.” (Du, Bhattacharya and Sen 2007)

Messaging needs to position along the lines of “there is no trade-off” — consumers expect the “better” alternative to be at least equal in price and quality to what they are already buying

If you plan to charge a premium, messaging needs to revolve around other ways your offering saves money (the ‘value in use’ argument from the B2B area)

Future Opportunities

What influences consumers? We lack consensus on the profile of the socially conscious consumer and company:

• My final report will have a model of possible influences• But we must better understand the influences and the

gaps between attitudes, intentions, and behaviours

Research in this area needs to be more rigorous. • Price and quality are never equal, so let’s not assume

they are

Research Opportunities

Enough surveys. We need better methods:

• Self-reported survey results simply are not up to the task of determining a price premium, or real marketplace behaviour

• Consumers often assume the socially conscious choice must be either more expensive, or not as effective

• More rigorous methods include conjoint, forced-choice, traditional experiments

Firm CSR Actions

Consumer Attitudes

towards CSR Actions

Consumer Behavioral Intentions

Willingness to Change

Behavior

Willingness to Pay a Premium

Willingness to Punish

Influences

Enhancements and Impediments

Impediments:•Contradictory firm actions•Prior negative consumer

knowledge or attitude re: firmEnhancements:

•Consumer knowledge of action

•Consumer understanding•Prior positive consumer

attitude re: firm•Company / issue fit

Impediments:•Negative consumer

attributions (why? greenwashing)

•Effect on perceived quality

•Negative perceptions of consumer efficacy

•Consumer sacrificeEnhancements:

•Positive perceptions of consumer efficacy

•Acceptance of firm and consumer responsibility

Impediments:Competitive actionsConfusion at POP

HabitMisleading packagingRequired trade-offs

Enhancements:Clear benefit

Prior small commitmentConsistency/fit with brand

Salience of issueSimplified claims/labels

In-store education