Title:
Ethical Brands: A comparative study of Unilever and Nestle in Nigeria: The difference between promises and reality: Do consumers really notice and buy?
“What’s a label worth?” A lot it would seem in the current market trends. What with companies striving to position their brand labelling as ethically produced or labelled (The Economist, 2008). Ethical brands are in a position where there is a paramount need to distinguish and differentiate from the pack while simultaneously striving to meet the functional desires of consumers as well as their psychological or representational needs (Doyle, P 1998).
The last decade has seen the rise in consumers’ ethical consciousness and the concept has grown to become a global phenomenon. There has been an increased awareness by consumers’ of the need to do good to themselves and to the environment. Interest in ethical products has been underscored by the growing awareness and knowledge about ethical and global trade issues ((Cowe R, Williams, S 2000), Mintel (2004), and as such countries like Britain saw sales of fair trade products increase to 46 percent from 2002 to 2003 to reach an estimated £92million in value (Fairtrade foundation 2005). In like terms over the same time frame North America and the Pacific Rim saw a growth in the industry which reached 37percent leading to 1million in total sales.(Fair trade Federation 2005).
In trying to build brand reputation, marketers need to strike a balance between carefully identifying actual functional and representational dimensions while distinguishing themselves in such a manner as would reflect consumers’ needs based on motivations for ethical choices made by them. However, the issue of using ethical considerations in brand building by ethical companies has been seriously questioned due to the negative effects these brands might have on consumers and their environment.
Changing attitudes and beliefs is the predominant motive for ethical brand positioning by most global organisations to create positive evaluations about their product and corporate reputation. The growing trend is that marketers seemingly express moral obligation as well as the assurance that ethical behaviour is compulsory in order to ascertain trust in brands. This gives credence to the general marketing theory which stipulates that all exchanges are based on trust ( Kotler, 2003), and conflicts are likely to arise if buyers and sellers are not in agreement with respect to their ethical mindsets (Lee 1981). This statement holds true because in recent times companies seen as unethical have been the brunt of backlash from consumers, stakeholders and interest groups resulting in boycotts of products.
Research on ethical brands and the acceptance, perception of this concept is not expansive as was discovered when trying to locate literature for this topic. Using my home country; Nigeria and two of its major multinational corporations; Unilever and Nestle as case studies for my research, I aim to draw useful and relevant conclusions about the brands’ products and the consumers’ purchase habits, perception of their ethical stand as well as their products and corporate image.
My desire to carry out this research came as a result of my work experience in marketing and the my interest through my studies in programme on the creativity and hind-sight employed in developing new strategies for sustaining and extending products or services which will consequently this will have a great bearing on my career move for the future.
2. Preliminary Review of the Literature
Interest in research into the area of business and marketing ethics has grown through the years but research in ethics and branding has not been extensive. There however has not been a lot of research on branding and ethical branding especially. Brands have been around for over a 1000 years and the impact of branding and its power over consumers in society today is phenomenal. Brands are prevalent in consumer’s everyday life; production and consumption, food and clothing, personality and style, and from pop to culture to politics (Yin Fan 2005).
Exploratory research in the concept of ethical brands is relatively novel in Nigeria but it is hoped will eventually become an important marketing concept and tool for indigenous companies and marketers of the 21st. The outcome of the research is aimed at giving an insight into the attitudes, perceptions of Nigerians to the concept of business ethics and ethical branding and the resultant motivations to purchase of these brands. The research aims at discovering what factors promote brand loyalty and re-purchase of products based on different variables such as culture, gender, age, education and income in the study.
Marketing has been a regular target of criticism for perceived unethical business practices much more than any other business. The opinion is that the higher the frequency of interaction, the higher the tendency to focus on marketing as a target of criticism (Ferrell and Gresham 1985). It is also argued that as marketing involves more direct contact with high public visibility than any other functional areas, it remains in focus for unethical practices (Swan and Nolan 1985).
The result is that many corporations are becoming more sensitive to consumers and changing their brands to reflect more ethical values to sustain brand image, attract and retain the trust and patronage of consumers. Reason for this stems from the fact that consumers have become indifferent to the different strategies applied by marketers in their communications in a bid to make the bottom line and this has led to fragmentation of the different tools of market communications.
Ethical branding and corporate reputation
Brands and branding has become a widely used term in the business world today with many people unable to agree on exactly what it means. It is defined by the American Marketing Association as: a name, term, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and differentiate them form those of their competitors. A brand is a differentiation device, the living memory and the future of its products (Kapferer, 1997). They represent not only the products or services provided by the company itself, the brand is the company and brands become a synonym of the company’s policy ( Goodyear, 1996; de Chernatony and MacDonald, 2003). No longer is the brand just an interface between the company, its customers; the general public but the face of the company.
Major brands like Coca cola, Nike and McDonalds have such a great brand power which is awesome. They evolved from the drive to create brands which began in the 1980s on the notion that standardising products all over the world would save costs and regular consumer communication. There has been back lash from interest groups in recent times in spite of this. Such negative feelings is most likely because such global brands are highly visible, dominant and therefore are easy targets for criticism and attack and the threat it represents to local markets and cultures.
The argument here is that people believe such global brands have a social responsibility as found out in research involving 3,300 in 41 countries and as such are expected to address any social issues associated with their products. Inability to do this can result in adverse consequences- as in the case of Shell Petroleum in 1995 and its activities in Ogoni Land in Nigeria which resulted in the killing of Ken Saro Wiwa an occurrence which is still an albatross for the multinational to date and Nestle with the outcry about their infant formula sales in Africa in 2005. This portrays the fact that consumers equate global brands with quality and guarantees. A brand in itself is neither good nor bad, however, the value represented by a brand, its branding decisions and practice as a division of marketing can be ethical or unethical (www.ethicalconsumer.org)
What is ethical branding?
Extant literature review questions conventional branding practice and explores the links between ethical branding and corporate social responsibility. In marketing, the key function of branding involves more than naming a product. The question being asked here is “Should branding be ethical?” Most companies would be in agreement as to the need to be ethical but it has been found that it is indeed difficult to place a definition to the term ethical branding as argued by many researchers.
In their study, Sahakian W.S; Sahakian, M.L (1993), in their review of ethics according to Aristotle, the renowned father of philosophy posited ethics using the term “Self-realization” and argues that when an individual acts in accordance with their nature and realises their full potential, they will be content in life. Man should not just live but live well in with conduct governed by moderate virtue. Virtue denotes doing the right thing, to the right person, at the right time.
Ethics in other words refers to moral rules or behavioural principles in deciding what is right or wrong. It is difficult to distinguish between ethics and legality. This is due to the fact that ethical values vary amongst individuals and organisations and between diverse cultures, which change through time.
Ethical branding, as a subset of ethical marketing, relates to definite moral principles which classify right and wrong behaviour in branding decisions. Most research done in market ethics have focused on product safety, pricing, advertising, and marketing research (Laczniak,1993 ; Smith, 1995 and Murphy, 1999) with little or no attention given to branding. The general opinion is that an ethical brand should do no harm to the public but instead contribute to or help promote the public good.
Many branding objectives carried out by global multinationals have been questioned by consumers and interest groups. Advancement in technology has led to consumer products becoming nothing more than a mere commodity, where there are fewer genuine and tangible differences between competing products and the unique selling proposition no longer important with emotional selling proposition taking its place (Aitchison, 1999, p.42). Consumers’ emotions are being manipulated to achieve brand differentiation. Thus, the ultimate objectives in branding can be summed up as follows:
· To dominate the market (eliminating competition)
· To increase customer loyalty( increase in switch cost)
· To raise entry barriers (ward off potential threat)
Many of these objectives have no withstood scrutiny by both consumers and stakeholders. Criticism has arisen due to repercussions from activities of brands succeeding in the market due to issues such as exaggerating non-existing benefits in a basically commodity product and false and misleading advertising which promotes conspicuous consumption and self-indulgence.
Theories on ethical brand positioning
In their study, Sagar, Mahim, Singh, Deepali; Agrawal, D.P (EBSCOHOST, 2006) a framework for ethical brand positioning in which Anchor was used as the case study. The study focused on ethical and cross-cultural problems in brand positioning with the identification of five elements of brand positioning; brand awareness, brand identity, brand image, brand personality and brand communication and the correlating variables in line with ethical and cross-cultural issues. They make a case for ethics as a brand denominator and differentiation strategy advantage in marketing. According to their study, brand positioning is deemed ethical if it is responsive to issues such as environment protection, consumer satisfaction, and price sensitivity and is practised by very few companies. Using exploratory research of literature they
developed five hypothesis for testing the relationship between ethical brand positioning and the five elements of brand positioning; Hoa , Hob Hoc Hod Hoe; with each one representing one of the variables respectively as not playing a significant role in any of the elements identified. Using Anchor as their case study , drew up a construct for the validity scales for the elements of brand positioning using the “null” hypothesis in its study of Anchor to show that ethics was successfully as a marketing tool by the brand and stated that ethics meant more than morality but rather is complex, with an interdependent relationship between culture, religion, society and business and this dependence results in varying but clearly defined patterns and behaviours in society and therefore makes a case for the varying factors and variables as having a remarkable influence on the action of ethical consumerism by consumers.
Who is the ethical consumer?
The ethical consumer in marketing ethics has not been researched much in existing literature in order to find correlations between consumers’ personal ethics and its impact on intentions to purchase brands based on its ethical properties to determine whether consumers actually care about ethical branding ethics and what their preconceptions are about the concept. Consumers according to studies usually have ethical considerations but these do not essentially become reflected in their actual purchasing behaviour. Thus, the question is been asked “Does ethical branding matter to the consumer?”
In the study of ethical segmentation of consumers in developing countries, research was done by measuring consumers ethical beliefs and the factors which determine ethical perceptions; Machiavellianism, ethical orientation, opportunism, trust as well as demographic classification questions, Al-Khatib, A. J; Stanton, D. A and Rawwas, A. Y Mohammed (2005) grouped consumers into three distinct groups namely the principled purchasers, suspicious shopper, corrupt consumer amongst consumers in Saudi Arabia, Kuwait and Oman. Study was based on gender, age and education using the clustering approach to identify the unique ethical consumer segments. The findings from study was that responses were merely socially desirable to appear seemingly ethical, a gap was found in measures which could have a determinant influence on controlling this bias and use of a more diverse cultural base would produce more expansive knowledge of the ethical consumer.
The ethical concepts of fair trade and going green
The aim of this research is to identify the extent of the Nigerian consumers’ understanding of the concept of fair trade and green marketing as multinationals such as Unilever and Nestle. These companies are producers of fast moving consumer goods and now promote their brands products in their corporate communications based on fair trade (production under fair working conditions) in third world countries and green products (eco-friendly or not animal tested).
Fair trade as a concept originated in the 1960s in Europe through the support for Nicaraguan farmers by the Dutch and since then has grown into a 0million global niche market having more than 400 companies in the developed world importing and distributing products with the fair trade mark (Vidal, 2003). Products such as Sainsbury’s fair-trade clothes; converting its Tu range to ethically branded products and is advertised as being produced with fair trade cotton ( EBSCOHOST, 2007). The globalisation of world trade estimated at £3.5million per annum has moved more than 400million people out of the poverty level in the Tiger economies of East Asia and elsewhere (Geographical, 2004). In studies carried out on this concept, researchers have looked at the effect brand awareness has on buyer behaviour and successful product marketing and the issues identified with communicating the “human element of sustainability”. (Wright, Tiu. L and Heaton, S., 2006) and they also identify the challenge of gaining consumer understanding of the issues relating to fair trade.
The West African continent exports coffee and cocoa of which Nigeria is one of the major suppliers for cocoa to the developed countries. Ethical issues abound about brands from the consumers, suppliers and organisational perspective and their actions concerning working conditions and remuneration to the growers.
The study aims to look at the Nigerian consumers’ perception of fair-trade and green marketing as it applies to the global brands and their buying intentions based on their ethical values. Companies such as The Body shop and its ethical stance in its product have succeeded in building consumer confidence with their ethically branded products but this is not the case for most ethical companies as some consumers believe companies are exploitative in their marketing strategies in the use of these concepts. This is because of the premium pricing placed on such products in the differentiation strategy by these companies.
Literature on the ethical values and the role they play in purchase decisions of ethically branded product have focused on the effects of age, gender, education in the developing countries but not much research has been done using cross-cultural variables in developing host countries of multinational global brands. This study aims to close that gap in its analysis.
With the literature review taken into consideration on the varying views on ethical branding, factors and variables which influence perceptions, attitudes, values, image and buying intentions of consumers’ with their associated brands, a gap is noticeable in these studies. This is the absence of expansive research into cross-cultural influences, income and other salient variables such as economy, education, income, ethnic orientation, concept awareness of ethical branding in the Nigerian context as well as factors responsible for this lack. This needs to be studied as the theory of planned behaviour (Atzen, 1985) presents gaps in previous studies as it does not make for proper analysis of the complexities resulting from varying influencing factors of intention to purchase ethical brands.
Research questions to be answered are:
The purpose of this exploratory study is to study the issue of formulated discourse and findings on common place ethical conceptualities in developing countries and compare it with what obtains in the country of study to identify similarities and differences based on the variables to be used in this research to establish a hypothesis about perception of ethical brands in the country of study.
Research Objectives
4. Research Plan
4.1. Research Perspective
For this study I aim to take the interpretivist approaching. This is because this methodology is viewed as ideal for studies on differences between people or “social actors” (Saunders, Lewis and Thornton, 2007). It will be subjective based on meanings drawn from data and conducted with a realistic approach utilising a conceptual framework of the theory of ethical brands and therefore deductive. This is because the study aims to understand and identify causal relationships between variables and commonalities in patterns of participants’ behaviour, attitudes, perceptions and values and comparisons made between established theory and findings from the analysis of data collected to identify similarities and differences from the output. The data triangulation approach, which involves a multivariate system of data collection; qualitative and quantitative will be used in data collation.
4..2. Research Designs
The research design will be cross-sectional and will be carried out at a particular point in time. This is chosen because this research seeks to explain relationships between factors related to the concept. (Easterby-Smith et al., 2002)I intend to use the data triangulation approach which will involve a multi-method system of data collation which will be the use different methods of qualitative study.
It will involve the use of case study and comparative design as this is valuable when a “how” or “why” question is being asked over a set of events over which the investigator has no control” (Yin, 2003: 9). I will be using two multinational global companies as case studies. Comparative design is mentioned because comparisons might be made in the course of my study while determining the final outcome of my findings from the analysis of the case studies (Bryman and Bell 2003).
The data for this research will be derived from the main ways of collating data and these will be:
i. Primary data : Focus groups and questionnaires
ii. Secondary data
Primary Data
The primary data will involve the use of both in-depth interviews and questionnaires. I plan to use four focus groups each of which will be comprised of four- five respondents and will be balanced in terms age, sex and ethnic status, with the us of single sex or same age groups in some instances (Hayes 2000:395). The relevant data will be collected through the use of semi-structured focus group in- depth interviews in which I intend to be part of and will last for 45minutes each. This method is selected because it is a great way of obtaining data about body language and facial expressions as well as narratives and provides a clearer perspective to understanding the subject of study analysis to do with attitudes and perceptions in consumer behaviour.
The questions in the questionnaires will be well-structured in order to provide relevant and concise answers. Questionnaires will be distributed to respondents’ face to face bearing questions to adequately attempt to capture data about the subject matter will be distributed to a cross section of participants to be able to appropriately design and analyse the data retrieved for interpretation to be made from the data.
Secondary Data
This will be used in order to gain a deeper insight into the research topic. Relevant literature is retrieved from reliable articles and journal sources such as: Keynote, emerald, Ebscohost, Infotrac, Euromonitor, Datamonitor, company profiles, Mintel, Business premier and related websites on ethical issues.
Sampling
The technique to be used for the data collection non-probability sampling and will be purposive based on the sample size for the interviews and questionnaires. It is selected so as to get a good representative of the population in order to draw up credible and relevant information on participants without bias. This technique is chosen because it is best suited for this study being a case study and answers questions such as the “How” and “Why” of an action; in addition saves time. Participants will be chosen across different ages, gender and socio-economic status for the generation of realistic data for the study’s objectives to be actionable and achievable.
Validity, reliability and generalisibility
Validity
The research will be planned with care to ensure the validity of the methodology used adequately measures and provides credible findings based on the interpretations of the questionnaire design and interview question used (Sapsford and Jupp 1996:1).
Reliability
Reliability refers to the extent to which the data collection techniques will provide findings which are consistent (Easterby-Smith et al., 2002: 53). This reliability is subject to participant error and this is not easy to control, however it can be minimised by the choice of a “neutral” time. There might be room for bias as in his case, participant’s might not want to be seen to be unethical and thus give answers they feel I want in my questionnaires or focus groups. Observer bias is another uncontrollable factor in this research; I however intend to be as objective and neutral as possible.
Generalisability
The research will be specific in so far as it concerns the country of study and not general. However, findings may be applicable in other case studies different from case study dependent on its peculiar external factors.
Sampling Strategy
For my research, I will be studying consumers in Nigeria, using Unilever and Nestle as comparative case studies. I will be interviewing and using questionnaires for students in higher institutions, professionals and working class across different age groups to capture effectively and adequately measurable data respectively using the convenience sampling.
Ethical Considerations
This research will be undertaken while adhering strictly to the guidelines and procedures in the BES ethics handbook. I will abide by the rules by completing the checklist. None of the seven questions is applicable to my research, thus, it will be duly filled and handed to my supervisor.
For my research I intend to be circumspect and act in confidence with the results of the interviews and questionnaires in which names will not noted thus allowing for the anonymity of participants. The participants will have fore-knowledge of the purpose of my research.
My questionnaires will only be distributed after due approval and authorization from my supervisor.
I will take into consideration respondents’ safety as well as mine in any given situation during interviews.
I will act in accordance to the Data Protection Act, data protection principles and data security parameters.
Any special resource or access required (if appropriate)
I have no need for any special resources or access as far as I know, for the purpose of my research.
References
Al-Khatib, A. J., Stanton, D.A., Rawwas. Y.A.M. (2005) ‘Ethical segmentation of consumers in developing countries: a comparative analysis’ International Marketing Review [Online] 22, ( 2) 225-246. Available from: <http://www.emeraldinsight.com/10.1108/0265133051093287> [08 February 2008]
Bell, J. (2007) ‘Doing your Research Project: A guide for first time researchers in education, health and social science’ 4th Edition. McGraw-Hill Education: Open University Press
Bussey, N. (2006) ‘Is it important to be an ethical brand’ Business Source premier [Online] 11, p17- 17 3/4p, 1c 4bw. Available from: <http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=20283367&site=ehost-live > [04 February 2008]
Fan, Y., (2005). ‘Ethical branding and corporate reputation’. Corporate Communications: An International Journal [Online] 10, (4) 341-350. Available from: <http://search.ebscohost.com/login.apsx?direct=true&db=buh&AN=19576918&site=ehost-live > [08 January 2008]
Graham, P., Helen, F. (2005) ‘Corporate Reputation: What Do Consumers Really Care About?’ Journal of Advertising Research. [Online] 45, (3) 305-313. Available from: <http://search.ebscohost.com/login/aspx?direct= true&db=buh&AN=20196493&site=ehost-live> [04 February 2008]
Jewell, S. (2007). M70CBS ‘How to Write a Research Proposal and Tips for Tackling your Dissertation’ Coventry University.
MINTEL Report, (2006) ‘Nestle in talks to buy McCartney brand’
Available from
<http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&&type=NSItem&class=News&sort=recent/display/id=210175&anchor=210175 > [ 09 February 2008]
McGivern, Y. (2006). ‘The Practice of Market and Social Research: An Introduction’. 2nd Edition: Prentice Hall
Nicholls, J.A. (2002) ‘Strategic options for fair trade retailing’ International Journal of Retail & Distribution Management [Online] 30, (1) 6-17. Available from: <http://www.emeraldinsight.com/10.101108/095905502> [06 February 2008]
Sagar, M., Singh, D., and Agrawal, D.P. (2006) ‘Framework of Ethical Brand Positioning: A case study of Anchor’. Journal of Management Research [Online] 6, (2) 72-73 12p. Available from: <http://search.ebscohost.com/login.aspx.?direct=true&db+buh&AN=23218455&site=ehost-live > [22 January 2008]
Saunders, M., Lewis, P., and Thornhill, A. (2007). ‘Research Methods for Business Students’.4th edition London: Prentice Hall
Strong, C., (1996) ‘Features contributing to the growth of ethical consumerism- a preliminary investigation’ Marketing Intelligence & Planning [Online] 14, (5) 5-13. Available from: <http://www.emeraldinsight.com/10.1108/02634509610127518> [04 February 2008]
Szmigin, I., Carrigan, M., O’Loughlin, D. (2007) ‘Integrating ethical brands into our consumption lives’ Business Source Premier [Online]. Available from: <http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=25234529&site=ehost-live > [22 January 2008]
Websites References:
Economist.com [Online]. ‘The good consumer’ Available from: <http://www.ecnomist.com/surveys/displaystory.cfm?story_id=10491144 > [22 January 2008]
Ethicalconsumer.com [Online]. Available from: <http://www.ethicalconsumer.org/boycotts_list.htm > [08 February 2008]
FOOD & DRINK europe.com ‘Nestle: Fair trade market is fair game’ [Online] Available from <http://www.foodanddrinkeurope.com/news/news-NG.asp?n=52207-nestle-fair-trade > [09 February 2008]
Gantt Chart for the Dissertation Project
September 2007 Starters
The Activity
21/1
04/2
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Writing research proposal
Reading literature
Finalize objectives
Draft literature review
Devise research approach
Draft research strategy and method
Review secondary data
Organize the interviews
Develop interview questions
Conducting interviews
Analyze data
Develop questionnaires
Pilot test and revise questionnaires
Administer questionnaire
Enter data into computer
Analyze data
Draft findings chapter
Update literature read
Complete remaining chapters
Submit to and await feedback tutor
Submission
Submission Date: 8th September 2008
Credit:ivythesis.typepad.com
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