The Role of Ethical Concerns in Consumer Purchase Behavior: Understanding Alternative Processes

ABSTRACT - This paper proposes a model that describes how consumers' ethical concerns about business practices may influence their purchase behavior. The model links ethical concern, attitudes toward the brand and the organization, and purchase intentions. It was tested in a preliminary pilot study that provides some initial support for an explanation of how a form of "ethical purchase behavior" may come about, including the role of "family" or "individual" branding strategies and whether the business practice of concern is product/brand-related or at the level of the organization.

Citation:

Sandra J. Burke and Sandra J. Milberg (1993) ,"The Role of Ethical Concerns in Consumer Purchase Behavior: Understanding Alternative Processes", in NA - Advances in Consumer Research Volume 20, eds. Leigh McAlister and Michael L. Rothschild, Provo, UT : Association for Consumer Research, Pages: 119-122.

Advances in Consumer Research Volume 20, 1993      Pages 119-122

THE ROLE OF ETHICAL CONCERNS IN CONSUMER PURCHASE BEHAVIOR: UNDERSTANDING ALTERNATIVE PROCESSES

Sandra J. Burke, Georgetown University

Sandra J. Milberg, Georgetown University

N. Craig Smith, Georgetown University

[Each author contributed equally. The authors wish to thank the anonymous reviewers of the session proposal for their helpful suggestions.]

ABSTRACT -

This paper proposes a model that describes how consumers' ethical concerns about business practices may influence their purchase behavior. The model links ethical concern, attitudes toward the brand and the organization, and purchase intentions. It was tested in a preliminary pilot study that provides some initial support for an explanation of how a form of "ethical purchase behavior" may come about, including the role of "family" or "individual" branding strategies and whether the business practice of concern is product/brand-related or at the level of the organization.

INTRODUCTION

Ethical decision-making and purchase behavior has received relatively little attention from consumer behavior researchers. A related stream of research examined "environmentally concerned consumption" (also described as ecologically concerned/responsible or socially conscious/responsible consumption), with the objective of developing a demographic and socioeconomic profile of the environmentally concerned consumer. Prompted by the consumerism movement of the 1970's, these studies were interested in the "consumer who takes into account the public consequences of his/her private consumption or who attempts to use his/her purchasing power to bring about social change" (Webster 1975). They identified characteristics of environmentally concerned consumers for segmentation purposes.

In contrast to this earlier work on environmentally concerned consumption, our interest is in a broader array of ethical concerns that may influence purchase behavior. All purchase behavior is in some sense ethical, involving moral judgement. This paper is focused on ethical decision making involving purchase decisions where those ethical concerns are tied to business practices. For example, a consumer is concerned about the abuse of human rights in a foreign country, say South Africa. Corporate involvement in South Africa may then become a factor in the consumer's purchasing decisions. Similarly, consumers concerned about animal rights may consider whether a cosmetics product has been tested on animals. The research is intended to improve our understanding of consumer behavior. It also has significant implications for business ethics, public policy and marketing strategy.

In Morality and the Market, Smith suggests the market can act as an arbiter of "good" and "bad" business practice. At work is "ethical purchase behavior," defined as "an expression of the individual's moral judgement in his or her purchase behavior" (Smith 1990: 178). Smith conducted case research of consumer boycotts, a clearly identifiable form of ethical purchase behavior. He showed how consumers, in conjunction with pressure groups, can use their purchasing power to influence corporate policies and practices. For example, the consumer boycott of Barclays Bank in the United Kingdom was a major contributing factor in the bank's decision to withdraw from South AfricaCit had been the largest consumer bank in that country (Smith 1990: 234-41). Key factors in boycott effectiveness and success are moral outrage of consumers and the firm or product's connection with the "grievance". Consumers have to be concerned, willing and able to act for a boycott to work. Connection with the grievance means the consumer is able to connect a purchase decision to a concern about business practices and a more fundamental ethical concern. For example, in the California grape boycott, consumers could readily connect grapes with their feelings of moral outrage over the treatment of farm workers (Smith 1990: 250-53, 261).

In this research, we are attempting to establish the conditions under which ethical concerns influence purchase behavior and, thereby, provide for social control of business. All we can say at present is that consumers may express concern about business ethics in their purchase decisions. We are uncertain as to when they will do this, the form it will take, and what mediates their behavior. The boycotts research suggests it is important to examine when there is a greater or lesser connection between the ethical issue and the purchase decision. To operationalize "connection", we are currently studying two key variables. First, whether the practice is product-based (for example, the use of environmentally harmful packaging) or whether it is organization-based (corporate involvement in South Africa). Second, whether the link between the brand product and the parent organization is known, a variable that influences whether consumers connect a product-based practice with all of an organization's products as well as whether they connect an organization-based practice with a brand product.

One rationale for the maxim "good ethics is good business" is that unethical conduct is penalized in the marketplace and ethical conduct rewarded. Yet, in many circumstances, firms may be immune to marketplace sanctions. This research examines the conditions under which firms are called to task or rewarded by consumers; i.e. as reflected in consumer attitudes toward the brand and the organization, and purchase intentions. As well as implications for business ethics, the research also has implications for public policy. When marketplace sanctions cannot operate there is a requirement for public policy interventions. These interventions may take various forms, including the promotion of consumer activism. In the Barclays boycott, pressure groups succeeded in connecting the bank, in consumers' minds, with apartheid.

From the corporate perspective, the research has implications for marketing strategy in two respects. First, it indicates how firms acquire (or lose) competitive advantage through ethical (or unethical) conduct. Second, it highlights the strengths and weaknesses of "family" and "individual" branding strategies. Despite the economic advantages of a family branding strategy, where all of an organization's products carry the same brand name (e.g. Kellogg), many firms pursue individual branding strategies. An organization often has individual brand names for its different products (e.g. Procter and Gamble). One reason for this is the fear that a problem with one product will "spillover" and harm all the organization's products. Research has found that negative evaluations of a brand product may lead to negative spillover (or "reciprocity"), i.e. less favorable attitudes toward all products under the same brand name (Romeo 1991; Park, McCarthy and Milberg 1992; Milberg 1992). Milberg has found positive as well as negative reciprocity effects (Milberg 1992).

FIGURE 1

RESEARCH MODEL

In keeping with the earlier work on both consumer boycotts and reciprocity effects, we are specifically investigating the impact of level of ethical concern ("moral outrage"), branding, and whether the ethical issue ("grievance") is at the firm or the brand level. The factors found to be key in consumer boycotts have become independent variables in the research model for this study and our attempts to explain how ethical concerns related to business practices influence purchase behavior. Because we are interested in individual behavior (rather than the collective behavior found in pressure group organized consumer boycotts), we are examining attitudes, purchase intentions and the link between the two, and investigating their antecedents.

CONCEPTUAL DEVELOPMENT

A model is proposed that examines the underlying driving effects of consumers' ethical concerns about business practices on purchase intentions (see Figure 1). The model examines the interactions between attitude toward the ethically "charged" practice (shown as level and type of ethical concern), attitude toward the brand, attitude toward the organization, and purchase intentions. Within this framework, a number of alternative "causal" paths may best represent the relationship between attitudes toward the ethical issue (issue attitude) and purchase intentions. For example, issue attitude may effect purchase intentions only indirectly through attitude toward the brand. Alternatively, this link may occur through attitude toward the organization. Furthermore, direct links between issue attitude (and/or attitude toward the organization) and purchase intentions, as well as interactions among all variables may be possible process paths.

Which of these alternative paths, if any, are operating in a given situation may depend on a number of moderating variables. As discussed above, we believe a key variable is whether the concern is primarily manifest in brand practices (e.g. killing dolphins in the production of tuna) or organizational practices (e.g. discriminatory employment practices). The other key moderating variable is the strength of the link between the brand name and the parent organization. Thus, depending on the given situation, different paths are proposed to capture the underlying processes. The following hypotheses specify predicted relationships among the variables:

HYP1: Level of concern regarding ethically charged practices will significantly affect attitudes toward the brand and/or organization. Specifically,

HYP1A: In low or high link situations, level of concern will affect the attitude toward 1) the organization when the unethical practice is organization-based and 2) the brand when the unethical practice is brand-based.

HYP1B: However, in high link situations, level of concern should also impact brand attitudes if the practice is organization-based and, conversely, organizational attitudes if the practice is brand-based.

HYP2A: Ethically charged brand practices will primarily impact attitude toward the brand and ethically charged organizational practices will primarily impact the attitude toward the organization.

HYP2B: However, in high link situations brand practices should also impact attitudes toward the organization and, conversely, organizational practices should also impact attitudes toward the brand.

HYP3: Purchase intentions will be impacted by brand and/or organizational attitudes. Specifically,

HYP3A: Brand attitudes will primarily impact target brand purchase intentions and organizational attitudes will primarily impact purchase intentions toward other organizational products.

HYP3B: However, in high link situations, brand and organization attitudes will impact purchase intentions for both target brand and other organizational products.

For all situations, while negatively charged ethical practices are expected to result in less favorable attitudes and purchase intentions, positively charged practices are hypothesised to result in more favorable effects.

METHODOLOGY

Overview

This research examines reciprocity effects of ethical or unethical business practices on consumers' attitudes and purchase intentions towards brands and organizations associated with these practices. To investigate the central issues of concern, this study examines the effects of three variables on brand and organizational attitudes and purchase intentions: level of concern toward various types of positive and negative, ethically charged business practices (e.g., environmental responsibility), whether the practice occurs at a brand or organizational level, and whether the link between brand and parent organization is known. Specifically, level of concern was measured via a battery of scale items. Respondents were then categorized as either high or low concern subjects. The ethical practices examined were either associated with 1) a brand practice, i.e., the killing of dolphins in the production of Star-Kist tuna; or 2) an organizational practice, i.e., Heinz engaging in discriminatory employment practices. In addition, the link between the brand and parent organization, i.e., Heinz owns Star-Kist tuna, was either explicitly provided or not provided. Thus, the overall design was a 2X2X2 between-subjects' design, with level of concern (high or low), practice (brand, organizational) and link (known, unknown) as the three independent variables.

Subjects and Procedure

Subjects were eighty undergraduate business students enrolled in a mid-size eastern university. Each subject was randomly assigned to one of the four treatments. Subjects participated in the study as part of a voluntary in-class exercise.

Each subject was given a cover story in the form of a newspaper article which focused on either a brand or organizational "unethical" practice. In addition, the article either did or did not provide information connecting the brand and the organization. Following the newspaper article, subjects completed a questionnaire assessing purchase intentions for Star-Kist and other brands, attitudes toward Star-Kist and Heinz, and overall level of ethical concern for numerous practices. Upon completion of the questionnaire, subjects were fully debriefed.

RESULTS

Using an ANOVA, partial support for hypothesis 1 was found. Specifically, concern for animal rights significantly affected (F=5.75, p=.01) attitude toward the brand (Star-Kist) when the practice was brand-based (i.e., killing dolphins to produce tuna). However, concern for unfair organizational employment practices had only a directional, but nonsignificant affect on attitude toward the organization (Heinz) when the practice was organization-based (i.e., discriminatory promotion practices toward women and minorities). Specifically, an average attitude rating of 4.5 on a 5-point scale was observed in low concern subjects versus 2.86 in high concern subjects. Additionally, no support was found for hypothesis 1b.

Regarding hypothesis 2a the results reveal that whether the unethical practice was brand-based or organization-based significantly affected brand attitudes (F=4.73, p=.03). Specifically, brand attitudes were significantly lower (X= 2.84) when the practice was brand-based than when the practice was organization-based (x= 3.64). However, no effect on attitude toward the organization was observed. Further, the effect of the interaction between link and practice on attitudes toward the brand or organization (HYP2B) could not be examined (a manipulation check revealed that the low link/brand practice manipulation was ineffective).

Finally, the results support hypothesis 3a. Specifically, Star-Kist brand attitudes significantly impacted purchase intentions for Star-Kist (F= 101.9, p=.000) but not those for Heinz Ketchup. In addition, attitude toward the organization (Heinz) significantly affected purchase intentions for Heinz Ketchup (F= 5.2, p= .03) but not purchase intentions for Star-Kist tuna, in high and low link conditions. However, hypothesis 3b could not be examined for the reason stated above.

DISCUSSION

By incorporating respondents' different levels of ethical concern, this research goes beyond a conventional attitude-purchase intention study. The antecedents of purchase intention are found to have important and separate effects, with intensity of ethical concern manifest in brand attitude and attitude toward the organization. This encourages our belief in the usefulness of research examining ethical concerns in purchase behavior.

Concern about business practices that are brand-based is manifest in brand attitudes and, in turn, purchase intentions for the target brand. More surprising perhaps, is that brand-based business practices do not appear to influence attitude toward the organization, even though the link between the brand and the organization is known. While attitude toward the organization affects purchase intention, if this attitude is unaffected by brand-based business practices, products other than the target brand will not suffer. If this preliminary finding can be confirmed, it has interesting implications for branding strategies. A rationale for individual branding is the reduced exposure to problems with one brand affecting the firm's other brands. This may not hold. Conversely, pressure groups identifying a brand-based practice of concern would have little to gain from attempting to organize boycotts of all the organization's brands.

Organization-based practices appear to have less impact than brand-based practices. Again this questions conventional wisdom on branding. Organization-based practices had much less effect on brand attitudes and no effect on attitude toward the organization. However, an alternative explanation may lie in the respondents' strongly favourable attitude toward Heinz, suggesting an alternative organization may need to be chosen in future studies. Asked for any comments on the stimulus materials, a number of respondents mentioned their loyalty to Heinz and to Heinz Ketchup:

- "My feelings for the H. J. Heinz Co. are VERY GOOD."

- "I wonder why I dislike Heinz tuna because they kill Flipper, but not Heinz Ketchup? I guess when I really think about it I shouldn't buy either..."

- "Before reading this article I had no idea of their business practices. Heinz is the only ketchup I eat thus making that my only conflict."

- "Although I strongly disagree with the discrimination against women and minorities in Heinz, I have already formed a certain loyalty to Heinz because I enjoy its taste (I'm talking especially about its ketchup)."

It is also possible that the organization-based practice (discrimination against women and minorities) was less salient to the respondents and may also need to be changed. A further limitation was the ineffectiveness of the brand-link manipulation. This problem did not allow investigation of the interaction between the level of practice and the link conditions. More extensive pre-testing will be conducted to improve stimulus materials and manipulation effectiveness.

In summary, the results of the study partially support the relationships between ethical concerns, brand/organizational attitudes and purchase intentions. In particular, ethical concerns as well as type of practice (brand vs. organization) were shown to have separate effects on brand and organizational attitudes. Further, these brand and organizational attitudes had subsequent influences on purchase intentions for brand and other organizational products. Thus, evidence was found in support of the overall model, suggesting the need for further, more conclusive investigation. Phase two of our research program will focus on the same variables, but in addition will investigate the underlying processes which drive the attitudinal and purchase intention outcomes derived in phase one, once completed. Phase three will compare the effects associated with "ethical" issues with those associated with other "product" issues (e.g. product quality), to determine if ethical issues effect attitudes and purchase intentions differently than other product issues.

REFERENCES

Milberg, Sandra J. (1992), "Reciprocity Effects of Brand Extensions: Dilution, Fortification, Expansion." Working Paper. School of Business Administration, Georgetown University.

Park, C. Whan, Michael S. McCarthy, and Sandra J. Milberg (1992), "An Examination of Negative Reciprocity Effects Associated with Direct and Sub-Branding Extension Strategies." Working Paper. Graduate School of Business, University of Pittsburgh.

Romeo, Jean B. (1991), "The Effect of Negative Information on the Evaluations of Brand Extensions and the Family Brand," in Rebecca H. Holman and Michael R. Soloman (ed.) Advances in Consumer Research (Provo, UT: Association for Consumer Research), pp. 399-406.

Smith, N. Craig (1990), Morality and the Market: Consumer Pressure for Corporate Accountability (London and New York: Routledge).

Webster, Frederick E., "Determining the Characteristics of the Socially Conscious Consumer," Journal of Consumer Research, Vol. 2 (December 1975), pp. 188-96.

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