Friday, December 6, 2019

Ethical Consumerism (A case of Food and Drinks business)

Question: Identify the whether the ethical consumerism has changed the companies tactics and consumer buying behvaiour? Answer: Executive Summary The major purpose of this study is to identify the whether the ethical consumerism has changed the companies tactics and consumer buying behvaiour. Ethical consumerism is word that does not only defines the honesty and fair trade in fact it is more related to the quality of food and pricing of the products etc. the chosen company here is McDonalds who over the years has come up with new ideas and ventures to support its ethical view. Company follows the utilitarian approaches where the company has been able to gain the large customer base. Apart from that, McDonalds uses halal food, positive form of advertising and value pricing are some of the major ingredients of ethical consumerism which helps the McDonalds to stay at the top positions. Besides that, with the of secondary research it has been found that, company is strictly using the ethical form of the pricing called value pricing. On the other hand company fails to improvise its advertisement which is deceiving in past. However, with the help of quantitative data analysis, it has been found that, company is able to reach large customer base because of value pricing, and quality of offer. Most of the respondents within the primary research are not happy with company services which are poor. Introduction In the current contemporary business scenario, ethical consumerism is one of the most important part which affect the organizations strongly. There were times when ethical consumerism was a philanthropic word but currently the ethical consumerism is removing the concept of stereotype of selling of products as per the personal choice. Currently ethical consumerism is defined as consumer personal choice for consumption based on the ethical issues like human rights, social justice and animal welfare (Borzaga and Becchetti, 2010). The study will deal with various aspects of issues in food drinks of the McDonalds. There has been numerous examples the food chain companies were not used to ethical consumerism within their business. The researcher will also go through the various figures and tables which show that ethical consumerism in food and drinks industry is growing since 2006 (Carroll, 2009). Apart from that, the study will also focuses on the moral principles and standard have been followed within the food chain company or not. UK is one of the largest food markets where the study will take places (Crane et al. 2007). With the help of various opinion and survey the study will try to focus on the consumer behaviour towards the food items. Consumer international is one of the regulators of the ethical consumerism. Ethical Consumerism The term ethical consumerism is being used by the UK magazine in 1989 which suggest that fair trade. Ethical consumerism is one of the major global moralities based ethical system where purchasing decision is made based on the moral choice (De Cremer and Trenbrunsel, 2011). Ethical consumerism is not only limited charity, donations or to fair trade activities but is also related to the price, quality and payment techniques are other factors that is related to the ethical consumerism of the food industry (Maignan and Ferrell, 2008). As per the UK food statistics 2013, total agric food sector contributes more than 97.1 billion which approximately 7.5 of national GDP. The food prices in the recent times have been risen by 12% since 2007. Most of the retail food chain companies like McDonalds and Subway has major chain of food worldwide. Since the 1999 to 2009, ethical consumerism in the food and drinks market is growing (Mcdonalds.com, 2015). Ethical consumerism in the food and drinks industry has been changes as per ethical consumption of the customers. Food industry was involved in the several law suit and other legal cases in the course 70 years of the business (Dillard and Dujon, 2008). Ethical consumerism in food industry is been growing as the most of the fast food companies and restaurants are trying to use the recyclable products which will lead in the path of sustainability. Ethical food and Drink 1999 m 2008 m Organic 390 1980 Fair trade 22 635 Rain forest - 369 Farmers markets 131 220 Free range eggs 452 768 Freedom foods 173 415 Sustainable fish 189 174 Tuna fish 172 51 Freedom food 37 128 Total 1566 4371 Graph 1: Ethical consumerism in Food chain industry (Source: Garsten and Hernes, 2008, pp-344) Company review McDonalds is one of the largest food chain in the world with revenue worth of 28 billion and with 500,000 employees in worldwide. McDonalds and other fast food industry like subway and the KFC and burger king are known of the giants of the world who follows the ethical form of consumerism in order to gain the confidence of the consumers (Griseri and Seppala, 2010). Utilitarian Approach: Most of the companies are strictly following the utilitarian approach which will lead to greatest good for the large number of populations. One of the major examples is McDonalds has increases the wages of the employee every years in the form of designation and salary (Hartman and Werhane, 2009). Apart from that, company uses participative form of leadership and gives fair chances for every one opinion from customer to workers regarding any change (Langlois and Schlegelmilch, 2009). Some of the of the ethical consumerism approaches used by the McDonalds Value based Pricing: McDonalds follows value based pricing methods pricing for the products and service sold by the company to their consumers (Furunes and Mykletun, 2009). Figure 1: Values based Pricing strategies used by McDonalds (Source: Kline, 2010, pp-12) Companies McDonalds $ Burger king $ Big Mac burger 3.99 5.50 Cheese burger meal 5 6.20 Chicken meal 5.59 6.19 Bacon burger meal 4.49 5 Family chicken meal 12.36 15.10 Graph 2: Value pricing used McDonald in compare to other companies (Source: McDonalds value pricing Value addition % Price 11.1% Variable cost 7.8% Volume 3.3% Fixed cost 2.3% Halal food: McDonalds uses halal meat at its fast food centers outlets. Halal meat is slaughter by halal method which is religious slaughter. In nearly more than 100 outlets of the McDonalds around the UK are serve the halal approved chicken (Kotler and Lee, 2006). The sandwich served in stores has been contained halal meat since 2007. British Muslims population is been growing from 3% to 7% in 2013. Feedback from the consumer are being one of the major indicators which shows that, consumer are willing to purchase halal food. As per the Food standard agency report of 2012, 975 of cattle and 965 of poultry slaughter using the halal method in UK because of the demand of fast food chain companies. EU union is carrying out the study to examine the feasibility of introducing the labeling on meat to specify how animal is killed which has been offered by the various stores at McDonalds (Mcdonalds.com, 2015). Ethical advertising: Ethical advertising comprise of the honesty, social consciousness and the environmental consciousness. McDonalds has been very much controversy for its advertising but company has recently change its policy of using the social and environmental consciousness advertising (Lawton and Lasthuizen, 2011). McDonald uses solid, permanent and constructive ethical programmes which will help the company for years to come. For instance in 2003, McDonalds started a nationwide advertising campaign in UK to promote healthy leaving and eating which includes removal of super size option , changing fires and sola with milk and mixed fruit juice in a happy meal (Birch and Moon, 2008). Recently, McDonalds healthy salads with chicken have also been introduced with lose fat menu option in their advertising. McDonalds has stopped using the children, patriotism and other military person from their advertisement in order to promote the product ethically (Braley, 2008). Fast food chain Ethical advertising McDonalds 15.35% Burger King 7.45% KFC 13% Subway 9% Pizza hut 11.2% Graph 3: Ethical Advertising of the fast-food chain company (Source: Dev et al. 2009, pp-213) However, there has been serious allegation has been made against the McDonald in recent years for Instance: McLibel UK in 1990, environmental campaigner held and Dave has allegedly kept the defamation case against the McDonalds (Coughlan, 2009). The trail ran for more than two and half years and has become one of the longest trails of English era. McDonalds exploit the children advertising by exploiting the children with their misleading advertising. Apart from that, several cases against the KFC and McDonald are being given in the court which against the selling their burger with fat free note which is unethical consumerism. This has increased the obesity problems in worldwide (Collins and Schultz, 2008). Opinion Survey While conducting the opinion survey 10-15 respondents are taken from the GSM London. The opinion survey will be used on the primary and quantitative form of questionnaire in order to understand the actual thoughts of consumer on McDonalds (Carey, 2006). 1.How often do you buy from the McDonalds? Options No of respondents Total respondents Response % Once in a week 5 15 33% Twice in a week 4 15 27% Once in a month 3 15 20% Twice in a month 2 15 13% More than twice month 1 15 7% Graph 4: Purchasing from McDonalds Findings and Analysis From the above , it has been found that most of the consumer are purchasing the McDonalds products more than twice a week with 27%. This shows that demand of burger of McDonalds is been rising with every years although there has been strong competition in the market (Braley, 2008). How far do you agree that McDonalds charges value pricings? Options No of respondents Total respondents Response % Strongly Agree 6 15 40% Agree 4 15 26% Neutral 3 15 20% Disagree 1 15 7% Strongly Disagree 1 15 7% Graph 5: Pricing of McDonalds Findings and Analysis Around 40% of the respondents believes that McDonalds ahs value pricings. Since 2007, company has changed its pricings strategies from penetration to value pricing in order to create universal appeal for their customers. This has increase the customer base for the company from 11.07% in 2008 to 2013% (Dodds and Joppe, 2006). How far do you agree that advertising campaign of McDonalds is ethical? Options No of Respondents Total respondents Response % Strongly Agree 3 15 20% Agree 5 15 34% Neutral 4 15 26% Disagree 2 15 13% Strongly Disagree 1 15 7% Graph 6: Advertising campaign of McDonalds Findings and Analysis From the above, it has been found that, around 34% of the respondent agree that advertising campaign of the company is more ethical but more than 13% of respondent still believes that McDonald does not uses the ethical advertising. Company has uses clown to promote and mark its brand value. How far do you agree that McDonalds products meet their ethical standard? Options No of respondents Total respondents Response % Strongly Agree 2 15 13% Agree 5 15 34% Neutral 4 15 26% Disagree 1 15 7% Strongly Disagree 3 15 20% Graph 7: Meeting the Ethical standard Findings and Analysis Around 34% agrees that, McDonalds produce the products which meet the ethical standard (Fox, 2007). Some of the products like use of Halal meat and value pricing shows that compnay is able to meet the standard of ethical consumerism. 5.Which factors needs more emphasis for better ethical value of products? Options No of respondents Total respondents Response % Quality of food 4 15 26% Organic products 5 15 34% Advertising 3 15 20% Recyclable packaging 2 15 13% Payment options 1 15 7% Graph 8: Factors needed to give more emphasis for McDonalds From the above, around 26% and 34% respondents totally agree that quality of food and advertising campaign products are some of the major factors that needed to give more emphasis for the products. Conclusion With the help of the secondary form of research , it has been found that McDonalds is able to register their name in ethical form of consumerism by introducing the halal meat , value pricing and positive advertisement that has able to gain the large customer base. Although company has been criticized for several advertisement and use of child within their advertisement campaign but company has recently has come up with new form of advertisement campaign such as salads and fruit makes healthy and reduce the obesity. Apart from that, primary research has helps to understand the actual thought of the customers regarding products. As most of the consumer are agree that company is able to generate value pricing products and also has been able to meet the ethical standard as promised by the company. However, most of them has also feel that advertising is one of the major controversial area which still ha not be improved. Company uses utilitarian approaches while following the ethical consumerism. There been ample evidence which shows that, company is looking to generate the large customer base via introducing new ethical and sustainable products and packaging like paper packaging etc. During the time of primary form of research, some of code of conduct has been flowed which include maintaining the anonymity of the respondents. Reference List Books Borzaga, C, and Becchetti, L. (2010) The Economics of Social Responsibility. 6th ed. New York: Routledge. Carroll, A. (2009) Business Ethics: Brief Readings on Vital Topics, 3rd ed. London: Routledge. Crane, A. et al (2007) CSR: Readings and Cases in a Global Context, 6th ed. Sydney: Routledge De Cremer, D. and Trenbrunsel, D. (2011) Behavioural Business Ethics: Ideas on an Emerging Field, 4th ed. New York: Routledge Dillard, J. and Dujon, V. (2008) Understanding the Social Dimension of Sustainability. 6th ed. London: Routledge. Garsten, C. and Hernes, T. 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