Beyond PR

Oct 16, 2012

Sustainable Business & CSR: Will Consumers Pony Up?

In her keynote yesterday at the 2012 PRSA International Conference, June Cotte (@jcotte), an associate professor of marketing at the Richard Ivey School of Business in Ontario, discussed responsible consumer buying habits in over three products: coffee, cotton and chocolate.  The big question she posed was this: Will people spend more on “responsible” products?

According to Cotte, over the past 40 years the reasoning in which a consumer would buy one product over another has changed dramatically.  In the past a consumer would try to buy a cleaning detergent without phosphates which have potential health impacts and pollute water supplies.  Today, labor practices, animal abuse, and philanthropic cause have an influence over the decisions people make.  However, she found that there is a gap between attitude and actual behavior.  A person may have an prejudice towards a product but, when no one is looking still buys it for financial reasons.

Whether it is T-shirts or coffee, there is a premium some will pay based on some measure of corporate responsibility, Cotte noted. People were willing to spend more than $3 more for a T-shirt if the garment contained organic cotton.  Oddly, the premium consumers were willing to pay remained consistent if the shirt was made of 25% organic cotton or 75% organic cotton.  It seems as long as there’s an effort being made, the consumer will agree to pay more.  The same principle applies to coffee and chocolate, only different variables are taken into consideration –  such as labor rights and fair trade.

Interestingly enough, a brand always known for responsible behavior can launch new products and reap the benefit of their existing image.  However, companies with bad reputations generate proportionally greater rewards when they start marketing responsible products. I guess consumers like to see companies make decision to change something beside their bottom line and are willing to support that notion.

The hard part for brands, according to Cotte, is informing the public of the cause or environmental initiative they’ve chosen to tackle.  Most of us make buying decisions based on habits or brands we’ve grown to trust over our lifetimes, underscoring the challenge brands face when communicating new initiatives.

Author Michael Seghieri is a divisional vice president with MultiVu, a PR Newswire company.

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