Trust Wins Over Ethical Consumers

financial times
Published by The Financial Times on June 25th, this letter was in written by GlobeScan Chairman, Doug Miller, in response to a June 7th article entitled “In search of the elusive ethical consumer”.
Michael Skapinker’s “In search for the ethical consumer” was good as far as it went, but missed a couple of key points.
The corporate interest in the ethical consumer that he outlines is well founded. It is a significant and growing segment of the consumer marketplace, currently in the range of 25 percent of consumers in both emerging and established economies. The fact that in any one product category the actual market share of this segment is in the 5 to 10 percent range is not surprising – there is always a gap between the size of any consumer segment and the market share achieved.
There are a number of reasons ethical consumers hold back from purchasing specific products marketed to them, beyond what the column mentions. The major one is trust. Our 2010 Greendex study for National Geographic of 17,000 consumers across 17 markets found that among ten inhibiting factors, distrust in corporate claims about the environmental attributes of their products was the top-reported barrier. Ranked second was a perceived lack of leadership from companies and governments. In other client studies we have found that trust in the company behind the product can have as much to do with purchasing behaviour as product attributes have.
In summary, capturing the ethical consumer is as much about corporate reputation and branding as it is about product marketing and attributes. Companies who want to succeed with this growing market segment need to get all their corporate and product ducks in a row first, then seek credible third-party endorsement (e.g., a well-established ‘trust mark’ like Fairtrade).
Read this letter on The Financial Times