ETHICAL CONSUMERISM

Ethical Consumerism 11

ETHICALCONSUMERISM

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Table of Contents

Executive Summary 2

Ethical Consumerism 2

Ethical Consumerism Means for Businesses 3

Ethical Consumerism: TOMS SHOES 4

Company Overview 5

Ethical Issues 5

Approaches Toms Shoes Company has used to become more Socially Conscious Business 6

Consumer Buying Behavior 7

Conclusion and Recommendations 8

Reference List 9

ExecutiveSummary

Therationaleof thisreportwasto evaluatewhatethicalconsumerism meansforbusinesses,withspecialreferenceto Toms Shoes Company. Toms Shoe Company is a for-profit businessentitybutwith a charitablecomponent.Thecompanywaslaunchedby entrepreneurandbusinessmanby thenameof Blake Mycoskie after experiencingthehospitalityof poorcivilianin a villagein Argentina. Itis evidentthatToms Shoe philosophyof ‘one forone’ has beenverypivotalin guidingtherelationshipbetween thecompanyandthesociety.Tom’s businessmodelis veryextraordinary,whereasmanycompaniesengagein cause-associated marketingthecompany’sphilanthropic sectionis one of themostimportantmarketingstrategies. Businessentitiesmust respondto theneedsof consumersby ensuringtheir manufacturingprocessesare not onlyethicalbutdonot harmtheenvironment.Toms Shoes Company offersshoeswith vegan andsustainable materials,andis continuously workingtowards expandingtheseoffering.Theshoesofferedare madeof materialsthat donot damagetheenvironmentandthat are madeincludeorganiccotton,naturalhemp,andrecycled polyester. In addition,allthepackagematerialsare alsomadefrom 80 percent recycled post-consumerwasteandare writtenwith soy ink.Themanagementshavealsodefinedaptbusinesspracticesforall theemployees,andeverystaffmemberis heldaccountableforconformingto thecompanypolicies.Allalong measuresare putin placeto ensurethatbusinessoperationsintegrateenvironmentally friendlypractices.

EthicalConsumerism

Ethicalconsumerism refersto thepracticeof procuringgoodsandservicethat are manufacturedin a mannerthat lessensenvironmental andsocialdamage,whileat thesametimeavoidingproductsthat are judgedto impactnegatively on thesocietyandenvironment.In thisrespectbeingan ethicalconsumer,is not limitedto onlychoosingproductsthat are perceivedto be ethicalproducedanddistributed.Itentailsbuyingproductsthat fallintothebasketof ethicalcategory.Itgoesto theextentof boycotting productsthat failto meetthethresholdof ethicalcategoryandthatmay harmour environment,that violatehumanrightsandthat are producedin an unsustainable way(Thornton, 2001).

Productsthat fallintothecategoryof ethicalcategoryincludeenergyefficientproductssuchas bulbs,powerfrom renewable sources,woodproducts,organicproduce,fairtradecommoditiesandrecycledpaper.Ethicalconsumptioncan be a potenttoolforchange,forexample,therecentrejectionof genetically modifiedfoodin United Kingdom. Nonetheless,moreneedto be doneto ensureethicalconsumptionyields desirablefruitin thesociety. A recentsurveyconductedby Co-operative Bank in theUnited Kingdom, showedthateventhoughonlyone-thirdof consumersin Britain are concernedabout ethicalconsumption,onlya mere3 percent of theUnited Kingdom marketis dedicatedto theproductionof ethicalproducts(Thornton, 2001).

EthicalConsumerism MeansforBusinesses

Commercialentitiesmust respondto theneedsof consumersby ensuringtheir manufacturingprocessesare not onlyethicalbutdonot harmour environment(Thornton, 2001). In ethicalproduction,thefollowingthefacetsare vitalin theeyesof thecustomer:

  • · Sustainability

  • Transparency

  • Ethical manufacturing and distribution

  • Social responsibility

  • Fair labor

  • Use of renewable energy

  • Ethical marketing and Advertising

  • Use of natural and pure ingredients

  • Safeguarding human health

  • Providing succinct information about nutrition

  • Respecting human rights

  • Respecting environment

  • Recyclable packaging

EthicalConsumerism: TOMS SHOES

Tom’sshoesare producedwith environmentally friendlyfabrics,suchas recycled polyester, hemp,andorganiccotton,

  • Packaging materials are made of 80 percent consumer waste

  • Boxes are printed with soy ink

  • Toms Shoes Company provides fair wages to all employees both in United States and overseas factories (Tom Company, 2014).

  • The company does not permit child labor and slavery

  • Books of account re-audited by third parties

  • The one for one- One sold- one given away- philosophy ensures that the society benefit from company’ business operations (Tom Company, 2014).

  • Company has excellent relationships with suppliers

  • The company produces durable shoes that are friendly to the environment

  • Creating job opportunities for locals by producing shoes in states where the corporation gives (Tom Company, 2014).

CompanyOverview

TomsShoe Company is a for-profit businessentitybutwith a charitablecomponent.Thecompanywaslaunchedby entrepreneurandbusinessmanby thenameof Blake Mycoskie after experiencingthehospitalityof poorciviliansin a villagein Argentina (Tom Company, 2014). Hencefrom thebeginning,Tom Shoes aremeantto not onlymakeprofitsto theproprietorbutto alsoserveas a charitableorganizationto helpalleviatepoverty,by providingvitalhumannecessities(shoes)(Spaulding, Fernandez andSawayda, 2011).

Tom’sbusinessmodelis veryextraordinary.Whereasmanycompaniesengagein cause-associated marketing,thecompany’sphilanthropic sectionis one of themostimportantmarketingstrategies.Thecostof supportingthecompany’sphilanthropicprogramis builtinto theproductssalesprice(Tom Company, 2014). In thisprogram,thecustomeris thusturnedinto a sponsor,in supportingthecompanybecomesa sustainable firm peggedon givingbackto thesocietyon a continuousbasis.In thisarrangementas longas individualscontinueto buythecompany’sproducts,childrenin povertystrickenregionsshall continueto receivea pairof shoes.Through thisphilanthropicprogramToms Shoes Company canmakea profit,supportitself, giveto thesocietyandhenceplaya significant[artin makingtheworlda betterplace.

EthicalIssues

ThoughToms Shoes has beenableto helptheneedyfrom differentpartsof theworld,theprogramhas comeunder increasedcriticismfrom manyquartersthatfeelthatratherthan creatingopportunitiesforthepoorin theworld,thecompanyprogramservesto heightendependencyon goodwill of otherpeople.Manyscholarsconcurthattheaptestwayto createsustainability, which is one of theessentialelementof ethicalconsumerism, is through creationof jobopportunitiesandeducation.Itis onlythrough suchaspectsthattheneedyandpoorin theworldshall be ableto liftthemselves from thepovertySpaulding, Fernandez andSawayda,2011).

Thesecondethicalissuerevolvesaround manufacturingsitesin overseestatessuchChina, a countrythat has beenallegedto propagatefactoryabuse.Itis evidentthatthemainreasonthat makessuchlocationappealingto companiessuchas Toms Shoes Inc is thefactthatlaboris cheapandthatthelaborlawsare lessstringentSpaulding, Fernandez andSawayda,2011).

ApproachesToms Shoes Company has usedto becomemoreSociallyConsciousBusiness

Informationon thecompany’swebsite indicatesthatthere is an incessant believeby themanagementthattheycan improvethelivesof manyindividualsaround theplanet.In thisregard,thecompanyworksin a waythatmaintainsthevalueof their brand.Socialresponsibilityis suchoneareawhereToms Shoes Company has excelledmassively. Itmainfocusis socialandenvironmental effectsof its operationsSpaulding, Fernandez andSawayda,2011). Since itwaslaunchedin 2006 thecompanyhas madetremendousstridesin thefieldof socialresponsibilityandhas accomplishedaspectssuchas:

TomsShoes Company offersshoeswith vegan andsustainable materials,andis continuously workingtowards expandingtheseoffering.Theshoesofferedare madeof materialsthat donot damagethesurroundings andthat are madeincludeorganiccotton,naturalhemp,andrecycled polyester. In addition,allthepackagematerialsare alsomadefrom 80 percent recycled post-consumerwasteandare writtenwith soy inkSpaulding, Fernandez andSawayda,2011).

Second,thecompanyhas disclosedthatmostof its shoesare madein China, eventhougha significantpercentageis alsomadein Argentina andEthiopia. Thecompanyhas a functionalwellorganizedsupplymanagementteamto overseesuppliers anddealersto seeto itthattheymaintainToms corporate socialresponsibility.Thecompany’sglobal staffensuresthatvendorsmaterialsare regularlyevaluatedandcertifiedandmeettheall thestandardssetby themanagement.Theteamalsoensuresthatoperationsare conductedin linewithin thepremiseof applicablelawin theabove-mentionedstates,includingrulesthat relateto humantrafficking andslaverySpaulding, Fernandez andSawayda,2011).

Themanagementshavealsodefinedaptbusinesspracticesforall theemployees,andeverystaffmemberis heldaccountableforconformingto thecompanypolicies.Allalong measuresare putin placeto ensurethatbusinessoperationsintegrateenvironmentally friendlypractices(Tom Company, 2014).

Thethirdandperhapsthemostimportantsocialresponsibilityis givingbackto thesociety.Thegivingstoryis wellillustratedin theToms Shoes web site.Itis apparentthatgivingis theDNA of Toms hoeCompany, as can be illustratedby their philosophy,‘one forone’ Spaulding, Fernandez andSawayda,2011). Everyinstancean individualpurchasesa shoe,apparelandeyewear from thecompany,partof themoneyis usedto provideshoesto povertystrickenareasandrestoresightsto peoplefrom under privilegedregions.

ConsumerBuyingBehavior

Generally,a consumerdoesnot actin isolationwhenmakingpurchasingdecisions,butratherare influencedby severalfactors,includingpeoplearound them. Broadly speaking,there are four mainfactorsthat influenceconsumerbehaviorpsychological,cultural,personalandsocialfactors.Culturalfactorsentailtheinherentvaluesanddecisionsprocesseswithin a personculturethat might shapeconsumerbuyingbehavior.Socialfactorsincludereferencegroups,familymembersandotherinspirational groupsthatinfluencepurchasedecision.Personalfactorsentail aspectssuchas ageof theconsumer,their lifestyle, income,occupation,andpersonality,whilepsychologicalfactorsentailour attitudes,perceptionandbeliefs.

TomsShoe Company is a businessentitythat is gearedtowards makingprofitsfrom operational activities.In thisrespectitutmostimportancethatthecompanymeticulously monitorsbusinessactivitiessuchas sustainability, factorycompliance,financesandwelfareof societyandnatureof its productsin orderto maintainaptbusinessconduct9Spaulding, Fernandez andSawayda,2011). Eventhoughconsumersare inclinedto purchasefrom businessentitiesthat actively participatein philanthropicactivities,moreoftenthan not theyare moresupportive whentheygetsomething in return.

ConclusionandRecommendations

Ethicalconsumerism refersto thepracticeof procuringgoodsandservicethat are manufacturedin a mannerthat lessensenvironmental andsocialdamage,whileat thesametimeavoidingproductsthat are judgedto impactnegatively on thesocietyandenvironment.Toms Shoes Company offersshoeswith vegan andsustainable materials,andis continuously workingtowards expandingtheseoffering.Theshoesofferedare madeof materialsthat donot harmtheenvironmentandthat are madeincludeorganiccotton,naturalhemp,andrecycled polyester. In addition,allthepackagematerialsare alsomadefrom 80 percent recycled post-consumerwasteandare writtenwith soy ink.Toms businessmodelis veryextraordinary.Whereasmanycompaniesengagein cause-associated marketing,thecompany’sphilanthropic sectionis one of themostimportantmarketingstrategies.Thecostof supportingthecompany’sphilanthropicprogramis builtinto theproductssalesprice.In thisprogram,thecustomeris thusturnedinto a sponsor,in helpingthecompanybecomea sustainable firm peggedon givingbackto thesocietyon a continuousbasis.Thecompanyhas alsomaintaineda highethicalstandardthat guidesits workersin differentpartsof theworld,andthatensuresthatproductsproducedare of highquality,companyrespectsrightsof workersandactively participatesin socialresponsibility.The companyneeds to meticulously monitorbusinessactivitiessuchas sustainability, factorycompliance,financesandwelfareof societyandnatureof its productsin orderto maintainaptbusinessconduct and shake offcriticism leveled against its philanthropic program.

ReferenceList

Spaulding,A., Fernandez, S. and J Sawayda, J2011.TOMS: One for One Movement. Daniels Fund Ethics Initiative.University of New Mexico. Retrieved from:http://danielsethics.mgt.unm.edu/pdf/TOMS%20Case.pdf

Thornton,L.T 2001. Ethical consumerism. TheGuardian.Retrieved from: http://www.theguardian.com/money/2001/feb/22/ethicalmoney1TomCompany 2014. TOMSCompany Overview. http://www.toms.com/corporate-responsibility