Exploring the Effect of Ethical Concerns on Consumer’s Buying Behaviour

This literature review explores the effect of ethical concerns on consumer buying behaviour. It covers theoretical frameworks such as Howard-Sheth Model and Black Box model, ethical consumerism, five ethical approaches, and factors influencing buying behaviour. The review highlights the importance of organisations satisfying ethical concerns of society and avoiding undesirable consumer behaviour.

Running head: LITERATURE REVIEW
Literature Review
Topic: Exploring the effect of ethical concerns on consumer’s buying behaviour
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Table of Contents
Introduction......................................................................................................................................2
Overview of ethical concerns about consumer buying behaviour...................................................2
Theoretical understanding of consumer buying behaviour.............................................................4
Concept of ethical consumerism......................................................................................................7
Five ethical approaches....................................................................................................................9
Five stages of Consumer Decision-Making...................................................................................10
Factors influencing buying behaviour...........................................................................................11
Effect of ethical concerns on consumer buying behaviour............................................................13
Gap in literature.............................................................................................................................14
Summary........................................................................................................................................15
Reference List................................................................................................................................16

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Introduction
Ethics are principles of right behaviour which direct the decisions along with activities of
a person. The society has a general set of standards and the society expects that each of the
members must adhere to ethnic morals and norms of the society. The organisations need to study
and satisfy the ethical concerns of society and the organisations also avoid developing the
advertisements and products which may lead to undesirable consumer behaviour. In marketing,
ethical consumerism is a consumer activism which based on consumer choice. Positivism buying
of the consumers refers to the ethical products and negative purchasing is associated with moral-
boycotting along with company-based purchasing. The organisations always do marketing to
convince the consumers to choose their products and it is up to the consumer which products
they would purchase from. In this literature review, mostly secondary data sources are gathered
to analyse the scholars’ perspectives on ethical consumerism and consumers’ buying behaviour.
Theoretical frameworks are used to underpin the literary concept of consumer behaviour and
industry examples are used to show the practicality of consumer behaviour.
Overview of ethical concerns about consumer buying behaviour
Ethical behaviour of the organisations refers to morally and ethically correct conduct of
the management according to the society. Ethical behaviour is correct in the eyes of law and
ethical behaviour is also based on the interests of the people which may lead to the welfare of
society. As stated by Lin et al. (2014), radical changes of economic, technological, political and
legal and cultural factors lead to bring significant changes in the consumer behaviour. Marketing
is still in need to adapt to the changes, both in terms of the application of the techniques and
methods. According to Pappas (2016), marketing is solely a business concept and the aim of the

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marketers to reach consumers with their products. The authors further stated that the major role
of the marketers to use the distribution channel to reach the customers with promotions. On the
other side, as argued by Sharma (2014), the application of the marketing techniques and
functions in both social and economic process bring value to the customers. Value of the
marketing is not just limited to the money as the organisations must be aware of the promotions
and goods and services related to this. Marketing in today is not just the exchanging of the ideas
and products which are motivated only by profitability. Different values are transferred from
organisations to the different parties with the aiming of satisfying the economic goals, wants and
needs of the organisations as well.
Horner and Swarbroke (2016) believed that consumerism triumphed in the battle of
ideology in the 20th Century which represents the rudimentary characteristics of modern nations
and society. Today, consumerism is the social movement which finds the ways to enhance the
power and rights of the consumers than the sellers and manufacturers. The consumers are aware
of the marketing ethics which are related to the moral assessment of individual marketing related
behaviour. In the article named Ethical Consumer Behaviour in Marketing, authors Ruzica
Kovac and others stated that corporate marketing behaviour is associated with consumer
behaviour as each of the organisations has its consumers or vice versa. The consumers search for
the background information and CSR activities of the organisation prior to making the purchase
from the organisations as today's customers are getting informed through the internet. The
consumer behaviour is surpassing just the cultural aspect and it has become more
multidisciplinary as it could be understood and influenced by the Theory of Planned Behaviour
Model. As opined by Montano and Kasprzyk (2015), Theory of Planned Behaviour stated hat
purchase intentions of the consumers are directly generated and motivated by their own set of

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value systems, interpersonal ethics, moral norms and interpersonal ethics. Therefore, actual
consumer behaviour of the buyers has not been charged with the same intensity of the intended
behaviour. The consumers today do not get motivated to purchase the products just by observing
the promotions. Consumers check their personal interests and calculated benefits before taking a
decision on purchasing of the products. The consumers face the dilemma of ‘prudence vs.
morality’ as the consumers now distinguish an action as ethical (Kovac-Znidersic et al. 2013).
The authors stated further that ethical consumer behaviour is associated with decision-making
and purchases as the consumption experience of the customers are affected by ethical concerns.
In the article named The Effect of Business Ethics on Buying Behaviour, by Emmi Seppanen,
the authors stated that before freely purchasing of the products, the consumers are concerned
about some of the ethical issues like human rights, well being of people, labour conditions and
environment.
Theoretical understanding of consumer buying behaviour
Howard-Sheth Model
Howard Sheth Model is a combination of psychological, social and marketing influences
on choices of the consumers into coherence sequence of the process of information. Howard
Sheth Model explains consumer behaviour on the perspective of cognitive function and it
provides an empirical depiction for outcomes of consumer behaviour (Bellini et al. 2017).
Howard-Sheth Model suggests three levels of consumers' decision-making. The first-level of
decision-making of the consumers describes extensive problem-solving. In this level, the
consumers search for information on different brands before making a purchase in the market.
The second level of consumer behaviour is limited problem solving and the consumers arrive at

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the brand preference after seeking some comparative brand information. The third level of
decision-making is about habitual response behaviour and the consumers know well about the
different brands. In this level, the consumers differentiate the characteristics of each product and
the consumers decide about purchasing the particular products they seek.
Howard Sheth Model describes four sets of variables. Input is the first variable and the
input provides three different types of stimuli in the consumers' environment. Physical brand
characteristic is the significative stimuli and verbal and visual brand characteristic is the
symbolic stimuli. Consumer's social environment provides the third type of stimuli from a
reference group, family and social class. Perceptual and Learning Constructs is the second
variable which is involved in consumers' contemplating decision. Perceptual bias can happen if
consumers distort the information which has been received from the past experience. Learning
constructs are the consumers' goals, criteria for evaluation alternatives, information of the brands
and buying intention. The output is the third variable and it comes from the learning and
perceptual variables (Mihaela 2015). This variable is associated with the attention, attitudes,
intention and brand comprehension. The fourth variable is external variable is associated with the
decision-making process and it includes the importance of consumer personality traits, the
importance of purchase, time pressure and religion.
It can be deduced that strength of Howard Sheth Model lies on four different types of
variables which are linked in working relationship to cover major aspects of purchase decision
along with effective utilisation of contribution from behavioural characteristics.
Black Box model of consumer behaviour

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The Black Box model of consumer behaviour recognises the stimuli responsible for buyer
behaviour of the customers. The stimuli may come from the promotions and advertisements of
the product which is presented to the customers by the marketers. The environment is also dealt
with the consumers’ black box. As stated by Zavyalova et al. (2018), the buyer's black box
comprises two different subcomponents; buyer decision process and buyer's characteristics. The
author further clarified that black box theory is about mental consciousness and it states that the
mind is full of outputs and inputs which are well defined. The environment factors of consumer
buying behaviour are associated with marketing stimuli which may come from product, place,
price and promotion. Environment factors of consumer buying behaviour are associated with the
demographic, socio-cultural, technological and political. Buyer responses are associated with the
buying attitudes and preferences along with purchase behaviour. Purchase behaviour of the
customers depends on what, where, when and how much the customers buy. In addition, brand
and company relationship behaviour is another factor which provides stimuli to customers. As
opined by Pasquale (2015), consumer buying behaviour is affected by personal, social and
cultural and psychological characteristics and the organisations must be aware of the fact to
design the offerings.
Cultural factors of consumer buying behaviour are related to the culture, subculture and
social class of the customers. Social factors of buying behaviour are associated with the family
and friends’ references, roles and status of the customers along with reference group. Personal
factors of the customers in consumer buying behaviour are related to the age and lifecycle stage,
economic situation, occupation of the consumers, lifestyle and personality of the consumers.
According to Zavyalova et al. (2018), psychological factors of consumer buying behaviour are

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related to motivation, perception, learning and beliefs and attitude. Therefore, it can be deduced
that these factors lead to the transformation of the stimulus into specific responses.
Figure 1: Black-box model of consumer behaviour
(Source: Zavyalova et al. 2018)
Concept of ethical consumerism
Ethically consumerism refers that customers must choose to purchase the products which
are ethically sourced (Burgoon and Fransen 2017). Ethical consumers purchase the products
which are ethically produced without harming the society and environment. Examples of ethical
consumerism can be buying free-range eggs or to boycott the products which are produced
through child labour. Some of the ethical products include fair trade goods, organic produce,
electricity renewable energy, energy-efficient light and recycled paper. The customers seek
information about the products or service before they purchase and Ethical Consumer Research

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Association publish the details in their magazine. Ethical consumerism is associated with seeking
information about the products and involves watching how the food is being prepared, how much
energy is used. Ethical consumers are inspired to purchase the products which may be produced
locally as ethical consumption is a powerful tool to bring change. Khan et al. (2016) published
the research where they showed that a third of the UK consumers believe in ethical consumption
and only 4% of the UK market is devoted to producing ethical goods and service. The customers
in recent time are aware of the different products and they search for their manufacturing and
packaging process through the internet. Today, the marketers share videos about the
manufacturing process and they publish the reports about the organisation's CSR activities so
that the customers can learn how much ethical the organisation's business process is. As argued
by Summers (2016), the whole point of ethical consumerism is that the customers ‘know’ what
they are purchasing and the customers must buy the products which are produced ethically. For
example, the clothing industry is observing pressure for high-quality products which are
produced in a way which supports human rights properly in Australia.
Ethical consumers observe many elements before purchasing the products and services
and the businesses need to respond on certain things which are more important today than just
good product or lower prices. The organisations need to look on the natural and pure ingredients,
clear information about nutrition, ethical sourcing, transparency, fair labour, honouring human
labour and fair labour, protecting the human right, sustainability and ethical marketing (Hassan
et al. 2016). Today's business needs to examine how they are evolving and meeting the
expectations of the customers and the organisations need to simultaneously respond ethical
consumerism. The customers can focus on ethical marketing and advertising and the
organisations focus on ‘giving back to the community and society’ campaign. For example,

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Apple Inc. solved the issue of workers' rights in suppliers' factories. In the year 2014, Apple Inc.
found the solution for China Labour Watch which was getting very serious for safety, human
rights and environment. Apple Inc. got a lower rating form Ethical Consumerism because Apple
impacted the environment through creating conflict by using harmful minerals and they
performed low in quantified targeted for the environmental performance.
Five ethical approaches
The first ethical approach is fair-trade as organisations take this approach to highlight the
proposals of the firm aspiring to support the local communities (Culiberg 2014). The aim of the
organisations is to improve the livelihood of marginalised and poor people in the developing
countries and fair-trade aspires to empower manufacturers and encourage forming
democratically to run the co-operation.
The second ethical approach is boycott as the customers will not purchase from any
organisations or brands if the organisations or brands are not doing the business ethically. As
pointed out by Ferrell and Fraedrich (2015), if enough companies and consumers can boycott
certain products or company; they have to change their marketing and product formulae. For
example, Nestle has been faced the issue when Indian customers stopped purchasing Nestle
Noodles due to excessive containing of unhealthy spices. The third ethical approach is selective
shopping when the customers must choose a certain brand and the customers can choose some of
the high street brands. In selective shopping, the customers can just shop from the brands they
think are correct and use the ethical process to manufacture the products. Selective shopping can
bring bigger change by confronting manager rather than avoiding the brand (Wood et al. 2015).
The fourth ethical approach is buying less as it is a way to save the planet. Buying less campaign

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shows the support to the ethical brands and the Western Countries has been showing much
concern on ethical consumerism. In Western Countries, consumption habit of the consumers is
unsustainable and it is the right way to support the buying-less campaign. The fifth ethical
approach is to buy from the local as these types of products are thought to be the core principle
of ethical shopping. Local food is eco-friendly and it is better than buying globally as less
transport fuel is spent if the people buy local. Local food is fresh and it supports the food
industry (Khare 2015).
Five stages of Consumer Decision-Making
Marketers' goal is to understand what is going on inside the mind and head of the
customers and the decision of making purchases have five different stages.
Problem recognition is the first stage when the customers develop the need that they want
to be satisfied. The consumers must feel like missing something and they need those things to
feel normal.
Searching for information is the second stage when the customers search for information
about different products which can satisfy the needs. The customers take help of the Search
Engine as it is the easy way to find the products they are looking for. The customers can search
for the information about the products from reference group also (Ryoo and Drumwright 2017).
Evaluating alternative is the third stage when the customers evaluate and find satisfaction
level from the best deals they get. This evaluation can be based on the price, quality and
reference. Customers read reviews and the customers compare the price and they choose
ultimately the one product or service which satisfies all the parameters of the customers.

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Selection stage is the decision of making a purchase of the product and the customers
take the risk to purchase the selected product. The customers may have prior experience or the
customers may succumb into the promotions of the product to give the product a try (Badgaiyan
and Verma 2015).
The final stage is the evaluation of alternative as it is associated with the post-purchase
decision of the customers. The customers judge the product based on their expectation and this
evaluation can make the customers a repeat-purchasers or just one-time customers. If the
customers like the product or service, the customers will definitely recommend the product to
near and dear ones. This evaluation of alternative improves the brand image of the organisation.
Figure 2: Five-stages of consumer decision-making process
(Source: Jin and Kim 2015)

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Factors influencing buying behaviour
Figure 3: Factors influencing buying behaviour
(Source: Sangroya and Nayak 2017)
Internal
Internal factors are associated with psychological category and attitudes of human beings.
Jin and Kim (2015) stated that the attitude of the customers is learned tendency to answer in a
consistently favourable way toward a specific object. Internal factors of the customers before
making a purchase are associated with perceptions of the customers, learning, need and
motivation. The marketers always try to affect the internal factors by their unique promotion
technique. People can form diverse perceptions of the exact same stimulus as a result of the three
cumulative processes; selective attention, selective retention and selective distortion. Motivation

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moves the people during the purchase. In the opinion of Abraham Maslow, the people may have
psychological needs like hunger and thirst or people have safety needs like security and
protection (Zekiri and Hasani 2015). The customers may have social needs like belonging and
love the people also search for esteem needs like recognition needs.
External
External factors of consumer behaviour are the family, reference, social class, subcultures
and groups. The culture of the customers is the important cause of people's wants and beliefs as
the people are mostly learned. The culture of the people sets the value, wants, behaviour and
observations when subculture is defined by the distinct culture group that exists as a specific
segment within a complex society. Before purchasing a product, the customers can get distracted
by the references of friends and family. The social class can share distinct interests, values and
behaviours (Sangrover and Nayak 2017). Reference groups are of two types, primary groups like
family, friends and neighbours and secondary groups are those which are in touch with less
distraction. The reference group is aware of ethical consumerism and they convince the near
ones to make a purchase from the same brands.
Effect of ethical concerns on consumer buying behaviour
Purchase behaviour of the customers sometimes shows the sense of ethical and moral
judgement. In the 21st Century, the consumerism is distinguished by the growing significance of
the application of the ethics and it shows in the purchase and consumer behaviour (Shaw et al.
2016). Ethical consumerism is related to the activities like ethical investment and ethically
motivated purchasing of the products. Ethical concerns of consumer buying behaviour are
complex and diverse. As opined by Carrington et al. (2017), relationship purchasing occurs when

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the consumers seek to educate the sellers about their needs and product-oriented purchasing is
shown in community-supported agriculture in the UK and in the USA. In addition, fully screened
type of ethical purchasing occurs when the customers observe the ethical ratings across whole
product area (Solomon et al. 2014). In the food and beverage industry, increase in consumption
of labelled fair-trade products has increased by 5.06% and 10% growth has been seen in the sales
of organic food in Australia (Ictu.ie 2018).
In recent time, rapid globalisation has weakened the national government and this
incident occurs directly through taking rights of regulating the market by International Agencies
like NATO, NAFTA and some bilateral agreements. The customers are observing the rise of
transnational corporations which seek profit in business (Shah and Amjad 2017). Therefore, it
can be deduced that buying behaviour of the customers is affected by the green advertising and
ecological approach of the marketers. The PR team of the organisations need to promote the
business in a way which reflects the support of human rights, no use of child labour and the
organisations should not harm the animals. Nowadays, ethical consumption has focused on
principles, obligations and values of the consumers towards actions. As argued by Carrington
and Attalla (2015), ethical consumption fosters an artificial opposition between ethical and un-
ethical consumption. It can also be stated that in recent time, a shift in market power is seen
towards consumers. The effectiveness of a market campaign about ethics in business and in
marketing recently has increased ethical consumerism. The people are now aware of ethical
transportation as an increase in the purchase of ecological vehicles has been increased by almost
128% in the last two years across the globe (Ictu.ie 2018).

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Gap in literature
The earlier works investigated majorly the influence of level of ethical concerns or moral
outrage on the firm’s branding. Branding of the organisations does impact on the customers’
buying behaviour. The consumers’ boycott of the products and services for not conforming the
ethics of marketing and producing has been explained in scholarly articles to show the business
practices. Some of the research scholars also stated the individual factors of consumer buying
behaviour focus on influencing the ethics of marketing of the organisations. Some critiques
examined the purchase intention, attitudes and consumers' personality. A gap has been found in
the concept of previous research scholars as consumer behaviour in purchasing has not been
changed much as the consumers’ purchase the products or service in same intensity. Therefore,
intended behaviour of customers is needed to research further by the marketers before they focus
on ethical consumerism.
Summary
It has been concluded that there is a gap between the ethical purchase intention of the
customers and actual buying behaviour of the customers. Consumers' perceptions and attitude are
based on intention and purchase behaviour, whereas, attitudes and statements of intention of the
customers predict the actual purchases in the area of social marketing. Consumer dissonance
reflects the consumers do not share the idea of their behaviour, intentions and preferences. With
the advancement of time, maximum numbers of customers refuse to purchase the products which
have unethical attributes. The customers in the market make their purchasing decision which is
based on the analysis of the products' quality, availability, brand and not just the ethical
elements. The marketers avoid ethical consumerism by making a shortage of ethical products in
retail stores, giving discounts on unethical products, through aggressive marketing. The

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marketers need to understand implementation intention, situational context and actual behaviour
control of the customers. The marketers focus on cognitive progression to understand the beliefs
of the customers which are determined by attitude, influence-behaviour and intention.
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