The article in the url below demonstrates the limits for firms that rely too heavily on the market segment of ethical consumers (Chapter 2: CSR: Do Stakeholders Care? p25):
“In the beginning, American Apparel put a "sweatshop free" label on its t-shirts. But sex turned out to be a better sell than good labor practices. Lessons in the limits of altruism.”
The pessimistic (or realistic, depending on your perspective) view of human nature held by Dov Charney, America Apparel’s CEO, is that “to get what you want, you must appeal to people's self-interest, not to their mercy.” The article argues that the success of Charney’s approach, at least in relation to the teenage customer to whom American Apparel seeks to appeal, lies in understanding the gap between people’s stated intentions and actual practice:
“A whopping majority of American shoppers may consider themselves environmentalists, but, according to the Journal of Industrial Ecology, only 10% to 12% "actually go out of their way to purchase environmentally sound products." Similarly, Brandweek reported on a survey that found that even among consumers who called themselves "environmentally conscious," more than half could not name a single green brand.”
The article argues that, instead, successful ethical retailers rely on other research that suggests people are much happier treating themselves to luxury items, while at the same time feeling like they are doing something virtuous:
“Perhaps this is why many big companies and brands are not so much changing their products as adding new alternatives to their existing product mixes, or carving a small donation to charity out of their profit margins. Pepsi-Cola is testing an all-natural version of its flagship drink called Pepsi Raw, and Clorox has launched an eco-friendly line of cleaning products. The Bono-promoted (Product) Red initiative brands existing products that dedicate a portion of the purchase price to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. There's even a (Product) Red version of the iPod.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Sex vs ethics
Fast Company Magazine
It's a dilemma for investors who want hefty returns and a clean green conscience: Can you own Big Oil and still feel good in the morning?
From: Issue 124 | April 2008 | Pages 54-56 | By: Rob Walker
http://www.fastcompany.com/magazine/126/sex-vs-ethics.html
