Corporate social responsibility to be rewarded by consumers

Posted by Daniel Palmer on 29th December 2008

New research has discovered that German consumers, like an increasing number of consumers in countries like Australia and England, are demanding greater corporate responsibility from companies. Such conduct on the part of companies influences the purchase decisions of consumers.

This is the conclusion reached by a survey carried out by GfK Panel Services in cooperation with GfK-Nürnberg e.V. and Roland Berger Strategy Consultants.

The survey looked at the attitudes of consumers towards issues such as organic and fairly traded products, energy-efficient household appliances, fair working conditions and protection of the environment and climate, and for the first time compared these with actual buying behaviour.

Fairness towards employees considered the most important issue
The survey revealed that consumers first and foremost expect companies to behave responsibly towards their own employees, paying fair wages and showing solidarity. For a total of 74%, this is the biggest responsibility faced by a company. Responsibility to customers in terms of high-quality products at reasonable prices comes a distant second (29%). Following just behind is responsibility to suppliers and 28% of Germans have a preference for products from their local region.

For 26% of consumers it is crucial that companies pay their suppliers across the world fair prices and do not tolerate child labour. One in five consumers believes it is important that the production processes of companies are eco and climate-friendly. The need to show a sense of responsibility towards people with social needs and in difficulties ranks comparatively low at 9%, as does responsibility towards the shareholders of a company at 8%. Corporate sponsoring of sport, culture and science is considered the least important at 6%.

If a company actually does act according to the principles of corporate responsibility, consumers are more than ready to pay a higher price for the product. Consequently, approximately half of the German population would pay more for products that are proven to have been made locally or bear the label “energy-saving”. A total of 39% of buyers of electrical appliances cite the country of origin as a very important factor influencing their purchase. 36% of the German population would spend more money on a product that is “made in Germany”.

Different consumer types according to attitudes and buying behaviour
The German population can be divided into five different consumer types according to consumer attitudes to issues of corporate responsibility. These five types exhibit clear differences as regards their attitudes to life as well as their buying behaviour.

The type referred to as “responsible consumers” are the most relevant in terms of consumption. They are happy to champion the causes of others and place importance on the defense of human rights, social responsibility and development aid as well as the responsible use of resources. They do not just pay lip service to these beliefs but put them into practice when buying groceries, electrical appliances, paint or cars. These consumers are very consistent in their actions; in this group, 13% more than in the total population say they only use electrical appliances with the highest energy efficiency ratings in their homes. Looking at buying behavior, in fact a quarter more than in the total population opted for an electrical appliance with the A++ energy efficiency rating for their most recent purchase.

In contrast, the type referred to as “believers in hard work and progress” have a completely different profile. Of more relevance as far as they are concerned, are their own initiatives closer to home, such as the family or in the neighborhood, and social issues such as science and research. The three remaining consumer types also have completely different profiles, with different emphases in the area of corporate responsibility. The “traditional egoists” are attached to tradition and their local region, but have rather a low sense of responsibility towards their fellow man. The “progressive idealists” are forward-looking and feel a sense of duty towards those who are weaker than themselves. In comparison to the other consumer types, they are the most likely to be prepared to pay more for an “organic” label on a product (39%). The “volunteers” show a high level of voluntary commitment in their local region. An important factor influencing their purchases is the country of origin. 45% of this group are prepared to pay more for a product labeled “made in Germany”, and 55% would spend more on a product bearing the label “locally produced”.

Developing new consumer groups
Looking at the consumer and company perspective together, it is clear that different corporate responsibility issues are significant for different sections of the population. The responsible consumers even give consideration to the ethical standards and environmental issues related to the production, consumption and disposal of products when making their purchase decision. They are therefore directly relevant to consumption. Other consumer groups become important in terms of the corporate responsibility activities of companies through their emphasis on voluntary activities or the strengthening of regional or national factors. Labels such as “locally produced”, “energy-saving” or “untreated” are not just ways for producers and retailers to project a particular image; consumers are also increasingly prepared to pay a higher price for them.