The importance of market research for sustainability and ethics

I read a very interesting article from Australian Food News (http://ausfoodnews.com.au/2009/03/25/new-study-tracks-changes-in-the-australian-grocery-shopper.html) about growing market trends according to research from The Nielsen Company. The research found that the population of Australia with migrants born in Asia, could increase to a rise of 21 percent by 2050 (based on research and trends in 2010).

Nielsen_V1

This is a massive increase and would suggest that over 1-5 people living in Australia are of Asian background. This would have huge implications on a large variety of industries.

Bringing us forward to the current year ,2015, another article by Mark Dingley discusses market trends in the Australian manufacturing industry.

Asia is really shaking up Australian manufacturers (as we’ve reported before). There are some massive opportunities out there to export more to, and meet the demand of, Australia’s quality produce, and it was clear at AUSPACK that manufacturers are willing to do what it takes to get the advantage. For some, this means launching new products especially for export to the Asian market. For others – especially those in the dairy industry – this means ramping up production to meet the growing demand. These opportunities also bring challenges: How do you scale production sustainably? What is required to meet the hygiene and quality standards for export?

(http://ausfoodnews.com.au/2015/04/22/auspack-2015-wrap-up-5-trends-you-need-to-know.html )

I find the first question about sustainability really intriguing. From my other research I have found many fashion brands such as Puma, Zara and Adidas are trying to improve their business procedures in terms of sustainability. Many businesses seem to be trying to improve how they go about business from design to end product delivery. I believe many consumers these days want to know where the products they are buying are sourced from and that those they are in exchange with are performing both ethically and morally sound. For example, a 2014 online article from Farm Weekly mentioned:

Demand for free-range eggs has jumped more than 15 per cent in the past five years and now accounts for one in every five eggs produced in Australia.

(http://www.farmweekly.com.au/news/agriculture/livestock/general-news/cracking-demand-for-freerange/2715544.aspx) 

eggs-spartan

Consumers I feel are becoming more conscious of the impact that they can create on business with the concept of supply and demand. I believe these sorts of examples iterate just how important market research is for companies to be on top of their game, especially in saturated markets such as FMCG or fashion retail. Businesses need to be aware of how consumers use their products and what drives them to use their product or certain types of products.

As another example of a ripe topic on business ethics is dominate tech company Apple. There has been much media exposure to the conditions of workers at Apple factories in China. A RelianceRisk.com.au article reported…

Last year, concerns were raised over worker conditions at Apple factories in China, following an investigation by China Labor Watch. As reported by The New York Times, the workers’ rights group accused the company of not enforcing compliance with occupational health and safety regulations at Apple supplier factories across China. Locked fire exits, absence of safety training, significant overtime, and flammable substances found on the floors of factories were some of the hazards identified through China Labor Watch’s inquiry.

(http://www.reliancerisk.com.au/safety-concerns-for-apples-suppliers/)

Apple-logo1

These types of issues bring up debate and I’d like to put forward a questions… 

  • Should businesses be conducting more market research on the importance of sustainability to their consumers? OR should businesses simply invest money into providing more sustainable production, rather than researching the topics relevance to it’s consumers?
  • Do you personally tend to give much importance on where your product been sourced from or where it was produced?
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6 thoughts on “The importance of market research for sustainability and ethics

  1. Kotler states that marketing ‘is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services’.

    Going by this definition, it can be assumed that delivering value is important in business sustainability. So in my opinion firms should invest in creating value for customers, to better ensure long-term customer satisfaction and loyalty which can lead to business sustainability. With value in mind, products must also be of good quality. To build a strong brand image, brand reputation is essential, in which case many businesses engage in social responsibility measures. So all aspects that may damage the brand reputation should be avoided, especially those of poor labour conditions. Personally, I am always weary of what I am paying for a product and where it is produced. Delivering value is a process, so I would say yes yes and yes to the three questions.

    Reference
    http://www.kotlermarketing.com/phil_questions.shtml

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  2. There is little questions that in today’s society, consumers are increasingly concerned with the ethical and sustainable business practices. From the ethical treatment of animals in food production, to the environmental sustainability of energy sources, to the conditions and safety of workforces (particularly in the developing world) consumers are taking more interest in the business practices and policies of producers.
    This has significant implications for marketing professionals in managing the reputation and public relations of their organisations – especially if they fall short of society (and particularly their customer’s) expectation regarding sustainability and ethics. Practices such as ‘greenwashing’, where environmental credentials are exaggerated or fabricated, are an example of managing perceptions.
    Organisations that mis-read their customer’s social conscious do so at their peril, as competitors more in tune with consumer sentiment take market leadership.
    All that said, ethics are not black and white, and what is acceptable for one consumer group is offensive to another. Therefore, the ethical stance of a consumer group is just another dimension on which the market can be segmented and targeted. Market research has a role to play in identifying the size, scope and psychographics of this segment as it would for any other.

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  3. As a customer, yes I personally do care if the product is sustainable, but when I’m making decisions, it’s not as important as quality and price. I actually find B2B needs to attach more importance on sustainability. Nowadays, procurement, specially those of listed companies who values their own image and reputation, tends to contract with suppliers who offers sustainable products. They always ask these ‘green’ questions in their tenders. For a business who wants to win business from these companies, the most effective way is to prepare for these sustainability questions, record relevant data in a good system as they go, rather than being panic and wasting time and money on research when preparing bidding tenders which always have strict deadlines.

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  4. major brands now are more keen on building trust on their products by becoming environmentally and ethically conscious. Companies are willing to invest in making their products sustainable. The question at this point is whether as a company we should research the impact of out products sustainablity as it is very clear now that is a necessity as the consumer of today is more and more conscious.

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  5. Conducting a market research is one of the better ways to find out what people might consider or want. Market research will determine how people behave according to your or your competitors marketing effort. So it market research plays and important role in sustainability. With the ethical slant the hope is to reinforce the positive values of a brand and increase customer loyalty.

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  6. It is very unfortunate for the Australian market that the overhead costs for maintaining a business is higher than the average in most parts of the world regarding – wages, incentives (eg superannuation), rental of business (eg taxes, factory leases etc) and others. As most businesses are focused on ever increasing their profit margins they turn to the Asian markets whereby wages are lower and cost to run a business offshore is much lower. An example of this is many farmers who are apart of the Victorian Farmers’ Federation have turned to relocation to Indonesia and India as it is much cheaper and profitable to run their cattle farm compared to having to pay higher wages and pay a lot more for land ownership.

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