Charlotte, NC — It is not uncommon to hear in any business course that consumers vote with their dollars, and sales signal approval. However, this simple philosophy seems less applicable today and it may be the case that the dollar has slowly lost its potency as a primary mechanism for messaging of what consumers do and do not want.
For instance, the introduction of apple slices and yogurt packs in McDonald’s Happy Meals was not due to a drop in sales or lost interest in French fries. It was due to external pressures and increased scrutiny from legislators regarding the marketing of unhealthy food choices to children. And McDonald’s apple adoption has dramatically impacted the apple consumption rates within the US.
Marketing healthier options is one thing, but marketing morality is another. One of McDonald’s long-time rivals, Burger King, has engaged in advocacy campaigning with some success (in regards to anti-bullying) and some ridicule (in regards to greenhouse gas emissions). Although the fast-food sector has a broad target market and the abhorrence to bullying is widespread, it is safe to say that methane gas is not at the forefront of their consumers’ minds when ordering a Whopper.
Firms leveraging situations and social issues is not new, but showcasing their moral authority despite a disinterested consumer base is. Even when attempting anonymity, the presence of a brand means that a message is never truly altruistic and this was most notably demonstrated by Frito Lay’s anti-commercial commercial during the peak of COVID-19 cases in April 2020.
A more recent attempt to showcase a company’s concern for society’s well-being is Coca-Cola’s #OpenToBetter campaign in the UK, which encourages consumers to embrace change and put their resolutions for a better world on public display. But do consumers really want self-reflection whenever they sip soda? And let’s be real, this is a marketing ploy since the design is clearly created for brand engagement.
Corporate social responsibility (CSR) has evolved beyond business interest in sustainability to various levels of accountability and virtuous ventures, and forms of Corporate Social Justice (CSJ) are on the rise. Even algorithms are being redefined to ensure fairness in our search for products and information, and social action is being viewed as appropriate and, in some cases, warranted for the business world.
There is a danger, however, in desiring products that not only suit personal wants but also social needs, since the impact is not always measurable nor effective. Businesses achieve success by focusing on areas of specialization, and so it may be best for firms to stick to what they do best and not enter realms they have no prior experience in, even when they have the best of intentions.
Rational consumers seeking value rather than virtue must work harder to understand the corporate social responsibility bandwagon companies are jumping on, and spot those who are abusing or misusing the conscious consumer trend.
And so, here are four key questions consumers should ask themselves about all CSR campaigns.
1. What’s in it for the corporation?
This question is not to suggest that corporations are inherently up to no good. Rather, it is important to understand a corporation’s motivations for embarking on a CSR campaign and how the campaign might also bolster the corporation’s bottom line. For instance, it was discovered in India that corporate promoters were distributing CSR donations to their own NGOs (non-governmental organizations) in order for the money to make its way back into their own pockets.
2. Is there potential for diverting attention or misrepresentation?
British Petroleum topped Fortune’s annual corporate accountability rating for CSR in 2004, 2005, and 2007 (and achieved second place in 2006), and the social initiatives that assured the accolades, such as BP’s turtle sanctuary, seemed to serve as a distraction to the negligence regarding production practices leading up to the 2010 oil spill and its aftermath. And who could forget the Volkswagen dieselgate scandal in 2015, whereas just a year prior the company was given acclaim for its sustainable initiatives.
3. Should issues be branded and how does it position others in the industry?
An odd side effect of social labelling or virtue signaling is that it almost simultaneously positions all those products not bearing such badges or launching advocacy campaigns as being devoid of social consciousness – which is likely not the case. Take for example the recent Vogue piece claiming to be pushing gender norms for the fashion industry. Are brands that cater to genders then in the wrong? Should Lane Bryant and Men’s Warehouse begin offering androgynous attire? Or is Vogue pushing a moot point since gender and fashion don’t have to conflict and people can simply decide for themselves what they want to wear and not make a fuss over it. Men dressing in gowns is not new and fashion should be a personal preference, not a platform for self-promotion.
4. Is there potential for doing more harm than good?
A 2011 study by Germany’s University of Hohenheim discovered that some Fairtrade certified coffee farmers actually became worse off in comparison to conventional producers due to being limited by certification for investing in improvements or taking advantage of expansion opportunities. It was found that, in comparison to one-third of their conventional counterparts, 45 percent of farmers with Fairtrade certification had “per capita incomes below the extreme poverty line.” The primary reasons cited as to why the non-certified producers were better off was due to having greater productivity yields given their ability to properly manage their land as well as expand their land ownership as needed. Basically, the standards imposed for Fairtrade certification inhibited growth prospects since, to be certified, a farm must be classified as “small” and, therefore, must remain as such.
It seems that for the crowded field of CSR campaigns to remain navigable, consumers must demand transparency or simply require businesses to remain in their own court of affairs. Those who side with economist Milton Friedman’s doctrine claim that the sole responsibility of a business is business — to generate profits and further growth prospects.
In the Nobel Laureate’s own words “there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
In this sense, businesses are doing right by society by creating jobs, engaging in production, and contributing to economic advancement while providing value to those wanting to buy. It is no secret that consumption can bring pleasure, and those obsessed with Target can attest to this fact. Even the simple act of grocery shopping has been known to bring joy.
According to Ramit Bennetti, the author and founder of the website I Will Teach You To Be Rich, and quoted in Business Insider, “a business idea is simply a skill or knowledge that solves a person’s problem and that they want to pay you money for.” Needs and wants within a marketplace prompt entrepreneurial mindsets which in turn can improve a society’s well-being indirectly (by increasing the standard of living) or directly (by targeting specific needs for niche audiences).
And that is wonderful in and of itself.
Take for example, the ability for those with Parkinson’s to now “eat with confidence” thanks to Liftware. Or a product like Lifestraw that can be used by those who love to camp and hike, or those across the globe truly struggling for access to clean water. Each is making the world a better place—not through some grand stated mission of social responsibility but by serving consumers.
Businesses who are ethical, responsible, and generate value should be rewarded with profits for their production purposes alone, and consumers expecting more may discover that enticing business to partake in societal welfare beyond their scope has potential to make matters worse — often while pulling the wool over our eyes.
Dr. Kimberlee Josephson is an Assistant Professor of Business and the Associate Dean for the Breen Center for Graduate Success at Lebanon Valley College in Annville, Pennsylvania.
This article was originally published on FEE.org. Read the original article.
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