Factors Impeding Ethical Consumption Pepsico - Free Sample Solution

Questions: Write an analytical business report on what ethical consumerism means for businesses. Choose a company and explain and analyse how they operate ethically. This must take into account the ethics and values of the company you choose to focus on. The report must be written in business report format and include the following six numbered sections: An executive summary which gives a brief overview of the argument in your report including key findings and conclusions. A contents page which lists the sections and the page numbers. An introduction which gives an overview of the structure of your report. A brief overview and analysis of ethical consumerism, identifying the examples of some of the products which fall into the ethical category. You must include a definition of ethical consumerism and arguments as to why it is a good strategy for businesses to adopt. A detailed review of one company claiming to operate ethically. Discuss the approach(es) they have used to become a more socially conscious business, linking this with their ethics and values. The results of a short opinion survey on what influences consumer buying behaviour, carried out by you from a small sample of 10-15 students at GSM London. You need to conduct primary research for this section. A conclusion which includes critical evaluation of ethical consumerism based on the evidence that you have gathered both from your primary and secondary research, focusing on the company you have chosen for detailed review. Recommendations as to how your company could become more ethical. You must include a references list after the main body of the report. Remember to use Harvard referencing where appropriate. A copy of your opinion survey should be included in an appendix. Answers: Introduction Ethical consumerism is the current trend among the customers of the UK. Almost 80% customers prefer to buy those products sourced in an ethical way. The definition of ethical consumerism is supporting the fact that only products or their quality is not associated with the sense of ethical consumerism whereas the business practice of the company is also a factor. Many companies is using child labor, some are not paying properly to their employees, some are harming the environment and some are exploiting the society (Carrington, Neville and Whitwell 2014). All these factors are related with the ethical consumerism that customers are looking for. Looking at the sector growth in this segment most of the companies have started ethical practices within their organization. However, only practice will not increase the awareness therefore companies are promoting their initiative of ethical business to attract the ethical customer to increase the business (Katz 2011). The objective of this rep ort is to understand the ethical practice of PepsiCo within their business organization. The study also ascertains how, they are promoting such ethical consumerism. The company had a bad record in the past therefore the report will analyze how they are able to increase the ethical customer base. Ethical consumerism Ethical consumerism is the latest concept of the current business environment. Ethical consumerism refers to the preference of the customer to buy a product sourced and distributed ethically that may be as simple as choosing. According to Bray, Johns, and Kilburn (2011), ethical consumerism can be viewed from two different perspectives one is the customers perspective and the other is the organizations perspective. From the customers perspective it can be assessed that the companies that are well aware about the ethical responsibilities towards the society, will be benefiting more, therefore supporting those organization is better to develop an environmental safety assurance. On the other hand, White, MacDonnell, and Ellard (2012) have stated that organizations are viewing it as one of their strategies to get more business. The preference of the ethical product is growing among the global customers as well as the customers of the UK. Therefore, many organizations are emphasizing to p romote their product from the ethical point of view so that more customers prefer to buy their products with the ethical sentiment. Two categories of products are operating their businesses that are ethical and unethical. Many companies do their business by practicing a wrong way (Shen et al. 2012). It may so happen that few companies that do not pay properly to their employees come to the list of unethical business. This happens because employees are providing the material of business and the company is not looking after them. PepsiCo is one such company that operates their business in the food sector, which has changed its image from few unethical practices to become one of the ethical companies in the world. The company has changed their strategy of product that is associated with the health concerns of the customers (Yeon Kim and Chung 2011). The company is diversifying their business from the carbonated drinks to the natural and organic drink. Tropicana is one such brand from PepsiCo that is produced keeping in mind the health concerns of their customers (Papaoikonomou, Ryan and Ginieis 2011). Looking at the environmental aspect, the company is also trying to build their manufacturing units that are environmentally friendly so that they get maximum mileage in the industry. Since the preferences of the customers are increasing towards the ethical products, therefore implementing this strategy is producing better results for them. Companies that are practicing ethical business through their products and processes are emphasizing to increase the awareness towards the ethical product and they are conducting several programs to make customers understand that use of such product will help them to contribute for the betterment of the environment (Singh, Iglesias and Batista-Foguet 2012). Company review of PepsiCo PepsiCo is adopting an ethical business throughout various processes so that they can also get the benefit of ethical consumerism. The company has changed their strategy by implementing several sustainable approaches to their business. The company has taken a target to increase the use of recycled plastic for their packaging by 50% within 2018. The company is currently using 34% recycled plastic for their packaging. To implement this strategy PepsiCo is conducting several awareness programs for the customers so that they help to gather plastic instead of throwing it here and there. More adoption of the recycled plastic will help to reduce the cost of packaging by the company. To get success in the recycling of the bottles the company has collaborated with the Dream Machine recycling initiative for their waste management (Davies, Lee and Ahonkhai 2012). The project structure shows that there will be kiosks in different locations. Consumers will scan the barcode of the can or bottle an d put them into the collection box. If consumers are maintaining this process then they will get reward points that can be redeemed for movie ticket, coupons, and many others (Solomon, Russell-Bennett and Previte 2012). Ethical packaging also includes several information printed on the sticker, therefore, the company is also emphasizing on the information part to provide the consumer right to their customer. The company is also emphasizing on the health of their customers because most of the customers are concerned of the effect of the soft drinks. Looking at this concern, the company is initiating several healthy products that are low in fat and sugar and will not increase the calorie intake (Bucic, Harris and Arli 2012). The main product of the company was associated with the carbonated drinks and many consumer forums are raising the question of health concerns with the carbonated product. PepsiCo has launched Tropicana brand that is a 100% natural with no synthetic ingredient added to it (Lewis and Potter 2011). PepsiCo is promoting this brand to those customers who are concerned with the health aspect and who would not want to intake anything unnatural. Looking at the health benefits of their customers the company has also introduced various potato chips that are low in calorie such as baked potato chips. To provide a good healthy product to their customers it is important that the c ompany get good raw materials. In order to achieve this they are working with their suppliers to provide the best and natural ingredients for their production (Brunk and Blmelhuber 2011). Quality of each product undergoes thorough checking so that customers get the best product. The company is adhering to the food safety laws and regulations that are applicable to avoid any problem in the future. PepsiCo is also emphasizing on responsible marketing of their product so that they do not put any adverse effect on the society. The company has involved several celebrities throughout the globe to send a good message to their customers so that customers feel better about the product they are consuming (Erwin 2011). The company has made a lot of profit from the society. Thus, they have introduced the PepsiCo foundation that helps many non-profit organizations to make better contribution to the society. The company proposes to promote the philosophy of the PepsiCo to foster healthy, vibrant, and self-sufficient communities worldwide through global partnerships that improve the quality of life across communities in areas of need. Not only the company itself involves with the community welfare program but it also encourages their employees to make good contribution to the society so that they can help every human being to live a better life (Littler 2011). The company has made their mar k by donating good amount to the disaster relief foundation. The company introduced the We Inspire campaign, which provides a platform to empower women throughout the globe. All these activities of the organization encourage building a healthy society and PepsiCo being a global organization they have tried to provide the facility to all the country where they make their business (Joy et al. 2012). Opinion survey The opinion survey conducted took place in one of the busy supermarkets in the UK. The customers in that supermarket are very brand conscious and they try to buy ethical products as much as possible. For this opinion survey, a sample size of 10 consumers was s taken. There was a short questionnaire where customers have given their opinion in the form of ratings about various factors of the PepsiCos business. The ratings range from 1-10. The questionnaire asked about several aspect of ethical business for PepsiCo. During the survey, most of the samples were well aware about the activity of the organization that is associated with their business. The factors of the rating were social responsibility, child labor, consumer health and environmental responsibility. Most of the consumers are well aware about all the aspect of ethical consumerism and they were of the opinion that there was some problem in the initial stage with PepsiCo. The company was unable to produce products that are hea lthy for the consumers. Therefore, the company has changed their strategy and initiated many healthy products in the recent time. According to the customers, PepsiCo has made a good mark in prohibiting child labor and they have taken many initiatives to prevent the same. The average score given by the customers are 9.1, which is very good. The next best score is in the social responsibility that is 7.4 and customers know the initiative of providing a platform for womens empowerment. The third segment that customers spotted about the ethical consumerism is the environmental responsibility. All the customers are well aware of the collaboration of PepsiCo with Dream Machine project. Customer appreciates the initiative of environmental sustainability and average score in this segment is 7.3, which is more than the best. The last segment that was consumer health has made very poor score from the consumer perspective. The score is as low as 4.4. This says that PepsiCo is not providing a h ealthy product to their consumers. Ethical consumerism should emphasize in this aspect also because customers want good product from the organization. PepsiCo still managed to score 4.4 in this segment because of their initiative to provide good product like Tropicana that is 100% natural with no added sugar. The company also introduced diet Pepsi and Mountain dew in the segment of carbonated drinks to minimize the calorie intake by the customers. Conclusion In conclusion, from this report we understand that the current market of the business environment is changing rapidly. Customers are becoming aware about their products and they want to support those companies only who make ethical business. Particularly in the UK 80% of consumer, emphasize on buying ethical product. The definition of ethical consumerism is also associated with the ethical responsibility of the organization. Most of the time the consumers prefer ethically processed products. Therefore, most of the organizations are emphasizing to produce the ethical product for their customer to get the maximum preference. The initiative like recycling plastic for their packaging, providing better platform to empower women in the society and increase the health and safety factor within their product. The company is also providing relief fund to the disaster victims, which are the example of ethical responsibility. The average score of ethical consumerism is high because customers rea lize that the organization is changing their strategy to become one of the ethical organizations in the world. Recommendations Health and safety PepsiCo should emphasize more on the health and safety features for their product. They should be more responsible because their brand value is high among the customers. Products those are bad for health need withdrawal and substitutes needs greater promotion in the markets for better health. More environmental responsibility Company is using recycle plastic for their packaging whereas company should use biodegradable plastic that is much better for the environmental sustainability. Child labour PepsiCo is not allowing child labour in their business. This alone is not enough. They should make more campaigns to prevent child labour so that every country gets the benefit of the project. Reference List Bray, J., Johns, N. and Kilburn, D., 2011. An exploratory study into the factors impeding ethical consumption.Journal of business ethics,98(4), pp.597-608. Brunk, K.H. and Blmelhuber, C., 2011. One strike and you're out: Qualitative insights into the formation of consumers' ethical company or brand perceptions.Journal of Business Research,64(2), pp.134-141. Bucic, T., Harris, J. and Arli, D., 2012. 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