The power of ethical branding

Ethics have gone up the business agenda in recent years and are a potentially powerful influence on consumer decisions. Alan Mitchell says brands need to look carefully at these changes and to prepare for a deep shift in public expectations of

What effect does a changing political climate have on brands? As an issue, ethics has been going up the business and branding agenda for many years. Now, judging by the new Government’s first few weeks in office, its impact on the political agenda will also be palpable.

Already, there’s little doubt that ethical considerations are a potentially powerful influence on consumer purchasing decisions. As Shell has found out with its environmental policies and its treatment of indigenous peoples, and Nike with its cheap labour sourcing policies, if a brand gets its ethical stance wrong, it can dog the business wherever it goes and whatever it does. And as brands like the Body Shop, and more recently, the Co-op Bank have shown, wearing your ethical heart on your sleeves can do wonders for sales. But how strong will the pressure on brands to display ethical credentials really become?

Arguably, what happened in the polls recently merely reflects the yearning for less “meism” and more “usism” that market researchers began finding among the British public ten years ago. According to Richard Adams, managing director of the fair trading retail organisation Out of this World, best estimates from all research so far suggest there are 15 million ethical consumers in the UK – consumers who would prefer to choose positively “ethical” products and companies as against those which are not.

And, as Roisin Rowbotham-Jones, project director at BBH Futures, told a recent BBH seminar on subject, the shift in the balance of power between consumer and producers, the devastating impact of the media exposé, and relative prosperity – which give us the luxury of worrying about these things a little more – all mean that consumers can and do vote with their purse.

Whether it’s specific issues such as environmental impact or exploitation of child labour, or a more general pressure on corporations to “give something back” to society through charitable donations, contributions to local communities or support for the arts and sports, every brand is needing to take a conscious decision as to what sort of ethical stance to take.

Yet it’s very easy to misjudge the ethical playing field. As the Green bandwagoners of the late Eighties discovered, a key issue is judging an acceptable price to pay for principles. Being efficient doesn’t usually allow sentimental considerations to get in the way, and when offered the choice between the sentimental and the lowest cost operator, markets tend to choose the latter. As Adams told the BBH Futures seminar, most of his 15 million consumers have so far proved to be armchair ethicals who are “radicals in the surveys but reactionaries at the checkout”.

Besides, it may just be that now that the Government has taken ethics on board, some of the middle class guilt that’s driven so much of ethical consumerism thus far will be assuaged, and that the pressure to “do good” will be redirected from business and back to government.

Either way, marketers need to take the ethics challenge seriously, if only because it is so easy to misunderstand what it represents. The big mistake is to see it as an isolated issue, to be treated separately from the rest of the brand’s strategy. It’s a mistake because the chances are that it’s merely a symptom of a much deeper sea-change. Every successful brand has to adapt to stay in tune with its times. But ethics is not just another social trend to be adapted to and ridden, such as the changing role of women in society. It’s an advance warning of a deeper shift in public expectations of what brands do and what they stand for.

Put simply, consumers want brands to stop being two dimensional. The whole history of branding has taught marketers the power of packaging, so that the core skills of brand management often amount to little more than the art of facade management: how to paint a pretty enough picture of your particular bundle of emotional and functional attributes to close that sale.

Now, for all the familiar reasons – increasing marketing literacy, the rise of the pressure group, the development of the consumer press – consumers are realising that these bundles do not exist in isolation from society but are deeply embedded within it. If the BSE crisis did nothing else, it rammed down our throats that what we buy is the product of a long and complex series of behind-the-scenes decisions and actions which can affect us profoundly.

No matter what a marketer does to bolster his brand facade, consumers are increasingly looking behind it, and treating it as a facade: increasingly, brands are rightly seen not as representatives of products or even companies, but of supply chains. And they are expected to manage their supply chains both efficiently and responsibly.

One misconception is to assume that the future lies with corporate brands as opposed to standalone brands. This is not necessarily true. It may help, but it’s the marketing approach that really matters. A worse misinterpretation is that the assumption that companies need therefore to adopt politically correct motherhood-and-apple-pie “values”. Not so. All the evidence is that consumers trust people and companies who clearly believe in what they do, not those who just want to appear nice.

This is where the real force of so-called ethical consumerism lies. It is the most visible expression of a slow, faltering, confused and groping search by consumers for a new relationship between themselves and brands: evidence of a shift in their focus of trust, from the integrity of the product to the integrity of the people behind it.

When the question is no longer “Can I trust this brand to deliver attributes X or Y?”, but “are the people who bring me this brand the sort of people who I can trust to do X or Y?” (not destroy the environment, not rip me off) the nature of brands – and brand management – begins to change irrevocably.

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