View of “A STUDY OF ETHICS IN CONSUMER BEHAVIOR WITH REFERENCE TO RETAILERS DEALING IN CONSUMABLE PRODUCTS”

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Vol.04,Special Issue 04, ²^nd Conference (ICIRSTM) April 2019, Available Online: www.ajeee.co.in/index.php/AJEEE

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“A STUDY OF ETHICS IN CONSUMER BEHAVIOR WITH REFERENCE TO RETAILERS DEALING IN CONSUMABLE PRODUCTS”

Dr. Shilpa Sharma 1. INTRODUCTION

According to current scenario when everyone wants fair work and always remains in a protective shade, awareness towards these actions and right activities related to consumerism are increasing day by day.General public also has been increasingly interested about the good deeds of businesses in past few years. Organisations are now forwarding ahead for the protection of consumer‟s right by adopting some practises by the name of „Ethics‟. Because of this organisations pay their heavy attention on these kinds of interest. They have to consider ethics as a part of their process. Consumers today don‟t just buy goods. They have lots of questions to ask about product. Now they are more concern about ethical business practices than ever. Consumers don‟t even hesitate to react to unethical business practices.

Retailer in other hand should consider about ethics more than other businesses. It‟s because retailers are consumer touch points in supply chains. Ethical consumerism alternatively called ethical consumption, ethical purchasing, moral purchasing, ethical sourcing, ethical shopping or green consumerism. Ethics is a branch of philosophy that deals with values relating to human conduct, with respect to right or good and wrong or bad actions. Here ethics relates to retailers moral principles and values. It is practiced through 'positive buying' in that ethical products are favoured, or 'moral boycott', that is negative purchasing and company-based purchasing. The retail industry is the first link in the distribution chain, from the customer‟s point of view. It is therefore vital for retailers to act in an ethical manner because they affect the lives of many people.

2. ETHICAL ISSUES THAT CAN AFFECT RETAIL INDUSTRY 2.1 Corporate Social Responsibility

CSR has increasingly become the corporate buzz word. It is an enlarged concept responsibility. It is a general evaluation of “values” linked to the relationship a business organisation and its environment. In organisation perspective, it is responsibility towards the customer (Pepe, Fabbio and Mario, 2010). CSR is concerned with the integration ofEnvironmental, Social, Economic and Ethical considerations into business Strategies and practices (Jones et al 2007). CSR has become a major component in businesses last few years. Ten years back very few companies issued CSR reports. But now more than 8000 organisations around the world have signed the UN global compact pledging to show global citizenship in areas like Human rights, labour standards and environmental protection (Gustin 2012). According to CSR literature, Customers are interested in the social behaviour of organisations.

Those behaviours have a major impact on customers purchasing decisions. In most occasions, customers themselves claim that CSR profile of a company pays a major role in what brands they choose to purchase (Castalado et al 2009).Retailing plays a major role in global supply chains. They become the guarantors of entire value chain. Because they are the once who face the end consumer in supply chains. Particularly those of their own brand products are directly reflect their corporate image (Pepe, Musso and Risso 2010). Due to fierce competition in retail environment, retail organisations find it difficult to differentiate their business from others. Today consumers are not always going after product attributes like quality and price. Today they evaluate organisations on their ethical attributes (Homberg, Hoyer and Fassnacht 2002). CSR is the best way to address customers‟ ethical needs. In fact CSR is one of the main ethical attribute that customers consider when evaluating companies.

2.2 „Green‟ Issue

In past few years green issue has become a hot topic in the business world. Majority of the organizations wanted to go green and many have done it. Going green means simply reducing the impact or damage which can happen to the environment because of a business. It includes reducing CO2 emission, reducing wastage, reducing the power usage and using environmental friendly power sources.

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2 2.3 Product Safety

Safety is a basic consumer right. It is safe guarded by the product safety act which ensures only safe products are available in the market (Vella 2013).Product safety refers to the degree of risk associated with using of product. Normally any product involves some degree of risk. But that risk should be under the “acceptable” risk range.It‟s every ones responsibility in the supply chain to ensure the safety of the product. In clothing industry, manufacturers should use safe materials and chemicals. Clothing retailers should be well aware of what they are selling. Like that, each and everyone in the supply chain have their own responsibilities to assure the safety of the product (Vella 2013).Selling unsafe product can destroy the customer faith. It is that much important to assure the safety of the product especially in retail industry.

2.4 Ethical Sourcing

This is the most important ethical issue to clothing industry. Socially responsible trading became a growing issue during the 1990s when companies with global supply chains- particularly those in the clothing and food industries- were coming under rising pressure from consumer groups, governments and trade unions to ensure decent working conditions for those producing their goods. More recently, growing environmental concern has also increased consumer awareness for sustainable sourcing, with many now opting for clothing made from organic cotton, hemp or other low-impact raw materials and garments designed to be washed at lower temperatures (Flakoll& Reynolds 2009).

As a result, ethical sourcing is now part of the corporate responsibility agenda of most major organisations. Many corporate investment companies today screen their ventures according to a range of social and environmental criteria, including an organisation‟s efforts to secure adequate labour conditions in their supply chain, and retailers are increasingly implementing corporate codes of practice to ensure that the working conditions of those producing their goods meet or exceed international labour standards. Retailers are now facing the challenge of monitoring not only their immediate suppliers, but also their suppliers‟ to ensure satisfactory ethical standards are met (Morell 2010). With this demand, savvy retailers and businesses are increasingly realising that a reputation for fairness is invaluable.

2.5 Why Being Ethical Is Important In Business?

Ethical practices are very important in today‟s business world. Irrespective of the business sector, manufacturing retail or whatever, ethical behaviour has become a part of the business. A policy of ethical compliance helps to create a workplace culture where all employees are treated with respect. Employees are given equal access to advancement opportunities and the workplace becomes a positive and nurturing environment.Retailers may use certain ethicalstandards which help them in decision making. The consumers have the right to get correct and precise knowledge about the products sold to them in respect of warranty, guaranty, price, usage, ingredients etc. Ethics is essential for the long run of the business. Ethical business is essential in today„s competitive and dynamic environment.

2.6 Statement Of The Problem

In retailing business ethical practises are supporting hand for retailors and for government also because customer satisfaction can be achieved by providing right item which follows quality, quantity, packaging billing and many more. Consumer should not be exploited and this act can be covered by ethical values.

2.7 Purpose Of The Study

This study is proposed with the further analysis of ethical practises adopted by retailors who deals with consumable products. A verity of factors focuses consumer‟s behaviour like retailors nature towards item specification, taxation policy, quality of product etc. This research is intended to study the ethical behaviour of consumer through the implementation of questionnaire. By examining different type of retailors behaviour one should benefit in this study to better understand growing impacts on retailers‟ business by adopting ethical practises. The study will address literature which support primary constructs of study. This research will search retailer‟s ethics and introduce some policies for ethical practise.

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3 2.8 Objectives Of The Study

 To understand consumer behaviour for ethical practises

 To suggest new taxation policies for retailing

 To understand impacts of ethics in business

 To aware consumer for good deeds in business 3. REVIEW OF LITERATURE

Laure Lavorat„The success of a retailer‟s ethical policy‟ (Jan.2005) concludes that retail communication has to focus on deeds rather than on intentions. It should show rather than tell, through actual demonstrations, and spotlight actual results. Retailers must demonstrate their business purpose. An ethical return on investment is measured by its contribution to a fairer and more human world, but also by its contribution to company growth. According to Dr. Nripendra Narayan Sharma, „Ethics in retailing-perceptions of management and sales personnel‟ states that retail salesperson need guidelines on ethical issues.

The policies should be formulated and clearly communicated so that satisfaction of customer can be achieved. Retailers can handle situation of customer and solve the problems of exploitation. Jobansms in his study „ethical and unethical aspects of retail industry‟ concluded that the retailers should charge fair price for the products offered to them. The consumers have the right to get correct and precise knowledge about the products sold to them in respect of warranty, guaranty, price, usage, ingredients etc. Ethics is essential for the long run of the business.

4. METHODOLOGY

The purpose of this study is to determine ethical practises of consumer and suggest some policies to retailers who deal in consumable products. To obtain primary data from the unit of study self-administered questionnaire will be distributed to five different retailers.

Secondary data will be used for the description of study and foranalyse ethical practises which are adopted by retailers.

4.1 Sample Size

The sample size of study will be fifty. The participants will be retailers who deal in consumable goods. Researcher will distribute questionnaire to different categories of retail stores like garments shop, electronics shop, departmental storekeepers, general stores and footwear shops. The study will consist ten retailers in each of five stores totalling the sample size of fifty. The participants in the study range from the ages group of 18 to 70 years. The study will use simple sampling method to select participants.

4.2 Instrumentation

Theinstrumentation that will be used in the study is a questionnaire consisting of seven questions. The content of the questions will be divided into two questionnaire formats. Four questions in this format will consist of dichotomous responses where only two responses and participants have to select one only. Three questions will consist of Likert five scale rating follows practices of ethics, good deeds, and behaviour of business. The questionnaireseeks to measure ethical practices adopted by consumer and perception towards taxation policies for ethical business.

4.3 Data Collection

Fifty questionnaire responses will be collected by from consumers to analyse retailer‟s perception towards ethical practices that exists in the business deeds. The data collected by the retailers will be divided by the specific retail stores as well as by the consumable products. Secondary data is collected from periodicals some articles and news published by traders. Primary data will be covered by Likert scale and dichotomous response. Analysis will be done by using tables, charts figures to organise the data.

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4 1. Interpretation

TABLE: 1 Demographic analysis of retailers

S.No Variable Parameter Frequency Percentage

1 Gender Male

Female 45

5 90%

10%

2 Age 1945-65

1966-85 1986-2005

3 32 15

6%

64%

30%

3 Work experience 0-5 years

5-10 years 10-20 years More than 20 years

4 16 22 6

8%

31.4%

43.2%

12%

4 Sector Organised

Unorganised 37

13 73.2%

25.5%

5 Consideration for Ethical retailer Yes

No 43

7 85.5%

13.2%

Gender distribution says that 90% are male retailers and only 5% are female. In retailing male are predominant factor in retailers. Retailers age distribution shows that dominant group is between age of years is 1966-85 with 64% respondents, above the birth year of 1986 is 30% and between the ages of 1945-66 years is 3% only. This may due to well established parental business of retailing in Kota city. After 1986 30% only involved because new generation want to gain experience first in metro cities. Majority of the respondent have good enough work experience in retailing as 43.2% retailers are in between 10-20 years and more than 20 years are 12% only. Organised sector is higher in comparison of unorganised sector which is 73.2%. Retailers considered themselves as ethical retailer reported as 85.5% those who are not in favour of ethical practises in business covered 13.2% which is very lesser.

TABLE: 2 Perception towards ethical practices and frequencies

S.no variables Parameter Frequency percentage

1 To achieve desired targets one need to be unethical Agree

Neutral Disagree

20 6 24

40%

12%

48%

2 Business is ethics only Agree Neutral Disagree

40 4 6

80%

8%

12%

3 To get knowledge about product is a right of consumer

Agree Neutral Disagree

47 3 0

94%

6%

- 4 Is it moral duty of seller to

furnish full details about product on packing it self

Agree Neutral Disagree

44 3 3

88%

6%

0 5 10 15 20 25 30 35 40 45 50

Agree Neutral Disagree Agree Neutral Disagree Agree Neutral Disagree Agree Neutral Disagree

To achieve desired targets one need to

be unethical

Business is ethics only

To get knowledge about product is a right of consumer

Is it moral duty of seller to furnish full

details about product on packing

it self

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As retailers focuses towards ethical practises few retailers disagree with ethical practises some are neutral and they focused towards situation based decision. If it required to be unethical they missed their good deeds. Among these retailers still 80% accept that business is ethic only. Whereas 12% retailers are disagree with it. Furnishing knowledge about product gain highest percentage and retailers accept (88%) that it is moral duty of seller to provide information about product on its packing. Maximum respondents agree with 94% that to have complete information of product is right of consumer. Only three percent retailers deny with consumer‟s right as they consider that there is no impact of information over buying behaviour.

TABLE: 3 Quality maintenance perception and frequencies

Qualitative factors Always Very

often sometimes never By maintaining quality of products is main

base of retailing 43 5 2 0

To deal with standard products only 35 12 3 0

Standards of item is important business 33 15 2 0

By supplying committed quantity and measurement

23 25 2 0

To deal with hygienic products with proper

packing 18 20 12 0

To print manufacturing /expiry date, MRP etc. 32 13 3 2

Have you ever provided fake bill 0 24 14 12

Prediction of potential quality maintenance of product demand among retailers is preferred.

Standardization of product is mostly followed by retailers and they agreed with higher numbers that standardisation is important and need of an hour. Very often they supply committed quantity with measurement. Among retailers printed information of mrp. , expiry date and manufacturing accepted by 32 respondents which is highest among category.

Regarding fake bills mostly retailers respond in often category but no one said that always he provide fake bills. Some retailers are having bill book and they accept that they never provided any fake bill. They are the respondents who are receiving and giving bills are in priority and they always follow ethical deeds in business.

TABLE: 4 Taxation policy related issues

Category Favour in % Against in %

New taxation policies for retailers are

supportive 20% 65%

Do you provide invoice of item 73% 26%

Invoice contains tax information 67% 33%

Do you believe to receive bills 92% 8%

0 5 10 15 20 25 30 35 40 45 50

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When we analyse magnitude of taxation policy differences between in favour or against it is obvious that current taxation policy is not satisfying the retailers but they expect that in future it will be supportive. Only 20% are in favour of current taxation policy. Maximum retailers are providing invoice of items and for receiving bills they are satisfied with sellers mostly retailers are receiving bills on each order some retailers are not receiving bills on each order as they trust upon their relationship with sellers. Majority of respondent‟s follows tax consideration policy and contains tax information on invoice. Few among them are not focusing on invoice information as they believe that there is no impact over sales of product. Retailers deals with old vendors with whom they do negotiation for delivery and orders.

5. FINDINGS AND KEY INSIGHTS OF ETHICAL PRACTICES FOR CONSUMER

It is showed by analysis that retailers are focusing towards ethical practises. They considered these as a right of consumer. Retailers are required to plan strategies so that consumer‟s trust can be built for retailer. Retailers can take experience of seniors those who are successful in retailing sector so that loop falls can be minimised. They should follow the conditions of tax policy so that transparency can be maintained. Qualitative products can develop believe and good will of retailer, so consumer should increase trading behaviour in standardised items.Printing information should be properly provided to customer because accuracy can develop good deeds in business. Retailers should be aware towards order delivery as some of retailer confessed that sometime order delivery make hurdles in retailing, accurate quantity measurement of products are not following by venders.

Retailers should consider keynotes while selecting vendors. Some retailers are hoping betterin future for current taxation policy. With support of new taxation policy retailers can be more beneficial in business. GST awareness campaign should be plans to launch a nationwide to educate the traders. It is expected from government that if GST in year 2019 more simplified and sustained, it will prove to be trader friendly taxation system.

However to encourage more appropriate if certain tax benefits in GST are given to traders for collecting tax revenue. Among respondents little demand for GST procedure that if it is simpler retailers are not unnecessarily harassed, it will inculcate a confidence among the trading community about GST and more and more people will come under formal economy.

6. CONCLUSION

Ethical practices are only business for retailers. Consumer is now a days much aware towards good and bad deeds of business. As quality of item and billing conditions can be more clarify and it can be more supportive to end user. To maintain quality of item and standardisation is need of an hour. Retailers are hoping for current taxation policy that it will be more helpful and supportive for increasing ethical practices in future. With the support of government taxation policy ethical behaviour can be increased among consumers.

REFERENCES

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0%

20%

40%

60%

80%

100%

120%

New taxation policies for retailers are supportive

Do you provide invoice of item

Invoice contains tax information

Do you believe to receive bills

Against in % Favour in %

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