Different Dimensions of Ethical Marketing in Textile Sector with Special Reference to The UK
Some basic information on ethical marketing is provided in an article in Learnmarketing site (Anonymous, n.d.). These are discussed in the following paragraphs.
Ethical marketing involves moral aspects of marketing. The topic covers all areas from sourcing raw materials to selling to consumer. Due to greater consumer awareness, buyers seek products which are ethically produced and marketed. Consumers’ views on ethics are influenced by their culture, education, experience, social and economic status, background, religion, community, peers, family upbringing and country.
If any company decides on ethical marketing-
- The term “Ethical marketing” needs to be clearly defined in the context.
- The branch of ethics to support needs to be determined.
- Method of implementing ethical methods of marketing needs to be decided.
- Areas of ethical operations like suppliers, customers, production techniques or whole supply chain should be decided.
Although there are several dimensions related to ethical marketing. More general ones are considered in this review focused on UK textile sector.
Shaw & Tomolillo (2004) pointed out that media coverage and pressure groups have been instrumental in shaping ethical value in textile sector. Ethical consumers have been demanding more moral and social responsibilities by textile firms. Maslow’s (1970) hierarchy of needs is used to distinguish between clothing and fashion. The hierarchy is physiological needs, safety, belongingness, self-esteem and self-actualization. Only at the last two stages of the hierarchy, consumers seek fashionable clothes. In UK, products catering to ethical marketing have higher market value. Ethical issues of textile sector concerns sweat shop production conditions of developing countries from where the garments are made. UK firms source their supplies from these units to take advantage of lower cost conditions. In these garment units, workers are forced to work long hours, paid below subsistence wages and endure inhuman working conditions. After the famous Nike episode, consumers are more alert and demand fairer trade practices and codes of conduct. To pay better wages and working conditions to workers, the manufacturer has to spend more. This raises cost of the product. When enforcing code of conduct, textile firms are silent on paying remunerative prices to producers. This is an unfair trade practice. Using animal skins and hairs for fashion garments are also viewed negatively by consumers. Recently, a number of fashion chains in UK, (Next and Espirit for example), are withdrawing from ethical marketing. The consumers seek alternate suppliers of ethical products. The authors conducted research on ethical consumerism using purposive sampling.
Hughes (2001) reviewed UK ETI work and stressed on the need to pay more attention on supplier-retailer terms of trade and worker issues at production sites.
The impact of ethical and fair trade labelling in UK retail sector on sustainable production and consumption was analysed by Hartlieb & Jones (2009). Textile sector was a component in this study.
On the basis of a survey, Park-Poaps (2010) warned that consumer pressure is currently only on a few certain types of firms. He recommends small and private firms to be brought under such pressure, as they form the majority. Although the research was done on US textile firms, the findings are relevant to UK also.
Traceability is a concept of ethical marketing. Traceability of origin of raw materials, production and marketing processes till the product reaches the customer has organisational as well as control dimensions apart from ethical dimension. Traceability confers market power to the firm. Consequences of traceability could also be felt across these dimensions. These aspects were discussed by Guercini & Runfola (2009).
CODE OF CONDUCT AND REGULATIONS
Pretious & Love ( 2006) focused on sourcing ethics and code of conduct for UK fashion retailers. Profitable business and ethical sourcing decisions may not always match.
A number of measures have been initiated by Ethical Trade Initiative (ETI) on code of conduct for corporates and improve working conditions of workers in manufacturing units. But codes-based strategy is affected by international subcontracting and predominance of female workers in garment units. These points are elaborated in Hale & Shaw (2001).
Gündüz (2009) investigated upon the reasons for proliferation of non-governmental systems of labour regulations in textile sector of EU, USA and Turkey. In the buyer –driven textile sector, traditional institutions were incapable to regulate or equalise labour standards across the board. These institutions compromised on strategies as they were constrained by structural problems. The private institutions are only interested in regulating the units connected with them. Government agencies, on the other hand, have to regulate all units within the country. Thus, standardisation, equalisation and generalisation of labour standards are left to private agencies.
Rising costs due to implementing better working conditions are not compensated by enhancing prices by customers. On the other hand, customer firms pressurise suppliers to further reduce their prices. Thus, all these talk about fair trade and ethics are only applied to producers and not to textile firms when they refuse to give remunerative prices to suppliers. Different codes of conduct by different customers can be conflicting. Helping the suppliers to comply with the codes and training them are the only interests shown by customer firms. If they give remunerative prices to suppliers, they will be motivated to undertake reforms in their units. At the most, what is often done is to award the supplier for the “good” work. This cannot be equal to giving remunerative prices. Shorter life cycles of textile products put immense pressure on suppliers with reduced lead time. Ensuring better social practices is not the sole responsibility of suppliers. Customer firms need to support them with all inputs including remunerative prices. Findings of Minten et al (2006) show that contract farmers will remain loyal to the contractor as long as there is technology support and the prices offered by the firm is above local market price and covers their costs with improved income directly or indirectly.
In Malaysia, since the introduction and auditing of labour standards, there had been no violations of codes of conduct by producers. But some violations have been reported on foreign contract workers. These include ban on trade union membership, withholding workers’ passports and unsuitable accommodation. These generally escape the auditors as they only look at violations by producers. Neoliberal state of Malaysia places restrictions on transnational labour migrants, breaching codes of conduct for garment industry. The finding is relevant as Malaysia exports garments to UK also (Crinis, 2010).
Suppliers are facing the double load of meeting short lead times and improving working conditions. Complying with labour standards imposed by customer firms is a big task if additional support is not given. This scenario was analysed with respect to Indian garment manufacturers in the study of Stigzelius & Mark-Herbert (2009). The findings indicated the need for higher price support or longer term contracts for economic motivation of suppliers. Higher legal and social compliance may lead to lower labour turnover and increased orders. The mutual compensation effects of these factors need detailed study. This is relevant as India exports garments to UK also.
Textile retailers use any one of the three off-shore strategies to low cost locations. These are: direct sourcing from headquarters, through intermediaries or through international hubs. The third one is most preferred. Retail management is directly responsible for better working conditions at production units. The responsibility is indirect in the latter two cases. However, retail firm is ultimately responsible for any ethical problem as they face the end-result. Even in the case of hubs, retail management exert considerable pressure on them. These findings were reported by Fernie et al (2009).
Generally, outsourced production units of developing countries are blamed for poor working conditions and corporates insist on codes of conduct and standards to these units for continued orders. This action arises from pressure from consumers for ethical practices. However, working conditions in these firms are also suspect. Malmurugan (2008) conducted a questionnaire survey on executives from 600 textile firms in India… The more common internal marketing problems related to working conditions were-
- Equal opportunity does not exist for comparable performance.
- There is no freedom for subordinate to bypass the immediate boss and reach the superiors if there is genuine grievance against the boss.
- Security and comfort of female employees is inadequate.
- Transparent appraisals to ensure fair deal are necessary.
These factors are related to employee satisfaction and their output. Malmurugan’s work originates from similar studies in other countries, especially of Lewthwaite (1998) in UK.
When western companies act as change facilitators for better working conditions for suppliers in developing countries, many challenges occur. Top management may not understand the need for involvement in it. They may be contended with just asking the suppliers to follow the standards. Lack of resources is a deterrent against complete monitoring of all suppliers and sub-suppliers. Most companies have very large number of suppliers. For example, IKEA has about 1300 suppliers. Collection of sufficient information to set ethical standards is often difficult in supplier countries. Inadequacy of tools and information may affect implementation of codes of conduct. The social and cultural factors of host country can also impact implementation. When imposing very strict working conditions, suppliers’ workers themselves could create obstacles. Increased workload due to environmental and social criteria will cause resistance. Seasonal workers may prefer to work long hours during the working seasons to earn extra money to tide over no-work seasons. Shorter working hours may be resisted under such conditions as prevailing in India and China. Verifying information given by suppliers is not always easy as support evidence is absent. Figures on age, number of workers, their salaries and other facilities may be false. Workers will not dare to come forward to reveal the truth as they will lose their jobs or will be punished heavily. The motivation for such cheating comes from increasing demands from multiple customers. Some of the demands may not be immediately practicable and some others may involve heavy costs. These might prompt owners of production units to falsify data. The codes of conduct may not be enforceable due to inadequate support from local laws. Too many audits by multiple firms are a nuisance and supplier factories may not agree to this. The above points are given in the work of Mont et al (2010).
Miller & Williams (2009) examined the methods of implementing living wage in global textiles sector. Increase in unit labour cost equivalent to the difference between existing and national average living wage will not affect the bottom line of retail firms. Fragmented and outsourced manufacturing and aggressive buying practices create a strong case for hard bargaining by trade unions.
EFFECT OF GLOBALISATION
Globalisation has changed ethical dimensions. Value and power of brands and corporate reputations are exposed to greater vulnerability. There is growing divergence of trade as distant and different stakeholders are drawn into ethical trade. This divergence has increased due to poverty alleviation schemes of developing countries. The power is shifted from producers to intermediaries due to production outsourcing. Knowledge of design, brand and markets is becoming very important. Producer countries can substitute one another, thus enhancing country competitions. Oligopolistic power of multinationals grows; but consumer power does not grow. There is information asymmetry, with large corporates determining what information should be public and what should not be. There is also filtering information regarding ethical trade itself. Indirect regulatory mechanisms serve only as denial of responsibility defence for companies about working conditions in outsourced far-off production units. This has affected the nature of direct regulations and incentives. Evaluating impact of such regulations is difficult. Distanced stakeholders do not trust each other. Entry of new regulatory stakeholders makes matters worse. There is increased perception of risks, uncertainty and change. All of which encourage short-term, self-interested opportunistic behaviour of stakeholders. Ethical trade is global, regional, national and local (Heeks & Richard, 2004).
Findings of Rahman (2009) showed how Bangladesh garment industry (which also supplies to UK) has been suffering from hierarchies of vulnerabilities in the process of their global integration. Ethical marketing became a serious issue with neoliberalism and globalisation. Bangladesh conditions affect ethical marketing in UK retail sector. This is the reason to include this paper here.
FAIR TRADE: FAIR TO WHOM?
Randall (2005) found inadequate translation of fair trade practices into full commercial success in craft sector.
Some economists like Lindsey (2004) (cited by Nicholls & Opal (2005) see Fair Trade as an aberration, not obeying free market rules and not maximising financial utility of the investor. However, fair trade guarantees against market failures. Fair trade is both in and against market. Nicholls & Opal (2005) discussed various aspects of fair trade in detail.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Gold et al (2010) used resource-based and relational theories to explain inter-firm supply chain collaborations especially to address environmental and social issues of ethical marketing.
Koszewska (2010) observed the following trends regarding CSR aspects of textile sector. In textile sector, CSR strengthens customer loyalty. Customers prefer textile companies to integrate CSR as one of their regular practice rather than as a separate programme. Consumers seek all information about the ethical practices of the company before making buying decisions. Internet and social sites promote such attitudes. Surveys show that textile customers are more concerned about the country of origin and ecological issues than working conditions. CSR governing environmental protection, along with fair trade and working conditions, in production units becomes a part of ethical marketing. There are a number of firm voluntary codes and codes of national and international organisations regarding these ethical issues.
Internal environment management is as important as any other organisational activity. Environmental protection and green purchasing as a component are becoming parts of ethical trade itself. (Jinglu, 2009).
Increasing demand for ethical clothing has prompted UK retailers to develop CSR policies on their method of garment sourcing and supplier partnerships. Ethical products offered by UK textile retailers also include organic cotton clothing produced by Fair Trade suppliers. Goworek (2011) presented the results of a case study on People Tree, a fair trader sourced from developing countries. The firm provides a transparent view of its production source via internet. This is an example of socially responsible and environmentally sustainable practice.
Cause related marketing (CRM) and CSR were compared by Sheikh & Beise-Zee (2011). Both are public relations tools. CRM may be more cost-efficient, but its effect is limited to customers with high cause affinity. It has negative effect on customers with low or negative affinity to the cause. However, CRM can mitigate negative effects of CSR in cause affinity market segment.
Cooke & He (2010) found Chinese textile firms adopting the business case approach towards to CSR rather than employee welfare.
Fletcher (2010) pointed out that the term “fast” fashion need not be associated with unsustainability. It need not represent unethical or environmentally damaging practices. It is only a method of accelerating sales and economic growth. The author used the opposite term “slow” fashion to bring out the concept by contrasting the two terms.
According to Beard (2008) ethical fashions are influenced by lifestyle and societal factors and there are challenges to sustainability of ethical fashion. This is increasingly seen in the case of UK firms like Sarah Ratty’s niche, high-end brand Ciel.
POLITICS OF ETHICAL CONSUMPTION
Barnett et al (2011) argued that ethical consumption is not merely market response to changing consumer demand. It is rather a political phenomenon reflecting strategies and repertoires shared among many governmental and non-governmental agencies. The authors analysed UK ethical consumption practices. Ethical consumption has become a global responsibility. But this should be supported with knowledge about origin and process of production. Both moral and skilled-active-creative roles of consumers are stressed here. Harrison’s Ethical Consumption Research Association and its magazine Ethical Consumer are notable mass movements in UK. In UK, market for ethical consumption has almost trebled during the last ten years from about £13.5 billion in 1999 to £36 billion in 2009. This includes a range of products and services from different sectors. The importance for green and organic products is increasing as a result of ethical consumption ideology. Fair trade consumption is an ideal example of ethical consumption. This has very strongly rooted in UK since early 1990’s.It has been achieved through effective communication. Fair trading of main stream products including textiles has played big role in this development. Fair trade is not anti-consumerism, but another way of consumerism. Many companies and organisations supporting fair trade are trying to influence governments and corporations. The authors use problematization approach to discuss the topic. The discussions are not restricted to, but inclusive of textile sector.
SUMMARY AND CONCLUSIONS
Ethical marketing has several dimensions. Companies desirous of following ethical marketing should fulfil certain basic criteria. Consumers, aided by pressure groups and media publicity, insist on ethical marketing by firms selling products to them. These include CSR, fair trade and better workplace conditions in production units. Companies implement them through codes of conduct imposed on suppliers. Country regulations also may support this. While codes of conduct and standards are applicable to suppliers, their increasing costs are not compensated. Competitive pressure compels retailer firms to pressurize suppliers to reduce their prices further, although the costs increase. There is additional pressure on suppliers due to reduced lead times resulting from shorter life cycles. These extra pressures go uncompensated. Thus fair trade is often one-sided supporting only consumers and not producers. While there are checks and auditing on compliance with codes by suppliers, there is no such auditing of retailer firms. There are more reports on their violation of codes than of suppliers. Globalisation and neoliberalism has affected textile producers through hierarchies of vulnerabilities to external pressures. Corporate power dominates suppliers in developing countries in this buyer-power market. Politics of ethical marketing has intergovernmental dimensions. This is reflected in ethical consumption becoming a mass movement. New fashion trends are affected by lifestyles and societal factors, which are often detrimental to ethical marketing.
In summary, a strong case exists for a review of whole ethical marketing mechanisms from producers, retailer firms and consumer angle. Fair treatment of all stakeholders need to be guaranteed.
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