Introduction
Ethical consumerism has become an integral aspect of the modern economy. Individuals are increasingly making their consumption decisions based on ethical values.
Ethical consumerism refers to “the practice of purchasing products and services produced and distributed in a way that minimises social and environmental damage” (Attalla & Carrigan 2001, pp. 560-578). Thus, an ethical consumer is a person who purchases goods and services that support environmental and social responsibility.
Ethical consumerism is driven by the need to improve the wellbeing of consumers and the society, as well as, profits in a sustainable manner (Gemma & Makatouni 2010, pp. 287-299). Given the increase in demand for ethically produced goods, companies are shifting to ethical marketing to improve their competitiveness.
This paper will examine the impact of ethical consumerism on Twinings Company. It will begin with an overview of Twinings. This will be followed by a discussion on the ways in which ethical consumers affect the company’s marketing strategy.
Recommendations will also be made to enable the company to respond effectively to ethical consumerism.
Overview of Twinings
Twinings is a leading vendor of high quality tea in the world. The company was founded in 1706 in London where its headquarters is located. Currently, the company is owned by Associated British Foods and its products are sold in over 100 countries.
Twinings sells over 500 varieties of specialty tea brands. Its mission is to be the leading producer of premium tea brands in the world. The philosophy of the company is “to be totally committed to producing the highest quality tea brands and make them accessible to everyone” (Twinings 2015).
Twinings has several organisational values that guide its operations. These include aiming high, freedom to act, scope for growth, and collaboration.
The main competitors of Twinings in the global tea market include PG Tips Tea, Lipton Yellow, and Tetley. PG Tips is the main competitor since it has the largest market share of 25% (Pashova, Nikolova & Dimitrov 2013, pp. 1-9). Tetley is the second largest competitor with a market share of 23%.
Twinings has a total market share of 14%, which makes it the third largest firm in the industry. However, it has a dominant position in the specialty tea market. Twinings controls nearly 48.5% of the specialty tea market (Twinings 2015).
This achievement is attributed to the market knowledge and experience that the company has gained in the last 300 years. Twinings also faces competition from small specialty tea companies in London. These include Teanamu, Tea Palace, Tea Smith, and Postcard Teas.
Impact of Ethical Consumerism
4Ps of Marketing
Ethical consumerism has a great impact on the company’s marketing mix strategy. To begin with, the product strategy of the company promotes production of tea in an ethical manner. The company collaborates with its suppliers to ensure that the people working in various tea estates are treated fairly (Twinings 2015).
Twinings ensures that workers in tea estates are paid living wages and their working conditions are safe. It also discourages discrimination and child labour. Twinings uses ethical sourcing to access high quality ingredients and packaging materials that have the least negative effects on the environment.
The company purchases tea only from farms that promote social and environmental sustainability. Twinings also supports development initiatives in countries where it obtains its raw tea. For instance, it has partnered with Save the Children to support access to maternal and child health services in China and India.
In Kenya, the company provides training to farm workers to prevent gender-based discrimination in tea estates.
The pricing strategy of the company ensures fairness. Twinings uses value-based pricing to sell its products. This involves setting prices according to the benefits or value that consumers derive from its products.
Most customers in the specialty tea market are ready to pay as high as 15% more than the price of mainstream tea to access high quality products (Justorines & Richard 2012, pp. 412-422). However, Twinings focuses on reducing production costs to deliver superior quality at affordable prices.
For instance, the company purchases tea directly from farmers to avoid the costs associated with dealing with intermediaries. As a result, its suppliers receive fair prices, whereas its customers pay affordable prices.
The company’s promotional strategy encourages ethical marketing. Twinings uses advertising to create awareness about its products. It ensures that its adverts provide truthful and honest messages about the quality and benefits of its products.
This prevents enticing customers to buy products without making informed decisions (Amstrong & Kotler 2011, p. 123). The company also uses public relations initiatives such as press releases to educate the public on the importance of consuming organic tea.
The company sponsors research on the health benefits of consuming high quality tea. The results of the studies are usually published in newspapers and lifestyle magazines to educate the public.
This strategy improves the welfare of the community by encouraging individuals to consume healthy tea to avoid lifestyle diseases such as obesity (Tallontire, Rentsendorj & Blowfield 2001, p. 3).
The distribution strategy of Twinings promotes eco-efficiency and elimination of unethical practices in its supply chain. The products of the company are distributed by independent distributors in various markets. Twinings avoids abusing its bargaining power as a major supplier of high quality tea brands.
For instance, it provides generous profit margins to support the operations of its distributors. Moreover, the company has embarked on paperless transactions by using digital platforms such as sales websites to minimise its ecological footprint.
Sustainable Brand Innovation
Consumers normally react to a brand based on the way they perceive its value or qualities. This means that ethical values are important in marketing because they can validate or damage a brand (Eckhardt, Belk & Devinney 2010, pp. 426-436).
A brand must be a good corporate citizen in order to survive in a community where customers promote ethical consumerism. In this respect, the company’s brand positioning strategy promotes its commitment to incorporate ethical values in every aspect of its value chain.
The company focuses on building a value-based brand that satisfies the needs of all stakeholders. It has adopted a green branding strategy to improve its brand citizenship.
Green branding involves introducing ethical values such as environmental conservation at every stage of the product life cycle in order to maximise the benefits of a brand to the society (Xinming 2014, p. 17).
For instance, using green energy and biodegradable packaging materials throughout the product life cycle enables Twinings to reduce environmental pollution. Twinings also achieves ethical brand identity by incorporating sustainable practices in all its business processes.
The company promotes effective corporate governance, fair trade, equal treatment of employees, and product safety (Sadler 2003, p. 231). These strategies enable Twinings to create an ethical brand that is committed to corporate social responsibility.
Consumer Collaboration
Twinings has had to develop a collaborative approach to marketing to respond effectively to ethical consumerism. Products can remain relevant if ethical consumers participate in their creation (Brenton & Hacken 2006, pp. 1-14).
In this respect, Twinings creates brand communities, which consist of fans, co-creators, and champions who support ethical consumerism. Twinings has adopted brand community as a high-level strategy that supports its strategic goal of increasing profits, while minimising negative effects on the community.
Twinings as a brand has evolved into a community-based phenomenon, especially, in Europe where it has a strong market position. The company has created a brotherhood of specialty tea drinkers who are united by the shared ethos of promoting ethical consumption.
This strategy enables Twinings to position itself as the only brand that understands and produces tea on customers’ terms.
The company has created a tea club where employees and customers interact regularly to discuss the quality of its products. Nearly three thousand cups of different brands of tea are tasted by customers in the club every week (Twinings 2015).
The feedback from customers is used by employees to blend tea in a manner that satisfy market needs. This means that customers have become co-creators of the products of the company. Customers identify with the products because they reflect their ethical values, as well as, tastes and preferences (Barnett, Clarke & Cloke 2005, pp. 45-51).
Employees are also committed to the brand since nearly all of them are passionate consumers of high quality tea. They strive to improve every aspect of the brand to satisfy customer needs.
Brand community also helps the company to create awareness about its products. Members of the community often interact with each other in the company’s tea club and social media. The interactions allow customers to act as loyal brand ambassadors by sharing their tea experiences with potential customers (Pride 2004, p. 78).
Online interactions create buzz on social media about the products of the company. Face-to-face interactions enable loyal customers to create awareness about the products through word of mouth.
The benefit of this collaboration is that it reduces marketing costs since customers are not paid by the company to create awareness about its products (Ranchhod & Marandi 2005, p. 82). Moreover, it improves the ease of attracting customers since potential customers are likely to trust people who have used the products of the company.
As a result, the brand equity of the company has improved tremendously.
Recommendations
Twinings should consider the following strategies to respond effectively to ethical consumerism. First, the company should incorporate ethical values in its market segmentation strategy (Pelsmacker, Driesen & Rayp 2005, pp. 363-383).
This means that Twinings should focus on serving customers who share its brand personality and values rather than the mass market. In this respect, targeting the behavioural green market segment is likely to improve the success of the company.
This market consists of customers who have a negative attitude towards goods that contribute to environmental degradation (Banaji & Buckingham 2009, pp. 1197-12230). The customers tend to be early adopters of green products and influence others to consume ethically produced products.
In addition, they are not price sensitive. These attributes make the segment attractive to serve. For instance, price insensitivity will enable Twinings to charge premium prices to recoup the high cost of supplying ethically produced tea. Value congruence will ensure customer satisfaction and brand loyalty (Terpstra & Richard 2012, p. 92).
Second, the company should focus on corporate social responsibility (CSR) as a strategy for achieving its business goals (Drummond, Ensor & Ashford 2010, p. 112). Twinings should use its CSR initiatives to enhance sustainability through environmental conservation and improving community welfare.
Environmental conservation will ensure sustainable tea production and acceptance of the company (Carrigan & Pelsmacker 2009, pp. 674-687). Supporting needy communities will reinforce the company’s brand image, thereby improving its competitiveness.
Finally, Twinings has to improve its product quality in order to satisfy emerging market needs (Freeman, E 2010, p. 132). Innovation will lead to production of tea brands that satisfy the health and lifestyle needs of customers.
The resulting improvement in customer satisfaction will enable the company to defend its market share (Kazmi 2007, p. 114).
Conclusion
Ethical consumerism has become a significant determinant of competitiveness in the tea industry. Customers are increasingly becoming concerned about the social and environmental effects of producing tea. Ethical consumers have a strong preference for tea produced by companies that promote social and environmental responsibility.
Twinings responds to ethical consumerism by using green branding strategies. These include reducing its ecological footprint and supporting vulnerable communities. The number of ethical consumers is likely to increase in future as the world moves towards a green economy.
Therefore, Twinings should focus its future marketing strategies on serving the behavioural green market segment to increase its profits and market share in a sustainable manner.
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