Global customers buy brands that mix purpose with profit

Global customers buy brands that mix purpose with profit

Here's some evidence that consumers in emerging markets, rather than in developed countries, may soon be driving the market for sustainable and socially responsible products: Sentiments about social causes are generally stronger in emerging nations than in mature markets, according to the 2012 Edelman goodpurpose study.

In emerging markets, almost two-thirds of the consumers in countries including Brazil, China, India and the United Arab Emirates said they donated money to social causes, compared with 52 percent of those in the United States and Western Europe.

This gap also trickled into purchasing preferences: 62 percent of those in the emerging economies said they buy a "purpose-infused" product at least once a month, compared with 37 percent in developed nations.

We've written before that Chinese consumers -- and particularly young people -- have rated the environment as a higher priority than their U.S. and British counterparts. But it's interesting to see that the trend extends more broadly to other emerging markets, with more residents from those economies saying they support social causes financially than those in more mature markets. 

A global trend

That said, more consumers globally, regardless of their citizenship, are supporting businesses and brands that emphasize purpose along with profit, according to the Edelman study.

Even in the recession-weary United States, consumers are rewarding businesses that support societal causes like human rights and improving the quality of health care.

"Features and benefits of your products are no longer enough for a narrative," said Carol Cone, global practice chair of the Business + Social Purpose for Edelman. "After price and quality, the next trigger is purpose."

The influence of purpose as a factor in buying decisions has increased dramatically in some countries. For example, in the past 18 months the relevance of purpose has increased 100 percent in Japan, 70 percent in China, 43 percent in the Netherlands and India and 36 percent in Germany.

The 2012 Edelman goodpurpose study was conducted in January and February 2012, covering approximately 8,000 adults in 16 countries. Close to three-quarters of those surveyed (72 percent) said that they would recommend a brand that supports a good cause over one that does not, compared with 52 percent who said  the same thing in 2008 when Edelman first started conducting its research.

Perhaps more significantly, 73 percent of those surveyed said they would switch brands if a different brand of the same quality supported a good cause.

"When people buy a brand, they want to know that it supports something," Cone said.

Photo of Latin businessman by rSnapshotPhotos via Shutterstock.

The U.S. paradox

The desire to ensure that purchases could serve an ulterior motive that helps society dynamic could partially explain a paradox in the attitudes of U.S. consumers, as could shifts in the country's political dynamic, Cone said.

U.S. respondents are most inclined to believe that "people like me" should be responsible for tacking society's issues, she said. (Only 35 percent of U.S. respondents, compared to 22 percent who laid the primary responsibility on the government.) Ironically, they were also the only group that became less personally involved in social causes over the past 18 months, the data show.

"Brands and corporations can ease the burden for consumers by making involvement in social issues easier and more aligned with the core needs they face today – jobs, hunger, education and health care," Cone said.

For the survey as a whole, 19 percent of the respondents laid the primary responsibility for taking action on "people like me," versus 54 percent who said it should rest on the should of government.

Consumers in China were the most likely to say that the government should be responsible. In Germany, 36 percent of the respondents said "people like me" were responsible; but 43 percent pointed to the government.

Consumer trust relies on corporate purpose

Over time, the data suggests that businesses will need to pay even more attention to purpose. For example, 87 percent of the Edelman respondents said that businesses should put at least equal weight on society's concerns and their own profit motives; however, less than one-third believe companies are currently doing a good job.

More than half of the respondents indicated that they believed CEOs should publicly commit and support long-term commitment to these issues.

A separate Edelman study about how businesses can build consumer trust underscores the idea that a company's attention to societal issues will give it "license to lead" in the future. While consumer trust today is tied to operational excellence, increasingly consumers care more about societal attributes, according to the Edelman Trust Barometer.

In fact, seven out of the top 10 factors that will drive consumers to trust businesses in the future are societal attributes, not operational attributes, the Edelman data show.

Among those attributes is how a company treats employees, the credibility of its ethics, how it treats the environment and how it addresses society's needs.

"Trust earned today is based on operational attributes," Cone said. "Trust tomorrow will be earned on social performance. Companies that want to earn the license to lead must perform in a social way."