Darnall, Nicole

Sarti, Silvia

Testa, Francesco

LSE Research Online

Collectivists,	individualists	and	indifferentsConsumers	increasingly	prefer	to	purchase	sustainable	and	healthy	products.	This	trend	is	important	if	we	are	tomeet	the	United	Nations	Sustainable	Development	Goals.However,	most	evidence	about	consumer	preferences	is	based	on	self-reported	purchases	rather	than	consumers’actual	purchases.	Moreover,	when	asked,	consumers	tend	to	overstate	their	sustainability	and	health-consciouspurchases.The	problem	with	this	situation	is	that	companies	wishing	to	market	their	sustainable	and	health-conscious	productsare	faced	with	incomplete	information	about	their	market	opportunities.	Managers	are	asking:How	big	is	the	market	for	sustainability	and	health-conscious	products?How	many	consumers	consistently	purchase	sustainability	and	health-conscious	products?What	differentiates	consumers	who	purchase	sustainable	and	health-conscious	products	from	otherconsumers?Our	recent	study	assessing	consumers’	actual	purchases	of	sustainable	and	health-conscious	products	addressesthese	questions.By	relying	on	product	labels,	we	investigate	consumers’	actual	purchases	across	more	than	370,000	purchasingtransactions	and	five	categories	of	product	labels	promoting	(1)	social	equity/fair	wages,	(2)	ecological	sustainability,(3)	personal	health,	(4)	organic	production,	and	(5)	vegan	lifestyles.Additionally,	we	consider	whether	consumers	are	motivated	more	to	purchase	products	that	offer	personal	benefitsvs.	public	benefits	vs.	both.Our	findings	reveal	three	consumer	types:	“collectivist	consumers,”	“individualist	consumers”	and	“indifferentconsumers.”Collectivist	consumersCollectivists	allocate	more	of	their	total	spending	towards	sustainability	and	health-related	products	that	offerpersonal	benefits	–	such	as	goods	that	may	improve	their	personal	health.	Additionally,	more	than	the	otherconsumer	categories,	collectivists	allocate	a	greater	portion	of	their	total	spending	towards	products	that	offer	publicbenefits	–	such	as	products	that	improve	ecological	sustainability	or	guarantee	fair	wages	to	workers.LSE Business Review: Collectivists, individualists and indifferents Page 1 of 5		Date originally posted: 2018-07-13Permalink: http://blogs.lse.ac.uk/businessreview/2018/07/13/collectivists-individualists-and-indifferents/Blog homepage: http://blogs.lse.ac.uk/businessreview/Collectivists	account	for	7	per	cent	of	total	consumers	in	our	sample.	While	this	number	is	proportionally	small,collectivist	consumers	allocate	28	per	cent	percent	of	their	total	purchases	towards	sustainability	and	health-relatedproducts.	This	sizeable	allocation	is	greater	than	any	other	consumer	group.Individualist	consumersLike	collectivist	consumers,	individualists	purchase	products	that	offer	more	personal	benefits	–	such	as	goods	thatpromise	improvements	to	personal	health.	However,	these	consumers	differ	from	collectivists	in	one	important	way.They	tend	to	spend	far	less	of	their	total	purchases	on	products	that	promote	public	benefits	–	such	as	products	thatimprove	ecological	sustainability	or	guarantee	fair	wages	to	workers.Individualists	represent	22	per	cent	of	total	consumers.	These	consumers	spend	about	11	per	cent	of	their	totalpurchases	on	products	that	bear	one	or	more	sustainability	and	health-related	labels.Indifferent	consumersIndifferent	consumers	are	not	persuaded	to	purchase	any	sustainability	and	health-related	products,	regardless	ofthe	benefits	they	offer.	Indeed,	indifferents’	purchases	of	sustainability	health-related	products	most	likely	occur	byaccident.Indifferent	consumers	represent	the	majority	(71	per	cent)	of	total	consumers.	Indifferents	allocate	only		4	per	centpercent	of	their	total	purchases	towards	sustainability	and	health-related	products.Figure	1.	Consumer	segmentation	based	on	actual	sustainability	and	health-related	purchasesLSE Business Review: Collectivists, individualists and indifferents Page 2 of 5		Date originally posted: 2018-07-13Permalink: http://blogs.lse.ac.uk/businessreview/2018/07/13/collectivists-individualists-and-indifferents/Blog homepage: http://blogs.lse.ac.uk/businessreview/	How	these	findings	compare	with	self-reportsIn	comparing	our	findings	to	research	based	on	consumers’	self-reports,	we	show	that	consumers’	actual	purchasesof	sustainability	and	health-related	purchases	differ	significantly	from	their	self-reported	purchases	in	that	actualpurchases	are	sizeably	lower.One	prior	study	indicates	that	16	per	cent	of	consumers	self-report	that	they	make	personal	and	environmentalstewardship	a	priority	in	their	purchases,	76	per	cent	report	being	engaged	in	sustainability	in	some	way,	and	9	percent	report	not	being	concerned	about	social	and	environmental	stewardship	(NMI,	2010).	Another	study	shows	that12	per	cent	of	consumers	self-report	that	they	actively	purchase	sustainability-oriented	products,	while	51	per	cent	ofconsumers	report	inconsistent	behaviour	and	37	per	cent	report	not	being	concerned	about	sustainability	issues(Angelini	et	al.,	2012).Figure	2.	Consumer	segmentation	frameworks:	A	comparison	of	studies	using	actual	vs.	self-reported	dataLSE Business Review: Collectivists, individualists and indifferents Page 3 of 5		Date originally posted: 2018-07-13Permalink: http://blogs.lse.ac.uk/businessreview/2018/07/13/collectivists-individualists-and-indifferents/Blog homepage: http://blogs.lse.ac.uk/businessreview/Why	our	findings	matterWith	only	7	per	cent	of	the	consumer	market	consistently	purchasing	sustainability	and	health-related	labels,	it	wouldbe	easy	to	conclude	that	product	labels	are	ineffective	at	influencing	the	consumer	market.	One	business	responsemay	be	to	avoid	developing	labelled	products.	However,	it	is	important	to	recognise	that	the	combined	purchasingpower	of	collectivists	and	individualists	accounts	for	29	per	cent	of	the	total	market.	This	proportion	is	noteworthy.Firms	that	can	deliver	products	which	appeal	to	these	consumers	may	be	rewarded	with	considerable	marketopportunity.Another	key	finding	relates	to	indifferents’	low	interest	in	sustainability	and	health-related	labels.	One	reason	maysimply	be	consumers’	lack	of	awareness	(Darnall	and	Aragon-Correa,	2014;	Darnall	et	al.,	2017;	Testa	et	al.,	2015;Wei	et	al.,	2017).	If	so,	then	our	study	identifies	a	significant	need	to	increase	consumer	education	and	awarenessabout	sustainability	and	health-related	product	labels.	Such	awareness	can	bolster	the	market	for	sustainability	andhealth-related	products	and	assist	with	meeting	global	sustainable	development	goals.LSE Business Review: Collectivists, individualists and indifferents Page 4 of 5		Date originally posted: 2018-07-13Permalink: http://blogs.lse.ac.uk/businessreview/2018/07/13/collectivists-individualists-and-indifferents/Blog homepage: http://blogs.lse.ac.uk/businessreview/♣♣♣Notes:This	post	is	based	on	the	authors’	paper	Market	segmentation	of	consumers	based	on	their	actual	sustainabilityand	health-related	purchases,	published	in	Journal	of	Cleaner	Production	192,	270-280.	The	authors	thank	TIM-Telecom	Italia	and	the	other	partners	involved	in	the	LivLab	Project	(Unicoop	Tirreno,the	National	Research	Council	(CNR)	and	Bruno	Kessler	Foundation).The	post	gives	the	views	of	its	authors,	not	the	position	of	LSE	Business	Review	or	the	London	School	ofEconomics.Featured	image	credit:	Photo	by	sydney	Rae	on	UnsplashWhen	you	leave	a	comment,	you’re	agreeing	to	our	Comment	Policy.Silvia	Sarti	is	a	postdoctoral	researcher	at	the	Institute	of	Management	of	Sant’Anna	School	ofAdvanced	Study	in	Pisa,	Italy.	She	is	working	on	sustainability	management,	consumer	behaviour	andgreen	consumption.	She	holds	a	PhD	in	management	from	Sant’Anna	School	of	Advanced	Study,	anMSc	in	economics	and	management	and	a	BA	in	business	economics	from	University	of	Perugia,	Italy.silvia.sarti@santannapisa.itNicole	Darnall	is	a	professor	of	management	and	public	policy	at	Arizona	StateUniversity	in	the	School	of	Public	Affairs	and	the	School	of	Sustainability.	She	isassociate	director	of	ASU’s	Center	for	Organizational	Research	and	Design	(CORD),team	leader	of	the	Sustainable	Purchasing	Research	Initiative,	and	a	visiting	professorInstitute	of	Management	of	Sant’Anna	School	of	Advanced	Study	in	Pisa,	Italy.	Herresearch	examines	the	factors	that	facilitate	and	impede	organisational	and	individualsustainability	behaviours.	ndarnall@asu.eduFrancesco	Testa	is	associate	professor	at	the	Institute	of	Management,	Sustainability	Managementarea	at	Scuola	Superiore	Sant’Anna	(SSSA).	He	specialises	in	the	economics	and	management	ofinnovative	environmental	policy	instruments	and	their	relationship	with	the	economy	fundamentals	andcompetitiveness.	His	research	has	received	significant	support	from	the	European	Commission.f.testa@sssup.it		LSE Business Review: Collectivists, individualists and indifferents Page 5 of 5		Date originally posted: 2018-07-13Permalink: http://blogs.lse.ac.uk/businessreview/2018/07/13/collectivists-individualists-and-indifferents/Blog homepage: http://blogs.lse.ac.uk/businessreview/

Collectivists, individualists and indifferents

http://eprints.lse.ac.uk/91082/1/Sarti_Collectivists-individualists_Author.pdf

Collectivists, individualists and indifferents

Abstract

Similar works

Full text

Available Versions

LSE Research Online