What target segment should be aimed at to promote ethical consumption? Considerations regarding the spread of ethical consumption from a consumer segmentation perspective 1

Recently, following the penetration of the words “SDGs” and “sustainability” in society,
attention has also been focused on the behavioral change among consumers known as
ethical consumption. The word ethical means “ethical” or “moral”, with ethical
consumption referring to consumption behavior that takes people, society,
the environment, and one’s area into consideration. While the conventional word
“eco-friendly” only refers to initiatives addressing environmental issues,
“ethical consumption” is characterized by the fact each customer strives to resolve not only environmental issues, but social issues in a broad sense, such as poverty, child labor,
welfare, and regional issues, from an economic perspective by engaging in ethical
consumption behavior.

What kinds of approaches can be considered to increase the number of consumers
engaging in ethical consumption in order to resolve social issues? I’d like to consider
this by analyzing the results of an independent survey conducted by INTAGE over two
articles.

Classifying consumers by “action” and “consciousness” to search for an “easily swayed segment”

INTAGE has explored business that consumers find sustainable by segmenting consumers
by sustainable behavior level and identifying the direction of products chosen by
“high sustainable behavior level people” and the brand measures that they are interested
in/like. However, while the word SDGs has penetrated society at large, the proportion
of high sustainable behavior level people has remained unchanged for several years. This is likely because those who engage in sustainable behavior continue to do so, while those
who do not remain unchanged. At the same time, the number of low sustainable behavior
level people is on the increase due in part to decreasing leeway in life driven by the
economic environment including price hikes.

What sorts of measures can be used to zero in on ethical consumption purchase behavior in this setting, and to increase the number of consumers engaging in ethical consumption?
One relatively easy approach may be to have people who are highly ethically conscious but are not taking action at present go on to take action. I have used the results of an online
survey conducted by INTAGE to ascertain the current state of consumers’ ethical
consciousness and ethical behavior to classify consumers by extent of consciousness and
behavior level and analyze the people who are highly conscious, yet have not taken action.

Fig.1

In this survey, respondents were asked 30 ethical consciousness questions and 17
ethical behavior questions. I first ran a factor analysis on the 30 ethical conscious questions to extract their directions of consciousness and then ran a cluster analysis which resulted
in the following 4 segments with different conscious levels (Fig.2).
[1] Ethically unconscious:
　Negatively reacted to all 5 factors aggregating the 30 questions
　 ⇒ Segment with no interest in ethical consumption
[2] Decadence oriented:
　Strongly positively reacted to “self-centered/decadence orientation factor”
　⇒ Segment that believes the world will not change anyway
[3] Moderately conscious:
　Neither higher nor lower than other clusters on all 5 factors
　⇒ Segment with no characteristic consciousness
[4] Ethically oriented:
　Strongly positively reacted to factors other than “self-centered/decadence orientation
　factor”
　⇒ Highly ethically conscious segment

Fig.2

Similarly, respondents were classified into the 3 following different behavior levels based
on the behavior questions (Fig.3).
[1] Ethically inactive:
　Negatively reacted to all 4 factors aggregating the 17 questions
　⇒ Segment not ethically active
[2] Ethically moderately active:
　Neither higher nor lower than other clusters on all 4 factors
　⇒ Segment taking no characteristic action
[3] Ethically active: 　
　Strongly positively reacted to all 4 factors
　⇒ Segment that engages in ethical behavior

Fig.3

Fig.4 presents the results of combining the conscious clusters in Fig.1 with these behavior
clusters to confirm distribution.
It is clear that the composition rate of the “ethically highly conscious and active segment
(ethically oriented x ethically active segment) (1)” is 15.1%, and of the target for increasing ethical behavior, “Ethically highly conscious, but only take moderate behavior segment
(ethically oriented x moderate action segment) (2)”, deemed to present relatively low
barriers, is 14.1%.

At the same time, “Ethically moderately conscious, and only take moderate behavior
segment (moderately ethically oriented x moderate action segment) (3)” comprised the
largest segment at 39.6%. If this segment’s ethical consciousness can be further increased and they be led to become “Ethically highly conscious, but only take moderate behavior
segment (ethically oriented x moderate action segment) (2)”, changing the behavior of
segment (2) can be expected to have an even greater effect.

Fig.4

Next, let’s analyze “Ethically highly conscious, but only take moderate behavior segment
(ethically oriented x moderate action segment) (2)” in detail, and search for hints to
further increase ethical behavior with.

Obtaining hints to spark ethical behavior from analysis of the “ethically highly conscious, but only take moderate behavior segment

Let’s examine the specific ethical behavior the “Ethically highly conscious, but only take
moderate behavior segment (ethically oriented x moderate action segment)” is not
currently able to engage in. (Fig.5)

Fig.5

Compared to the “Ethically highly conscious, who also take behavior segment (ethically
oriented x ethically active segment)”, the “Ethically highly conscious, but only take
moderate behavior segment (ethically oriented x moderate action segment)” was unable to engage in ethical behavior like “Choosing fair trade products”, “Choosing products with eco marks”, and “Choosing organic products”. This segment is characterized as not buying
premium products that make ethical claims because these products are often priced higher that the average price range for each category due to innovations to their
production/manufacturing environment and the procurement costs of raw materials.

To further define an image of this segment, let’s examine the profile of this “Ethically highly conscious, but only take moderate behavior segment (ethically oriented x moderate action segment)”. (Fig.6)

Fig.6

Women in their 60s comprise the largest portion of this segment, and annual household
incomes are also high, indicating they are a segment with more time and money in their
lives. They also have a strong desire to act for society in future and for the next generation, are ethically-minded, and feel changing their lifestyle habits is acceptable if they can
change the world for the better through it.
However, they don’t go on to take ethical action due to reasons like not knowing what to
do, or not knowing any stores that offer ethical products, so appear to want information
that will lead to concrete initiatives to take.
When considering products/services and communication to increase ethical behavior with
these characteristics in mind, hints may be found in keywords like
“value for money-focused” and “waste-free lifestyle”.
“Value for money-focused” is not simply “the pursuit of low prices,” but being able to
consider the balance of value and price a product/service offers. And the desire for a
“waste-free lifestyle” may include avoiding purchases one deems “wasteful” and a
predisposition to purchasing if one feels convinced an item is worth paying money for, such as being “expensive, but usable for a long time without breaking”.
They are deemed to have a “global environment-focused” and “for the next generation”
outlook, purchase few “premium products with ethical claims” due to insufficient
communication on the social significance and dissemination of the reasons behind their
“premium prices”. Now that words and ideas like protecting the global environment and
SDGs have spread to a certain extent, and new forms of SDG-type contributions like
“fair trade” are emerging, updates to how they are “communicated” may be needed.

Here is one example of an update.
Ryohin Keikaku, which operates Mujirushi Ryohin (MUJI) holds workshops at stores
nationwide to help consumers understand and feel a familiarity with “organic cotton”.
The workshops involve participants illustrating tote bags that use the company’s organic
cotton, are easy for anyone to enjoy, and seem to be a big hit every time.
Mujirushi Ryohin not only has participants enjoy the event, but uses these tote bags made of organic cotton to clearly convey not only the gentleness on the skin of its organic cotton handkerchiefs, towels and clothes, but its support for producers, like protecting the health of producers by cultivating its cotton using farming methods that limit the use of pesticides and chemical fertilizers.
Participants learn about ethical products and prices through the experience of enjoying the workshop. This isn’t something simple for everyone to do, but there are many hints to be
learned from it.

This article has focused on the “highly conscious but moderately active” segment as a
target segment to increase the number of consumers engaging in ethical consumption.

However, ethical consumption can be perceived and approach in a variety of ways. The
things people seek from ethical consumption, such as “trendiness” and “social
contribution consciousness”, and the ethical behavior they engage in will differ from
person to person. Suggestions that fit the context of these outlooks may make it possible
to increase ethical consumption.

The “Highly conscious but moderately active” segment we considered out target in the
current article was characterized as being most comprised by women in their 60s. However, they are actually widely distributed among women in their 40s~60s, with a mixture of
various life stages. In recent years, in response to the diversification of consumers,
methods for segmenting consumers have gone on to focus not only conventional
“demographic segmentation” like gender x age, but outlooks on life, values, and
classifications using real behavioral history. However, it is hard to go past demographic
segmentation when considering strategies to take, so in this initiative, I wanted to pursue
segmentation that covered segmentation covering values, behavior, and segmentals.

In part 2 of this series, I will implement a cluster (grouping) analysis of consumers using their specific ethical consciousness and ethical behavior and implement segmentation taking ethical direction and life stage into account.  This will help identify the profile of consumers to target in order to increase ethical consumption and raise their ethical consciousness and ethical behavior.

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The analysis in this article was implemented based on results from an INTAGE independent survey conducted with the following research design.
Survey Area: Nationwide, Japan
Respondent Criteria: 15~69-year-old men and women
Sample Extraction Method: Questionnaires distributed to panelists extracted from INTAGE’s monitor panel
Sample Size: n=5437sGender and age quotas in line with Japan’s population structure
Survey Implementation Period: (Wed) 27 ~ (Fri) 29, December 2023

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