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Experimental Design Paper

Minerva Schools at KGI

B110: Market Dynamics and Product Analytics

Prof. Eberhardt

October 3, 2020
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Summary and Critique

Parents go through an ethical awakening after having a child because they want to teach

their children optimal moral views. This phenomenon is called the Inheritance Factor. With this

in mind, Carey, Shaw, and Shiu (2008) wanted to investigate if ethical consumption trends are

changing families' buying habits. For the study, they interviewed three families who had kids

under the age of three and asked them questions about their ethical buying habits and the

influence the kid(s) had on their consumption.

However, the design of the paper fell short. The authors only loosely defined what makes

a family be 'ethical.' What is considered ethical consumption can vary largely among families.

The sampling problems go on: they used convenience sampling to recruit families that worked in

a company that produced internet content about ethical behavior, only interviewed three families,

and chose self-identified ethical families. These problems limit the generalization of the findings.

Lastly, they ignored the attitude/behavior gap. As Roberts, 1996, and Carrigan and Attalla, 2001

(as cited in Carey, Shaw, & Shiu, 2008) point out, more costumers pronounce themselves as

valuing ethical products than realized sales. For this reason, interviewing people isn't enough to

attest if they have a positive attitude towards products that are identified as ethical, or if they are

willing to buy those, despite the often financial trade-off.1

Alternative hypothesis and context

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#psychologicalExplanation: I analyzed the different factors that influence someone’s buying behavior and the
inconsistencies that might result from it: the financial incentives in one hand, and the desire to live a life consistent
with their personal values in the other.
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In 2019 there were over 83,482,000 families in the US, almost 34 million of those

families have kids under the age of 18 living with them (Statista, 2020). We can see that the

parent segment is far from a small one. Therefore, understanding their behavior is essential for

businesses to continue to serve families' needs and guarantee profits. The ethical products market

is also growing; 46% of Europeans report a willingness to pay more for ethical products (Mori,

2000 as cited in De Pelsmacker, Driesen, & Rayp, 2005). To make the study's scope narrower

and suggest specific strategies for raising revenues, we will focus on one aspect of ethical

products: fair trade. Fairtrade can be described as work partnerships aiming to help

disadvantaged producers sell their products within appropriate price standards (Fairtrade

Foundation, 2020). To understand the impact fair-trade labels have on parents choices, we will

run a few different studies that investigate the following general hypotheses:

● H0: Parents will not pay more for fair trade products, confirming the attitude/behavior

gap.

● H1: Parents are willing to pay more for fair trade products given their desire to teach their

children the optimal ethical views.

Study Design

Sampling

The study will use a mix of convenient sampling and cluster sampling to avoid bias and

represent the population. We will post a call for families to participate in a study about

supermarkets, offering payment for participation in local neighborhood groups. Once applicants

have sent in their application, we will create pools of applicants representing each neighborhood,
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taking into consideration factors such as their average income and selecting participants at

random.2

Study

To determine if families with kids are willing to pay more for ethical consumption, we

will expose them to a buying situation. Families will be told that the study will happen in two

encounters in a community partner supermarket. Half of the participants will be instructed to

bring their children along with them in the first meeting; half will be instructed to do so in the

second part. To avoid participant bias, we will tell families that we will analyze the impact of

different layouts on customers' choices.3

Upon arrival, families will answer a questionnaire about their buying habits. The

questionnaire will allow us to assess if they know what ethical buying is and their attitude

towards fair-trade products. After the questionnaire, they will be taken to the rice section of the

supermarket. There, the participants will be asked to choose one pack of rice. They will have ten

different options, five of them containing a 10cm fair-trade label. The five fair-trade options will

start at 50 cents more expensive than conventional rice and incrementally increase the price.

We will be able to measure parent's attitude towards ethical consumption with the

questionnaire. The actual behavior towards fair-trade will be measured by the amount of money a

parent is willing to spend in fair-trade rice. Lastly, we will measure if it makes a difference to

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#sampling: I critiqued the original sampling method, and proposed a combination of two sampling methods that
combined can help mitigate a bias sample. I also took into consideration randomization and population
representation for the purpose of generalizing the results.

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#researchStrategy
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have their children with them by comparing which rice they chose (fair-trade, non-fair trade)

alone versus accompanied by the children.4

Expected Results and strategic implications

If parents choose conventional rice, we cannot reject the null hypothesis, and therefore

their attitude towards ethical consumption doesn't translate into action. This would mean that the

fair trade label doesn't implicate better sales. Thus, market strategist should focus on lowering

the cost of fair-trade products rather than advertising them.

If parents with children buy more fair-trade products than parents alone, this informs

market strategists that they should focus on making fair-trade packages and labels more

children-friendly. To increase parents' awareness that their children will pay attention and

understand the difference between conventional and ethically produced ones, marketers can use

bright colors, pictures, and drawings that focus on the farmers' work and use simple language in

the labels and packaging. Marketers can also capitalize on the inheritance factor by making ads

that focus on the importance of teaching good values to their children through ethical

consumption.56

Based on how much parents are willing to pay for fair-trade rice, market strategists can

calculate the fair-trade label's value and therefore understand how much marketing resources

they should allocate to advertising fair-trade products.

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#ConsumerBehavior
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#CustomerCentricity
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#CognitivePersuasion: I used elements of the Elaboration Likelihood Model to persuade parents. We can assume
that the package targeting kids, will actually influence parents by relying on their commitment to teaching good
principles to their children.
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Words: 928
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References

Carey, L., Shaw, D., & Shiu, E. (2008). The impact of ethical concerns on family consumer

decision-making. International Journal of Consumer Studies, 32(5), 553-560.

De Pelsmacker, P., Driesen, L., & Rayp, G. (2005). Do consumers care about ethics? Willingness

to pay for fair-trade coffee. Journal of consumer affairs, 39(2), 363-385.

Fairtrade Foundation. (2020). WHAT FAIRTRADE DOES.

https://www.fairtrade.org.uk/what-is-fairtrade/what-fairtrade-does/

Smithers, R. (2009). Ethical sales triple over decade, says Co-operative Bank. The Guardian.

https://www.theguardian.com/business/2009/dec/30/co-operative-bank-ethical-sales-triple-re

port

Statista. (2020). Number of families in the United States by number of children under 18 living

in the household from 2000 to 2019.

https://www.statista.com/statistics/183790/number-of-families-in-the-us-by-number-of-childr

en/