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Why ethical orientation is important in influencing usage of locally made products
Dr. Ahmad Walugembe
What you need to know:
The United Nations Sustainable Development Goal emphasises industrial innovation and infrastructural development which fit into local production and growth of local industries for sustainable development
Buying locally manufactured products is hyped as one of the best ways for supporting local communities and promoting national development since it supports families, creates, and retains valuable job opportunities. The “Buying and consuming local philosophy”, reduces the transportation costs associated with goods, depending on imported goods, creates demand for local industries, diminishes unemployment, stimulates economic activities, and ultimately increases the national Gross Domestic Product (GDP) of a country. Usually, local products have implications for the achievement of sustainable development goals (SDGs). In fact, the coronavirus pandemic has reawakened the importance of buying locally manufactured products, and this points to the need for increased government support for local manufacturers.
The United Nations Sustainable Development Goal emphasises industrial innovation and infrastructural development which fit into local production and growth of local industries for sustainable development. However, this growth can be easily achieved only if there is an acceleration in the purchase and usage of local products by indigenous people in a country. Research suggests that in Sub-Saharan Africa there is a higher rate of usage of foreign products which eventually has increased their dependence rate on developed countries. This trend continues to affect a number of industries and products produced in Sub-Saharan countries including Uganda.
Despite being listed among the most innovative and entrepreneurial countries in the world, Uganda has a higher rate of new product failure which has resulted in business failure and ultimately loss of jobs (World Bank, 2011). In Uganda, there is a higher rate of usage of foreign products than locally made products (Global Innovation Index, 2015). This has driven the initiation of a number of government policies, Bills, and Acts to address this challenge; among them is the Buy Uganda Build Uganda (BUBU) policy (2014) and the Local Content Act (2019). However, these are yet to yield the desired results.
It is important to note that perception remains one of the critical drivers of consumer usage, especially for foreign products as opposed to local products. This is because customers perceive and associate products from developed countries with a strong brand image and quality that raises their status in comparison with products from developing countries. A case in point, China has dominated the Sub-Saharan African markets with consumers opting to buy Chinese products despite being questionable in quality instead of locally made products with better quality. Other studies have advanced pricing as a major determinant of consumer usage in the case of China while others have focused on behavioural and physiological values of consumers. In this submission, emphasis is on the ethical orientation of firms which has contributed to accelerating usage of locally made products in Uganda.
This study advances the view that ethically oriented firms can easily influence the usage of their products. This is premised on the view that ethically oriented firms believe and practice the values of honesty, fair play, and full disclosure in their manufacturing processes, distribution channels, and actual sale of their goods and services. Practicing such values perhaps strengthens the relationship between the firm and its customers because the firm will be seen to exist for the benefit of the customers. This kind of relationship is what is required between local manufacturing firms and their customers. More so being ethically oriented may also mean conformity to the manufacturing procedures and standards. In Uganda and many Sub-Saharan African countries, there exist standards and regulations related to the production of goods and services. However, the rate at which these standards are adhered to is very low. This may partly explain the low usage of locally made products in these countries. Jain (2020) indicated that business practices that conform to a specified set of rules within the industry have higher chances of creating more acceptability in that industry. This implies that manufacturing firms whose products provide a greater level of good after usage corresponds with the need for long-term performance of goods and services, communication, and delivery value to customers which can easily accelerate usage of their products and services.
Additionally, the ethical orientation of firms is further emphasised in the debate on increasing consumption of locally made products because it determines the choice of the marketing strategy. Research indicates that ethical marketing orientation provides standards that marketing managers are expected to use in order to help them develop, implement and monitor their strategies. This is because it facilitates the implementation of marketing principles within the boundaries and expectations of the general public, government legislators, and competitors. A great number of studies have proved that firms that tend to uphold the principles of justice and ethical uprightness in the implementation of their marketing strategies tend to drive sustainable consumption of their goods and services. In the same regard, ethical marketing practices provide a conduit through which firms communicate their ethical culture to consumers and this stimulates demand and builds a more reliable brand image for the firm. In the Ugandan context, local firms that have built their brand on decent marketing practices have succeeded in winning customers compared to their counterparts. This article advances the need for strengthening ethical practices among manufacturing firms in Uganda. This, therefore, creates the need for proper supervision of manufacturing and marketing processes in general. Such practices enable compliance with production standards, distribution channels, promotion, and pricing regulations as set by the industry. In the long run, this stimulates the acceptability of locally made products in the country and the possibility of ultimately accelerating usage.
This article is an extract of the study conducted by Dr. Ahmad Walugembe a Senior Lecturer, Makerere University Business School
