Does it matter to have an ethical brand? : A qualitative study of millennials perspective on unethical marketing activities within the soft drink industry

Abstract: Background Brand loyalty has been studied by a large number of scholars over the past few decades, including its impact on consumer purchase behavior and as a core concept when creating brand value. Having ethical business practice helps retain customers trust and enforce their loyalty to the brand. However, brand’s unethical behavior has always been a topic discussed by society, especially for the soft drinks industry. Problem Previous research has shown that there is a link between brand loyalty, brand trust and brand attachment. It has also been implied that consumers with high commitment to a brand might justify a brands unethical behavior. However, there is a lack of research within the field of brand loyalty and ethical business practices within the beverage industry. Purpose The purpose of this study is to understand how millennials with different levels of brand loyalty respond to unethical marketing activities to soft drink brands within the beverage industry. Furthermore, this research would like to give an insight to whether consumers care about ethical brands within this industry or not. Additionally, this study can help brands in the beverage industry to build their marketing strategies and maintain their consumer relationship. Method This study used a qualitative research method, where 15 semi-structured interviews were conducted with a purposive sampling method, with millennials as research objects. Additionally, the brand Pepsi has been used as a case to measure the participants brand loyalty in order to classify them to one of the three levels of loyalty in the conceptual framework.  Conclusion The results show that the more loyal consumers are towards brands, the less impact the brand’s unethical behavior has on them. For consumers with low loyalty, the chances of turning to alternatives when brands have ethical issues are greater. Whereas consumers who are on the Satisfied level have a neutral opinion towards the brand when it comes to unethical issues. While, consumers with high brand loyalty may ignore the brand's unethical behavior because of their loyalty and love for the brand. Brand image, product quality, product safety, environmental footprint and how brands handle the unethical issues have been identified as important factors when consumers make the purchasing decision.