Segmenting the market through the determinants of involvement: The case of fair trade

The fair trade market includes several types of actors, ranging from world shops to supermarkets, and from restaurants to clothing stores, involving a heterogeneous clientele. An analysis of fair trade consumers must be sufficiently granular to capture their different expectations, attitudes, and motivations; hence the need to segment the market. Through the concept of involvement, the objective of this research is to analyze and compare by segments the determinants of behavior of fair trade consumers. The research consists of three phases: segment identification, behavioral analysis by segment, and synthesis of the managerial implications. Two out of four hypothesized criteria prove to be effective in segmenting the fair trade market, namely age and distribution channel preference (whereas gender and education are not significant criteria). The analysis shows that the drivers of the involvement in the decision to buy fair trade products vary by segment. Thus, the article concludes with the development of communication axes that can trigger or strengthen the desired behaviors in each segment. It provides fair trade marketers with an efficient communication content that can be used for fair trade advertising, product packaging, branding, or merchandising. © 2011 Wiley Periodicals, Inc.     

Through Thick and Thin: How Fair Trade Consumers Have Reacted to the Global Economic Recession

Research on fair trade has flourished over the past decade as fair trade food products have gained popularity amongst consumers in many developed economies. This study examines the effects of recessionary economic conditions on fair trade consumers’ purchasing behaviour. An online survey was administered to 306 fair trade consumers from Canada, the United Kingdom and the United States of America. The results reveal a discrepancy among fair trade consumers as only consumers that purchase fair trade on an occasional basis adhered to established consumer behaviour norms, i.e. decreasing their purchases of fair trade products and becoming significantly more price aware. Respondents who actively consume fair trade generally remained loyal to their purchase. While some active consumers altered their purchasing behaviour, this phenomenon was not common amongst this group as no statistically significant changes were observed. Differences were also noted among the three countries as the Canadian and US fair trade consumers significantly decreased their consumption of fair trade as a result of the recession, whereas the UK consumers did not. In addition to the research results, theoretical and managerial implications will be discussed along with future research directions.     

Evaluating fair trade consumption: politics,defetishization and producer participation

This paper combines a critical review of the scholarly literature on fair trade with an analysis of data gathered during 19 months of ethnographic research conducted between 2001 and 2003 among the members of a Guatemalan fair trade coffee co‐operative and fair trade coffee roasters and advocates in the US. It explores three common claims made about fair trade consumption that: first, fair trade consumption emerges from the political choices and conscious reflexivity of Northern consumers; second, it defetishizes coffee by revealing the social and environmental conditions of the coffee production; and third, it forges equitable trade relationships between producers and consumers. While the research results demonstrate that there is some validity to each of the three claims, they also highlight two negative trends: the reinforcement of producer–consumer differences and low levels of farmer participation in fair trade networks beyond the realm of commodity production. In conclusion, the paper argues that overstating the exceptional nature of fair trade consumption weakens the market’s transformative potential. In order to nurture equitable trade partnerships fair trade must expand to accommodate a substantially higher degree of producer participation in administrative decision making and goal setting.     

An assessment of ethical obligation and self‐identity in ethical consumer decision‐making: a structural equation modelling approach

Research has supported the addition of ethical obligation and self‐identity to models of consumer decision‐making in ‘ethical’ contexts. The particular placement of ethical obligation and self‐identity within a model of ethical consumer decision‐making remains unclear. Are these measures an antecedent to attitude or behavioural intention? This paper presents findings from a large scale survey of ethical consumers that explores, through structural equation modelling, the specific placement of these measures within a validated model of ethical consumer decision‐making, which uses the theory of planned behaviour as an initial framework. This research is examined within the ‘ethical’ context of fair trade grocery purchasing. (Fairly traded products are those purchased under equitable trading agreements, involving co‐operative rather than competitive trading principles, ensuring a fair price and fair working conditions for the producers and suppliers.)     

Fair trade new product development

Recently, there has been a significant increase in the market for fair trade products. However, there is a discrepancy between the stated purchase intention of consumers and their actual purchase behaviour with respect to fair trade. This article takes an operational and strategic view of this issue and argues that one significant reason for this lies in the limited range of fair trade products currently available. Next, a strategic framework for fair trade new product development is presented and explored. Finally, key operational criteria for fair trade product selection are discussed using a case study example to support the conclusions.     

Applying neutralization theory to fair trade buying behaviour

More and more consumers are willing to pay a premium for fair trade products. However, great potential remains as the market shares of these products are still low. In the present study, neutralization theory was applied to investigate the reasons for consumers hesitating to buy more fair trade products. A postal paper‐and‐pencil survey was sent out using random addresses from the telephone book in the German‐speaking part of Switzerland, resulting in a final sample size of n = 620. The results show that the techniques of neutralization are used to various degrees. A principal component analysis resulted in two strategies of neutralization: an internal strategy (focusing on the consumers themselves) and an external strategy (focusing on the farmers in developing countries). A regression analysis proved that the internal neutralization strategy was an important predictor for fair trade buying behaviour, even when controlling for attitudes towards fair trade.     

Fair trade and global cognitive orientation: a focus on Spanish fair trade consumers

In the past few years, there has been an increase in the ‘ethical consumer’, characterized by more reflexive values like solidarity, social responsibility, multiculturalism and ecology. This idea has found support in the appearance and development of proposals like fair trade, along with others, such as responsible consumption, the recycling business or sustainable development. In a parallel way, also during the past few years, various analysts have pointed out that the phenomenon of globalization is changing not only the aspect of the world but also our way of perceiving it, which is progressively becoming a ‘global orientation’. In the framework of these two tendencies, this paper examines the extent to which ‘global orientation’ is also a characteristic of consumers of fair trade products. The paper presents a two‐phase exploratory study. The first phase, of a quantitative nature, showed the greater global orientation of Spanish consumers of fair trade products, and it obtained a typology of them. This typology showed, however, that not all the clusters of consumers of fair trade products have a high global orientation, which reveals that the relationship between this dimension and the consumption of fair trade products is not a direct, straightforward one. The subsequent qualitative study examined the components of this global orientation in each of the three clusters where the consumption of fair trade products was the highest. The results showed that the purchase of fair trade products is influenced by the ‘global orientation’ of the consumer, although other factors, such as a sense of social responsibility and trust in international non‐governmental organizations, can condition this influence.     

The Role of Personal Values in Fair Trade Consumption

Research in the U.S. on fair trade consumption is sparse. Therefore, little is known as to what motivates U.S. consumers to buy fair trade products. This study sought to determine which values are salient to American fair trade consumption. The data were gathered via a Web-based version of the Schwartz Value Survey (SVS) and were gleaned from actual consumers who purchase fair trade products from a range of Internet-based fair trade retailers. This study established that indeed there are significant interactions between personal values and fair trade consumption and that demographics proved to be useless in creating a profile of the American fair trade consumer.     

Why does not everybody purchase fair trade products? The question of the fairness of fair trade products' consumption for consumers1

Current statistics show that more than three out of four people in France have heard about fair trade. However, fair trade goods are purchased in significantly higher proportions by executive class people, individuals with a postgraduate education, urban dwellers and high‐income earners. Why does not everybody purchase fair trade products? An important question follows: is fair trade not really fair for consumers? This paper seeks to gain deeper insight into what social features give rise to the consumption of fair trade goods using quantitative and qualitative data to verify the reasons for which fair trade goods are consumed by particular groups in society. It shows that the lack of access to information and financial resources can explain consumers' refusal to purchase fair trade products. But this explanation is incomplete, as the meaning given by consumers to their consumption appears to be a key‐factor to understand their behaviour: refusing to buy fair trade goods can be a deliberate choice.     

The relationship between in-store marketing and observed sales for organic versus fair trade products

To stimulate sales of sustainable products, such as organic and fair trade products, retailers need to know whether their in-store instruments effectively enhance market shares. This study uses sales data and a multilevel modeling approach to explain the market shares of sustainable products according to shelf layout factors, price level, price promotions, and consumer demographics. It argues that the effect of these variables differs between organic versus fair trade products, as buying motives might differ, organic buyers tend to be more loyal, and price is a more informative signal of quality for organic products. Results show that the number of facings has a positive relationship with the market share of fair trade brands, but not with the market share of organic brands. The same holds for the price difference with the leading brand, which is important for fair trade brands but not for organic brands. In contrast, an arrangement of the product category by brand is associated with higher market share for organic brands but not for fair trade brands. Additionally, placement at eye level and clustering of items benefits both types of sustainable brands, whereas they appear to be not very sensitive to price promotions. Finally, higher sales of sustainable products are found in areas where the customer base is older and has a higher education level.     

The political motivations of ethical consumers

Consumer‐driven labelling schemes such as Fairtrade and the Forest Stewardship Council, are based upon several assumptions of consumer decision making and behaviour. This study aimed to test the validity of some of these assumptions, including the belief that consumers are acting ‘on behalf’ of workers and communities in economically developing countries by supporting fair and ethical trade. It examines the political motivations underlying ethical consumption, such as its relationship to other forms of political activism, reasons behind high purchase frequency and how existing values interact with consumption choices. Drawing upon the results of a series of six focus groups with 58 participants and a nationally representative panel‐based survey of 1014 Australian consumers, this paper argues that many of the factors involved in consumer decision making are inconsistent with the assumptions made by private economic governance schemes in attempting to harness consumer power, calling into question the effectiveness and legitimacy of such schemes. However, by tailoring the marketing strategies to different types of consumers, along with suppliers and retailers, these schemes can potentially increase their effectiveness.     

An Exploration of Opportunities for the Growth of the Fair Trade Market: Three Cases of Craft Organisations

Businesses that maintain ethical standards have an advantage in the marketplace based on the increasing interest of consumers in products that have a social and ethical component. Fair trade organisations that adopt environmental, social and ethical principles in trading are in a good position to make the most of this growing interest in the market. However, it is unclear whether fair trade organisations are taking full advantage of emerging market opportunities for ethically traded products. This research explores this issue by describing the business strategies of three fair trade organisations that import and sell craft goods into Western countries and evaluates them in the context of this growing market. The research findings indicate that in order to remain in business, fair trade craft organisations have had to adopt better business practices in recent years, improving quality, customer service and product offerings to customers. However, growth appears to be limited, as distribution remains focused on a small, niche market. This paper explores the distribution strategies of two fair trade commodity organisations that are successfully reaching a wider customer base, demonstrating that fair trade products have a unique selling advantage in the mainstream marketplace. In conclusion, fair trade craft organisations are not exploiting this market opportunity to the degree they should and will need to explore wider distribution and alternative business strategies to expand their market share.Debora Randall completed her Masters of Management at Massey University, in Auckland, New Zealand. She is currently using her interests in business and community development to work towards practical economic solutions to poverty. She is living in Vancouver, Canada where she is working on a number of community economic development initiatives.     

Fair Trade Consumption: In Support of the Out-Group

Two sets of self-transcendence values – universalism and benevolence – act as a source of motivation for the promotion of the welfare of the other rather than the self. This article sought to determine the exact nature of the interaction between these sets of values and the consumption of fair trade products. In an earlier study, universalism values were found to have a significant influence on fair trade consumption whereas benevolence values did not, despite their shared goal and values theory. Additionally, there was supporting evidence in the extant literature that benevolence values should influence fair trade consumption behavior. This study took a closer look at the individual values that make up the value categories universalism and benevolence to better understand and describe this universalism–benevolence distinction in fair trade consumption. It was established that perhaps group membership has an influence on the decision to buy fair trade products. Specifically, it seems that an overriding sense of responsibility to one’s own group – the in-group – prevents some consumers from identifying with, empathizing with, and subsequently sharing resources with fair trade producers; members of out-groups in far-flung corners of the globe. It appears that the universalism–benevolence distinction in fair trade consumption might also be described as an in-group–out-group distinction.     

ἐμπάθɛια (Empatheia) and Caritas: The Role of Religion in Fair Trade Consumption

There is much still to learn about the nature of fair trade consumers. In light of the Pope’s encyclical Caritas in Veritate, this article sought to advance the current understanding by investigating the role of religion in fair trade consumption. In this study, fair trade consumers and non-consumers across many religions as well as the non-religious described their consumption of fair trade products as well as the use of their religious beliefs in their purchase behavior. It appears that the non-religious are slightly more inclined toward buying fair trade products. Of the religious observers studied, Buddhists have a greater propensity to buy fair trade. The relationship between religion and fair trade consumption is complex in that religious affiliation – group membership – alone is not enough to encourage members to buy fair trade; rather, it is the use of religious beliefs as a criterion in consumption behavior that linked religion to fair trade consumption.     

Understanding consumption behaviours for fair trade non‐food products: focusing on self‐transcendence and openness to change values

Using the Schwartz value system, this study explored the personal values of consumers related to fair trade product consumption. This study further investigated how the values determine beliefs, attitudes and purchase intentions associated with fair trade non‐food products. Data were collected using an online survey from a random sample of 1824 nationwide consumers. The results of this study revealed that fair trade purchasers show a higher level of self‐transcendence (universalism, benevolence) and openness to change values (self‐direction, stimulation) than non‐purchasers. These values also have positive effects on the formation of beliefs, attitudes and purchase intentions pertaining to fair trade non‐food products. Fair trade purchasers were also found to possess distinctive socio‐demographic characteristics concerning age, education and income. Findings can offer marketers specific information regarding consumers' motivations to purchase fair trade goods, which can improve targeting of products and ultimately increase the business and benefits of fair trade.     

The role of positive emotions in experiential decisions

This research examines how consumers experience decision making for experiential products such as vacations. We combine data from 1) ethnographic interviews, 2) online community discussion forums, and 3) an introspective vacation-planning task to explore the experience of emotion in the decision process and to develop a new model of decision making that extends extant decision theories. We find that consumers experience a variety of positive emotions as they plan vacations, from facilitative feelings that guide the plan to fantasy feelings consumed for pleasure. Positive emotions are most evident in reaction to imagery and when the consumer's self identity is salient, and often precede more analytic information processing. Overall, this research offers a richer understanding of the emotional nature of consumer decision making for experiential products and services.     

Shopping for Human Rights. An Introduction to the Special Issue

Globalization, free trade, and individualization have opened up a worldwide marketplace for trading goods. The fair trade movement and other political consumerist endeavours view consumers as important active holders of responsibility for global welfare. Civil society and governments strive to teach consumers how political consumerism can be used as a push factor to change market capitalism. The market itself can also create an interest in political consumerism and, thereby, teach consumers about the political responsibility embedded in their shopping choices. When this happens, the market works as a pull factor for securing human rights. Questions can be raised about the significance of political consumers as a way to solve complex global problems. Political consumerism may be a fair-weather option that loses its attractiveness in times of downward private and corporate economic spirals. Parts of the fair trade movement believe that there are problems with sole reliance on voluntary consumer choice and using personal money and private capital to solve human rights problems by shopping them away. The exponential growth of voluntary codes of corporate conduct and labelling schemes has also created contradictory practices, incoherence in efforts, and superficial changes or what activists call “sweatwash.” Increasingly, many actors call on international law to create new standards that apply direct human rights obligations on corporations.     

Effects of Lightness‐Location Congruency on Consumers’ Purchase Decision‐Making

A considerable body of psychological and neuroscientific research has demonstrated the existence of robust sensory correspondences between various features, attributes, or dimensions of experience in different sensory modalities. Despite findings indicating the importance of sensory correspondences to human information processing, research on purchase decision‐making has not to date focused sufficiently on this phenomenon. The present study examines how the lightness of packaging colors, and the location of products on a display shelf interact to affect consumers’ purchase decision‐making via perceived visual heaviness. As predicted, a display with light (dark) colored products positioned in the upper (lower) shelf positions increases shoppers’ perceptual fluency and facilitates their visual search, thus leading to the suggestion that “light” (heavy) locations are most appropriate for light (dark) colored products. Moreover, the lightness‐location congruent display is shown to influence people's choice behavior positively as well. This research also demonstrates that when consumers consider the lightness (in terms of their weight) of the products, they are more likely to choose light (vs. dark) colored products located in the upper shelf positions. These results therefore demonstrate that consumers’ purchase decision‐making may be promoted by in‐store environments designed to be congruent with their sensory correspondences.     

Independent Financial Advisers – Why They Remain the Strongest Distribution Route for Pensions

Despite financial services companies operating in multiple channels, the Independent Financial Advisers (IFAs) channel remains the most popular distribution route when it comes to pension sales. To understand how they compete and the nature of the strategic groups within this channel, this paper examines how IFAs perceive they add value to the decision making of consumers when purchasing pension products. The paper identifies four strategic groups of the IFA population (operating within the pensions market) based on the benefits they perceive they can add to their service to assist consumer decision making. Using cluster analysis within SPSS from a survey of 468 IFAs, four main groups emerge; these can be classified in terms of (1) analytical skills, (2) value for money, (3) reputation and (4) personalised service.     

Opening the black box of entrepreneurship: The Italian case in a historical perspective

This paper critically examines the discourse surrounding fair trade mainstreaming, and discusses the potential avenues for the future of the social movement. The authors have a unique insight into the fair trade market having a combined experience of over 30 years in practice and 15 as fair trade scholars. The paper highlights a number of benefits of mainstreaming, not least the continued growth of the global fair trade market (tipped to top $7bn in 2012). However, the paper also highlights the negative consequences of mainstreaming on the long-term viability of fair trade as a credible ethical standard.