Do Consumers Care about Ethics? Willingness to Pay for Fair‐Trade Coffee

Consumers’ buying behavior is not consistent with their positive attitude toward ethical products. In a survey of 808 Belgian respondents, the actual willingness to pay for fair‐trade coffee was measured. It was found that the average price premium that the consumers were willing to pay for a fair‐trade label was 10%. Ten percent of the sample was prepared to pay the current price premium of 27% in Belgium. Fair‐trade lovers (11%) were more idealistic, aged between 31 and 44 years and less “conventional.” Fair‐trade likers (40%) were more idealistic but sociodemographically not significantly different from the average consumer.     

Pay‐for‐Performance,Employee Participation,and SME Performance

This study examines how pay‐for‐performance (PFP) systems affect the performance of small‐ and medium‐sized enterprises (SMEs). We decompose PFP into two dimensions: scope and depth. PFP scope captures the variety of performance measures and reward types included in a firm's PFP system, and PFP depth reflects the relative amount of performance‐based pay compared with total pay. We posit that PFP scope has a positive whereas PFP depth has an inverted U‐shaped effect on employee participation, which in turn enhances SME performance. Analysis of data collected at both employee and firm levels of 444 SMEs during 1999–2006 supported these hypotheses.     

Measuring consumer's willingness to pay for organic and Fair Trade products

Previous research has extensively studied consumer's environmental and social concerns. However, measuring the value of the environmental or social dimension of a product remains a challenge. This paper proposes to partially fill this gap by measuring the double ‘Fair Trade and organic’ labels' value using an experimental method – the Becker‐DeGroot‐Marschak's mechanism. Two ‘organic and Fair Trade’ and two conventional chocolate products were tested on a sample of 102 consumers. Results show that organic and Fair Trade labels increase consumers' willingness to pay, and allow the identification of three consumers clusters. The first cluster represents people insensitive to the label. For the second cluster, the ‘organic and Fair Trade’ labels' influence on the improving image of the products is positive and important. And finally, for the third cluster, the valuation of the ‘organic and Fair Trade’ label is determined by the product's taste. Our research contributes to a better understanding of consumers' valuation of Fair Trade and organic labels, leading to our conclusions, which offer managerial implications with respect to this market (importance of taste and usefulness of double labels).     

For Love or Money? Fairtrade Business Models in the UK Supermarket Sector

This article analyzes the distribution of benefits from Fair Trade between producing and consuming countries. Fair Trade and conventional coffee production and trade were examined in Nicaragua in 2005–2006 and 2008. Consumption of the respective coffees was assessed in Finland in 2006–2009. The results indicate that consumers paid considerably more for Fair Trade-certified coffee than for the other alternatives available. Although Fair Trade provided price premiums to producer organizations, a larger share of the retail prices remained in the consuming country relative to conventional coffee trade. Paradoxically, along with the certified farmers and cooperatives, Fair Trade empowers roasters and retailers.     

A Cross-National Investigation on How Ethical Consumers Build Loyalty Toward Fair Trade Brands

Although Fair Trade has recently experienced rapid growth around the world, there is lack of consumer research that investigates what determines consumers’ loyalty toward Fair Trade brands. In this research, we investigate how ethical consumption values (ECV) and two mediating variables, Fair Trade product beliefs (FTPB) and Fair Trade corporate evaluation, (FTCE) determine Fair Trade brand loyalty (FTBL). On the basis of two empirical studies that use samples from the U.S. and Korea, we provide evidence demonstrating that the manner in which ECV influence FTBL differs in the U.S. and Korea. In the U.S., ECV determine FTBL only indirectly via FTPB, whereas in Korea they determine FTBL directly as well as indirectly via FTCE. We discuss theoretical and managerial implications of these findings.     

Alliances Between Corporate and Fair Trade Brands: Examining the Antecedents of Overall Evaluation of the Co-branded Product

This research investigates the potential for a “fair” co-branding operation. A major corporate brand is fictitiously allied with a Fair Trade labelling organization brand. The sample for the study is composed of 540 respondents, representative of the French population. By considering commercial brands and Fair Trade labels as dissimilar in terms of customers’ perceived Fair Trade orientations, this article studies (1) how this lack of similarity impacts perceived congruence between both entities (i.e. perceived relevancy and expectancy of the alliance) and (2) how prior brand attitudes and congruence influence customers’ evaluation of the co-branded product. The results of this research demonstrate that: (1) Consumer prior brand attitudes toward the partner brands influence very little customers’ evaluation. (2) Perceived similarity of the partner brands has a strong influence toward congruence of the co-branding operation. Results also indicate that congruence (measured as relevancy and expectancy) has a strong influence upon customers’ evaluation. (3) An inverted U-shaped relationship exists between perceived similarity and relevancy of the alliance, and between expectancy and customers’ evaluation. The results obtained through the test of a partial least square model, and inverted U-shaped hypothesis, represent a new insight into co-branding theory. The high discursive power of fair co-branding is a key issue: the corporate brand provides the alliance with its leading position, while the Fair Trade brand provides the ethical attribute.     

Perceived Marketplace Influence and Consumer Ethical Action

The present work presents two studies exploring the impact of perceived marketplace influence (PMI) on consumer decisions to engage in ethical marketplace action. Study 1 shows that PMI is associated with positive (negative) word‐of‐mouth in response to the ethical (unethical) actions of an organization. Study 2 shows that PMI is associated with the purchase of and willingness to pay for ethical products Fair Trade and philanthropy‐linked ethical products. Differences emerge between the two dimensions of PMI (PMI Consumer and PMI Organization) based on the hedonic or utilitarian features of the products. Results also show autonomous motivation to mediate the relationship between PMI and ethical intentions. We conclude with discussion of the implications of PMI for policy and consumer well‐being.     

Comparing stated and realized preferences for shade‐grown vs. conventionally grown coffee

We used both stated preference and revealed preference data to estimate willingness to pay (WTP) for shade‐grown coffee as compared with conventionally grown coffee. Stated preference data was collected using contingent valuation studies. Revealed preference data came from an experiment where all survey participants received a personally identifiable voucher redeemable for a free bakery item when the holder purchased a coffee. We compared estimates of mean and median WTP a price premium for shade‐grown coffee from stated preference data with similar estimates from revealed preference data. We used a logit model to evaluate the effect of explanatory variables (measures of environmental attitudes, personal norms for pro‐environmental behaviour and demographic variables) on respondents’ WTP a price premium for shade grown coffee. Model parameters were estimated using the maximum likelihood approach. Respondents with higher scores on measures of environmental attitudes and personal norms for pro‐environmental behaviour were, on average, willing to pay more for shade‐grown coffee. While this paper examined a specific case, purchase of shade‐grown coffee, our results confirmed that stated environmental concern was a good predictor of pro‐environmental behaviour. We found that mean and median WTP estimates from stated preference methods were higher, but not significantly different than mean and median WTP estimates from actual purchases, indicating convergent validity between stated and realized preference methods. The majority of individuals both stated WTP a price premium and purchased shade‐grown coffee at a price premium. We did, however notice some interesting behaviour at the individual level where stated preferences under‐predicted realized preferences at low price‐premia and over‐predicted realized preferences at high price premia.     

What organic and Fair Trade labels do not tell us: towards a place‐based understanding of certification

Certified organic and Fair Trade food products are making their way into the mainstream among Western consumers and, as such, are increasingly viewed as sustainable and preferable alternatives to the conventional food system, with its many negative social and environmental externalities. Two case studies discussed in this paper indicate, however, that operationalizing the goals for organic and Fair Trade food via certification can be a complex and difficult process. Specifically, the implementation of certification creates a disconnect between expectations raised by labels and the ‘lived experience’ of small farmers. In the case of small farmers in Mexico growing certified organic tomatoes and herbs, certification exacerbated socio‐economic inequality and disrupted local social norms by creating a hyperfocus on surveillance. In the case of small farmers in the Dominican Republic growing Fair Trade bananas, the certification process prioritized the demands of the market to such a degree that the farmers were largely unaware that they were participating in anything ‘alternative’, and it simultaneously reinforced socio‐economic inequalities within the communities. These findings suggest that if the appeal of certified labels rests on the integrity of what the label represents to consumers, then such consumer movements would benefit from a more robust analysis of how certification intersects with and affects local spaces, cultures and communities at the point of production.     

The effect of firm scale and CSR geographical scope of impact on consumers' response

The role of corporate social responsibility (CSR) in shaping consumer perception and attitude has received many attentions both in the academia and practitioner world. While this domain has invited numerous research, but research highlighting how consumers react toward learning the size of a firm conducting CSR and geographical scope of the CSR impact is still scarce. We investigate how consumers shape their attitude and consumption behavior after knowing that the CSR action is done by a small, locally-owned business that brings impact to the local community through an experimental study. Our study adds a shade in understanding how the effect of a firm size and geographical scope of CSR impact might increase consumers' favorable attitude and behavior toward the business and its products. Our findings show that when consumers learn that the firm conducting CSR is a small, locally-owned (in coffee shop business) that directs its action toward local beneficiaries, they demonstrate more favorable attitudes toward the action and the firm, which manifest in the form of better intentions to acquire the product as well as willingness to pay premium prices for it. Our findings confirm the US consumers' love affair with local businesses, in particular. While the findings generally benefit small, locally-owned businesses, they also suggest recommendations for large, multinational businesses to design their marketing strategy in an attempt to increase favorable reactions from consumers.     

Fair Trade and the consumer interest: a personal account

Abject poverty and rampant consumerism are twin ills of global capitalism. This short paper serves to encourage discussion on the role of Fair Trade in healing those ills. After describing the benefits of Fair Trade for producers, a paradox concerning the joys and blights of contemporary consumption is presented. Drawing on an autoethnographic method, the author indicates how Fair Trade resolves this paradox in the consumer interest.     

Research on Fair Trade Consumption—A Review

An overview and assessment of the current state of research on individual consumption of Fair Trade (FT) products is given on the basis of 51 journal publications. Arranging this field of ethical consumption research according to key research objectives, theoretical approaches, methods, and study population, the review suggests that most studies apply social psychological approaches focusing mainly on consumer attitudes. Fewer studies draw on economic approaches focusing on consumers’ willingness to pay ethical premia for FT products or sociological approaches relying on the concept of consumer identity. Experimental, qualitative and conventional survey methods are used approximately equally often. Almost all studies draw on convenience or purposive samples and most studies are conducted in the USA or the United Kingdom. Several problems in current research are identified: amongst others, studies’ rather narrow theoretical focus, potential hypothetical and social desirability bias of conventional survey data, and a lack of generalizability of empirical findings. In turn, we suggest that research would benefit from both a multiple-motives and a multiple-methods perspective. Considering competing theories can help to single out key behavioral determinants of individual FT consumption. The combination of different methods such as conventional surveys and field experiments contributes to uncovering respondents’ truthful answers and improves generalizability of results. Scholars in the field of ethical consumption research should use experiments to detect causal relations proposed by theories and conduct cross-country surveys to gather insights as to how differences in market structures, cultural traits, and other path dependencies affect patterns of individual FT consumption.     

Criteria for Responsible Business Practice in SMEs: An Exploratory Case of U.K. Fair Trade Organisations

This paper develops a set of 16 criteria, divided into four groupings, for responsible business practice (RBP) in Small and Medium-Sized Enterprises (SMEs) drawn from the existing SME/RBP literature. The current lack of a general set of criteria against which such activity can be judged is noted and this deficit is redressed. In order to make an initial assessment in support of the criteria so derived, an exploratory feasibility study of RBP in U.K. Fair Trade organisations was conducted. The findings from this study show that most but not all of the RBP criteria seem to be applicable to U.K. Fair Trade organisations but it is recommended that the complete set of criteria continues to be used in further research until such time as there is a general consensus as to which criteria are appropriate. Implications for RBP in small businesses in general, and for Fair Trade organisations in particular, are drawn out and suggestions for further research are identified.     

The Importance of the Indirect Transfer Mechanism for Consumer Willingness to Pay for Fair Trade Products—Evidence from a Natural Field Experiment

A natural field experiment is conducted on the determinants of consumer’s willingness to pay for “fair trade” (FT) products. In four treatments, subjects are offered different choices in connection with a coffee purchase, such as buying regular coffee or FT coffee at a premium, regular coffee with or without a premium, or donating directly or not donating. Depending on the treatment, the premium or direct donations are either given to FT or a well-known charity. A large part of the willingness to pay a premium for FT coffee over regular coffee is shown to be not related to the specific attributes of FT coffee but rather caused by the indirect transfer mechanism that FT uses, i.e., selling products at a premium which goes to the cause of FT.     

The Fair Trade Idea: Towards an Economics of Social Labels

The concept of Fair Trade is applied to the marketing of a variety of goods. In recent years it has met a continually increasing interest among consumers. Different Fair Trade organizations are trying to accomplish an improvement in working and living conditions in developing countries by means of Fair Trade certificates and by paying a price markedly above world market standard. This is meant to lead to the attainment of basic social standards, especially in agricultural production. The article deals with how Fair Trade works and whether the social aims can be achieved by the application of this trade concept. Our main result is that even though efficiency of redistribution through the Fair Trade institutions is lower than through traditional relief organizations, the Fair Trade concept provides an additional incentive to support better living conditions in the Third World. Moreover, it provides a stimulus for producers to reorganize the production process in a socially more acceptable manner even when this is not rewarded by the Fair Trade company.

A conceptual framework for analyzing consumers' food label preferences: An exploratory study of sustainability labels in France,Quebec, Spain and the US

In a qualitative study of 375 consumers in France, Quebec, Spain and the US, respondents are asked to choose between pairs of actual food labels and to describe the reason(s) for their choice. The food labels included sustainability labels (eco‐labels, Fair Trade, origin) as well as product attribute (e.g. quality, kosher) and health/nutrition labels. Respondents' reasons were coded in the original language using the same coding system across all four nations to examine their preferences for label message, design and source. We also examined the role of consumers' values, beliefs and experiences on their label choices. The coding system was drawn from a review of theoretical and empirical literature and provides a conceptual framework we call the Label Consumer Interaction model for evaluating consumers' food label preferences. Although this is case study, the results point to substantial differences across nations in terms of preferred labels, as well as the rationale for their choice in terms of attributes of the labels and consumer characteristics.     

Railway Imperialism: The Example of the Pereires' Paris–Saint-Germain Company, 1835–1846

Trade marks are, and have been since the late nineteenth century and throughout the twentieth century, vital business assets. The paper argues that they (along with brand names, trade names, and company names) have been of crucial importance to the rise of the modern corporation. US law and the courts have protected these property rights at the same time as the value of these assets to the modern firm has increased. The paper explains the significant role of trade marks in the evolution of the modern enterprise; provides historical data on US laws and court rulings; compares the trade mark and the patent; and indicates how, over time, the trade mark has contributed to efficiency gains in the modern firm.     

Demystifying Fair Trade in France: The History of an Ambiguous Project

In France, Fair Trade arrived on the scene in the late twentieth century, and since then has passed through several experimental phases before becoming an enduring “realistic” economic alternative. To understand the transformation, this article defines Fair Trade as a social construct issues and tensions of which change depending on the point of entry. By conducting a secondary analysis of several data sets from varied sources, including documentary material, interviews, and observations, the authors trace the history of Fair Trade in France, define its introduction as a system, describe its institutionalization, and contribute to a greater understanding of how its ideals have changed and become more professional over time. The analyses reveal that the term “Fair Trade” has become ambiguous, spanning divergent and conflicting ideas and projects, including opening and closing conventional market systems and alter-globalization and anti-globalization.     

中美贸易摩擦背景下美国知识产权调查的触发机制及应对策略

美国知识产权调查是由美国企业向美国国际贸易委员会提出,对可能存在的知识产权侵权行为作出裁决的制度。过去十几年间,中国一直是遭受美国知识产权调查最多的国家,严重影响我国企业的出口和产品国际形象。相对而言,中国企业知识产权储备和应对意识严重不足,应诉态度比较消极,缺乏相应的应诉资源,这也让我国出口企业更容易成为美国知识产权调查的对象。应注重提升我国企业的知识产权意识和发挥政府的保障作用,从源头上降低知识产权调查风险。遭遇调查时,注重对应诉资金的筹集与使用、合理选择应诉团队、科学选择抗辩理由,提高胜率。同时积极运用调解、诉讼内并购、反诉等手段,尽可能取得好的结果,减少损失。     

The Role of the Beneficiary in Willingness to Pay for Socially Responsible Products: A Meta-analysis

Many companies have made significant investments in socially responsible production practices for their products. Environmentally safe cleaning products, fair trade coffee, and sustainable seafood are just a few examples. In this paper, we conduct a meta-analysis of over 80 published and unpublished research papers across a large number of product categories to better understand differences in willingness to pay (WTP) for socially responsible products. In particular, we are interested in whether the beneficiary of the social responsibility program—humans, animals, or the environment—affects WTP. We use two dependent variables: the percentage premium people are willing to pay and the proportion of respondents who are willing to pay a positive premium. We find that the mean percentage premium is 16.8 percent and that, on average, 60 percent of respondents are willing to pay a positive premium. Importantly, across both dependent measures, we find that WTP is greater for products where the socially responsible element benefits humans (e.g., labor practices) compared to those that benefit the environment. Implications for retailers, manufacturers, and future research are discussed.