Concept of Fair Trade - Essay Example

Consumers purchase more fair trade products Contents Introduction 3 Discussion 3 Concept of fair trade and its existence in the particular product range 3 Factors affecting purchase decision of consumers and extent to which they undertake such ethical choices 4 Factors that can increase sales of fair trade products 5 Conclusion 7 References 8 Introduction In the recent years there has been an increase in awareness amongst the consumers in relation to every service and product which has influenced the consumer market to purchase more of fair trade products. The products that have the “Fair Trade” logo highlights that the ethical issues are considered while delivering these kinds of products to the customers. The discussion of the report is to analyze whether customers are in favour of or are against purchase of fair trade products and the reason behind such behaviour. The twenty first century has seen the evolution of ethical consumers. The traditional theories of consumer behaviour were strongly related to the rational aspect of consumers whereas in the present scenario the consumers buy more of justice, intangibility and conscience. The issue of ethical consumerism has gained its importance in the recent times which clearly states that while making purchase decisions the factor of ethics is highly integrated by the consumers. Discussion Concept of fair trade and its existence in the particular product range The concept of fair trade can be related to an organized social movement with a goal to help the producers located in developing countries to make the best practices of trading and even to encompass sustainability. The fair trade practices comprise of high environmental and social standards and even advocates a higher price payment to the exporters. It is a kind of trading partnership that is based majorly on transparency, respect and dialogues that secures more of equity in the practice of international trade (Ransom, 2006, pp. 94-95). The major benefit of such fair trade is that it tries to establish the best conditions for trading and even secures rights for those marginalized workers or producers. These fair trade practices usually demands for the support of the consumers in order to raise awareness, campaign for changes, and even support the producers so as to eliminate the loopholes that are in conventional trading. There are certain fair trade organizations such as FLO International, World Fair Trade organization, Network of European Worldshops, European Fair Trade Association that involves into various forms of ethical marketing programs and aims at selling fair trade products mainly through supermarket channel so as to create a real impact through large volumes of product sales. The fair trade products provide the opportunity to the customers to shop everyday and help to reduce the level of the poverty across the world and develop a bright future (White, Macdonnell and Ellard, 2012, pp. 103-118). The fair trade mark on the products denotes that the standards of the fair trade have been met by the traders as well as the producers. There are two types of standards such as one applies to all those smallholders who work jointly in organizations or other co-operatives with a democratic form. The other encompasses the employers giving all forms of rights to the workers along with decent wages. When the products of fair trade at offered at minimum prices then it comprises of the total cost of the production whereas the minimum prices indicates that the extra amount would be given towards better improvement of the society in terms of health, education, farms, etc (Nicholls and Opal, 2005, pp. 78-79). The food products are the main in this context and comprises of cocoa, coffee, tea, bananas and honey. The other commodities include textiles, crafts, flowers etc. Factors affecting purchase decision of consumers and extent to which they undertake such ethical choices The mode of expressing concern by consumer towards the ethical behaviour that has been adopted by companies is through ethical buying. The consumers who purchase these ethical products possess a social responsible attitude and express their thoughts by means of their purchasing decisions (Ransom, 2006, pp. 101-102). There are two different forms of ethical consumption one is in context of benefitting people and the other is in order to benefit the natural environment. Consumers are nowadays buying products that have possessed positive qualities whereas they even boycott those products that have negative attributes (Ransom, 2006, pp. 63-64). Such boycott campaigns comprise that of Nestle that had been boycotted because of the issue of infant formula and the other example is that of Nike which had gone through labour abuse issues. The growth of ethical consumption can be clearly stated through opinion polls of some previous research that highlights of about 68% of the total population of UK prefer to buy fair trade products and the majority of the population is willing to pay price premiums for the green products or those that are made ethically or traded ethically (Nicholls and Opal, 2005, pp. 113-114). However in some countries that like that of in France only 1% of the total market share favour purchasing ethically manufactured product or those that has fair trade labelling (Bezencon and Blili, 2010, pp.1305-1321). The major factor that drives such a discrepancy amongst various countries is the gap between the behaviour and attitude of people. Some of the consumers do not purchase those products that are not fairly traded on the contrary the majority of the consumers still evaluate the attributes of the products before making a purchase decision. In today’s scenario still the most important factors behind the purchase decision is quality, price, brand and convenience (Ransom, 2006, pp. 92-93). The discrepancy factor across the countries towards purchasing fairly traded products is mainly due to lack of information, unavailability of fairly traded products and disbelief towards the intentions that forms the basis of ethical products (Ransom, 2006, pp. 95-96).The variations in the consumer buying behaviour are mainly due to the values and beliefs that differ across the globe. The society that has the attitude to act as responsible citizens and help the needy or the environment in whichever way possible are the ones who consume these fairly traded products even at higher prices in comparison to those consumers or the society that is price sensitive and do not belief in such fair trade practices. Factors that can increase sales of fair trade products Fair trade products though they have a very noble cause behind its sales still has not gain equal importance across the globe. In some regions where these kinds of products had gained significant importance on the other hand there exist still a decent percentage of market shares that are not in favour of purchasing such products (Nicholls and Opal, 2005, pp. 139-140). This difference in consumer buying behaviour is mainly due to the change in attitude and beliefs that plays a vital role while making a purchase decision. In order to drive sales of these fair trade products the first step that should be adopted by the organizations is to adopt measures so as to change the attitude of these consumers (Nicholls and Opal, 2005, pp. 113-114). The trust of the consumers needs to be gained which can only be done through spreading more awareness of these fairly traded products and using different marketing communication platforms so as to reach to the majority of the consumers. The trust factor can be achieved through making the consumers believe by providing them data annually so that they know that paying extra money for these products is benefitting the society and to what extent such products are being accepted by consumers across the globe (Nicholls and Opal, 2005, pp. 74-75). These products need to be promoted first at minimum prices but providing the required information to the consumers as to why they are regarded as fairly traded products (Shaw, Hogg, Wilson, Shui and Hassan, 2006, pp. 427-440). The minimum prices would be help the organizations to build a strong base of customers and if such customers can be transformed into loyal customers then they can be easily influenced for paying marginal cost extra for the products so that amount can be given to the weaker sections of the society for their education, health, etc., and also for further environmental development. Spreading more awareness is the only method through which such an initiative gain importance as many people who do not consume fairly traded products is simply because they are not aware of the characteristics of the fairly traded products. Most of the fair traded organizations have undertaken a three year strategic plan to spread awareness across the globe in regards of fair trade products so that the consumers are influenced to buy such products (Nicholls and Opal, 2005, pp. 145-146). From the above discussion of sales influencing factors for fair trade products it can be said that if the producers and suppliers practice manufacturing and selling of value added and ethicality produced products keeping the factors under consideration then the potential consumer will definitely buy those fair traded products. The increasing global awareness of selling and buying fair traded products has made the potential and educated consumers concern about the benefit of consuming fair trade product with ethicality of maximum return in terms of product quality (Ransom, D. 2006, pp. 115-116). Fair trade product always retains high consumption value in terms of quality and also these are environment and health positive in nature. The main objectives of customers behind buying any product are good quality, standard quantity and environment and health positive in case of non food products (Nicholls and Opal, 2005, pp. 100-101). The fair traded product retains the three major qualities that positively stimulate the needs of the consumers for purchasing the products. Conclusion It is important to conclude the paper by summarising the reasons behind purchasing trend of fair trade products by the customer. In the globalized economy where there is strong competition in almost all sectors it is a very challenging issue for many organizations to promote fair trade products and more over convince the customers to purchase such products. Global consumers have become well aware of the benefit of purchasing fair trade products by different consumer awareness programs initiated by several NGOs and governments (Ransom, D. 2006, pp. 190-191). The fair trade products take into account the cost of production of the farmers and other producers and also consider all the ethical issues that are involved in production. The key reasons behind customers’ purchasing trend of fair trade products are as follows. The fair trade products ensure the customers that there has been no violation of any ethical right while delivering the products or services to the customers. The fair trade products do not only takes into consideration the producers or traders but even contribute towards environmental issues. The major motive of this practice is to ensure that the society and environment as a whole is in a stable condition. References Bezencon, V., and Blili, S. 2010. Ethical products and consumer involvement: what’s new? Journal of European Marketing. Vol. 44 (9/10), pp. 1305-1321. Nicholls, A., and Opal, C. 2005. Fair Trade: Market-Driven Ethical Consumption. Great Britain: SAGE Ransom, D. 2006. The No-nonsense Guide to Fair Trade. UK: New Internationalist. Shaw, D., Hogg, G., Wilson, E., Shui, E. and Hassan, L. 2006. Fashion victim: the impact of fair trade concerns on clothing choice. Journal of Strategic Marketing. Vol.14, pp. 427-440. White, K., Macdonnell, R. and Ellard, J.H. 2012. Belief in a Just World: Consumer Intentions and Behaviors Toward Ethical products. Journal of Marketing. Vol.76 (1), pp.103-118. Read More