Most of international and national trade transactions are based on liberalism. The WTO (World Trade Organisation) is the biggest legal environment to let those transactions occurred.This study is aimed at to understand the perception of mature consumers regarding Fair Trade as a brand in order to contribute in Fair Trade business sustainability.
Context and Justification of Topic
Context and justification of topic has been categorised in following three sub-headings: Personal, Academic and Business.
The business model of Fair Trade applies particularly to producers from South and consumers from North (Nicholls and Opal 2005) and this model basically involves social considerations (Le Mare 2007). As an international student and that too from a developing economy, getting concerned about development of economies is natural to me. Agriculture seems to be the strength of developing countries, but, it is one of the weaknesses. Watkins (1996 cited by Smith 1998) also argues that the process of flooding the world markets with cheap food is destroying local agriculture in many developing countries. This situation therefore affects directly the level of life of producers of the Third World. As Ransom (2006) said, many countries of the South remain entirely dependent on producing basic commodities. To counter this issue, one solution is to pay a price which will allow producers to live with minimum revenue and to continue their business (Littrell and Dickson 1999).
Inspired by authors of the 18th century like Montesquieu (1748) who argues that trade is an instrument of peace because it creates relationship between different nations preserving each part's interest, researcher's personal beliefs has led him to support strongly the notion of justice. Rousseau (1755) which was concerned by inequality among peoples stated that one inequality among human being is due to privileges of few people to the detriment of others. As Nicholls and Opal (2005) said Fair Trade try to distribute economic benefits more fairly between all stakeholders.
Researcher's interest concerns the end-user of the SCM, the consumer, particularly its relation with Fair Trade as a brand. The development of Fair Trade as a brand has been a non controlled process (Nicholls and Opal 2005) which has lead to the emergence of many competitors and thus many labels. Therefore it is important to know and understand consumer perception toward the Fair Trade brand or brands in order to tailor a better marketing communication strategy. This idea is echoed by Nicholls and Opal (2005) who argued that in the future, increase consumer education and innovative marketing that build brands and create a set of values is essential for Fair Trade development. Few researches have probably been done in this area as suggested by Nicholls and Opal (2005) but depending of the continent or the country the result might be different.
Solomon et al. (2006) argue that perception is a part of consumer behaviour. Moreover, consumption life varies greatly from one European country from another and sometimes within different regions of the same country (Solomon et al. 2006). Fill (2006) explain that marketing communications strategies depend of the goals and the target audience. Thus each group focused in each country and in each region, is a potential area of a specific research in term of results.
As every business model which born the objective is to survive. Create sustainable and self-sufficient businesses for the highly competitive world market is a priority for the Fair Trade Stakeholders (Littrell and Dickson 1999). Therefore researcher will attempt to provide a knowledge which will contribute among several others to build sustainability in the Fair Trade business model using the Fair Trade brand perception. Sustainability for Fair Trade is a particular issue because Fair Trade concept leads him to work "in" and "against" the market (Ransom 2006; Raynolds et al. 2007). Working in the market means to survive among competitors. Working against the market means to bring social considerations which are not took account in liberalism because they do not follow the "Supply and Demand" theory built by Smith (1776).
Outline of Literature Review
The intention of the research is to use Fair Trade brand perception among a specific category of consumer or potential consumer (mature consumers) to provide a particular knowledge to contribute to Fair Trade business sustainability.
Fair Trade Global Comprehension
The Fair Trade literature is significant and diverse. In a recent research, De Pelsmacker and Janssens (2007, p.361) said that:
Fair Trade is an alternative approach trading partnerships that aims for sustainable development of excluded or disadvantaged producer of the Third World.
Fairness in Fair Trade is about price. Most of national and international trades are based on Smith (1776) "Supply and Demand" theory which argue that the price of each good result from the match of its level demand and its level supply. This theory is one of the foundations of liberalism.
However, the application of this principle in trade relations between countries of the North and those of the South has lead to a particular situation. Producers of the South have seen their buying power diminished years after years. This buying power reached the critical level which put in danger producers' business and their level of life. This idea is echoed by Keynes (1947 cited by Nicholls and Opal 2005) who mentioned that proper economic prices should be fixed not at the lowest possible level. The level required is the one which will provide producers with proper nutritional and other standards in the conditions in which they live (Keynes 1947 cited by Nicholls and Opal 2005).
Examining the Fair Trade literature, a global analysis let to identify three approaches:
- Economical and Institutional
Economical and Institutional Fair Trade Approach
One literature focused on the macroeconomic (Bhagwati and Hudec 1996a) and institutional (Bhagwati and Hudec 1996b) causes of Fair Trade like American trade restrictions as anti-dumping, quotas or arbitrary tariffs (Bovard 1991). Stiglitz and Charlton (2005) argue that changing the actual rules of world trade could promote and raise the poorer countries' economy through freer and fairer trade. This approach define more Fair Trade as a regulation system more than a business model. Therefore it focuses less on business and people. Even if Singh (2001) belongs to this group of authors, he opened the door of Fair Trade as an alternative trade practise underlying the role of Alternative Trade Organisations (ATO) in this business model.
General Fair Trade Approach
Another group of literature attempts to provide an overall view of the Fair Trade business model, describing its Supply Chain Management (SCM) and asking the question of its future and its sustainability (Littrell and Dickson 1999; Nicholls and Opal 2005; Raynolds et al. 2007). This group of authors explain the main role of the ATOs like Oxfam or Traidcraft in UK, Max Havelaar in Netherlands and Thousand Villages in the United States. Those ATOs are the drivers of the Fair Trade business and the link between producers and consumers. ATOs are created the Fair Trade certification and the floor price defined by the following formula (Nicholls and Opal 2005):
Fair Trade floor price = cost of production + cost of living + cost of complying with Fair Trade standards
The general literature of Fair Trade provide a good understanding of Fair Trade and points out the general strategies to develop this business like, financing, certification and marketing strategy. This literature is relevant for building a general knowledge about Fair Trade.
Specific Fair Trade Approach
Finally the last approach based on researches or cases study focus in a particular aspect of the SCM. Fridell (2007) explore the Fair Trade business through several cases study related to coffee (Colombia, Costa Rica). Across several cases studies of the Mexican coffee farmers Jaffee (2007) stated clearly the sustainability of the Fair Trade for those producers. Using mini-cases study Ransom (2006) analyses coffee (Mexico and Peru), cocoa (Ghana) and banana (Guatemala and Caribbean) and state the future of fair trade too. Randall (2005) has studied three Fair Trade craft organisations and compared their organisational strategy to expand their market in order to insure their sustainability.
In a previous study, de Ferran and Grunert (2007) explored French Fair Trade coffee buyers' purchasing motives. Nicholls and Alexander (2006) investigate the value of the Fair Trade network enhancing the understanding of the business to consumer as marketing strategy. Watson (2007) investigates the nature of the Fair Trade consumption using an ontological perspective evolving justice and the moral act theory of Smith (1759 cited by Watson 2007). All those research papers attempt to demonstrate that, as the final step of the Fair Trade SCM, consumers of the North are crucial in the sustainability of Fair Trade business.
Solomon et al. (2006) argue that consumer behaviour is the study of the processes involved when individuals or groups select, purchase use or dispose of products or services to satisfy needs and desires. This particular literature related to Fair Trade consumer behaviour provides a range of knowledge to understand Fair Trade consumer perception.
Consumer Perception and Branding
Consumer perception is the first aspect of consumer behaviour (Solomon et al. 2006). Perception is the process by which stimuli as light, colour or sound are selected, organized and interpreted (Solomon et al. 2006). Another important element is consumer attitude. Bagozzi et al (2002) define attitude as an evaluation. As a matter of fact Bagozzi (1986, 1989 cited by Bagozzi et al 2002) include perception as a part of his "attitude model formation process". Therefore researcher's conception of consumer perception will include the formation of attitudes. De Pelsmacker and Janssens (2007) have built a behavioural model for Fair Trade buying, focusing on perceived information (quantitative and qualitative) and product-specific attitudes.
Van Gelder (2003, p.197) defines brand perception as "consumers' perception" of the values of the brand"
Values of the brand
The Gestalt psychology mentioned by Solomon et al. (2006) explain that consumers tend to perceive an incomplete picture as complete and to group together similar objects. Therefore to help consumer to fill this gap between them and the brands, Knapp (1999, p.42) suggest that it is important to understand those values (and also the attributes) to support the branding process.
Crainer (1995) stated that the power of brands is related to their subjective content, involvement and evocation. Floor (2006) argues that only strong retail brands will survive. Exploring different nature of brand (personality and communication) he provides different strategies (price, convenience and store experience) to build a strong retail brand. In a research study, Wnke et al. (2007) shown that brand name strongly influence brand perception. They uncovered that the widely assertion that consumers use brand name as diagnostic and legitimate search attribute is very likely true. In his brand approach, Aeker (1996) also noticed the importance of the name in the process of building strong brand.
Fair Trade, consumer's brand perception and branding will form researcher's core knowledge to address his study among one of the promising segment (Solomon et al. 2006), labelled Generation X and constituted by peoples aged between 45 and 70.
The aim of the research is to understand mature student perception about the brand Fair Trade and how this perception could contribute to Fair Trade Business sustainability. Following objectives have been set to achieve the aim of the research:
- Assess mature consumers knowledge in general about Fair Trade
- Understand and evaluate the perception of brand among mature consumers according to their beliefs and the messages perceived by them from Fair Trade brands;
- Ascertain the way in which Fair Trade brands can contribute to the business in a better manner as per mature consumers' view point.
The methodology addressed to the dissertation is categorised under its research philosophy, research design, data collection and the analysis.
According to Saunders et al. (2006) ontology and epistemology are two major research philosophies to consider. Epistemology deals with knowledge whereas Jankowicz (2005) believes that ontology is concerned with nature of reality. Jankowicz (2005) further argued that traditionally there are two approaches to public knowledge creation, positivism and interpretivism.
Natural scientist adopts the positivism approach as it is related to evolving testing theory or hypothesis (Saunders et al. 2006). Furthermore, Jankowicz (2005) states that for this approach, the best way to achieve the truth is the scientific method qualified as the hypothetico-deductive.
As Saunders et al. (2006) said the research philosophy we adopt content important assumptions about the way in which we see the World. Researcher view the world composed by social actors rather than mathematical variables. Therefore he decides to adopt an interpretivism approach because the researcher believes that Fair Trade brand perception forms a subjective reality. This belief is support by few basic assumptions of interpretivism developed by Jankowicz (2005) such as the fact that truth is not absolute and the purpose of enquiry is to gain sufficient understanding to predict future outcomes.
As per Saunders et al. (2006) there are two approaches that can be considered to draw a research design: Deductive or Inductive. Deductive approach is the one used by natural scientist which implies anticipate, predict and control phenomena (Collis and Hussey 2003, cited by Saunders et al. 2006). The purpose of this method is to build theory or to modify existing theory regarding the findings (Jankowicz 2005; Saunders et al. 2006).
As deductive approach focuses on existing or future theory to test it requires that its concept has to be operationalised (Saunders et al. 2006). Another aspect of this approach is the fact that results enabled generalisation and therefore a high structured methodology is used to facilitate replication (Gill and Johnson cited by Saunders et al. 2006).
An inductive approach is likely to be used by researches based on interpretivism (Jankowicz 2005). At the opposite to deductive approach, inductive approach will built theory because theory follows data rather than vice versa as with deduction (Saunders et al. 2006). As Easterby-Smith et al (2002 cited by Saunders et al 2006) said when you are interested in understanding why rather than describing social phenomena you may chose an inductive approach. The focus of the research is on "understanding" the perception of mature consumers. Therefore the researcher selects an inductive approach for the research project.
Types of research
There are two types of research that are possible to conduct: qualitative and quantitative. Historically, positivist approach has always given priority to quantitative research and even though it is possible to combine both the approaches, interpretivist approach gives priority to qualitative methods and techniques (Jankowicz, 2005). As stated in the aims and objectives, researcher is interested in understanding the perception of mature consumers regarding the Fair Trade brand and the meaning behind; he decides to conduct a qualitative research as compared to quantitative research.
"Research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure" (Saunders et al. 2005). Selltiz et al. (1981 cited by Jankowicz 2005) defines design as the arrangement of conditions for analysis and collection of data, which are purposely planned. Three major designs as identified by Jankowicz (2005) are exploratory, descriptive and causal. Exploratory are adopted in order to discover what the issues might be whilst descriptive and causal designs are relevant to get more detailed (Jankowicz 2005). "An exploratory study is a valuable means of finding out what is happening to seek new insights to ask questions and to assess phenomena in a new light" (Saunders et al. 2007, p.133). Therefore, researcher has decided to undertake exploratory study as it rightly fits with purpose and objectives of the research.
Primary and secondary sources are two main sources for data collection.
"Primary data is known as original data that is collected from the main source" (Collins and Hussey, 2003, p.160). Observation, survey, questionnaire or interviews are several available methods to collect primary data (Hussey and Hussey, 1997). The researcher will make use of semi-structured interviews for conducting this study. The interviews are more suitable as they enable the researcher to collect information on feelings, opinions, emotions and experiences (Denscombe, 2007). Semi-structured interviews seems more suitable as these types of interview leads to present a list of subject matter or questions to be covered in a non-standardised way (Saunders et al. 2006). This means that this type of interview allow flexibility in the process as it makes it promising to enquire a question which was not scheduled or take into account issues raised by interviewees themselves (Bryman 2004). Since the answers are open-ended the respondent can give more emphasis on points of interest during the interview (Corbetta, 2003).
10 interviews will be conducted amongst mature consumers in London. As the sample taken to conduct this research is small, its findings cannot be generalised. Moreover, the purpose of the research is not to generalise the findings and as the nature of the research is qualitative.
Secondary data consists of documentary, multiple sources and survey, documentary (including written and non-written materials: notices, correspondence, reports to shareholders, diaries, public records are good examples of written materials. Pictures, video recordings, films, television programmes are the examples of non-written materials). Censuses and regular surveys are subtypes of survey based secondary data. Multiple source secondary data is based on documentary or on survey or both of them (Saunders et al. 2007). Various sources such as journals, books, internet including university's electronic resources will be used as secondary data by researcher.
Data collected from the interviews will be recorded and analysed according to the themes in order to respond to the aims and objectives of the research. Matrix would be arranged to analyse the data and after categorising into themes, it would also be compared with the literature reviewed in order to draw conclusions and further recommendations.
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