Fairtrade - Influencing Purchase Decisions*



Case Code : CLCB040
Publication date : 2005
Subject : Consumer Behavior
Industry : -
Length : 05 Pages
Price : Rs. 100

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Key words:

Fairtrade mark, Oxfam, Fairness in trade, Fairtrade movement, Cafédirect, Tesco, Starbucks, Costa Coffee, Rainforest Alliance and Kraft.


* This caselet is intended for use only in class discussions.
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The caselet describes how an increasing number of consumers were buying products with the Fairtrade mark, which guaranteed fair and stable prices to producer co-operatives, plus decent working conditions for workers. With the increasing demand from consumers for Fairtrade marked products, corporates like Tesco, Starbucks, etc., too started selling Fairtrade-marked products.


» Evolution of consumers into those sensitive to the need of social and economic equity in the marketplace
» How organizations are trying to remove inequalities in trade
» Pressure on corporates to be more equitable in their trading.

Corporations involved in the sales of non-alcoholic beverages like coffee, tea, and chocolate were often criticized by NGOs of not providing a fair value for the raw materials purchased from the farmers of developing countries. NGOs alleged that the corporations were making handsome profits by selling the finished products while being insensitive to the needs of the farmers.

NGOs like Oxfam pointed out that though a cappuccino was sold for three dollars, the cocoa farmer did not even receive three cents from that purchase.

One of the ways in which NGOs helped promote fair trade was through the use of the Fairtrade mark, which was given to those products which guaranteed fair and stable prices to producer co-operatives, plus decent working conditions for workers...

Questions for Discussion:

1. Assess the extent to which the Fairtrade mark influenced the shopping orientation of consumers?

2. What were the ways in which the business world used the Fairtrade mark?