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Corporate Responsibility: Fairtrade’s Power As Merely A Brand
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Corporate Responsibility: Fairtrade’s Power As Merely A Brand - Executive Leadership Articles

Corporate Responsibility: Fairtrade’s Power As Merely A Brand

Executive Leadership Articles

Corporate Responsibility: Fairtrade’s Power As Merely A Brand

It’s one thing to be a socially responsible corporation. It’s another to be certified as such, and it’s yet another to be recognized by your clientele as such. We have addressed the resistance of some corporations to avoid the appearance of self-aggrandizement with certification logos, but how powerful is a logo in connecting customers to a product’s ethical practices, and how does this translate to product preference? Recent findings by researchers in New Zealand address some of these issues, pointing to a strong indication that for most consumers, the logo itself has the drawing power, even without connection to the ethical practices the logo represents.

Past research shows that consumers prefer products with fair trade labeling, but this study addressed whether it was the logo itself or the ethical claim attached to the logo that inspired preference by purchasers. Four brands of coffee were presented, one with the official Fairtrade logo (indicating certification by Fairtrade International, one specific association of certifying bodies), two with a fictional Exchange Ethics logo, and one with no fair trade labeling at all. Consumers in a shopping mall were asked which product they were most likely to purchase.

The results show that the official Fairtrade logo has a “strong effect on consumer choice,” over the alternate fair trade logo, which was nearly as strongly preferable to the coffee with no fair trade branding at all. The implication seems to be that if preference were driven by ethical practices themselves, the difference in preference between the Exchange Ethics and Fairtrade products would be much smaller, since each would bear the certification of an ethics-related standard. The strong preference for the Fairtrade-labeled product seems to indicate a preference for the logo itself, rather than the ethical practices it represents.

Researchers conclude that there is power in the Fairtrade logo, but that its power rests on something other than the ethical practices it certifies. However, there’s a gigantic hole in this research. It doesn’t address the degree to which consumers are familiar with the brand. Given three brands of coffee to choose from, a consumer familiar with Fairtrade’s standards would seem to be more likely to choose products with its logo over an unknown logo from an unknown certifying agency. This is a major consideration, as trust in branding is consistently proven to be a driver in decision-making. People are much more likely to donate to a charity they’re familiar with than to one they’ve never heard of. Similarly, confidence in Fairtrade would seem to be a motivating factor, at least among consumers who understand what the label certifies.

One thing does seem clear, however. For better or worse, Fairtrade labeling does appear to translate into consumer preference. Whether buyers are simply fond of the logo or of its positive association, more sales mean better outcomes for Fairtrade-certified stakeholders, from investors to retailers to producers, and as long as the certifying bodies maintain their own ethical standards and evaluations, the actual motivation behind the purchases may be negligible, or even irrelevant, although of course one would hope that it’s neither.

For the corporation concerned about whether its customers understand the ethics behind the branding, perhaps some work needs to be done so that “Fairtrade” is more than a trend, style, or fashion. Some amount of marketing along those lines, toward a more educated and discerning clientele, may be in order.

Reference Link:
http://mro.massey.ac.nz/bitstream/handle/10179/7745/Fair%20trade%20article%20Konopka_Wright_Avis_Feetham_ANZMAC_2015.pdf

 

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Corporate Responsibility: Fairtrade’s Power As Merely A Brand - Executive Leadership Articles

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