Literature Review on "Ethical Branding Fairtrade"

Literature Review 8 pages (3560 words) Sources: 10 Style: Harvard

[EXCERPT] . . . .

Ethical Branding: Case of Divine Chocolate

UK consumer attitudes

Purchasing fair trade chocolate (Divine Chocolate)

USA consumer attitudes

Purchasing fair trade chocolate (Divine chocolate)

Comparison of attitudes

USA and UK consumers towards fair trade chocolate purchasing

Questioner

According to Visser, W, Matten, D, Pohl, M & Tolhurst, N (2010)fair trade principles and ethical branding is in line with the sustainability of corporation's business. The business incorporating fair trade principles create a unique selling point for themselves and as a result the consumers are also attracted towards these products. The awareness in developed countries regarding the food and clothing has increased usage of fair trade products. Coffee and chocolate are major items gaining a focused attention by the consumers of young and high income group. The consumers in different markets reflect acceptance for fair trade products according to their own demographic and purchase attributes. There are multiple factors that influence such decisions including price, availability, product features, and awareness are most significant factors influencing fair trade products (Ma, Littrell&Niehm2012).The price of the products marketed under fair trade is also notable factors in influencing the consumption decisions. The business is focusing on creating value for their clients through adoption principles of fair trade. The case of consumers in United States and United Kingdom market is observed in terms of a renowned chocolate brand namely Divine Chocolate. The business is focused to create value for its shareholders through following principles of fair trade.

The principles of fair trade and ethical food products are adopted throughout developed nations. The companies are tilted towards enchasing the benefits of awareness created within the consumer markets. The public awareness is not only the necessary factor in increasing sales and consumption of the fair trade products. It also requires the adherence to business and marketing strategy followed in other business segments. It also requires a fair price for the consumer in order to facilitate the purchase. The quality of the product along with the applicability of other related market features and quality is also essential to facilitate consumers.

Divine Chocolate is one of the leading food businesses in creating awareness within the community regarding the benefits of using fair trade and ethical products. It has also provided its customers with a reasonable and competitive pricing strategy. The quality of the products is also equivalent to the rival products. It has not only gained access to developed markets but at the same time it is also maintaining its efforts to create awareness among consumers and distributors of the products. The United Kingdom and United States market consumers share almost similar values regarding the consumption of fair trade and ethical product brands.

UK consumer attitudes:

There are various factors that influence the consumer behaviors and trends. The socio-economic, education, and demographic factors in influencing consumer behaviors are notable factors. Food marketing and sales are especially considered as a major industry in promoting fair trade among consumers. The increased usage of organic and healthy diet is also promoted throughout developed countries. The demographic variables following fair trade for food industry also includes gender segregation and attitudes towards using ethical food (Wright & McCrea, 2008). The study De Pelsmacker, Driesen, & Rayp (2005) reveals a significant indicator in terms of consumer attitudes and behaviors for fair trade products. The consumers are reported to pay a slightly higher amount for ethical and fair trade food products. Loureiro,&Lotade (2005) confirms the claims made in the earlier research when it indicates that consumers are receptive for fair trade food products and willing to pay more. However the study could not attempt to measure such response as performed by De Pelsmacker et al. (2005).

Therefore it can be concluded that the customers positively welcome fair trade products however when it comes to actual buying, price remains an important factor. The consumer research performed by Didier, & Lucie (2008) indicates that consumers of fair trade chocolate are willing to pay more for the ethically branded products. The research further identifies three clusters in represented as people incentive for the fair trade label. The second important factor is that the labels including fair trade information are significant in improving brand and product image. The consumers also value taste, texture, and quality of products against the claimed fair trade label. Therefore the views of the earlier researches with respect to fair trade value are confirmed.

Hira,&Ferrie (2006) highlights the requirements for fair trade products to improve sales. The products also require a main stream status within food industry across developing and developed markets. The research has emphasized on the importance of awareness and availability of products throughout the notable markets in order to increase potential of fair trade sales. It also highlights the potential of fair trade products in terms of sustainability. The study Wheeler (2012) also supports the suggestions of Hira et al., (2006) through highlighting government efforts in United Kingdom. It has played a significant role in developing awareness regarding Fair Trade. The increased awareness in society has influenced usage of ethical foods over the years. The increase in consumption of ethical foods is also concerning the value of natural and ethical food items. The decreasing consumer attitudes towards buying products that lack in food nutrition and conformity with the food standards. The research also found a notable connection between various personal characteristics and consumption of food items based on fair trade. These components are noted as education, age, gender, educational qualifications, and economic conditions.

The level of awareness is an influential factor for consumers about the consumption of items of fair trade in United Kingdom. A number of consumers are enjoying the amenity of awareness created in previous years through governmental and community-based programs. The governmental organizations along with other European standardization organizations and regulatory agencies are developing laws and norms for minimum acceptability for food products. The food products are especially treated as major items of concern in terms of their relevance for health and safety of the public (Wheeler, 2012).

Purchasing fair trade chocolate (Divine Chocolate):

The Day chocolate Company has adopted a mechanism to ensure adherence to principles of fair-trade. The company is regarded as one of the leading company adopting the usage of fair-trade coca usage within their production lines. Divine chocolate is the renowned brand of the company and they also advertise the features of fair trade. The consumers of the company are aware of the characteristics of the chocolate purchased. The farmers and traders of the coca powder used in manufacturing Divine Chocolate have a fair share in each sale. The adoption of fair trade principles are ensured through the company as the farmers of coca used in the production are offered a fair share in the value added product as Divine Chocolate. Fairtrade Foundation (2012)the rate for fair trade minimum price is $2,000 / tons. In addition to that $200 / ton premium is also paid to farmers. The report also indicates that climate change is posing a shortage of supply of coca, therefore the price for $2,300/tons as of July 2012. International Cocoa Organization (2012) highlights cocoa prices ranged $1,361 and U.S.$3,730/ton for the period of 2002 to 2012. The minimum price is observed during May 2004 as a result of global financial crunch in the market. The world cocoa production has attained an average annual growth rate of 3.3% during the period.

DeCarlo (2011) and Korgen, and Gallagher, (2013) agree on the contributions and operation of Divine Chocolate.The trends for purchasing fair trade products within the United Kingdom are observed through a through survey of shops and stores within the market. Raynolds, (2002) also highlights the importance of survey in order to assess market for fair trade in United Kingdom. The customer trends are developing around the awareness created throughout the country with the government and community efforts. The awareness among female members of society is more effective in terms of the transformation of the knowledge about fair trade and consumption of food items. The survey revealed that the fair-trade products are gaining popularity among the consumers. The Divine Chocolate is also gaining popularity among young and female consumers. The research Gropel (2012) is also of the view that consumers are willing to pay for Divine Chocolate in return to benefits of fair trade food product. The product is bought regularly by the consumers as a tribute to the manufacturers as they have promoted the product in terms of its effectiveness for implementation of principles of fair trade. The notable features found during the primary research are related to the following strategy components of the company.

The business is focused to provide a quality oriented affordable range of products. The business is also focused to create market awareness with the target market through various marketing initiatives. The consumers as well as the retailers are also provided with the assistance to create awareness regarding key elements of the products. The change in consumer buying attitudes is also observed through the efforts as a change in the production and… READ MORE

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