A Report of Fair Trade

Executive summary:

This report is about fair trade. Generally said, Fair trade is a consumer-driven movement to promote fair prices and reasonable conditions for producers of primary goods in developing regions. This report aims to explain the basic information and background of fair trade. It uses the questionnaire to research the consumer behavior of fair trade. Some results of research shows the awareness of fair trade is not very high, but after people know the advantages of fair trade, most of them will support it. The details of the research will be presented in the main body. Besides the questionnaire of fair trade, this report will also explain the thoughts of visiting the fair trade shop in Holmfirth. Meanwhile, the advices and actions will also be mentioned in the report. However, there are still many issues waited to be solved such as ‘Who decides what fair payment is?’ or ‘Shouldn’t all trade be fair?

Background

 

Consumers seek out the lowest price for goods of any given quality, maximizing their individual gain that is mainstream economists around the world. In addition, according to the traditional economic logic, producers seek to maximize their competitive advantage over others in a zero sum game of winners and losers in the global marketplace. Further, corporation will always purchase products at the lowest possible price, bargaining down their input costs where possible through competitive sourcing. (Raynolds,Murray&Wilkinson, 2007) However, there are millions of consumers choosing certified Fair Trade products instead of other cheaper option all over the world; an increasing number of companies, both large and small are willing to participate in a system where they must pay a price negotiated by a third party such Fair Trade standards.

 

Definition and Historical of Fair Trade

According to Raynolds, Fair Trade is perhaps the most dynamic of range of movements, campaigns, and initiatives that have emerged in recent decades in response to negative effects of globalisation. Simply said, consumer makes fair payment to the producers of the goods. Consumers pay a little bit extra to get a product that they know has been ethically produced (Hunt, 2012). The supporters of fair trade believe this movement has contribution to sustainable development by offering better conditions to the workers. Fair trade is concerned with the exports of raw material and goods from developing countries to developed countries. Some campaign have made for fair trade, for instance, anti-sweatshop movement in garments, eco-labelling in timber, and fair trade certification in food product. The most spread wide fair trade product is often raw materials like coffee, cocoa and bananas. These products can be found in many shops even in the supermarket. Additionally, some towns called as fair trade towns, where councils, schools, and shops use and promote fair trade.

The world’s first Fair Trade town is Garstang in UK.

This is Fair Trade Logo.

 

The campaign of fair trade origins in many disparate stands of protest against ‘survival of the fittest’ free trade capitalism (Redfern and Snedker, 2002). In 1960s, it was growing concern. The first fair trade label was launched in 1988. It was called ‘Max Havelaar’ from a novel about the exploitation of coffee pickers in the Dutch colonies. In Europe, the earliest traces of fair trade date from the 1950s when an Oxfam director had the idea of selling crafts in its UK shops made by Chinese refugees in Hongkong. In 1973, fair trade organisatie in the Netherlands added fairly-traded coffee to its sugar. Product-specific fair trade labelling initiatives have expanded greatly since 1989 (Macqueen, Dufey & Patel, 2006). Nowadays, Fair Trade sales are growing fast globally to over £500m in2003 and this growth looks set to continue (Nicholls & Opal, 2005). However, Fair Trade still only represents approximately 0.01 per cent of all goods exchanged internationally (Vidal, 2004). Nevertheless, new opportunities for growth are emerging and it will be crucial to devise the best strategies and structures to exploit these. Actually, there are some challenges need to reflect.

Fair Trade Movement’s GoalsThere are 6 goals of the Fair Trade movement’s joint statement as below (Raynolds, 2007):

 

1.      To improve the livelihoods and well-belling of producers by improving market access. Strengthening producer organizations, paying a better price, and providing continuity in the trading relationship;

2.      To promote development opportunities for disadvantaged producers, especially women and indigenous people and to protect children from exploitation in the production process;

3.      To raise awareness among consumers of the negative effects on producers of international trade so that they exercise their purchasing power positively;

4.      To set an example of partnership in trade through dialogue, transparency, and respect;

5.      To campaign for changes in the rules and practice of conventional international respect;

6.      To protect human rights by promoting social justice, sound environmental practices, and economic security

 

Different Method of Collecting Data

Primary data can be obtained from the first-hand experiences, which has not been published yet; it is more reliable, objective and latest. Primary data is more valid than secondary data. Secondary data can be collected from already been published source (Panneerselvam, 2004). Data is one of the most important and vital aspect of any research studies. Thus, it is critical for researcher to adopt appropriate research methodology to collect data to cover the stated research questions. The process of collecting data for research projects is called as research methodology.

There are two main research approaches, one is primary research method, and another is secondary research method (Nunan, 1992, Gratton et al, 2010). Gratton et al (2010) said that primary research method refers to collecting original data through experiments and survey (questionnaires, interview, and observation). Secondary research method is concerned with gathering secondary data from publish printed sources (books, journals/periodicals, magazines/newspaper) and publish electronic source (e-journal, general websites and weblogs) (Gratton et al, 2010). Daymon et al (2010) also said that there are two core ways of conducting a research, one is qualitative research, and another is quantitative research. “Qualitative research is less objective (and therefore less true) than quantitative research, however, each has strengths where the other is weak and weakness where the other is strong (Callingham, 2004, page103).” Pellissier el at (2008, page 20) suggested that “qualitative research is more appropriate than quantitative research methods to seek out and understand the complexities surrounding the underlying causes of behavior, because qualitative research attempts to go deeper. There are three main methods for collecting qualitative data in qualitative research, which are focus groups, direct observation, and in-depth interview.” Quantitative data can be easily and cheaply collected by post, telephone or computer-assisted interviewing systems (Pellissier el at, 2008).

The Research of Consumer Behavior of Fair Trade

The purpose of the questionnaire is to help researcher to find out the consumer behavior of Fair Trade and to explore strategies that may adopt to develop Fair Trade business. Researchers adopted Survey Monkey that is free online survey software and questionnaire tool. The questionnaire consists of 10 closed-end questions (See in Appendix). Due to the time limitation, researchers sent out 100 questionnaires and waited for one week to get response. As the result there are 36 respondents. After summarized answers, there are 5 key points below:

 

1)      Most of people got Fair Trade information by friends and they are somewhat aware of Fair trade products purchased at store.

2)      Consumers are willing to support development of Fair Trade and publicize the concept of Fair Trade to their friends.

3)      Consumers thought high visibility signage is the best option of buying Fair Trade products.

4)      Consumers expected for the development of Fair Trade products by utilization of environmental materials

5)      Lack of trust in Fair Trade certifiers is a major reason for not buying Fair Trade product

 

 

IDEAL of after Visting Fair Trade Shop in Holmfirth

There is no Chinese goods sales so it can promote and launch Chinese Traditional handicraft goods in order to help the housewives in the village earn extra income by selling fabrie products made during their spare time from farm chores.

All things made by hand in China above the picture.

There is no lookbook in shop so the simple as below:

Furthermore, it can held an tea time in the shop.And using fair trade food cook difference culture of food to customer such as using onganic rice to make sushi.

Moreover, the websit should be improve after comparing other website.

 

Conclusion

Nowadays, Fair Trade products were spread all over the world. People can easily buy fair trade product in the supermarket. However, the motivation for consumer to buy fair trade product become a challenge because the fair trade product do not have price competitiveness. In general, purchase Fair Trade product is a kind of ethically behaviour. Obviously, this motivation is not enough. Nevertheless, there were still some other ways to strength the competitiveness of Fair Trade product such as create unique selling point.

 

Reference

Callingham, M., (2004), Market intelligence: how and why organizations use market research in practice, London, Kogan Page Publisher

Daymon, C., Holloway, I., (2010), Qualitative research methods in public relations and marketing communications, New York, Routledge

Gratton, C., Jones, I., (2010), Research methods for sports studies (2^nd Edition), New York, Routledge

Hunt J., 2012, Fair Trade, Leo Paper Products Ltd, China

Macqueen D., Dufey A. & Patel B., 2006, Exploring Fair Trade Timber; A review of issues i  current practice, institutional structures and ways forward, IIED Small and Medium Forestry Enterprise Series, Edinburgh, UK

Nicholls A. & Opal C., 2005, Fair Trade, Market-Driven Ethical Consumption, SAGE Publications Ltd, London

Nunan, D., (1992), Research methods in language learning, New York, Cambridge University Press

Panneerselvam, R., (2004), Research Methodology, New-Delhi, PHI Learning Pvt. Ltd.

Pellissier, R., (2008), Business research made easy, Wetton, Juta& Co.

Raynolds L., Murrary D.L. & Wilkinson J, 2007, Fair Trade: the challenges of  transforming globalisation, Routledge, USA & Canada