Fair Trade Effectiveness

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  • Topic: Fair trade, FLO International, Trade
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  • Published : January 18, 2013
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Department of Marketing and Statistics Authors
Bachelor ThesisErik Freivald Nielsen
Andreas Onni Robert Persson
Supervisor
Erik Kloppenborg Madsen

Fair Trade
Saving the world – one cup of coffee at a time

Aarhus School of Business
Aarhus University
May 2011

Table of Contents
Abstract3
1. Introduction4
1.1. Industrial revolution4
1.2. North – South division5
1.3. Introducing the notion of Fair Trade6
1.4. Problem statement7
1.5. Three different approaches to defining corporate social responsibility8 1.6. Delimitations9
2. What is Fair Trade11
2.1. The history and evolution of Fair Trade11
2.1.1. Four different waves of evolution11
2.1.2. The early days of Fair Trade12
2.2. Definitions of Fair Trade14
2.2.1. Three main components of Fair Trade16
2.2.2. Fair Trade as a mixed-form market17
2.2.3. Four components of the Fair Trade market19
2.2.4. Critique of Fair Trade20
3. Fair Trade in the South24
3.1. Definition of business ethics24
3.2. The green perspective25
3.3. Corruption in the South25
3.3.1. Corruption classification26
3.3.2. Corruption and foreign aid26
3.3.3. Consequences of corruption27
3.3.4. Misuse of foreign aid28
3.3.5. Three windows of corruption29
3.4. The role of women30
3.5. Local producer point of view32
3.5.1. Co-operatives33
4. Fair Trade in the North35
4.1. Free trade vs. Fair Trade35
4.2. Three challenges for Fair Trade38
4.3. Fair Trade going mainstream40
4.3.1. Cafédirect case example40
4.4. Fair Trade marketing mix42
4.5. Branding Fair Trade44
4.6. Brand identity and brand name45
4.7. The six criteria of a brand name45
4.8. Fair Trade branding issues45
4.9. Certification46
4.10. Four imperatives for Fair Trade promotion49
5. Facts and figures51
5.1. Fair Trade figures from 199551
5.2. Fair Trade in 33 countries52
5.3. Fair Trade organizations53
5.4. European Fair Trade importers54
5.5. EFTA, turnover per member.55
5.6. Fair Trade sales per capita56
5.7. Fair Trade global sales figures57
5.8. Fair Trade growth per product group 2000-200358
5.9. Fair Trade growth per product group 2009-201059
6. Conclusion60
7. Bibliography64

Abstract
The purpose of this thesis is to review the usefulness of Fair Trade. Consumers are becoming ethically aware therefore the analysis of Fair Trade can prove to be very useful into understanding how ethically aware consumers actually are when faced with a choice: buying Fair Trade or not. The following thesis will develop the idea of Fair Trade, especially by focusing on two entities: the North and the South. The reasoning behind this approach is that we believe that the North is somehow in debt to the South after the historical abuse of the ex-colonies. Natural resources from Africa played a role in building the industrialized northern world that we are used to today and perhaps it is time for the North to repay the moral debt, and one way to do it could be by Fair Trade. It will do so by firstly analyzing the meaning of Fair Trade to try and get a better understanding of where it emerged from and why. Definitions of Fair Trade will be provided with the help of some Fair Trade organizations as well as researchers. Hence this will lead to a historical part to gain insight into where Fair Trade originated from. This will be followed up by some critique on the Fair Trade concept. Furthermore it will take a look at Fair Trade from a southern point of view and elaborate on the challenges that Fair Trade might face. Life in the South is different culturally speaking than life in the North therefore Fair Trade organizations will have to adapt to the challenges that they might face in the South. The challenges include for example corruption and a different view on the role of men and women in society. Finally a northern point of view is adopted to investigate the possibilities and challenges present for Fair Trade in North America and Western...
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