The study, carried out at the University of Bonn, Germany, investigated whether the rise in fair trade, organic and Cause Related Marketing (CrM) products is happening at the expense of charitable donations.
“Results from this paper provide valuable information on consumers’ decision making with respect to Fairtrade, organic and charitable giving, “ write the researchers, “that can be used by policy makers as well as marketing departments and NGOs in the organic, FT and charity sector at a national and regional level.”
Accepted for publication in the journal Food Quality and Preference, the research claims to be “the first empirical study ..conducted to analyse and compare different forms of ethical consumption and/or behaviour. ”
The researchers found that some 27 per cent of participants tended to chose ethically marketed products rather than engage in other forms of charitable behaviour, such as a donating.
The survey was based on face-to-face interviews with 484 participants. Coffee was selected coffee as the product under investigation. Each interview consisted of questions around participants’ purchasing and consumption habits, their knowledge of Fairtrade, donation habits, and attitudes towards donations and Fairtrade. Socio-demographics and the Choice Experiments (CE) were also analysed.
Each choice set in the CE consisted of four coffee packages characterised by four attributes; price (ranging from €2.99 to €5.99), organic (no or yes), label (no label, international fair trade label, CrM label) and donation (indicated as money going directly to the producer). To control the brand effect, a typical coffee package was chosen and labelled with ‘Your favourite brand’
Analysis identified five consumer types or “market segments”:
- Class 1: “price conscious coffee shoppers” (41 per cent of all respondents)
- Class 2: “the donors” (27 per cent); very supportive of donations but indifferent to organic.
- Class 3: “organic production” (15 per cent); rate organic relatively highly, but also emphasise donation and price
- Class 4: “supporters of Fairtrade” (14 per cent)
- Class 5: “the denier “(3 per cent); dislike any kind of label.
“While variables such as product price and attitude towards fair trade, organic production and donations to charity organisations determine class membership,” observed the researchers, “socio demographic characteristics with the exception of age, proved not to be relevant. Willingness To Purchase (WTP) for the attributes organic, fair trade and donations via CrM differ significantly between groups as well as between labelling schemes.”
Interestingly, communicating information on the amount of money reaching the producer is “only relevant for a small part of all consumers,” but “if the absolute amount of money going to producers is indicated on the product, consumers perceive and value this information.”
Food Quality and Preference (2011)
Title: Are ethical consumption and charitable giving substitutes or not? Insights into consumers’ coffee choice.
Authors: Langen, N.