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Does Fair Trade Breed Contempt? A Cross-Country Examination on the Moderating Role of Brand Familiarity and Consumer Expertise on Product Evaluation

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Abstract

This article is a within- and cross-country examination of the impact of fair trade certification on consumers’ evaluations and attitudes toward ethically certified products. Across three experimental studies, the authors analyze how different levels of brand familiarity and fair trade expertise impact consumer decisions. The authors study this phenomenon across markets with different social orientation cultures to analyze potential dissimilarities in the way consumers evaluate and behave toward ethically certified products. Findings suggest that fair trade certifications enhance product valuations. However, this effect is especially observed for low familiar brands, once the level of fair trade expertise increases. Findings also suggest that there are individual cultural differences with respect to social and environmental labeling expertise that may account for some of the unexplained variation in choice behaviors observed across countries. Results indicate that especially in more (mature) individualistic markets (vs. collectivistic) consumer ethical behavior seems to be greatly influenced by consumers’ perceptions about the eligibility of brands using (or not) fair trade. This effect is strengthened by the significant mediating role of consumers’ ethicality perceptions on the relationship between fair trade and the willingness to pay for brands.

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Notes

  1. The results from the sample with participants who failed the manipulation check were similar to those when we excluded these participants: a significant fair trade main effect for the CPE-dependent variable (F(1, 199) = 6.04, p < .01), a familiarity with the brand main effect for the package evaluation (F(1, 199) = 12.77, p < .001) and CPE (F(1, 199) = 23.95, p < .001)-dependent variables, and a marginally significant fair trade certification × brand familiarity × fair trade expertise interaction for package evaluation (F(1, 199) = 3.18, p = .08 also emerged in the full data set.

Abbreviations

CSR:

Corporate social responsibility

CPE:

Consumer perceived ethicality

WTP:

Willingness to pay

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Funding

This study was funded by Fundação para a Ciência e Tecnologia (FCT Portugal)—Grant Number (SFRH/BD68358/2010)—and by the Multi-Year Funding Program for R&D Units (UID/GES/00407/2013).

Author information

Authors and Affiliations

  1. IPAM Lisboa, Universidade Europeia, Laureate International Universities, Estrada Correia, 53, 1500-210, Lisbon, Portugal

    Vera Herédia-Colaço

  2. UCP - Católica Lisbon School of Business and Economics, Universidade Católica Portuguesa, Palma de Cima, 1649-023, Lisbon, Portugal

    Rita Coelho do Vale

  3. Department of Agricultural and Resource Economics, University of California, Berkeley, 232 Giannini Hall # 3310, Berkeley, CA, 94720-3310, USA

    Sofia B. Villas-Boas

Authors
  1. Vera Herédia-Colaço
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  2. Rita Coelho do Vale
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Correspondence to Vera Herédia-Colaço.

Ethics declarations

Conflict of interest

The authors declare that they have no conflict of interest

Ethical Approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards.

Human and Animal Rights

This article does not contain any studies with animals performed by any of the authors.

Informed Consent

Informed consent was obtained from all individual participants included in the study.

Appendices

Appendix 1: Examples of Ethical Certification Marks Used in the USA and Europe

Appendix 2: Key Measures Used in Studies 1–2–3

Visual Inspection Measure

Package evaluation (three-item, seven-point bipolar scales, adapted from Schoormans and Robben 1996) (α1 = .89, α2 = .88, α3 = .84)

“Overall, do you think this package is:”

  1. (1)

    “ugly–beautiful,”

  2. (2)

    “does not confer quality–confers quality,”

  3. (3)

    “badly finished–very well finished.”

Cognitive measures

Product quality perceptions (seven-point scales, 1 = very unlikely, 7 = very likely, adapted from Kamins and Marks (1991) and Luchs et al. (2010) (α1 = .80, α2 = .78, α3 = .79)

“What is the likelihood of this product containing the following characteristics:”

  1. (1)

    “it’s not artificially flavored”

  2. (2)

    “it does not contain preservatives”

  3. (3)

    “it’s healthy”

  4. (4)

    “it’s safe”

  5. (5)

    “it has quality”

Consumers ‘perceived ethicality of a brand (CPE) (seven-point scales, 1 = strongly disagree, 7 = strongly agree, adapted from Brunk 2012) (α1 = .85, α2 = .83, α3 = .84)

“What are your perceptions about this brand:”

  1. (1)

    “the brand respects moral norms”

  2. (2)

    “the brand always adheres to the law”

  3. (3)

    “it’s a socially responsible brand”

  4. (4)

    “it’s a good brand”

Demand measure

Willingness to pay (WTP)

“What would be the price you would be willing to pay for this product?”

Appendix 3: Stimuli for the Valuation of Product Attribute Information

Study 1

Study 2

Note: Due to space constraints only a product category is presented per study. More images are available upon request.

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Herédia-Colaço, V., Coelho do Vale, R. & Villas-Boas, S.B. Does Fair Trade Breed Contempt? A Cross-Country Examination on the Moderating Role of Brand Familiarity and Consumer Expertise on Product Evaluation. J Bus Ethics 156, 737–758 (2019). https://doi.org/10.1007/s10551-017-3572-9

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