Ethics Religion And Sustainable Production Case Study Marketing Essay

1926 words (8 pages) Essay

1st Jan 1970 Marketing Reference this

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The introduction of Fair Trade has indeed encouraged many businesses in building an efficient ethical supply chain which involves applying strict measures that comprises of identifying, forming and maintaining good supplier relationship with both upstream and upstream. It is important that companies build a viable ethical supply chain as well encourage good working condition in accordance to existing labor laws in other improve brand image and build a strong reputation as well as contribute to sustainable development. In today’s business world, building ethical supply chains is extremely essential as it also comes with a lot of benefits attached to the practice. In an article by (Michael R. Levin and Richard J. Cellini, 2008) “Consumers, investors, business partners, regulators, and media organizations now expect a company and its entire supply chain to be ethical”.

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The world is becoming a global marketplace and companies must ensure that they have morally strong brand image and create a well trusted supply chain so as to add value not only to their brand but to their image in general, with the wide spread of internet and effective communication consumers are becoming aware of what is actually involve in production and distribution of goods and services. With the increasing rate of climate change people are becoming more conscious of how to care for the environment and the ways of how resources are being exploited.

Interestingly, in these recent economic downturn’s big multinationals companies such as Kraft, Nestle and Starbucks have all managed to form strategic partnership with Rainforest Alliance for Ethical Sourcing of Coffee beans, according to (IGD.com, 2009) Kraft started working with Rainforest Alliance to show support as part of their contribution towards sustainability and helping the environment, shortly after gaining great experience Kraft successfully expanded more work with Rainforest Alliance and included other brands and with this, “a total of 150,000 farmers benefited by gaining improved working conditions and better wages, they also helped to protect 70,000 acres of coffee farmland and helped protect rainforest plant and animal species” as reported by (IGD.com, 2009)

Nestle announced in 2005 to support sourcing its coffee beans ethically after bagging the title in the UK of being the most unethical company and partly responsible for driving down prices of coffee beans at the expense of poor small farmers, they decided to make a serious commitment to support Fair trade and fight poverty, invest in community projects such as improving schools and clinics, providing clean water and repairing roads.

Fair Trade label is particularly strong and popular in the United Kingdom, The United States Starbucks made a pledge to make all of its popular espresso brand Fair Trade by the end of 2009 on the other hand, Nestlé who happens to be a bigger brand with numerous has also join the bandwagon and made commitment to the mass consumer market like its number one rival Kraft, whose brands such as Maxwell house and Kenco has made sure all its coffee beans are from Rainforest Alliance certified farms. (Russell, 2009)

Starbucks made a commitment to ethical sourcing in 2009, and has become one of the largest buyers of fair-trade coffee, they also made a decision to have 100% of its “coffee certified or verified by an independent third party,” such as TransFair USA. To show their commitment to the sustainability, they have planned to invest in communities by doubling loans to farmers by 2015. According to Starbucks, (starbucks.co.uk, 2011)”responsibly grown, ethically traded coffee means working with farmers to produce coffee in ways that help provide benefits to their business, their communities and the environment.” This falls in line with the Fair Trade objectives, which states that, coffee bean growers should be adequately compensated for their harvest.

In addition, Fair Trade’s primary objectives is ensure that its sets standards for farmers’ organizations and labor are adhered to by all, they also work in the interest of small-scale producers and help them work in an organized manner, such as in a co-op and make sure all decisions are made democratically and not influenced. In Fair Trade, the farmers are allowed to form unions. While in the Rainforest Alliance’s standard, they do not get involved with the cooperation of farm workers, and are somewhat laidback. The Rainforest Alliance does not have any existing baseline premium for wages, and they only maintains the low wage bar set by local governments (Trauben, 2009)

2. According to research expert, (Johnson, 2010) who carried out a research in the UK to understand what consumers actually wants, in his studies he discovered that food is the most misunderstood area of public policy, as it accounts for 10% of household expenditure and is linked to 12% of employment, 70% of land use and 20% of energy use in the UK. He also mentioned that demand for food is higher than supply bearing in mind price, quality, availability and access such as logistics issues which play a very vital role in supply chain. (Doane, 2001) Defined “ethical consumption as the purchase of a product that concerns a certain ethical issue human rights, labor conditions, animal well-being, and environment it is chosen freely by an individual consumer”.

With growing trends and change in lifestyle consumer behavior and expectations have changed, due to various issues which ranges from “Self-interest” to “Purchasing Power”. People are getting busier and barely have time to cook and therefore have to rely on instant junk foods, maintaining a healthy diet is increasing becoming a difficult task but it is important to make sure that they consume ethically by making sure they are well informed of the food being sourced in a sustainable way. Sending out clear information to create awareness should be encouraged by the government so as to enable the food retailers provide more knowledge and give more information to improve the eating habit of consumers said the Chief Executive of Wm Morrison Supermarkets (Philips, 2010) which is the fourth biggest grocery retailer in the UK and has 479 stores with a strong focus on fresh products.

However, having access to affordable healthy foods should be greatly encouraged and not excluded economically from enjoying healthy meals, as these tends to be more expensive. With the recent economic downturn more people have very little disposable income to spend on buying food stuff, as price for simple basic commodities such as rice has witnessed an increase in price globally. (Philips, 2010) also said “Key to the affordability of food is choice. Supermarkets offer wide choice in order not only to meet customers’ expectations but also to drive competition. This encourages innovation to help ensure excellent quality as well as to keep prices down.”

The conclusion of the research carried out by the (Johnson, 2010) is that consumers have growing expectations and it is the responsibility of the supermarkets to act sustainably, and not increase prices of more healthier foods, Fair trade products should be made affordable and serve as an economically sustainability initiative which helps the environment and must be backed by clear information and honest Fair Trade labeling of products so that consumers have clear knowledge of where the products originates from and the environmental impact. Consumers are becoming more aware of brands that practice responsible sourcing and procurement, carbon footprints and favorable ethical trade practices. Brands who adopt ethical sourcing are perceived as being environment friendly, these ethical firms avoid actions that may somewhat negatively influence, or probably appear to influence, supply chain management decisions for sourcing of resources.

3. Recommendations to help cure the ills of the coffee market would be as follows:

In most developing countries where coffee is being exported, the coffee is regarded as very valuable export commodity which makes up a major contribution to their earnings, they are owned by small business owners, the coffee exported from these poor countries are highly consumed by the wealthiest countries, the coffee beans has variety of different grades most of they are somewhat identical which makes a standardized product, but they have distinctive flavors and specialty coffee falls into this category and has a much higher grade which makes it command a higher price than others. The Fair Trade coffee bean are in different grades, although specialty coffee requires a totally different production and pricing which in turn creates a quality control issue for Fair Trade coffee. (Haight, 2011) Fair Trade cannot solve all the problems relating to ethical supply and consumption, consumers should also play a part in curing the ills of the coffee by:

a) Ethical Consumption should be encouraged in great measures so as to make consumers use their purchasing power as a means to change questionable ills of the coffee market business as well as the severe oversupply of low cost substandard coffee beans.

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According to (Jeremy, 2007) Fair Trade is defined as a trading partnership based on dialogue, transparency, and respect that seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of marginalized producers and workers – especially in the South.

One complaint amongst many coffee drinkers is that the quality of Fair Trade coffee varies widely. The fact that the growers are guaranteed a minimum price for their product may have unintended consequences, one being that there is no incentive to improve quality.

b) Reward companies that practice high ethical standards to set an example for other unethical companies to change their ways of doing business, for example according to a recent study carried out by (Remi Trudel et el, 2012) in trying to understand how much more would consumers be willing pay for an ethically produced product? and also how much less would consumers be willing to pay for the product they think is unethical? 97 coffee drinkers were radomly chosen for the experiment and were given informations about the company’s production standards, the result from the experiment showed that people punished unethical goods with a much higher discount than they rewarded ethical products with premiums price.

c) Consume authentic ethical products and contribute to the lives of the growers by avoiding bad consumer choice and practices.

d) Always check labels and investigate popular brands to understand its history of production and encourage fairness in labor.

In conclusion, coffee experts in the industry must work hard to reduce the supply of low quality coffee beans and promote ethical supply of this commodity, which will not only improve the lives of the growers but also contribute immensely in shaping the coffee market, companies should increase actions towards socially responsible marketing, (McDonald, 2013) which involves:

Customer oriented marketing

Innovative marketing

Customer value marketing

Sense of mission marketing

Societal marketing

The introduction of Fair Trade has indeed encouraged many businesses in building an efficient ethical supply chain which involves applying strict measures that comprises of identifying, forming and maintaining good supplier relationship with both upstream and upstream. It is important that companies build a viable ethical supply chain as well encourage good working condition in accordance to existing labor laws in other improve brand image and build a strong reputation as well as contribute to sustainable development. In today’s business world, building ethical supply chains is extremely essential as it also comes with a lot of benefits attached to the practice. In an article by (Michael R. Levin and Richard J. Cellini, 2008) “Consumers, investors, business partners, regulators, and media organizations now expect a company and its entire supply chain to be ethical”.

The world is becoming a global marketplace and companies must ensure that they have morally strong brand image and create a well trusted supply chain so as to add value not only to their brand but to their image in general, with the wide spread of internet and effective communication consumers are becoming aware of what is actually involve in production and distribution of goods and services. With the increasing rate of climate change people are becoming more conscious of how to care for the environment and the ways of how resources are being exploited.

Interestingly, in these recent economic downturn’s big multinationals companies such as Kraft, Nestle and Starbucks have all managed to form strategic partnership with Rainforest Alliance for Ethical Sourcing of Coffee beans, according to (IGD.com, 2009) Kraft started working with Rainforest Alliance to show support as part of their contribution towards sustainability and helping the environment, shortly after gaining great experience Kraft successfully expanded more work with Rainforest Alliance and included other brands and with this, “a total of 150,000 farmers benefited by gaining improved working conditions and better wages, they also helped to protect 70,000 acres of coffee farmland and helped protect rainforest plant and animal species” as reported by (IGD.com, 2009)

Nestle announced in 2005 to support sourcing its coffee beans ethically after bagging the title in the UK of being the most unethical company and partly responsible for driving down prices of coffee beans at the expense of poor small farmers, they decided to make a serious commitment to support Fair trade and fight poverty, invest in community projects such as improving schools and clinics, providing clean water and repairing roads.

Fair Trade label is particularly strong and popular in the United Kingdom, The United States Starbucks made a pledge to make all of its popular espresso brand Fair Trade by the end of 2009 on the other hand, Nestlé who happens to be a bigger brand with numerous has also join the bandwagon and made commitment to the mass consumer market like its number one rival Kraft, whose brands such as Maxwell house and Kenco has made sure all its coffee beans are from Rainforest Alliance certified farms. (Russell, 2009)

Starbucks made a commitment to ethical sourcing in 2009, and has become one of the largest buyers of fair-trade coffee, they also made a decision to have 100% of its “coffee certified or verified by an independent third party,” such as TransFair USA. To show their commitment to the sustainability, they have planned to invest in communities by doubling loans to farmers by 2015. According to Starbucks, (starbucks.co.uk, 2011)”responsibly grown, ethically traded coffee means working with farmers to produce coffee in ways that help provide benefits to their business, their communities and the environment.” This falls in line with the Fair Trade objectives, which states that, coffee bean growers should be adequately compensated for their harvest.

In addition, Fair Trade’s primary objectives is ensure that its sets standards for farmers’ organizations and labor are adhered to by all, they also work in the interest of small-scale producers and help them work in an organized manner, such as in a co-op and make sure all decisions are made democratically and not influenced. In Fair Trade, the farmers are allowed to form unions. While in the Rainforest Alliance’s standard, they do not get involved with the cooperation of farm workers, and are somewhat laidback. The Rainforest Alliance does not have any existing baseline premium for wages, and they only maintains the low wage bar set by local governments (Trauben, 2009)

2. According to research expert, (Johnson, 2010) who carried out a research in the UK to understand what consumers actually wants, in his studies he discovered that food is the most misunderstood area of public policy, as it accounts for 10% of household expenditure and is linked to 12% of employment, 70% of land use and 20% of energy use in the UK. He also mentioned that demand for food is higher than supply bearing in mind price, quality, availability and access such as logistics issues which play a very vital role in supply chain. (Doane, 2001) Defined “ethical consumption as the purchase of a product that concerns a certain ethical issue human rights, labor conditions, animal well-being, and environment it is chosen freely by an individual consumer”.

With growing trends and change in lifestyle consumer behavior and expectations have changed, due to various issues which ranges from “Self-interest” to “Purchasing Power”. People are getting busier and barely have time to cook and therefore have to rely on instant junk foods, maintaining a healthy diet is increasing becoming a difficult task but it is important to make sure that they consume ethically by making sure they are well informed of the food being sourced in a sustainable way. Sending out clear information to create awareness should be encouraged by the government so as to enable the food retailers provide more knowledge and give more information to improve the eating habit of consumers said the Chief Executive of Wm Morrison Supermarkets (Philips, 2010) which is the fourth biggest grocery retailer in the UK and has 479 stores with a strong focus on fresh products.

However, having access to affordable healthy foods should be greatly encouraged and not excluded economically from enjoying healthy meals, as these tends to be more expensive. With the recent economic downturn more people have very little disposable income to spend on buying food stuff, as price for simple basic commodities such as rice has witnessed an increase in price globally. (Philips, 2010) also said “Key to the affordability of food is choice. Supermarkets offer wide choice in order not only to meet customers’ expectations but also to drive competition. This encourages innovation to help ensure excellent quality as well as to keep prices down.”

The conclusion of the research carried out by the (Johnson, 2010) is that consumers have growing expectations and it is the responsibility of the supermarkets to act sustainably, and not increase prices of more healthier foods, Fair trade products should be made affordable and serve as an economically sustainability initiative which helps the environment and must be backed by clear information and honest Fair Trade labeling of products so that consumers have clear knowledge of where the products originates from and the environmental impact. Consumers are becoming more aware of brands that practice responsible sourcing and procurement, carbon footprints and favorable ethical trade practices. Brands who adopt ethical sourcing are perceived as being environment friendly, these ethical firms avoid actions that may somewhat negatively influence, or probably appear to influence, supply chain management decisions for sourcing of resources.

3. Recommendations to help cure the ills of the coffee market would be as follows:

In most developing countries where coffee is being exported, the coffee is regarded as very valuable export commodity which makes up a major contribution to their earnings, they are owned by small business owners, the coffee exported from these poor countries are highly consumed by the wealthiest countries, the coffee beans has variety of different grades most of they are somewhat identical which makes a standardized product, but they have distinctive flavors and specialty coffee falls into this category and has a much higher grade which makes it command a higher price than others. The Fair Trade coffee bean are in different grades, although specialty coffee requires a totally different production and pricing which in turn creates a quality control issue for Fair Trade coffee. (Haight, 2011) Fair Trade cannot solve all the problems relating to ethical supply and consumption, consumers should also play a part in curing the ills of the coffee by:

a) Ethical Consumption should be encouraged in great measures so as to make consumers use their purchasing power as a means to change questionable ills of the coffee market business as well as the severe oversupply of low cost substandard coffee beans.

According to (Jeremy, 2007) Fair Trade is defined as a trading partnership based on dialogue, transparency, and respect that seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of marginalized producers and workers – especially in the South.

One complaint amongst many coffee drinkers is that the quality of Fair Trade coffee varies widely. The fact that the growers are guaranteed a minimum price for their product may have unintended consequences, one being that there is no incentive to improve quality.

b) Reward companies that practice high ethical standards to set an example for other unethical companies to change their ways of doing business, for example according to a recent study carried out by (Remi Trudel et el, 2012) in trying to understand how much more would consumers be willing pay for an ethically produced product? and also how much less would consumers be willing to pay for the product they think is unethical? 97 coffee drinkers were radomly chosen for the experiment and were given informations about the company’s production standards, the result from the experiment showed that people punished unethical goods with a much higher discount than they rewarded ethical products with premiums price.

c) Consume authentic ethical products and contribute to the lives of the growers by avoiding bad consumer choice and practices.

d) Always check labels and investigate popular brands to understand its history of production and encourage fairness in labor.

In conclusion, coffee experts in the industry must work hard to reduce the supply of low quality coffee beans and promote ethical supply of this commodity, which will not only improve the lives of the growers but also contribute immensely in shaping the coffee market, companies should increase actions towards socially responsible marketing, (McDonald, 2013) which involves:

Customer oriented marketing

Innovative marketing

Customer value marketing

Sense of mission marketing

Societal marketing

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