Fair Trade: Labels Matter


How important are labels in marketing? Labels can be a critical source of information for consumes about products and companies. A label can tell about a product’s ingredients, manufacturing, nutrition, marketing, and more. The Fair Trade logo has been in existence now for 13 years, and in that time it has made a strong impact on consumers’ choices. But, are consumers willing to pay more for products that carry the label?

New research supports the assertion that consumers will indeed pay more for ethically produced goods compared to conventionally-produced goods, to the tune of a whopping 30% premium. Researchers have found that the Fair Trade logo produces activity in the brain’s reward center which alters the willingness to pay computation produced in our brains.

The study also highlighted that consumers believe that foods labeled as fair trade taste better than foods without the label, even though scientists said the products in the study were identical and without any taste variation. It just reinforces a marketing mantra we all know: Perception is reality.

What labels influence you?

Group Activities and Discussion Questions:

  1. Discuss the importance of developing a clear, concise message for marketing programs.
  2. View video about fair trade: https://youtu.be/7K4G5-ydhS0
  3. Visit the Fair Trade Web site: http://fairtradeusa.org/
  4. Use a pyramid model to build the key messages: Top of pyramid – most important message that the customer wants to hear. Middle of pyramid – how the product achieves its value for the customer. Bottom of pyramid – proof points used to validate claims.
  5. Divide students into teams. Have each team develop a key message pyramid for a fair trade or environmentally-sourced product. (Make sure students select a target market first. Different target markets would have different message pyramids.)
  6. When debriefing the exercise, make sure to emphasize to students the difference between what a company wants to tell the market, and what a customer wants to hear about the product.

Source: Brandchannel.com, Manufacturing Business Technology

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