Segmenting the market through the determinants of involvement:

The Case of Fair Trade

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overview
Fair Trade Market includes a broad range of actors with a heterogeneous clientele Analysis of fair trade consumers must be conducted to fully understand motivations Objective: to analyze and compare by segments, determinants of consumer behavior

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Fair Trade: Organized social movement helping producers to make better trading conditions and promote sustainability Involvement: the extent of relationship of consumer values with the products Two Types of involvement:

Product Involvement Fair Trade Involvement

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Research problem

To study the impact of product and fair trade decision involvement on certain aspects of consumer behavior Hypothesis 1

The frequency with which the consumer chooses fair trade coffee whenever he or she buys coffee.

Hypothesis 2

The number of coffee per days or week that the consumer drinks.

Hypothesis 3

The consumer interest in reading an article about Fair Trade coffee.

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Important Variables

Basis of Segmentation:

Distribution Channel Gender Age Education

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Variables affecting Fair Trade:

Fair Trade Involvement:

Sign Value Hedonic Value Risk Adhesion

Product Involvement:

Sign Value Hedonic Value Utility

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Theoretical Framework

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Research Method
Exploratory Research Data collection through primary research (Questionnaires) Quantitative data Sample Size: 433 Sampling Technique: Two-Strata and Cluster Sampling

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Gender: Females (59%), Males (38%) Age: Under 40 (31%), 41-55 (32%), 56+ (35%) Education: Lower (46%), Higher (41%) Distribution Channel: Supermarkets (39%), World shops (20%), Supermarkets + World shops (38%)

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Analysis Method
Simultaneous multiple-group comparison Allows an inspection of the causal relations for two or more groups Structural Regression AMOS v16.0

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Results

Coffee involvement and its determinants do not affect fair trade involvement The fair trade sign value not a significant predictor for any group Analysis shows determinants of involvement differ according to market segment Age and distribution channel proved to have a significant relationship

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Gender and Education did not have a significant relationship Adhesion to fair trade strong predictor of involvement across all segments Importance of each dimension varied among different segments Consumer segments responded differently to communication techniques

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Conclusion

Fair Trade Market needs to be better understood to gain efficiency Specialized technique necessary to compare determinants of behavior across segments Communication oriented towards conveying underlying principles of fair trade Three pillars identified upon which the communication message should be based on: Fair Trade Principles Credibility of Products Pleasure of Consuming Fair Trade Products 4/15/12

Comments

Fair Trade becoming increasingly prominent throughout the world Shift to mainstream, resulting in diversifying of consumers and actors Segmentation and analysis a natural outcome of diversification Important to understand consumer motivation

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Study aimed at segmenting fair trade market to understand determinants of behavior Focus on behavior predictors rather than communication channels Effects of interaction of multiple variables not analyzed Applicable to Pakistani markets

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