Fairtrade Buying Behaviour: We Know What They Think, But Do We Know What They Do?
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1 Fairtrade Buying Behaviour: We Know What They Think, But Do We Know What They Do? Dr. Fred A. Yamoah Prof. Andrew Fearne Dr. Rachel Duffy Dr. Dan Petrovici
2 Background/Context The UK is a major market for fairtrade products (Nicholls and Opal 2008). It recorded 1.17 billion retail sale value in 2010 (Fairtrade Foundation 2011). Industry and fairtrade literature support the awareness-concern-action ethical purchasing stands. No fairtrade market fell back despite the effects of the economic recession (FTF, 2008/2009 Report) Socially conscious consumers in the UK are keeping to ethical consumption behaviour, including fairtrade purchases, despite the prevailing global economic recession (Carrigan and De Pelsmacker, 2009, and Bondy and Vishal, 2011) MAPP International Conference, 2013
3 Globescan (2009) Classification Enthusiasts (15% UK consumers) Very active and trust fairtrade Mainstream (30% of UK consumers) Moderately active and buy fairtrade Demographics Life-stage, Lifestyle and Regional (Little differentiation from UK averages for all 3 segments) Page 3 MAPP International Conference, 2013
4 Descriptors in fairtrade segmentation literature suggests an ethics driven purchasing behaviour (Bird and Hughes, 1997, Newholm, 1999, and Cowe and Williams, 2000 and Nicholls & Opal, 2008). The existing literature on fairtrade purchasing behaviour is dominated by the use of Claimed/Reported Behaviour. (Carrington et al. 2010) questions why ethical consumers don t walk their talk proposes a shift of emphasis from perceived behavioural control to actual behaviour control. Evidence beneath the headline figures do not support claims by Globescan and FTF s Reports. Dunnhumby (2009) suggests that wide distribution and increased prices account for the growth rather than shopper demand. Page 4 MAPP International Conference 2013
5 Decision Tree Showing Key performance indicators of Fairtrade Food products in Tesco within 52 weeks (ending November 2009) Dunnhumby, 2009) Page 5 MAPP International Conference, 2013
6 b. Research Questions To assess what fairtrade shoppers do by identifying: 1) Who buys fairtrade food products, and investigate whether fairtrade purchasing behaviour vary across shopper segments? 2) The marketing factors driving the growth in fairtrade retail sales? 3)How prevalent is cross shopping associated with fairtrade shoppers? 4)Differences between claimed versus actual purchasing behaviour (Survey data & Supermarket Till Receipts) PhD Workshop Hope Business School, April 1 st 2012
7 Research Methodology 1) Compare Means of Fairtrade appeal to Life-stage, Lifestyle and Regional segments using dunnhumby data 2) Run Cross shopping analysis using dunnhumby data 3) Undertake regression analysis to assess relative contributions of Price, Promotion and Distribution to Fairtrade Sales Volume using dunnhumby and Brandview datasets 4) Carry out a survey and till receipts collection MAPP International Workshop, 2013
8 What is the dunnhumby data? 2 years of weekly supermarket transactions Population = 17 million households Sample = 10% (1.7 million shoppers) Representative of 40%+ of UK households Over 30,000 food products (265,000+ total) Page 8 MAPP International Workshop, 2013
9 Results: FAIRTRADE APPEAL TO SEGMENTS MAPP International Workshop, 2013
10 Shopper Cross-shopping Pattern between Fairtrade Coffee, Tea, Banana and All other Fairtrade Food Products (%) : 52 weeks from 6-April-2009 to 4-April Cross-shop Group Percentage Unit Sales of Fairtrade Coffee Percentage Unit Sales of Fairtrade Tea Percentage Unit Sales of Fairtrade Banana Percentage Unit Sales of All Other Fairtrade Fairtrade Coffee only 31.7% Fairtrade Tea only % Fairtrade Banana only % --- All Other Fairtrade only % Fairtrade Coffee & All Other Fairtrade only 15.2% % Fairtrade Coffee & Fairtrade Banana 0.0% % --- Fairtrade Coffee & Fairtrade Tea 4.7% 8.0% Fairtrade Tea & Fairtrade Banana % 0.0% --- Fairtrade Tea & All Other Fairtrade % % Fairtrade Banana & All Other Fairtrade % 52.5% Fairtrade Coffee, Fairtrade Tea & Fairtrade Banana Fairtrade Coffee, Fairtrade Tea & All Other Fairtrade Fairtrade Coffee, Fairtrade Banana & All Other Fairtrade Fairtrade Tea, Fairtrade Banana & All Other Fairtrade Fairtrade Coffee, Fairtrade Tea, Fairtrade Banana & All Other Fairtrade 0.0% 0.0% 0.0% % 6.9% % 29.3% % 11.0% % 6.1% 5.0% 14.9% 21.8% 8.5% 7.2% Total 100.0% 100.0% 100.0% 100.0% Page 10 MAPP International Workshop, 2013
11 Regression results of price, distribution and promotion as factors driving supermarket fairtrade retail sales volume **p<0.01 *p>0.05 Marketing Factor Standardized Beta Coefficient (p-value) T-Value Significance Price ** Distribution ** Promotion Adjusted R - Squared MAPP International Workshop, 2013
12 Amount of fairtrade bought per month: actual versus claimed Spending value Minimum spending value Maximum spending value Mean spending value Actual Claimed Actual as a percentage of claimed spending value 9.16% Page 12 MAPP International Workshop, 2013
13 Fairtrade products, Alternatives and Other Ethical Products Bought Over Four Weeks Fairtrade product bought Fairtrade alternatives bought Other ethical products bought Banana Keep me Banana Free range eggs Banana Banana Chocolate Organic banana and Organic sugar Banana Chocolate and Coffee Banana Tea Organic banana Banana MAPP International Workshop, 2013
14 Conclusions Fairtrade Buying Behaviour: What we know they think is quite different from what they do! Attribution of increasing growth in fairtrade to growing mass appeal (All life-stage and lifestyle segments) has not been confirmed by behavioural segmentation based on supermarket loyalty card data Any implications for Mainstreaming Strategy? Survey versus till receipts comparison suggests a gap a need to know why Absence of cross shopping connotes lack of depth for across fairtrade MAPP International Workshop, 2013
Kent Academic Repository
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