Fear Fair Trade Discount Promotions

Savvy marketers realize there are circumstances in which dropping the selling price of an item retards sales rather than enhancing them. Studies at McGill University and Auckland University of Technology created one of those circumstances by offering promotional discounts on fair trade items. Consumers whose interest in fair trade was heightened by reading about its purposes were less likely to purchase a fair trade chocolate bar offered at 30% off than when offered at the regular price.
     The fair trade movement advocates a willingness to pay a premium to suppliers who treat workers humanely and conduct their operations in ways which sustain the environment. Its origins were in sales by producers in developing countries to consumers in developed countries of items like coffee and handicrafts. The spirit of free trade can now apply to sales within a developed country of a broad range of items and of the humane treatment of animals, not just workers.
     The researchers’ explanation for the drop in interest from promotional discounts is that the shoppers worried the lower price would impede adequate pay and proper employment conditions for the workers. Consumers who showed no particular interest in fair trade campaigns were, not surprisingly, more likely to buy the chocolate bar when offered at a 30% discount.
     For the fair trade proponents, the damage to the marketer from the price discount extended beyond missed chocolate bar sales. The researchers saw a drop in brand credibility, which would affect its other offerings to the marketplace. Again, this was not true for shoppers low in fair trade involvement.
     Knowing this, you might choose to avoid featuring in your promotional discount campaigns items carrying a fair trade benefits claim. Instead, harvest the extra revenues which come from shoppers willing to spend more money to express their values. If you do discount fair trade items, emphasize in the promotion a clear rationale which proves the discount does not lessen fulfillment of the fair trade objectives. This avoided the sales drop.
     Attention to shopper values is also important with green products, a benefit related to fair trade. Consumers expect to pay a premium for products with the sensitivity to environmental impacts which qualifies the products to be called green. But Drexel University researchers saw consumers in their studies get mighty irritated if consumers came to realize products had only trivial modifications in the direction of environmental sensitivity.

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