SEGMENTING THE MARKET THROUGH THE DETERMINANTS OF INVOLVEMENT: The Case of Fair Trade

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

 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

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.

IMPORTANT VARIABLES
Basis of Segmentation:
Distribution Channel Gender Age

Education

 Variables affecting Fair Trade:

Fair Trade Involvement:
Sign Value Hedonic Value Risk

Adhesion

Product Involvement:
Sign Value Hedonic Value Utility

THEORETICAL FRAMEWORK

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

 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%)

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

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

 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

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

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

 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