Playing Fair with Price
Topic Pricing Concepts and Pricing Determination
Key Words Fair trade products, living wage, corporate citizenship
InfoTrac Reference CJ120731955
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News Story 

Some retailers charge higher-than-market prices for products as part of an international campaign to help workers earn a wage in poor countries where such products are made. This practice, known as fair trade, is designed to help developing countries ensure healthy work conditions, build schools, protect the environment, and preserve ancient artistic traditions. Scores of fair-trade organizations, nonprofits, wholesalers and other businesses have sprung up recently, selling everything from coffee to carvings while ensuring that 15 percent to 30 percent of the retail price goes to the artisans. Starbucks recently began selling more expensive fair-trade coffee, and last year Dunkin' Donuts began making espresso drinks with fair-trade beans. Supermarkets are also selling everything from chocolate to bananas with fair-trade labels.

For decades fair-trade products sold briskly in Europe but they are just catching on in the United States. North American sales of fair-trade goods accounted for $180 million in 2002 -- up 44 percent from 2001 but a tiny fraction of overall U.S. retail sales. In 2002 total sales for fair-trade handicrafts were only $13.8 million in a North American gift market that generated $55 million in sales.

Even though the fair trade concept is lagging, there is a groundswell of support in public opinion for buying products that promote good corporate citizenship. Human rights organizations believe that as more American companies consider the benefits of the fair trade concept, they will also discover the gilded lining in dealing in fair trade products.

Questions
1.

Read the article and describe the concept of "conscious consumerism." Do you think this concept will have a broad enough following among consumers to ensure the continued success of fair trade products? Why or why not?

Source Jessica Guynn,"Fair trade' merchandise slow to catch on," Knight Ridder/Tribune Business News, August 15, 2004 pITEM04228000.
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