Fair Trade Performance in a Competitive Market

Abstract

Fair Trade Organizations (FTOs) market crafts from developing countries through retail stores and catalogs in the U.S. With their focus on maximizing income generation for artisans, FTOs provide a dramatic contrast to mainstream craft marketers whose attention is directed toward meeting customer needs and expanding shareholder profits. Two research questions were addressed: 1) How have FTOs developed viable organizational cultures that focus on support for producers while giving limited attention to customers? 2) How will FTOs continue to be viable in the increasingly competitive international market for ethnic products ? Five themes related to business performance were extracted from case studies with three leading FTOs. Themes described a large, flexible workforce of artisans in critical need of income; volunteer employees for U.S. retail operations; products targeted toward quality and ethnicity; creation of customer to artisans linkages; and changing store images. Propositions for FTO performance that address strategic appropriateness and competitive strategy were developed. Challenges for the future and research needs were identified.