Skip to main content
SpringerLink
Log in

A Cross-National Investigation on How Ethical Consumers Build Loyalty Toward Fair Trade Brands

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

Although Fair Trade has recently experienced rapid growth around the world, there is lack of consumer research that investigates what determines consumers’ loyalty toward Fair Trade brands. In this research, we investigate how ethical consumption values (ECV) and two mediating variables, Fair Trade product beliefs (FTPB) and Fair Trade corporate evaluation, (FTCE) determine Fair Trade brand loyalty (FTBL). On the basis of two empirical studies that use samples from the U.S. and Korea, we provide evidence demonstrating that the manner in which ECV influence FTBL differs in the U.S. and Korea. In the U.S., ECV determine FTBL only indirectly via FTPB, whereas in Korea they determine FTBL directly as well as indirectly via FTCE. We discuss theoretical and managerial implications of these findings.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Abbreviations

ECV:

Ethical consumption values

FTPB:

Fair Trade product beliefs

FTCE:

Fair Trade corporate evaluation

FTBL:

Fair Trade brand loyalty

SEM:

Structural equation modeling

CFA:

Confirmatory factor analysis

CR:

Composite reliabilities

AVE:

Average variance extracted

References

  • Aaker, D. A.: 1996, ‘Measuring Brand Equity Across Products and Markets’, California Management Review 38(3), 102-120.

    Google Scholar 

  • Ahmed, M., K. Y. Chung and J. Eichenseher: 2003, ‘Business Students’ Perception of Ethics and Moral Judgment: A Cross-Cultural Study’, Journal of Business Ethics 43, 89-102.

    Article  Google Scholar 

  • Ajzen, I.: 1985, From Intention to Actions a Theory of Planned Behavior in Action-Control from Cognition to Behavior (Heidelberg, Baden-Wurttemberg: Springer Inc).

    Google Scholar 

  • Ajzen, I. and M. Fishbein: 1980, Understanding Attitudes and Predicting Social Behavior (Prentice-Hall, Englewood Cliffs, NJ).

    Google Scholar 

  • Al-Khatib, J. A., S. J. Vitell and M. Y. A. Rawwas: 1997. ‘Consumer Ethics: A Cross-Cultural Investigation’, European Journal of Marketing 31(11/12), 750-767.

    Article  Google Scholar 

  • Anderson, N. H: 1981, Foundations of Information Integration Theory (Academic Press, San Diego, CA).

    Google Scholar 

  • Anderson, J. C. and D. W. Gerbing: 1988, ‘Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach’, Psychological Bulletin 103(3), 411-423.

    Article  Google Scholar 

  • Bagozzi, R. P. and Y. Yi: 1988, ‘On the Evaluation of Structural Equation Models’, Journal of the Academy of Marketing Science 16(Spring), 74–94.

    Google Scholar 

  • Baron, R. M. and D. A. Kenny: 1986, ‘The Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations’, Journal of Personality and Social Psychology 51(6), 1173-1182.

    Article  Google Scholar 

  • Batra, R. and O. T. Ahtola: 1990, ‘Measuring the Hedonic and Utilitarian Sources of Consumer Attitudes’, Marketing letters 2(2), 159-170.

    Article  Google Scholar 

  • Batra, R., P. M. Homer, and L. R. Kahle: 2001, ‘Values, Susceptibility to Normative Influence, and Attribute Importance Weights: A Nomological Analysis’, Journal of Consumer Psychology 11(2), 115-128.

    Article  Google Scholar 

  • Bernardi, R. A., M. B. Witek, and M. R. Melton: 2009, ‘A Four-Country Study of the Associations Between Bribery and Unethical Actions’, Journal of Business Ethics 84(3), 389-404.

    Article  Google Scholar 

  • Bird, K. and D. R. Hughes: 1997, ‘Ethical Consumerism: The Case of Fairly-Traded Coffee’, Business Ethics: A European Review 6(3), 159-167.

    Article  Google Scholar 

  • Bloom, P. N. and W. D. Novelli: 1981, ‘Problems and Challenges in Social Marketing’, Journal of Marketing 45(2), 79-88.

    Article  Google Scholar 

  • Brislin, R. W.: 1970, ‘Back-Translation for Cross-Cultural Research’, Journal of Cross-Cultural Psychology 1(3), 185-216.

    Article  Google Scholar 

  • Brown, T. J. and P. A. Dacin: 1997, ‘The Company and the Product: Corporate Associations and Consumer Product Responses’, Journal of Marketing 61(1), 68-84.

    Article  Google Scholar 

  • Chan, A., S. Wong, and P. Leung: 1998, ‘Ethical Beliefs of Chinese Consumers in Hong Kong’, Journal of Business Ethics 17, 1163-1170.

    Article  Google Scholar 

  • Cohen, J., P. Cohen, S. G. West and L. S. Aiken: 2003, Applied Multiple Regression/Correlation Analysis for Behavioral Sciences, 3rd edition (Lawrence Erlbaum Publishing, Mahwah, NJ).

    Google Scholar 

  • Creyer, E. and W. T. Ross Jr.: 1997, ‘The Influence of Firm Behavior on Purchase Intention: Do Consumers Really Care About Business Ethics?’, Journal of Consumer Marketing 14(6), 419-432.

    Article  Google Scholar 

  • Dacin, P. A. and D. C. Smith: 1994, ‘The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions’, Journal of Marketing Research 31(May), 229–242.

    Google Scholar 

  • De Pelsmacker, P. and W. Janssens: 2007, ‘A Model for Fair Trade Buying Behavior: The Role of Perceived Quantity and Quality of Information and of Product-Specific Attitudes’, Journal of Business Ethics 75(4), 361-380.

    Article  Google Scholar 

  • De Pelsmacker, P., W. Janssens, E. Sterckx, and C. Mielants: 2006, ‘Fair-Trade beliefs, Attitudes and Buying Behavior of Belgian Consumers’, International Journal of Nonprofit and Voluntary Sector Marketing 11(2), 125-138.

    Article  Google Scholar 

  • Dickson, M. A.: 2001, ‘Utility of No-Sweat Labels for Apparel Consumers: Profiling Label Users and Predicting their Purchases’, The Journal of Consumer Affairs 35(1), 96-119.

    Article  Google Scholar 

  • Doran, C. J.: 2009, ‘The Role of Personal Values in Fair Trade Consumption’, Journal of Business Ethics 84, 549-563.

    Article  Google Scholar 

  • Erffmeyer, R.C., B. D. Keillor, and D. T. LeCaire: 1999, ‘An Empirical Investigation of Japanese Consumer Ethics’, Journal of Business Ethics 18, 35-50.

    Article  Google Scholar 

  • Ferber, R.: 1977, ‘Research by Convenience’, Journal of Consumer Research 4(1), 57-58.

    Article  Google Scholar 

  • Ferrell, O. C. and L. G. Gresham: 1985, ‘A Contingency Framework for Understanding Ethical Decision Making in Marketing’, Journal of Marketing 49(3), 87-96.

    Article  Google Scholar 

  • Fishbein, M. and I. Ajzen: 1975, Belief, Attitude, Intention, and Behavior: An Introduction to Theory and Research (Addison-Wesley, MA).

    Google Scholar 

  • FLO (Fairtrade Labelling Organizations International): 2005, Annual report 2005 (Bonn: Fairtrade Labelling Organizations International), www.fairtrade.net.

  • Folkes, V. S. and M. A. Kamins: 1999, ‘Effects of Information about Firms’ Ethical and Unethical Actions on Consumers’ Attitudes’, Journal of Consumer Psychology 8(3), 243-259.

    Article  Google Scholar 

  • Fornell, C. and D. F. Larcker: 1981, ‘Evaluating Structural Equation Models with Unobservable Variables and Measurement Error’, Journal of Marketing Research 18(February), 39–50.

    Google Scholar 

  • Forsyth, D. R.: 1980, ‘A Taxonomy of Ethical Ideologies’, Journal of Personality and Social Psychology 39(1), 175–184

    Google Scholar 

  • Fraj, E. and E. Martinez: 2006, ‘Environmental Values and Lifestyles as Determining Factors of Ecological Consumer Behavior: An Empirical Analysis’, Journal of Consumer Marketing 23(3), 133-144.

    Article  Google Scholar 

  • Fritxsche, D. J.: 1995, ‘Personal Values: Potential Key to Ethical Decision Making’, Journal of Business Ethics 14(11), 909-922.

    Article  Google Scholar 

  • Grankvist, G., H. Lekedal, and M. Marmendal: 2007, ‘Values and Eco- and Fair-Trade Labeled Products’, British Food Journal 109(2), 169-181.

    Article  Google Scholar 

  • Gürhan-Canli, Z. and D. Maheswaran: 2000, ‘Cultural Variations in Country of Origin Effects’, Journal of Marketing Research 37(3), 309-317.

    Article  Google Scholar 

  • Gutman, J.: 1982, ‘A Means-End Chain Model Based on Consumer Categorization Processes’, Journal of Marketing 46(2), 60-72.

    Article  Google Scholar 

  • Han, J. K. and B. H. Schmitt: 1997, ‘Product-Category Dynamics and Corporate Identity in Brand Extensions: A Comparison of Hong Kong and U.S. Consumers’, Journal of International Marketing 5(1), 77-92.

    Google Scholar 

  • Han, S. and S. Shavitt: 1994, ‘Persuasion and Culture: Advertising Appeals in Individualistic and Collectivistic Societies’, Journal of Experimental Social Psychology 30(4), 326-350.

    Article  Google Scholar 

  • Hofstede, G.: 1980, Culture’s Consequences: International Differences in Work-Related Values (Sage, CA).

    Google Scholar 

  • Hofstede, G.: 1991, Cultures and Organizations: Software of the Mind (McGraw-Hill, London).

    Google Scholar 

  • Hofstede, G.: 2001, Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations (Sage, Beverly Hills, CA).

    Google Scholar 

  • Homer, P. M. and L. R. Kahle: 1988, ‘A Structural Equation Test of the Value-Attitude-Behavior Hierarchy’, Journal of Personality and Social Psychology 54(4), 638-646.

    Article  Google Scholar 

  • Huber, J. and J. McCann: 1982, ‘The Impact of Inferential Beliefs on Product Evaluations’, Journal of Marketing Research 19(August), 324–333.

    Google Scholar 

  • Hunt, S. D. and S. J. Vitell: 1986, ‘A General Theory of Marketing Ethics’, Journal of Macromarketing 6(Spring), 5–15.

    Google Scholar 

  • Hunt, S. D. and S. J. Vitell: 1993, ‘The General Theory of Marketing Ethics: A Retrospective and Revision’, in N. C. Smith and J. A. Quelch (eds.), Ethics in Marketing (Irwin Inc., Homewood), pp. 775–784.

  • Hunt, S. D. and S. J. Vitell: 2006, ‘The General Theory of Marketing Ethics: A Revision and Three Questions’, Journal of Macromarketing 26(December), 143–153.

    Google Scholar 

  • Iacobucci, D., N. Saldanha, and X. Deng: 2007, ‘A Meditation on Mediation: Evidence That Structural Equations Models Perform Better Than Regression’, Journal of Consumer Psychology 17 (2), 139-153.

    Article  Google Scholar 

  • Jacoby, J., J. C. Olson, and R. A. Haddock: 1971, ‘Price, Brand Name and Product Composition Characteristics as Determinants of Perceived Quality’, Journal of Applied Psychology 55(December), 570–579.

    Google Scholar 

  • Karacaer, S., R. Gohar, M. Aygun, and C. Sayin: 2009, ‘Effects of Personal Values on Auditor’s Ethical Decisions: A Comparison of Pakistani and Turkish Professional Auditors’, Journal of Business Ethics 88(1), 53-65.

    Article  Google Scholar 

  • Kotler, P. and G. Zaltman: 1971, ‘Social Marketing: An Approach to Planned Social Change’, Journal of Marketing 35(3), 3-12.

    Article  Google Scholar 

  • Laczniak, G. R., R. F. Lusch, and P. E. Murphy: 1979, ‘Social Marketing: Its Ethical Dimensions’, Journal of Marketing 43(Spring), 29–36.

  • Lazer, W. and E. J. Kelley: 1973, Social Marketing: Perspectives and Viewpoints (Richard D. Irwin Inc., Homewood, IL).

    Google Scholar 

  • Lee, C. and R. T. Green: 1991, ‘Cross-Cultural Examination of the Fishbein Behavioral Intentions Model’, Journal of International Business Studies 22(2), 289-305.

    Article  Google Scholar 

  • Lee, K. and S. Shavitt: 2006, ‘The Use of Cues Depend on Goals: Store Reputation Affects Product Judgments When Social Identity Goals Are Salient’, Journal of Consumer Psychology 16(3), 260-271.

    Article  Google Scholar 

  • Littrell, M. A. and M. A. Dickson: 1999, Social Responsibility in the Global Market: Fair Trade of Cultural Products (Thousand Oaks Sage Publications, CA).

    Google Scholar 

  • Loureiro, M. L. and J. Lotade: 2005, ‘Do Fair Trade and Eco-Labels in Coffee Wake Up the Consumer Conscience?’, Ecological Economics 53(1), 129-138.

    Article  Google Scholar 

  • Markus, H. R. and S. Kitayama: 1991, ‘Culture and the Self: Implications for Cognition, Emotion and Motivation’, Psychological Review 98(2), 224-253.

    Article  Google Scholar 

  • McCarty, J. A. and L. J. Shrum: 2001, ‘The Influence of Individualism, Collectivism, and Locus of Control on Environmental Beliefs and Behavior’, Journal of Public Policy and Marketing 20(1), 93-104.

    Article  Google Scholar 

  • Mitchell, V. W., G. Balabanis, B. B. Schlegelmilch, and T. B. Cornwell: 2009, ‘Measuring Unethical Consumer Behavior Across Four Countries’, Journal of Business Ethics 88(2), 359-412.

    Article  Google Scholar 

  • Mohr, L. A. and D. J. Webb: 2001, ‘Do Consumers Expect Companies to be Socially Responsible? The Impact of Corporate Social Responsibility on Buying Behavior’, The Journal of Consumer Affairs 35(1), 45-72.

    Article  Google Scholar 

  • Monga, A. B. and D. R. John: 2007, ‘Cultural Differences in Brand Extension Evaluation: The Influence of Analytic versus Holistic Thinking’, Journal of Consumer Research 33(4), 529–536.

    Google Scholar 

  • Muncy, J. A. and S. J. Vitell: 1992, ‘Consumer Ethics: An Investigation of the Ethical Beliefs of the Final Consumer’, Journal of Business Research 24(4), 297-311.

    Article  Google Scholar 

  • Nisbett, R. E., K. Peng, I. Choi, and A. Norenzayan: 2001, ‘Culture and Systems of Thought’, Psychological Review 108(2), 291-310.

    Article  Google Scholar 

  • Oliver, R. L.: 1997, Satisfaction: A Behavioral Perspective on the Consumer (Irwin/McGraw-Hill, New York).

    Google Scholar 

  • Oliver, R. L.: 1999, ‘Whence Consumer Loyalty’, Journal of Marketing 63(Special Issue), 33–44.

    Google Scholar 

  • Oumlil, A. Ben and Joseph L. Balloun.: 2009, ‘Ethical Decision-Making Differences Between American and Moroccan Managers’, Journal of Business Ethics 84(4), 457-479.

    Article  Google Scholar 

  • Ozcaglar-Toulouse, N., E. Shiu, and D. Shaw: 2006, ‘In Search of Fair Trade: Ethical Consumer Decision Making in France’, International Journal of Consumer Studies 30(5), 502-514.

    Article  Google Scholar 

  • Park, S.: 1998, ‘A Comparison of Korean and American Gift-Giving Behaviors’, Psychology and Marketing 15(6), 577-593.

    Article  Google Scholar 

  • Pieters, R., H. Baumgartner, and D. Allen: 1995, ‘A Means-End Chain Approach to Consumer Goal Structures’, International Journal of Research in Marketing 12(3), 227-244.

    Article  Google Scholar 

  • Polonsky, M. J., B. P. Quelhas, J. Pinto and J. Higgs-Klen: 2001, ‘Consumer Ethics in the European Union: A Comparison of Northern and Southern Views’, Journal of Business Ethics 31(2), 117-131.

    Article  Google Scholar 

  • Rallapalli, K. C., S. J. Vitell, F. A. Webe and J. H. Barnes: 1994, ‘Consumer Ethical Beliefs and Personality Traits: An Exploratory Analysis’, Journal of Business Ethics 13, 487-495.

    Article  Google Scholar 

  • Rawwas, M. Y. A.: 1996, ‘Consumer Ethics: An Empirical Investigation of the Ethical Beliefs of Austrian Consumers’, Journal of Business Ethics 15, 1009-1019.

    Article  Google Scholar 

  • Rawwas, M. Y. A., G. L. Patzer and S. J. Vitell: 1998, ‘A Cross-Cultural Investigation of the Ethical Values of Consumers: The Potential Effect of War and Civil Disruption’, Journal of Business Ethics 17, 435-448.

    Article  Google Scholar 

  • Raynolds, L. T., D. Murray, and P. L. Taylor: 2004, ‘Fair Trade Coffee: Building Producer Capacity via Global Networks’, Journal of International Development 16(8), 1109-1121.

    Article  Google Scholar 

  • Roberts, J. A.: 1996, ‘Will the Real Socially Responsible Consumer Please Step Forward?’, Business Horizons 39(1), 79-83.

    Article  Google Scholar 

  • Robin, D. P. and R. E. Reidenbach: 1987, ‘Social Responsibility, Ethics, and Marketing Strategy: Closing the Gap Between Concepts and Application’, Journal of Marketing 51(January), 44–58.

    Google Scholar 

  • Rokeach, M. J.: 1968, Beliefs, Attitudes and Values (Jossey Bass, San Francisco, CA).

    Google Scholar 

  • Rokeach, M. J.: 1973, The Nature of Human Values (The Free Press, New York)

  • Schwartz, S. H.: 1992, ‘Universals in the Content and Structure of Values: Theory and Empirical Tests in 20 Countries’, in M. Zanna (ed.), Advances in Experimental Social Psychology (Vol. 25) (Academic Press, New York), pp. 1–65

  • Shaw, D., Deirdre, E. Grehan, E. Shiu, L. Hassan, and J. Thomson: 2005, ‘An Exploration of Values in Ethical Consumer Decision Making’, Journal of Consumer Behavior 4(3), 185–200.

    Google Scholar 

  • Shaw, D. and I. Clarke: 1999, ‘Belief Formation in Ethical Consumer Group: An Exploratory Study’, Marketing Intelligence and Planning 17(2), 109-119.

    Article  Google Scholar 

  • Shaw, D. and E. Shiu: 2002a, ‘The Role of Ethical Obligation and Self-Identity in Ethical Consumer Choice’, International Journal of Consumer Studies 26(2), 109-116.

    Article  Google Scholar 

  • Shaw, D. and E. Shiu: 2002b, ‘An Assessment of Ethical Obligation and Self-Identity in Ethical Consumer Decision-Making: A Structural Equation Modeling Approach’, International Journal of Consumer Studies 26(4), 286-293.

    Article  Google Scholar 

  • Shaw, D. and E. Shiu: 2003, ‘Ethics in Consumer Choice: A Multivariate Modeling Approach’, European Journal of Marketing 37(10), 1485-1498.

    Article  Google Scholar 

  • Shaw, D., E. Shiu, and I. Clarke: 2000, ‘The Contribution of Ethical Obligation and Self-Identity to the Theory of Planned Behavior: An Exploration of Ethical Consumers’, Journal of Marketing Management 16(8), 879-894.

    Article  Google Scholar 

  • Sheth, J. and P. Wright: 1974, Marketing Analysis for Social Problems, (University of Illinois Press, Champaign, IL).

    Google Scholar 

  • Sikula, A. and A. D. Costa: 1994, ‘Are Women More Ethical Than Men?’, Journal of Business Ethics 13(November), 859–871.

    Google Scholar 

  • Sims, R. R.: 1992, ‘The challenge of ethical behavior in organizations’, Journal of Business Ethics 11(7), 505-513.

    Article  Google Scholar 

  • Singelis, T. M.: 1994, ‘The Measurement Independent and Interdependent Self-Construal’, Personality and Social Psychology Bulletin 20(5), 580-591.

    Article  Google Scholar 

  • Steenkamp, J. E. M. and H. Baumgartner: 1998, ‘Assessing Measurement Invariance in Cross-National Consumer Research’, Journal of Consumer Research 25(1), 78-90.

    Article  Google Scholar 

  • Strong, C.: 1996, ‘Features Contributing to the Growth of EC- a Preliminary Investigation’, Marketing Intelligence & Planning 14(5), 5-13.

    Article  Google Scholar 

  • Tan, J. and I. H. Chow.: 2009, ‘Isolating Cultural and National Influence on Value and Ethics: A Test of Competing Hypotheses’, Journal of Business Ethics 88(1), 197-210.

    Article  Google Scholar 

  • Triandis, H. C.: 1989, ‘The Self and Social Behavior in Differing Cultural Contexts’, Psychological Review 96(3), 506-520.

    Article  Google Scholar 

  • Tsalikis, J. and M. Ortiz-Buonafina: 1990, ‘Ethical Beliefs Differences of Males and Females’, Journal of Business Ethics 9(6), 509-517.

    Article  Google Scholar 

  • Uusitalo, O. and R. Oksanen: 2004, ‘Ethical Consumerism: A Review from Finland’, International Journal of Consumer Studies 28(3), 214-221.

    Article  Google Scholar 

  • Van Raaij, W. F. and T. M. M. Verhallen: 1994, ‘Domain-Specific Market Segmentation’, European Journal of Marketing, 28(10), 49-66.

    Article  Google Scholar 

  • Vinson, D. E., J. E. Scott, and L. M. Lamont: 1977, ‘The Role of Personal Values in Marketing and Consumer Behavior’, Journal of Marketing 41(2), 44-50.

    Article  Google Scholar 

  • Yi, Y. and H. Jeon: 2003, ‘Effects of Loyalty Programs on Value Perception, Program Loyalty, and Brand Loyalty’, Journal of the Academy of Marketing Science 31(3), 229-241.

    Article  Google Scholar 

  • Zadek, S., S. Lingayah, and M. Forstater: 1998, Social Labels: Tools for Ethical Trade, (New Economics Foundation, London).

    Google Scholar 

  • Zeithaml, V. A., L. L. Berry and A. Parasuraman: 1996, ‘The Behavioral Consequences of Service Quality’, Journal of Marketing 60(April), 31–46.

Download references

Acknowledgments

This research was financially supported by the Marketing Center at Seoul National University, Korea. Address correspondence regarding this paper to Kiwan Park.

Author information

Authors and Affiliations

  1. Korea Energy Economics Institute (KEEI), Seoul, Korea

    Gwang-Suk Kim

  2. Seoul National University, Seoul, Korea

    Grace Y. Lee & Kiwan Park

Authors
  1. Gwang-Suk Kim
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Grace Y. Lee
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Kiwan Park
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Kiwan Park.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Kim, GS., Lee, G.Y. & Park, K. A Cross-National Investigation on How Ethical Consumers Build Loyalty Toward Fair Trade Brands. J Bus Ethics 96, 589–611 (2010). https://doi.org/10.1007/s10551-010-0486-1

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-010-0486-1

Keywords

Search

Navigation