Corporate Reputation Review,

Vol. 12, No. 2, pp. 159176

2009 Palgrave Macmillan,
1363-3589
Corporate Reputation Review Volume 12 Number 2
www.palgrave-journals.com/crr/
ABSTRACT
There are numerous retailers in the specialty
coffee market that sell Fair Trade Coffee
(FTC). Some retailers sell FTC to meet the
demand of socially responsible consumers, some
are motivated by their own concern for small
coffee producers and others sell FTC because
of the taste profile of a particular FTC grow-
er s coffee. A critical question facing these re-
tailers is how best to position FTC: as good
tasting or as socially responsible? This study
examines consumers coffee preferences, their
comprehension of labels, the price they are will-
ing to pay for FTC and tests the effectiveness
of advertising socially responsible consumption
as primary benefit of purchasing FTC. The
implications for managing company reputation
and communication of social responsibility for
FTC are discussed and suggestions are given
for advertising strategy and management of
Fair Trade products
Corporate Reputation Review (2009) 12, 159 176.
doi: 10.1057/crr.2009.11
KEYWORDS: brand reputation ; corporate social
responsibility ; fair trade coffee ; socially responsible
consumption
INTRODUCTION
Numerous retailers in the specialty coffee
market sell Fair Trade Coffee (FTC), includ-
ing Starbucks, Green Mountain Roasters,
Peet s Coffee & Tea and Equal Exchange.
Some sell FTC to meet the demand of so-
cially responsible consumers, some are mo-
tivated by their own concern for small
coffee producers and others sell FTC be-
cause of the taste prole of a particular FTC
Taste Great or More Fullling : The Effect
of Brand Reputation on Consumer Social
Responsibility Advertising for Fair
Trade Coffee
Carl Obermiller
Department of Marketing, Albers School of Business and Economics, Seattle
University , Seattle , WA , USA
Chauncey Burke
Department of Marketing, Albers School of Business and Economics, Seattle
University , Seattle , WA , USA
Erin Talbott
Department of Marketing, Albers School of Business and Economics, Seattle
University , Seattle , WA , USA
Gareth P. Green
Department of Economics, Albers School of Business and Economics, Seattle
University , Seattle , WA , USA
Taste Great or More Fullling
Corporate Reputation Review Vol. 12, 2, 159176 2009 Palgrave Macmillan 1363-3589 160
grower s coffee. Peterson (2006) and Scott
(2001) nd FTC usually competes with spe-
cialty coffees because they sell at a similar
price point and to a similar demographic.
However, specialty coffee retailers tend to
be more concerned with the quality of their
coffee because taste is a critical attribute to
coffee consumers ( De Pelsmacker et al. ,
2005 ; Donneta et al. , 2007 ; and Rice and
McLean, 1999 ). To compete, it is necessary
for FTC to have a taste prole comparable
to specialty coffees. Unfortunately, as Rice
and McLean (1999) have discussed, FTC is
perceived by some consumers and retailers
as having inferior taste and quality inconsist-
ency when compared to specialty coffees. A
critical question facing these retailers is how
to best position FTC: as good tasting or as
socially responsible?
Bacon (2005) and Jaffee (2007) have
shown the FTC market provides signicant
benets to small coffee producers, helping
to alleviate poverty by providing funds for
schooling, health care and community sup-
port in regions that have been devastated by
the dramatic variations in coffee prices.
Brown et al. (2001) report that 70 percent
of the world s coffee is produced on small-
scale family farms that could be eligible for
Fair Trade certication and that most of
these families live in conditions of poverty.
But as Lewin et al. (2004) have shown, the
demand for FTC is much lower than the
potential supply, indicating the FTC market
is helping only a small fraction of impover-
ished coffee growers ( Dicum and Luttinger,
1999 ; and Pendergrast, 1999 ). Further,
Lewin et al. (2004) and TransFair USA
(2007) have estimated that a signicant por-
tion of the coffee produced under Fair Trade
conditions is sold in conventional coffee
markets, which usually bring a much lower
price than the FTC market. The limit on
FTC sales is not production capacity; it is
demand. As McCluskey and Loureiro (2003)
discuss in their study of labeling, determin-
ing how best to position a product like FTC
will increase consumers awareness and ul-
timately the demand for FTC. If the FTC
market is to reach its full potential for reduc-
ing poverty, it is critical that retailers deter-
mine how best to position FTC.
Fair Trade Coffee
Fair Trade is an alternative market approach
that aims to improve the well-being of small
producers in developing countries ( Gresser
and Tickell, 2002 ; and Talbot, 2004 ). The
FTC market was established in 1988 when
world coffee prices began a sharp descent.
It was branded Max Havelaar, after a c-
tional Dutch character who opposed the
exploitation of coffee pickers in Dutch col-
onies ( Jaffee, 2007 ). In 1997 the Fair Trade
Labeling Organizations International (FLO)
was formed as an umbrella organization to
expand the scope and monitor Fair Trade
with universal standards and labels. Fair
Trade goods that display the FLO inspection
label ensure the customer that farmers in
developing countries are paid a fair price and
earn a decent standard of living. FLO over-
sees smaller organizations that monitor sales
of Fair Trade goods in different regions. For
example, TransFair USA is the only licensed
organization that certies Fair Trade prod-
ucts sold in the US ( Rice and Mclean, 1999 ).
Although it also certies other produce, in-
cluding bananas, cocoa, tea, sugar and rice,
TransFair USA (2007) shows that coffee ac-
counts for two-thirds of the total Fair Trade
certied goods. FLO (2007) gives the stand-
ards that growers and importers must meet
to receive Fair Trade certication. In gen-
eral, producers must be small, family-based
growers that follow specied ecological
goals and are organized into democratic as-
sociations. Importers must pay at least a
minimum price established by FLO, offer
pre-nancing and purchase directly from the
grower associations using agreements that
extend beyond one harvest cycle. The ob-
jective of the FTC market system is to op-
erate a socially and environmentally
Obermiller, Burke, Talbott and Green
2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 161
sustainable market that allows small farmers
to escape poverty and consumers to have
high quality coffee.
FTC market challenges
TransFair USA (2007) has documented the
dramatic growth in the FTC market in the
US to be between 35 and 107 percent an-
nually during the period 2000 2006. They
also estimate FTC to be 2 percent of the
total coffee market in volume and 3 percent
of the retail value in North American mar-
ket in 2006, indicating signicant potential
for continued market growth. However, the
FTC market faces challenges. Most FTC has
been positioned on the social responsibility
attribute, but Powell (2002) notes that social
responsibility may not be the key to expand-
ing demand for FTC. Lewin et al. (2004)
show the majority of FTC is imported by
countries that are also large importers of high
quality specialty coffee. Unfortunately, James
(2005) and Rice and McLean (1999) indi-
cate that FTC may be perceived to be of
lower quality than other specialty coffees.
Coffee quality has several dimensions, in-
cluding taste, relating to specic avors;
healthfulness, relating to being free of pes-
ticides and herbicides; and social-responsi-
bility, relating to producer welfare, reducing
environmental impact and maintaining wild-
life habitat. FTC easily differentiates itself on
the latter two features, but it faces a chal-
lenge on taste.
Ottman (1998) has found that consumers
appear to have an a priori schema for so-
cially responsible products that they are
somehow inferior, to compensate for their
socially benecial aspects. We suspect this
consumer belief runs deep. Consider com-
mon advertising claims, such as no pain
no gain or healthy food that actually tastes
good. Consumers may expect FTC to taste
worse than specialty brands simply because
it accomplishes a social responsible goal.
James (2005) and Rice and McLean (1999)
indicate there is some justication for a bias.
In some cases the taste quality of FTC has
been objectively inferior to specialty coffee,
primarily due to poor quality management
and lack of knowledge and experience in
selecting and roasting coffee when FTC was
rst introduced. Whatever the reason, if
FTC is to expand demand by positioning
itself as comparable or better tasting than
specialty coffee, it must meet the challenge
of consumer skepticism.
As mentioned, FTC is well positioned on
the social responsibility dimension due to
the benets it provides FTC growers. In
addition, TransFair USA (2007) has docu-
mented that over 60 percent of FTC sold
in the United States is certied organic, so
FTC can also be positioned as environmen-
tally friendly and healthful as well. How-
ever, Mclaughlin (2004) notes that there is
signicant competition among labels that
suggest you can help others by shopping:
Fair Trade Certied, Fairly Traded, Rain-
forest Alliance Certied, Certied Sustain-
able Local, Slow Food Snail, etc .
Giovannucci and Koekoek (2003) and Rice
and McLean (1999) , among many, have dis-
cussed the likely confusion and uncertainty
caused by competing labels and the likely
blunting effect it has on consumers under-
standing of labels. If the FTC labeling does
not clearly communicate the social respon-
sibility and healthfulness attributes of FTC,
it will surely have difculty competing
against specialty coffees that promise good
taste.
As can be seen on the retail shelf and
company web pages, FTC is generally more
expensive than coffee from the convention-
al market, but similar in price to specialty
coffees. De Pelsmacker et al. (2005) , Lourei-
ro and Lotade (2005) and McCluskey and
Loureiro (2003) have shown that consumers
are willing to pay more for Fair Trade, or-
ganic and other certied coffees. However,
Devinney et al. (2006) have shown that the
estimates of willingness to pay listed on sur-
veys rarely match sales data. It is easy to
Taste Great or More Fullling
Corporate Reputation Review Vol. 12, 2, 159176 2009 Palgrave Macmillan 1363-3589 162
indicate on a survey a willingness to pay
more for a socially responsible product, but
when confronted with higher prices or per-
ceived differences in quality, most consum-
ers opt for lower price or the familiar brand.
So if FTC is perceived to be more expensive
than specialty coffee; at a similar price but
lower quality; or if consumers simply do not
understand what the label promises to de-
liver, FTC may have a difcult time con-
tinuing its past market growth.
Study Objectives
Initially FTC was sold by small, relatively
unknown coffee roasters such as Equal Ex-
change, so that it was not associated with
well-known specialty coffee brands. As the
FTC market has expanded, however, bet-
ter-known specialty brands have begun of-
fering it. We designed our experimental
research to test the hypothesis:
FTC brands will benet more from ad-
vertising their social responsibility position
when the brand is a well known specialty
brand, but more from a good taste appeal
when the brand is unfamiliar.
This hypothesis is based on the presumption
that consumers hold the prior belief that
FTC does not taste as good as other spe-
cialty coffee brands. Thus, for an already
familiar specialty brand, a good taste appeal
would be redundant; but, a social responsi-
bility appeal would marginally enhance per-
ceived value by clarifying the implication of
Fair Trade . On the other hand, for an un-
known brand, the Fair Trade tag would
suggest lower taste quality. Given the greater
importance in coffee choice to consumers
of taste relative to social responsibility, for
unfamiliar brands, a good taste appeal would
be more benecial than a social responsibil-
ity appeal. The ultimate objective of the
study is to assist FTC retailers to position
their product, depending on their current
brand strength, with the goal of increasing
demand for FTC.
The paper proceeds by rst testing sev-
eral key assumptions related to our central
hypothesis. We then test our central hypoth-
esis and discuss the implications of the study
for retailers and small roasters.
ANALYSIS
Several pre-tests were conducted to test key
assumptions. First, we wanted to determine
whether at least some FTC meets or exceeds
the taste dimension of quality held by well-
established specialty brands. Failing that,
positioning on the basis of taste would be
problematic. Second, we wanted to conrm
whether consumers hold an expectation that
FTC tastes worse than established specialty
brands. Third, we wanted to investigate the
extent to which an a priori belief that FTC
is of lower quality might bias the taste ex-
perience. That is, could FTC be judged to
taste as good as a known specialty coffee
even if it had the FTC label? Finally, we
wanted to compare our sample to the gen-
eral population on attitudes toward social
responsibility and the relation of those feel-
ings to beliefs about FTC. Our research was
conducted at a Jesuit institution with a focus
on social justice, and we expected our sam-
ple to be more aware of and favorable to-
ward FTC than the general population.
After reviewing these conrmatory tests
we constructed advertising experiments to
test the two-way interaction of message ap-
peal (taste versus social responsibility) and
brand reputation (well known versus un-
known).
Pre-test 1: Equivalent Actual Quality
To succeed with a position of good taste,
the taste claims need a reasonable basis in
reality. We conducted a blind taste test us-
ing FTC from Pura Vida, a local company
that sells FTC exclusively. Two identical
canisters of coffee, prepared by the campus
food service, were set up on a table in a
high trafc area on campus. One contained
Pura Vida: the other contained Starbucks
Obermiller, Burke, Talbott and Green
2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 163
House Blend. The containers were labeled
Roast 11 and Roast 24 , with the labels
periodically rotated, and the research was
described as a test of new coffee roasts. One
hundred and eight respondents students,
faculty and staff participated voluntarily.
Order of tasting was arbitrary. Respondents
drank samples of each coffee, with no addi-
tives, and rated them on a 7-point scale from
terrible to perfect, then completed a sur-
vey to indicate their normal coffee con-
sumption, normal additives, and the
importance they attached to four attributes
effect of coffee production on the environ-
ment, taste of the coffee, health concerns
regarding coffee and price paid to coffee
growers. The Pura Vida coffee was judged
to taste somewhat better than the Starbucks.
The mean for Pura Vida was 4.20, versus
4.05 for Starbucks. The difference was not
statistically signicant with a t -statistic of
t = 0.89. Taste of coffee was rated more im-
portant than the other three attributes on
3-point scales very, somewhat and not
important 1.15 for taste versus approxi-
mately 2.0 for the others.
Our results indicate that at least one brand
of FTC was perceived in blind taste tests to
be at least as good as Starbucks House Blend.
Also, consumers judged the taste dimension
of quality to be more important to their
brand choices than concern for the environ-
ment, healthfulness, social responsibility or
price paid to the growers.
Pre-test 2: Prior Belief that FTC
Tastes Worse
A sample of 107 participants, mostly MBA
students, responded to a survey with seven
Likert scales. The statements reected opin-
ions about the quality of national versus lo-
cal brands, products with higher recycled
content, FTC brands, large national rms
versus small local rms, organic foods, hand-
made versus mass produced goods and prod-
ucts from rms with a social responsibility
focus. Table 1 shows the mean response to
the seven items. Results suggest that
respondents believed the following:
1. National brands were not higher quality
than local brands.
2. Brands with high recycled content were
not lower quality than other brands.
3. Fair Trade coffee tastes worse than
regular coffee.
4. Large national rm brands are not lower
quality than small local rm brands.
Table 1 : Prior Beliefs About Quality
Item Mean
a
(st. dev.)
National brands are higher
quality
3.72 (1.56)

Brands that are made with high
proportions of recycled con-
tent are lower quality
2.81 (1.59)

Coffee brands that are labeled
Fair Trade generally taste
worse
4.23 (1.79)

Brands from large national
rms are usually of a lower
quality
3.73 (1.56)

Product is grown organically,
it is likely to be of lower
quality
2.39 (1.50)

Brands that are handmade are
of higher quality
4.41 (1.66)

Firms that focus their efforts
on doing good things for
poor people or for the
environment either have
to charge a higher price for
the same quality product or
charge a similar price for a
lower quality product
4.09 (1.78)

a
All scales were 7-point Likert, with higher numbers
indicating stronger agreement.
Taste Great or More Fullling
Corporate Reputation Review Vol. 12, 2, 159176 2009 Palgrave Macmillan 1363-3589 164
5. Organic foods are not lower quality than
non-organic foods.
6. Hand-made products are higher quality
than mass-produced products.
7. Firms with social responsibility focus are
lower quality or higher priced than other
rms.
For present purposes, the most important
result from Pre-test 2 is the relatively high
prior belief that FTC brands taste worse than
other specialty brands. Fully 45 percent of
the responses were in the agree to strong-
ly agree categories 5, 6 and 7 on the 7-
point scale. A t -test indicated that although
stronger relative to the other measured be-
liefs, the mean score on this item was only
marginally statistically signicant above the
scale mean of 4.0, with t = 1.49 at p = 0.07.
The pre-test conrmed our presumption
that consumers expect FTC to have lower
taste quality than other specialty brands. This
prior belief is likely based either on experi-
ence with Fair Trade brands whose strategies
were dominated by social responsibility
rather than quality control, or on the no
pain no gain type advertising claim dis-
cussed above.
Pre-test 3: Effect of Fair Trade Label on
Perceptions
Pre-test 2 suggested that, in general, con-
sumers are skeptical about the quality of
FTC. In order to specify the effect of the
Fair Trade label on impressions of taste, we
conducted an additional study in which the
actual coffee was the same but presented
under different labels. We set up a table in
a high trafc area, with two coffee urns
labeled Starbucks House Blend and
Starbucks Fair Trade Blend. After agreeing
to the study and before tasting the coffee,
109 participants indicated their coffee con-
sumption and expressed a preference for one
of the two blends. Nearly all participants
were students from the same population as
the other pre-tests and main study.
To isolate the Fair Trade label effect, we
kept the brand constant. After indicating
preferences, participants tasted each of the
coffees and rated them on a 7-point scale
from terrible to perfect . Seventy-nine
participants, or 73 percent of the sample,
were coffee drinkers. Of these participants,
a 58 percent majority reported an initial
preference for the House Blend. After tast-
ing the two coffees, however, the ratings
were nearly identical, a mean of 4.49 for the
House Blend and a mean of 4.43 for Fair
Trade; the difference was statistically not
signicant with a t -statistic of t = 0.89 at
p = 0.38. The taste ratings were only slight-
ly affected by the initial preferences. Those
who initially preferred House Blend had
slightly lower ratings of both coffees, but
there was no interactive effect. These results
suggest an initial biasing effect of the label,
but that bias failed to inuence the taste ex-
perience.
Participants were also asked to give their
willingness to pay for FTC and to dene
the terms Organic, Shade Grown and
Fair Trade. Overall, respondents reported
their willingness to pay for Fair Trade coffee
as $ 9.73 per pound and $ 1.27 per cup, rel-
ative to the given values for Starbucks House
Blend of $ 9.99 per pound and $ 1.00 per
cup. Thus, the sample s average willingness
to pay for the Fair Trade blend was lower
per pound, but this nding was not statisti-
cally signicant with t = 0.73. However, the
willingness to pay more per cup was statisti-
cally signicant with t = 3.92 at p < 0.01.
Further analysis indicated that willingness to
pay differed by initial preference. The sub-
sample that initially preferred the House
Blend indicated a lower willingness to pay,
$ 9.64 for a pound of Fair Trade, but $ 1.25
for a cup, versus the $ 9.99 per pound and
$ 1.00 per cup given as a base price in the
survey. Those who initially preferred FTC
were willing to pay more for both, $ 10.35
for a pound and $ 1.36 for a cup. For the
price per pound, the stated willingness to
Obermiller, Burke, Talbott and Green
2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 165
pay averages were not statistically signi-
cantly different from the $ 9.99 given, with
t -statistics less than 1.0 for both. However,
the willingness to pay per cup showed a
statistically signicant difference from the $ 1
price given, t = 89.78 for those who initial-
ly preferred House and t = 99.44 for those
who initially preferred FTC; both at
p < 0.01.
Our results are consistent with ndings
by De Pelsmacker et al. (2005) and Lourei-
ro and Lotade (2005) that consumers claim
they are willing to pay more for FTC. As a
result, the higher price of FTC should not
be a barrier to attracting consumers who are
concerned with social responsibility, but it
may be an obstacle to converting specialty
brand coffee drinkers. Of course, the usual
caveat regarding consumers actual spending
versus their survey answers applies here
( Devinney et al. , 2006 ).
There were mixed results regarding un-
derstanding of labels. The responses were
evaluated by two of the researchers; correct-
ness was agreed upon initially for 94 percent
with all differences resolved after discussion.
The respondents had a fairly good under-
standing of the term Organic with 75 per-
cent writing an accurate denition. This is
not surprising given that the term organic
has long been used in the market place.
However, the denitions of Shade Grown
were only 36 percent accurate and Fair
Trade denitions were 38 percent accurate.
These results suggest that organizations that
market Fair Trade goods and especially FTC
need to do a better job educating consum-
ers. If consumers do not understand what
the Fair Trade label stands for they will be
less likely to purchase the goods based on
social responsibility preferences.
The initial preference for House Blend
rather than Fair Trade was consistent with
the results of Pre-test 2 and with our pre-
sumption of an a priori bias against FTC. It
is interesting to note that the bias did not
affect the taste experience. As discussed
above, we suspect that the sample s inclina-
tion toward social responsibility in general
may have inuenced this result. However,
the combination of our sample s bias toward
social responsibility and the lack of under-
standing labels is disheartening. It suggests
that the general population will have an even
lower understanding of Fair Trade labels.
Combining that with price and taste con-
cerns related to FTC suggest a hurdle the
FTC market will need to overcome. Re-
garding price, it is important to note that
although a higher willingness to pay has
been documented, FTC is not always more
expensive than other coffees. Whereas it is
more expensive than conventional, or
canned, lower quality coffees, it is generally
in the same price range as most specialty
coffee. The fact that the majority of
respondents, 58 percent, initially preferred
the specialty brand suggests the price
and taste concerns could be challenging.
That is, for most people a stated higher will-
ingness to pay may be merely a social desir-
ability artifact that would not result in
actual sales. Still, even a minority of
42 percent represents a sizable market
potential for FTC.
Pre-test 4: Social Responsiveness of the
Sample
Our research was conducted in a university
community, a Jesuit school with a high
value on social responsibility. We expected
our sample to be more socially responsive
than the average American population and
that their feelings of socially responsible con-
sumption (SRC) might affect their response
to the FTC labels. We conducted a survey
to measure the SRC of our sample by com-
bining nine items selected from the 40-item
Socially Responsible Consumption Behav-
ior scale developed by Antil and Bennett
(1979) . We rejected using the full scale out
of concern for respondent fatigue. Three ad-
ditional items were designed to refer spe-
cically to the issue of Fair Trade. The 12
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Corporate Reputation Review Vol. 12, 2, 159176 2009 Palgrave Macmillan 1363-3589 166
items are given in Appendix A . Surveys
were administered in classes to 158 students
from the university community.
A factor analysis of the 12 SRC items
was completed to determine the dimen-
sionality for the SRC scale. Although the
analysis suggested three factors, they were
highly correlated and were not interpreta-
ble as distinct constructs. We elected to
treat the scale as a single construct. Analy-
sis of inter-item correlations conrmed that
the 12 items formed a reasonable SRC
scale, with coefcient = 0.83. After re-
coding for reverse-wording, the SRC scale
was computed as the sum of the 12 SRC
items. The average SRC score was 55.0.
By comparison, an average score per item
from Antil and Bennetts (1979) original
survey would yield 43.3 for 12 items. In
comparing the two scores we must ac-
knowledge errors that may result due to
generalizing from a sample of the original
items, from the addition of the new items,
and of course from the passage of time. The
comparison does support our expectation
that our sample may be atypically socially
responsive, and thus our results should
not be directly related to the general
population.
Conclusions from Pre-tests
We determined that at least some Fair Trade
brands can compete against specialty coffees
on the basis of good taste. We conrmed
our suspicion that consumers hold an a pri-
ori belief that FTC does not taste as good as
other specialty coffee brands. We character-
ized understanding of FTC labels as fairly
poor. Despite that poor understanding, the
Fair Trade designation was regarded favora-
bly and supported a higher willingness to
pay on a per cup basis for everyone and
generally for those predisposed toward FTC.
Finally, we conrmed that our participants
likely valued social responsibility more than
typical consumers.
Advertising Study
This study was designed to test the hypoth-
esis that FTC brands will benet more from
advertising their social responsibility position
when the brand is a well-known specialty
brand, but more from a good taste appeal
when the brand is unfamiliar. This hypoth-
esis is based on the presumption that con-
sumers hold the prior belief that FTC does
not taste as good as other specialty coffee
brands. Thus, for an already familiar spe-
cialty brand, a good taste appeal would be
redundant; but a social responsibility appeal
would marginally enhance perceived value
by clarifying the implication of Fair Trade .
On the other hand, for an unknown brand,
the Fair Trade tag would suggest lower
taste quality. Given our ndings on prior
beliefs, a good taste appeal would be more
benecial than a social responsibility appeal.
Design and procedure
The research design was a between-subjects,
two-factor experiment. The two factors were
brand familiarity and advertising appeal. Brand
familiarity is meant to signal quality to par-
ticipants, which Rao and Monroe (1989)
have shown is often the case for consumer
goods. We used Tully s coffee as the well-
known brand because at the time it did not
sell FTC, did not have a strong association
with corporate responsibility and was widely
known by the study participants. We used a
ctitious coffee company for our unknown
brand, The Brown Bag Beanery. Advertising
appeal was captured in the product descrip-
tion. Ads were constructed for the resulting
four experimental conditions:
a well-known brand of FTC promoted
with a good taste appeal,
a well-known brand of FTC promoted
with a social responsibility appeal,
an unfamiliar brand of FTC promoted
with a good taste appeal, and
an unfamiliar brand of FTC promoted
with a social responsibility appeal.

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2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 167
Other than the brand names, logos and rel-
evant sections of the text, the ads were iden-
tical. In all four conditions the control brand
was Tully s
1
Madison Blend, with no tag
line statement about either taste or social
responsibility, and the alternative was re-
ferred to as Compadre Blend. The ads were
designed and produced by a professional ad-
vertising layout employee of Tully s. The
good taste appeal was executed with the tag
line, Finally a Fair Trade Coffee with Fan-
tastic Flavor! and supporting copy. The so-
cial responsibility appeal was executed with
the tag line, Your Purchase Guarantees Fair
Trade Benets to Farmers and appropriate
copy. See Appendix B for copies of the four
experimental ads.
The dependent measures were attitude
toward the ad and brand choice. Attitude
toward the ad was measured with ve
7-point scales: three bipolar adjective scales
(very unappealing very appealing, very un-
favorable very favorable, and very negative
very positive) and two agree-disagree scales
(the ad would be successful in gettting atten-
tion and the ad would make most people
want to buy the product). Brand choice was
measured as the proportion of the participants
who selected the experimental brand versus
the control brand. The ad for the control
brand had the following text:
A balanced blend of our estate-quality South
American coffee and a touch of French roast
create a coffee that is wonderfully smooth
with intensity and depth. Madison Blend is
the perfect coffee for any occasion.
Manipulating constructs via ad copy is often
problematic. Language can be ambiguous
and realism may require certain claims. In
this study, although the control ad does
mention taste, it is a fairly weak assertion
relative to our ad based on taste appeal. It
was necessary to mention taste to make the
control ad believable. Also, our taste appeal
had a reference to high pay to emphasize
the growers motivation to provide high
quality. It is possible that respondents might
have construed this to indicate the grower
was receiving benets similar to those under
a Fair Trade system. Again, however, the
relative emphasis and the implication of
the higher wages are quite different across
the ads. Moreover, any inference about Fair
Trade from the mention of higher wages in
the good taste appeal would have worked
against support for the hypothesis, not for
it. Last, the price of the different coffees was
not mentioned. Our intent was to capture
the taste versus social responsibility attributes
without having a price interaction.
Participants were 193 students who par-
ticipated either individually or in small
groups. During classes, small groups of stu-
dents were separated from the class to par-
ticipate in a study described as assistance to
a local advertising agency that wanted reac-
tion to proposed print ads for two coffee
clients. Before viewing the ads, participants
were told that they would see two sample
print ads and respond to a few questions for
each. They were also told that they would
receive, as a thank you gift, one package of
coffee their choice of either brand. All
participants saw the control condition ad
rst, then the experimental condition ad.
The ads were projected onto a screen, each
for about 90 seconds, during which partici-
pants responded to the ve attitude items.
After the second ad, participants were re-
minded that, as a gift for participation, the
sponsors had made available 12-ounce pack-
ages of the coffee brands and that they could
select a package of the brand of their choice.
Participants were told that they could have
a sample of either one, but only one, of the
two brands, and that they could select the
brand by placing their questionnaire book-
lets in the appropriate box. The boxes were
labeled with the brand names and logos
identical to those used in the ads. Subjects
did not put their names on the response
forms. Thus, choice was measured anony-
mously and unobtrusively.
Taste Great or More Fullling
Corporate Reputation Review Vol. 12, 2, 159176 2009 Palgrave Macmillan 1363-3589 168
Results
Attitude toward the ad scales were con-
structed by averaging the ve measures. As-
sessment of internal reliability was done with
Cronbach s coefcient alpha. The scales
showed acceptable internal reliability for
both the control brand with = 0.90 and
the experimental brand with = 0.90. Factor
analysis of the scales conrmed unidimen-
sionality: for the control brand, a one-factor
solution to a principle components analysis
accounted for 72 percent of total variance,
and all ve variables had correlations of 0.80
or above with the single factor. For the ex-
perimental ad, 72 percent variance explained
of total variance and all variables correlated
at 0.82 or above. Results for the ad attitudes
and choice are presented in Table 2 and
Figure 1 . The attitude scores are an average
of the ve ad-attitude scale items. The
choice scores are the percentages of partici-
pants who chose the experimental brand
over the control brand in each of the four
conditions.
The results support the central hypothesis,
there was little difference in either attitude
or choice of the Fair Trade brand in response
to brand or ad appeal independently. How-
ever, when the two are considered together,
it is clear that a taste-based appeal was su-
perior for the unknown brand, Brown Bag
Beanery; whereas, the social responsibility
appeal was superior for the well-known
brand, Tully s. Analysis of variance indicated
a statistically signicant brand X appeal
interaction for attitude scores, with
F
(1, 188)
= 7.23 at a p < 0.01. Choice was ana-
lyzed; the supporting statistical test was a
chi-squared analysis with
2
= 13.37 at
p < 0.01. When Compadre was presented as
a Tully s Fair Trade brand and positioned
on the basis of taste, subjects chose it at
nearly the same rate as the control brand;
49 percent selected Compadre versus 51
percent for the control. But, when Compa-
dre had the well-known Tully s brand name
and was positioned as socially responsible, it
was selected by 81 percent of the partici-
pants. In contrast, when Compadre was pre-
sented as the unknown brand, Brown Bag
Beanery, it was selected 86 percent of the
time when positioned on taste, relative to
only 34 percent when position on social re-
sponsibility.
GENERAL DISCUSSION AND CONCLU-
SIONS
The ndings of this study have important
implications for how FTC should be posi-
tioned, whether on taste or social responsi-
bility, given the brand awareness and
reputation of the coffee retailer and roaster.
The majority of FTC roasters are small,
local producers; whereas, the largest sellers
of FTC are well-recognized specialty coffee
roasters.
2
Most small rms that sell FTC po-
sition their coffee on the social responsibil-
ity dimension; for example see the web sites
Table 2 : Ad Attitude
a
and Choice
b

Brand Appeal Sample size Ad attitude Brand choice ( % )
Tullys Taste 43 4.52 49
Soc. Respon. 48 5.06 81

Brown Bag Beanery Taste 49 4.93 86
Soc. Respon. 53 4.52 34

a
Attitude was measured as average of 7-point scales; higher numbers indicate more positive attitudes.

b
Choice is the percentage of the sample that selected the Fair Trade brand over the control.
Obermiller, Burke, Talbott and Green
2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 169
for Caf Campesino, Equal Exchange, Ma-
dre Monte Coffee and Pura Vida. Most large
rms position on the taste dimension; see
company web sites for Starbucks, Green
Mountain Roasters and Peet s Coffee & Tea
as examples. We believe the reason is that
small producers tend to be passionate about
social responsibility and see that as their dis-
tinction. Well-known specialty coffee pro-
ducers are responding to consumer demand
for good taste. The best opportunity for ex-
panding demand for FTC lies with appropri-
ate positioning by retailers and roasters.
Small rms should recognize the need to
establish taste rst and foremost. Large rms,
who already have a reputation for high qual-
ity for all their roasts, should promote social
responsibility as the distinguishing character-
istic of Fair Trade.
Our ndings conrm anecdotal observa-
tions from marketing practitioners and aca-
demic research studies. Previous research has
found that consumers are unlikely to favor
socially responsible consumption to the det-
riment of functional benets in product
choices: In fact, a number of corporations
have seen their efforts to sell socially respon-
sible products fail because consumers failed
to buy them in signicant number
( Devinney et al. , 2006: 36 ). This assessment
was made after an extensive review of
empirical studies and concluded that con-
sumers purchase products to fulll specic
needs and wants. They will not sacrice
functional features to socially responsible
ones. In a previous study of Fair Trade
buying behavior of Belgian consumers,
De Pelsmacker et al. (2005) concluded that
brand preference and taste were more
important than the Fair Trade label.
Although such an assessment may be dis-
heartening to corporate social responsibility
(CSR) departments, our ndings imply that
the role of social responsibility must be in-
trinsic to the strategic focus of an entire en-
terprise. We suggest four imperatives for the
promotion of social responsibility in con-
sumer marketing activities. First, the benet
of responsible consumption augments the
consumer choice decision, but should not
supersede the basic desire that drives the
consumer to pursue the product category.
As we demonstrated, social responsibility
benets will change attitudes and behaviors
if consumers are condent of the taste qual-
ity of the respective coffee brands. The op-
portunity to augment a quality advantage
allows specialty brands to sustain their ad-
vantage. Conversely, emerging brands with
no distinctive image should establish quality
credentials rst, not pursue a primary posi-
tion of superior social responsibility.
Second, certifying associations, such as
TransFair USA, should target leading brands
as their prime prospects. As shown from our
experiments quality augmentation is the
key value of social responsibility and as pre-
viously noted the dominant rms in the
respective consumer category will benet
most. A corollary to this targeting imperative
is to accept co-labeling partners selectively.
Because the certication label is not associ-
ated with high quality, it is important to
enhance the label reputation by restricting
it to quality differentiated products. Coffee
roasters should be required to demonstrate
unique processing resources and skills. It is
100%
80%
90%
70%
60%
50%
40%
20%
30%
10%
0%
Taste Social Responsibility
Tullys
Brown Bag Beanery
Figure 1 : Brand choice based on taste or
social responsibility
Taste Great or More Fullling
Corporate Reputation Review Vol. 12, 2, 159176 2009 Palgrave Macmillan 1363-3589 170
encouraging to note that consumers can dis-
tinguish high quality taste in coffee from
well-processed FTC beans.
Imperative three involves the manage-
ment of suppliers of certied Fair Trade
products. It is not sufcient for labeling as-
sociations to verify social value of its product
source; they must also ensure the function-
al qualities of the source. For FTC the up-
stream supply chain from roaster to farms
must adhere to the highest standards of
agronomy, storing and shipping. Similar
to the control of co-labeling partners,
the associations must earn a quality
reputation through complete supply chain
management.
The fourth imperative compels certifying
associations to participate in the education
of consumers with their co-label partners.
Emerging coffee roasters should adhere to
the creative strategy of superior taste in pro-
moting its Fair Trade blends. Leading brands
such as Starbucks, Green Mountain Roasters
and Peet s should collaborate with the Fair
Trade association in educating consumers of
the social value of FTC. This will not only
enhance the positions of the leading brands
but also improve consumer understanding
of Fair Trade. Our proposal is consistent
with a previous study by De Pelsmacker and
Janssens (2007) of Fair Trade buying behav-
ior that found the quality of information
to be more important than quantity of in-
formation. In that study the authors con-
cluded that consumers become indifferent
to general advocacy of Fair Trade but re-
spond to Fair Trade messages promoting
specic product categories, such as specialty
coffee.
Our study had several limitations. First,
we had the usual limitations of using student
participants within a geographic region;
both characteristics restrict the generaliza-
tion of our ndings. Although the increased
homogeneity of students was appropriate for
the test of hypotheses in the main study, and
even though coffee is a relevant product for
students, caution must be taken in general-
izing the relationship to other products and
other peoples. Further research should test
the central hypothesis on a more general
population. Another sampling issue is the
use of separate samples for the pre-tests and
main study. This was done to avoid sensitiz-
ing participants and introducing order ef-
fects. One could not ask questions about
various coffees without affecting any subse-
quent response to the coffee ads. Our solu-
tion was to use samples from a common
university population, presuming similarity
of prior beliefs. That presumption warrants
caution in generalizing to other groups. Sec-
ond, it is true the specic rms used in the
pre-tests and main study may have intro-
duced unknown biases. For example, Star-
bucks is well known for their corporate
responsibility, which may have biased against
nding the a priori expectation of inferior
Fair Trade blend. The same issue applies to
Tully s. Using a larger sample from a broad-
er population would mitigate against unin-
tended biases.
A nal point relates to a friction within
the Fair Trade movement. As Weber (2007)
notes, there are many individuals and groups
within the FTC industry that feel Fair Trade
is being used by large corporations to signal
they are pursuing measures of CSR, but
only doing so on a small portion of their
products. That is, large corporations are not
embracing the spirit of Fair Trade. This
group asserts that though corporations want
to be associated with CSR, they do not want
it to have a signicant impact on their bot-
tom line. Further, smaller rms actively use
their Fair Trade distinction to set them apart
from the large corporations, touting 100
percent FTC. Although each of these posi-
tions may be consistent with the mission of
the individual rms, neither contributes to
the basic requirement of established high
quality or to the marginal differentiation of
social responsibility, the two clearest avenues
to growth for the FTC market.
Obermiller, Burke, Talbott and Green
2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 171
NOTES
1 Tully s is a major coffee chain, with over 125 stores
in ve states, second to Starbucks in the region
and well-known to all participants in the study.
2 For example, although TransFair USA (2007) doc-
uments 372 FTC licensees in 2004 in North
America, Starbucks (2006) sold more than 10
percent of FTC worldwide.
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APPENDIX A
Socially Responsible Consumption (SRC)
Scale (PRE-TEST 4)
1. I d be willing to pay more to assure that
growers of agricultural products receive
a fair price for their products.
2. The benets of modern consumer prod-
ucts are more important than the pol-
lution that results from their production
and use.
3. Natural resources must be preserved
even if people must do without some
products.
4. Consumers should be made to pay higher
prices for products that pollute the
environment.
5. There should be an international law to
make all companies pay a living wage to
employees.
6. I would be willing to sign a petition or
demonstrate for an environmental cause.
7. I would probably never join a group or
club that is concerned solely with eco-
logical issues.
8. Free trade is more important than en-
suring that farmers get a fair and stable
price for their products.
9. I think that a person should urge his / her
friends not to use products that pollute
or harm the environment.
10. Commercial advertising should be forced
to mention the ecological disadvantages
of products.
11. I become incensed when I think about
the harm being done to plant and animal
life by pollution.
12. I d be willing to make personal sacri-
ces for the sake of slowing down pol-
lution even though the immediate
results may not seem signicant.
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2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 173
APPENDIX B
ADS used to Promote Taste and Social Responsibility
Unfamiliar Brand / Social Responsibility Appeal:

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Corporate Reputation Review Vol. 12, 2, 159176 2009 Palgrave Macmillan 1363-3589 174
Unfamiliar Brand / Good Taste Appeal:

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2009 Palgrave Macmillan 1363-3589 Vol. 12, 2, 159176 Corporate Reputation Review 175
Familiar Brand / Social Responsibility Appeal:

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Familiar Brand / Good Taste Appeal:

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