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Cafédirect: The Marketing Evolution and Market Penetration for Fair Trade Products
By Bob Doherty, Iain A. Davies, and Simon Knox
Bob Doherty is an Associate Professor at Liverpool Hope University, United
Kingdom. Iain A. Davies is a Lecturer in Marketing at University of Bath, United Kingdom.
Simon Knox is a Professor of Brand Marketing at Cranfield University, United Kingdom.
Case Synopsis
This case study investigates the performance of the fair trade pioneer Cafédirect and
how it achieved its prominent position in the United Kingdom’s mainstream coffee market
based on ethical positioning. The case explores how Cafédirect’s marketing and
communications channels resulted in rapid growth from niche player to a mainstream
product. The company, however, is now experiencing a market growth slowdown. Some
question whether it is possible for Cafédirect to regain its former momentum with its current
marketing strategy.1 The case challenges students to identify the competitive position of
Cafedirect and recommend marketing strategies for the future of this fair trade pioneer.
Case Objectives
The main objectives of this case are to:
To analyse the external conditions that led to the formation of Cafedirect
To understand how fair trade differs from the conventional market mechanism
To evaluate how Cafedirect’s marketing mix changed during the three different
marketing phases
To critically analyse how Cafedirect established a mainstream position in the UK
Hot Beverage sector
1
To appraise the changes in the competitive landscape due to the entrance of both
Multinational Corporations and supermarket retailers
Classroom Management
Provide this case one week prior to class as a key reading. Advise students to look at both
the Cafedirect and Fairtrade Foundations websites. This case could then be discussed in
either a single one hour class period or over a 40 minute seminar, it is very flexible in this
respect. Commence the class by discussing with the students the key issues in the case and
ask them all to answer the following two questions:
1. What were the external conditions that led to the formation of Cafedirect?
2. How does fair trade differ from the conventional marketing mechanism?
Discuss the components of the Fairtrade Supply Agreement and the Cafedirect Gold
standard. Then split the class into small groups to discuss the following questions. If time is
3. What are the distinct marketing phases of Cafedirect? Evaluate how Cafedirect’s
marketing mix changed during the different marketing phases.
4. Critically analyze how Cafedirect established a mainstream position in the UK
Hot Beverage sector.
2
5. Appraise the changes in the competitive landscape due to the entrance of both
Multinational Corporations and supermarket retailers.
Explain the growth in own-label fair trade sales and the consequent competitive pressure
on Fairtrade Organisations such as Cafedirect. Look at fair trade growth and then look at the
Questions:
1. Identify the tangible and intangible resources utilised by Cafédirect to support its
competitive position in the UK hot beverage market.
2. Cafédirect is a successful archetype for an “ethical business”, but is now facing some
extreme competitive pressures from traditional businesses providing similar products.
Do you think companies in an ethical niche have to compromise their ethics to
compete successfully in mainstream markets?
3. Should Cafédirect become more involved in the fair trade movement again? Should
the company be getting involved in climate change discussions or is this diluting its
core purpose?
4. Assume you were appointed the new Marketing Director of Cafédirect and given
specific instructions to get both profits and sales back on track. What marketing
strategies would you pursue?
Other sources of information on Cafedirect and Fair trade include:
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Christopher M. Bacon, “Who Decides What is Fair in Fair Trade? The Agri-Environmental
Governance of Standards, Access and Price,” Journal of Peasant Studies, 37, 1
(2010): 111-147.
Kristy Golding and Ken Peattie, “In Search of a Golden Blend: Perspectives on the
Marketing of Fair Trade Coffee,” Sustainable Development, 13, 3 (2005): 154-165.
Fairtrade Foundation, Tipping the Balance: The Fairtrade Foundation’s Vision for
Transforming Trade 2008-2012 (London: Fairtrade Foundation, 2008), available at
http://www.fairtrade.org.uk/includes/documents/cm_docs/2008/F/Final.pdf, accessed
9/30/10.
Fairtrade Foundation, “Awareness of FAIRTRADE Mark Leaps to 70%,” May 10, 2008,
available at
http://www.fairtrade.org.uk/press_office/press_releases_and_statements/may_2008/pr
ess_office/press_releases_and_statements/april_2008/press_office/press_releases_and
_statements/april_2008/awareness_of_fairtrade_mark_leaps_to_70.aspx, accessed
9/30/10.
Fairtrade Foundation, “Facts and Figures on Fairtrade,” available at:
www.fairtrade.org.uk/what_is_fairtrade/facts_and_figures.aspx, accessed 9/30/10.
Daniel Jaffee, Brewing Justice: Fair trade coffee, sustainability and survival. Berkley and
London: University of California Press, 2007).
William Lowe and Ellen Davenport, “Has the Medium (Roast) Become the Message? The
Ethics of Marketing Fair Trade in the Mainstream,” International Marketing Review,
22, 5 (2005): 494-511.
Mintel International Group Limited, Fair Trade Foods, UK Report, January 2009.
Mintel International Group Limited, UK Coffee Report, 2008.
Laura T. Raynolds, Douglas Murray, and Peter Leigh Taylor, “Fair Trade Coffee: Building
Producer Capacity via Global Networks,” Journal of International Development, 16,
8 (2004): 1109-1121.
Retail News, ‘Hot Beverages, September Report’, September 2008, pp. 40-42, available at
http://issuu.com/retailnews/docs/retailnews1sept08?mode=a_p, accessed 9/30/10.
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Supermarket.co.uk (2009), ‘Fairtrade Coffee Brands Removed from Asda Line-up’ available
at
http://www.supermarket.co.uk/news/2010/Mar/fairtrade-coffee-brands-removed-from-
asda-line-up-95071945.html accessed on 28/03/2010
Anne Tallontire, “Partnerships in Fair Trade: Reflections from a Case Study of Cafédirect’,
Development in Practice, 10, 2 (2000): 166-177.
Karla Utting, “Assessing the Impact of Fair Trade Coffee: Towards an Integrative
Framework,” Journal of Business Ethics, 86, 3 (2009): 127-149
Jenny Wiggins, “Growth in Fairtrade Towns Defies Downturn,” December 19, 2009.
Shelley Wrigley, “Gauging Consumer Responses to CSR Activities: Does Increased
Awareness Make Cents?” Public Relations Review, 34, 3 (2008): 306-308.
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1 Most of the data used in this case study comes from two longitudinal, exploratory studies into the management and
implementation of strategy in Cafédirect over the periods of 1999–2004 and 1999–2008, respectively.
