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Segmenting the Italian coffee market: marketing opportunities for economic agents working along the international coffee chain

Author

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  • Catturani, I.
  • Nocella, Giuseppe
  • Romano, Donato
  • Stefani, Gianluca
Abstract
Globalization, either directly or indirectly (e.g. through structural adjustment reforms), has called for profound changes in the previously existing institutional order. Some changes adversely impacted the production and market environment of many coffee producers in developing countries resulting in more risky and less remunerative coffee transactions. This paper focuses on customization of a tropical commodity, fair-trade coffee, as an approach to mitigating the effects of worsened market conditions for small-scale coffee producers in less developed countries. fair-trade labeling is viewed as a form of “de-commodification” of coffee through product differentiation on ethical grounds. This is significant not only as a solution to the market failure caused by pervasive information asymmetries along the supply chain, but also as a means of revitalizing the agricultural-commodity-based trade of less developed countries (LDCs) that has been languishing under globalization. More specifically, fair-trade is an example of how the same strategy adopted by developed countries’ producers/ processors (i.e. the sequence product differentiation - institutional certification - advertisement) can be used by LDC producers to increase the reputation content of their outputs by transforming them from mere commodities into “decommodified” (i.e. customized and more reputed) goods. The resulting segmentation of the world coffee market makes possible to meet the demand by consumers with preference for this “(ethically) customized” coffee and to transfer a share of the accruing economic rents backward to the Fair-trade coffee producers in LDCs. It should however be stressed that this outcome cannot be taken for granted since investments are needed to promote the required institutional innovations. In Italy FTC is a niche market with very few private brands selling this product. However, an increase of FTC market share could be a big commercial opportunity for farmers in LDCs and other economic agents involved along the international coffee chain. Hence, this research explores consumers’ knowledge of labels promoting quality products, consumption coffee habits, brand loyalty, willingness to pay and market segmentation according to the heterogeneity of preferences for coffee products. The latter was assessed developing a D-efficient design where stimuli refinement was tested during two focus groups.

Suggested Citation

  • Catturani, I. & Nocella, Giuseppe & Romano, Donato & Stefani, Gianluca, 2008. "Segmenting the Italian coffee market: marketing opportunities for economic agents working along the international coffee chain," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44146, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae08:44146
    DOI: 10.22004/ag.econ.44146
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    References listed on IDEAS

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    1. Unknown, 2008. "Institute of Agricultural Economics," Economics of Agriculture, Institute of Agricultural Economics, vol. 55(3).
    2. Giovannucci, Daniele & Koekoek, Freek Jan, 2003. "The State of Sustainable Coffee: A Study of Twelve Major Markets," MPRA Paper 17172, University Library of Munich, Germany.
    3. Ponte, Stefano, 2002. "The 'Latte Revolution'? Regulation, Markets and Consumption in the Global Coffee Chain," World Development, Elsevier, vol. 30(7), pages 1099-1122, July.
    4. LeClair, Mark S., 2002. "Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade," World Development, Elsevier, vol. 30(6), pages 949-958, June.
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    1. Yang, Shang-Ho & Hu, Wuyang & Mupandawana, Malvern & Liu, Yun, 2012. "Consumer Willingness to Pay for Fair Trade Coffee: A Chinese Case Study," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(1), pages 1-14, February.
    2. Cerjak, Marija & Naglić, Tatjana & Mesić, Željka & Tomić, Marina, 2015. "Croatian consumers' knowledge and attitudes towards Fair Trade," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202756, European Association of Agricultural Economists.
    3. Leonard Maaya & Michel Meulders & Nick Surmont & Martina Vandebroek, 2018. "Effect of Environmental and Altruistic Attitudes on Willingness-to-Pay for Organic and Fair Trade Coffee in Flanders," Sustainability, MDPI, vol. 10(12), pages 1-21, November.
    4. Ornella Papaluca & Mauro Sciarelli & Mario Tani, 2020. "Ethical Branding in the Modern Retail: A Comparison of Italy and UK Ethical Coffee Branding Strategies," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 12(1), pages 1-1, March.
    5. Bosbach, Moritz & Maietta, Ornella Wanda, 2011. "The Impact of Social Capital on the Implicit Price Paid by the Italian Consumer for Fair Trade Coffee," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114371, European Association of Agricultural Economists.

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