Fair Trade

Question 1

What is ‘fair trade’? How does fair trade benefit consumers? How does it benefit organizations?
Definition of Fair Trade:

“Every business transaction is a challenge to see that both parties come out fairly.”

                                                                                                                        Adam Smith, 1759
A trading organization, in view of dialog, transparency, and admiration, that looks for more prominent value in worldwide exchange. It helps feasible improvement by offering better trading conditions to, and securing the privileges of, distraught producers and workers.
Reasonable Trade is a considerable measure of things: a social equity development, an option business model, an arrangement of worldwide commerce, an instrument for universal advancement, a confidence based action.
It implies distinctive things to diverse individuals. There is no single, administrative, legitimate body. Along these lines, people need to investigate different models and ideas. Reasonable Trade's numerous definitions do constantly revolve around the trade of merchandise focused around standards of financial and social equity.
Fair Trade Benefit for Consumers:
1. Stable prices
For most items there is a Fair Trade Minimum Price that points/ objective to take care of the expenses of practical generation, actually when world business sector costs fall.
2. Trade Premium
The Premium helps producers to improve the quality of their lives. It is paid on top of the concurred Fair Trade cost, and producers choose equitably how to utilize it. Normally they put it in training, human services, ranch changes or transforming offices to expand salary.
3. Partnership
Producers are involved in decisions that affect their future. Fair Trade certified producers jointly own and manage Fair Trade International. Through the Fair Trade International's Board, its Committees and discussion forms producers can impact costs, premiums, benchmarks and general method.
4. Empowerment of farmers and workersThis is a goal of Fair Trade. Little rancher bunches must have an equitable structure and transparent organization keeping in mind the end goal to be ensured. Workers must be permitted to have agents on a panel that chooses the utilization of the Fair Trade Premium. Both gatherings are upheld via Fair Trade International to create their ability around there.
Customers can purchase items in accordance with their qualities and standards. They can look over a continually becoming scope of incredible items. By buying into Fair Trade consumers support producers who are struggling to improve their lives.
Fair Trade Benefit for Organizations:In 2012 sales of Fair Trade certified goods reached £1.3 billion, a 12% increase on the previous year, demonstrate that people still want ethically produced goods.
· Stand out from the competition:
Stocking of Fair Trade products can make your business more attractive to the consumers. Your organization could benefit from increased sales and profitability.
· Increase customer loyalty
Your dedication to Fair Trade could build client maintenance which will diminish your advertising expenses.
· Recruiting staff and volunteers
May be simpler in the event that you reveal to you are a minding and moral head honcho, and staff/volunteer maintenance might likewise increment.
· Positive public relations
Inform the neighborhood press regarding your prerogative to Fair Trade, and also your founders and different stakeholders.
· Live up to customer expectations
More youthful customers anticipate that organizations will work together morally and Fair Trade is restricted to begin with.
Reasonable Trade items are frequently high caliber as buyers are paying a little premium for them.

Question 2
Explain why intermediaries in the process of distribution of products, help to both lower and increase the final price of goods. Support your answer with examples.

Definition of intermediaries:An individual or a firm, (for example, an intermediary or advisor) who goes about as a mediator on connection between gatherings to a business bargain speculation choice, arrangement, and so on.
For example: In money markets, Money Market Dealers or Forex Dealers or a Firms are works as a brokerage services for banks or other financial institution between depositors and investors for seeking interest income and borrowers seeking debt capital.
Go-betweens generally have some expertise in particular territories, and serve a course for business and other sort of data.
In the above example; it is true fact that the broker or mediator service firm has to have their commission which is the cost of their expense is included and this may cause the cost of borrowing and lending will be increase rather than direct dealing with among the parties.
Same as this position will be reverse if in case mediator is not involved in any dealing and the deal is direct between two or more parties will be the reason of final price / cost high just because of no involvement of broker or mediator service firm as they have full expertise and having good knowledge of the market and large client list to negotiate.
Here is some sample of three separate markets:
a) Print market: Prior to the Internet, practically all books were sold through physical retail operations that act as intermediaries in the traditional market and may cause of price increase of original cost.
The move to the Internet was at first theorized to substitute conventional retailers by electronic retailers. Besides wholesalers, distributers or even creators would have the capacity to get immediate electronic access to the client, and this may build the market and openness and value control straightforwardly which may come about value low.
b) Music market: In customary markets, music is dominatingly sold through mediators (retail outlets) that match the offerings of record organizations with the inclination of shoppers. In electronic markets, things were at first anticipated that will change.
Record companies were hypothesized to move towards direct sales since the costs associated with electronic distribution of a digital product are almost negligible.
c) Flight ticket market: Right now, 80-90% of all tickets for planned flights are sold by means of travel operators in spite of the way that machine reservation frameworks (CRS), presented in the 1970's (Hopper 1990), can be utilized as a specialized foundation for immediate deals. It was conjectured that run deals via aerial shuttles would turn into the command conveyance model.

References

Benita M. Beamon, (1999) "Measuring supply chain performance", International Journal of Operations & Production Management, Vol. 19 Iss: 3, pp.275 – 292
Douglas M. Lambert, Martha C. Cooper, Janus D. Pagh, (1998) "Supply Chain Management: Implementation Issues and Research Opportunities", The International Journal of Logistics Management, Vol. 9 Iss: 2, pp.1 – 20
Gunasekaran, C. Patel, E. Tirtiroglu, (2001) "Performance measures and metrics in a supply chain environment", International Journal of Operations & Production Management, Vol. 21 Iss: 1/2, pp.71 – 87
Martha C. Cooper, Douglas M. Lambert, Janus D. Pagh, (1997) "Supply Chain Management: More Than a New Name for Logistics ", The International Journal of Logistics Management, Vol. 8 Iss: 1, pp.1 – 14
Robert E. Spekman, John W. Kamauff Jr, Niklas Myhr, (1998) "An empirical investigation into supply chain management: a perspective on partnerships", Supply Chain Management: An International Journal, Vol. 3 Iss: 2, pp.53 - 67