Read the case and answer all 2 questions.
Case 2: Building an international ethical brand: coffeeLarge multinational companies overwhelmingly dominate the global coffee industry. Such companies have come under increasing scrutiny over the last few years when they have been perceived to operate under poor ethical standards. An outcome of this has been that customers have been urged by consumerist lobbies to switch to independent coffee shops and away from major brands such as Costa, Caff Nero and Starbucks who scored poorly in an assessment of their social and environmental impacts.Caff Nero was found to have little evidence of environmental or ethical sourcing, while Costas policies were described as weak in the ratings scorecard produced by the Ethical Consumer magazine. As well as being penalized for its well-publicized tax avoidance, Starbucks has been criticized for trade union violations, removing paid lunch breaks, political lobbying and a lack of commitment to sourcing sustainable palm oil. And yet at the same time Starbucks has been named one of the worlds most ethical companies according to the Ethisphere Institute.The guidance for many consumers by ethical consumer watchdogs has been to drink coffee sourced by Fairtrade suppliers. Yet recently they too have been criticized. Research found that the Fairtrade Foundation was unable to ensure that all its workers are paid a living wage. Many producers of Fairtrade coffee work out of small farms and are poor themselves. They then employ a few workers who are paid even more poorly. If they have less than 20 workers the farmers do not legally have to pay the minimum wage set by the government. As thousands of these farms exist in multiple countries it is difficult for the Fairtrade Foundation to regulate and police, especially as the farmers are not breaking the law by underpaying their workers. Unfortunately, despite the ethical stance the Fairtrade Foundation has aspired to, this practice has led to the tarnishing of the brand among consumers.Companies with a focus on ethical marketing do evaluate their decisions from a business perspective. They also evaluate their marketing decisions from a moral perspective which, in a long international supply chain, is exceedingly difficult.The problem for an international company taking such a stand is that from a consumers perspective, ethical marketing is not a strategy; it is an overarching philosophy. This means if a company is building an international brand on an ethical stance, every part of its operation has to stand up to scrutiny. It needs to ensure its marketing platform in all countries in which it operates is honest and trustworthy so it is able to build strong relationships with consumers through a set of shared values across the globe.
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